Brief Explanation of Companies Incorporation (3rd) Third Amendment Rules, 2016

MCA has amended some provisions of Companies (Incorporation) Rules, 2014 to be effective from 27th July, 2016.

  • Rule 3(2) of Companies(Incorporation) Rules, 2014 – Explanation Added

‘Person’ word is defined as ‘Natural Person’ i.e. Indian Citizen & Resident in India.

No such  person be eligible to be a Member & Nominee in more than OPC.

  • Rule 8(2)(ii) of Companies(Incorporation) Rules, 2014 – Insertion

It includes the name of a registered trade mark or a trade mark which is subject of an application for registration under the Trade Marks Act, 1999 and rules framed there under, unless the consent of the owner or applicant for registration, of the trade mark, as the case may be, has been obtained and produced by the promoters

  • Rule 8(6)(n) of Companies(Incorporation) Rules, 2014 – Omission

Approval of Central government required for use of word “Financial Corporation” as Comma between the words Financial Corporation has been omitted.

  • Rule13(2) of Companies(Incorporation) Rules, 2014 – Explanation Added

Now the “Type Written” or “Printed” particulars of the subscriber and witness shall be allowed, if subscriber or the witness appends his or her signature or thumb impression.

  • Rule 16(1)(m) of Companies(Incorporation) Rules, 2014 – Explanation Added

In case the subscriber is already holding a valid DIN, and the particular provided therein have been updated as on the date of application and the declaration on this effect is given in the application, the proof of identity and residence need not be attached.

  • Rule 16(1)(q) of Companies(Incorporation) Rules, 2014 – Omission

There is no need to attach INC-10 for Director and Promoters verification for Incorporation of Company.

  • Rule 16(2)(g) of Companies(Incorporation) Rules, 2014 – Omission

Word ‘Partnership firm’ has been omitted from filing certified true copy of the resolution agreed to by all the partners specifying inter alia the authorization to subscribe to the memorandum of association of the proposed company and to make investment in the proposed company, the number of shares proposed to be subscribed in the body corporate, and the name of the partner authorized to subscribe to the Memorandum.

  • Rule 26 of Companies(Incorporation) Rules, 2014 – Insertion

Every Company which has a website for conducting online business or otherwise, shall disclose/ publish its name, address of its registered office, the CIN, Tel No, Fax No. if any, email and the name of person who may be contacted in case of any queries or grievances on the landing/ home page of the said website.

  • Rule 28(2) of Companies(Incorporation) Rules, 2014 – Proviso Added

Provided also that on completion of such inquiry, inspection or investigation as a consequence of which no prosecution is envisaged or no prosecution is pending, shifting of registered office shall be allowed.

  • Rule 29(1) of Companies(Incorporation) Rules, 2014 – Proviso Added

Provided that a change of name shall be allowed upon filing necessary documents or payment or repayment of matured deposits or debentures or interest thereon as the case may be.

  • Rule 30 of Companies(Incorporation) Rules, 2014 – Insertion

Under this Rule, For seeking approval from Central Government for altering the Memorandum with regard to shifting of registered office from one state to another State, one more attachment is inserted, if applies;

A copy of the NOC from the RBI where the applicant is a registered NBFC.

  • Rule 30(6)(C) of Companies (Incorporation) Rules, 2014 – Omission

The Company shall at least fourteen days before the date of hearing-serve, by registered post with acknowledgement due, a notice together with the copy of the application to the Registrar and to the regulatory body, if the company is regulated under any special Act or law for the time being in force.  Now, No need to serve notice to SEBI for shifting of registered office.

  • New Rule 37 – Inserted

Conversion of unlimited liability company into Limited Liability Company by shares or guarantee.

  1. Company shall pass a Special Resolution in a general meeting and the same shall be filed in Form No. INC-27.
  2. The Company shall publish a notice in Form- INC-27A within 7 days after passing Special Resolution and notice shall be published in English language and one in vernacular language where the registered office of the company is situated and same shall also be published on the website of the Company, if any.
  3. The Company shall within 45 days of passing Special Resolution file an application in Form- INC-27 of its conversion into Limited Liability Company by shares or guarantee.
  4. A declaration is required to be signed by not less than 2 directors including MD, Where there is 1, that no complaints, no inquiry, no investigation is pending against the company or its directors or its officers.
  5. The Registrar after considering all the documents filed by the company for its conversion will decide whether the approval for conversion should be granted or not.
  6. If approved, the Certificate of Incorporation will be issued in Form-11A.

Conditions to be fulfilled after Conversion:

  1. Company shall not change its name for a period of one year from the date of such conversion.
  2. The Company shall not declare or distribute any dividend without satisfying past debts. Liabilities, obligations or contracts incurred or entered into before conversion.

 Conversion shall not be eligible:

  1. Negative Net Worth of the Company;
  2. Application is pending for Striking Off under Companies Act, 1956 or Companies Act,2013;
  3. Company is in default of filing of annual returns or financial statements under Companies Act, 1956 or the Companies Act, 2013;
  4. Petition for winding up is pending against the company;
  5. Inquiry is pending against the company;
  6. Company has not received amount due on call in arrears, from its directors, for a period of not less than 6 months from the due date.
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