1. Compliance under The Companies Act, 2013 (SS1 & SS2)
J.J. Gandhi
Practising Company Secretary
231, Phoenix Complex, Sayajigunj, Vadodara
20 November 2018
J J Gandhi & Co. 1

2. Event based compliance To be complied when event occurs/ decision taken

3. Appointment of Auditor
Auditor can not be appointed for less than 5 years. Section 139 uses the word “shall”
Audit Committee to recommend Appt. of Auditor
Auditor has to provide certificate mentioning; (Rule 3)
Consent to act as Auditor
Eligible for appt. and not disqualified
Appt. is as per the term provided in the Act
Appt. is within the limit
First Auditor Appt.- by Board within 30 days of incorporation. If Board failed then Appt. by EOGM within 90 days of incorporation.
20 November 2018
J J Gandhi & Co.

4. Appointment of Auditor ….
Govt. Co. - First Auditor Appt. by CAG within 60 days. If CAG fails to Appt. Board can Appt. within next 30 days. If Board fails Appt. at EOGM within next 60 days.
Co. to intimate Appt. to Auditor
Now, liability is with Co. to file Form ADT 1 by using DSC of Director
To be filed within 15 days of appt. i.e. dt. of AGM
ADT 1 filed after 15th Oct. is late filing and attracts additional filing fees.
20 November 2018
J J Gandhi & Co.

5. Rotation of Auditor Applicable to
All listed Co.
Public Co. having Paid up cap. 10 Cr. & more
Pvt. Co. having Paid up cap. 20 Cr. & more
Any Co. with public borrowings from FI/ Banks/ public deposits 50 Cr. & more
Individual Auditor cannot be appointed for more than one term of 5 yrs
Firm cannot be appointed for more than two consecutive terms of 5 yrs
Co. to appoint Jt. Auditors in such manner that they do not complete their term in same year.
20 November 2018
J J Gandhi & Co.

6. Resignation of Auditor
No provisions contained under old Act
ADT 3 required to be filed within 30 days with the Co. & MCA & CAG, if applies.
Filed with the DSC of Auditor
Attachment - Resignation letter must mention date of resignation, reasons of resignation and other facts, if any.
Non compliance – Mini. Fine Rs. 50,000 extended upto Rs. 5 lacs.
20 November 2018
J J Gandhi & Co.

7. Resignation of Auditor …
Casual vacancy occurred due to resignation to be filled by Board within 30 days and also required to be approved by shareholders within 3 months.
Auditor can be removed before expiry of term
By serving special notice to Auditor
by passing Special resolution and
By obtaining previous approval of the CG
20 November 2018
J J Gandhi & Co.

8. Appointment of Director
For appointment, cessation and for change in designation of Director and KMP - DIR12 required to be filed
Required to mention other Directorship
Appointee can not use his DSC
Exiting Director can not use his DSC
For CEO/ CFO/ CS PAN is mandatory
20 November 2018
J J Gandhi & Co.

9. Attachments of DIR 12 Attachment for appointment
Board Resolution/ shareholders resolution of appointment
Consent to act as Director in DIR 2
Not attached to disqualification - DIR 8
Appointment letter if appointed as Independent Director
20 November 2018
J J Gandhi & Co.

10. Resignation of Director Sec. 168
No provision in the Companies Act, 1956
Should be in writing – mentioning date and reasons
Take effect when received by the Co. or date mentioned in it – Whichever is later. Sec. 168(2)
Resignation to be acknowledged by Co.
Acceptance by the Board is not necessary. Board has to take note of resignation. (Sec. 168(1))
Co. within 30 days intimate the ROC in Form DIR 12 and post the information on its website, if any.
20 November 2018
J J Gandhi & Co.

11. Resignation of Director …
Resignation to be mentioned in next Board Report
Attachment to DIR12 is resignation acknowledged by co.
Within 30 days from the date of resignation, resigning Director will upload DIR 11 attaching his resignation with reasons along with the fee. DSC of resigning Director is required
If the Company has minimum Directors, MCA system will not allow to upload resignation, unless Director is appointed to satisfy minimum requirement.
20 November 2018
J J Gandhi & Co.

12. Vacation of office by Director Sec. 167
If Director fails to attend all Board meetings held during last 12 months - even if leave of absence is granted by the Board.
If fails to disclose interest in Related Party Transactions u/s 184
Function as Director after vacation of office - imprisonment upto 1 year or fine of Rs. 1 lac to 5 lacs or with both
20 November 2018
J J Gandhi & Co.

13. Borrowings by Company

14. Public Company
A Company can accept money under following heads. This provision also apply to unsecured loans or Deposits or book entry. Account title is not relevant.
Public Co. can accept unsecured loan only from Directors. Even closely held public Co. can not accept from its shareholders or from relatives of Directors.
Director has to give declaration that the Loan given to the Company is not out of borrowed fund.
20 November 2018
J J Gandhi & Co.

15. Private Company
Pvt. Co. can accept unsecured loan from Directors and also form relatives of Directors.
Director or Relative has to give declaration that the Loan given to the Company is not out of borrowed fund.
Pvt. Co. can accept Deposits from shareholders but not exceeding the amount of paid-up share capital and free-reserves of Pvt. Co. (Notification dt. 05/06/2015)
20 November 2018
J J Gandhi & Co.

16. Prohibition to give loans Sec. 185
A company shall not give loan (directly or indirectly) to following;
Director of a Company or his relatives
Director of a Holding Company or his relatives
Firm in which above Director or relative is partner
Any partner of above firm
Private company where there is common Director or Director is Shareholder
Body corporate whose 25% or more equity capital is controlled by Director or Directors.
20 November 2018
J J Gandhi & Co.

17. Sec. 185 modified for Pvt. Co.
As per Notification dt. 05/06/2015- a private Co. which satisfy following all conditions can give loans, deposits or guarantee to parties covered in section 185
Which does not have a company Shareholder
Which does not borrow money from Bank/ FI / Body Corporate exceeding Rs. 50 crores or does not have borrowing exceeding twice the paid up capital – WL
Which does not have default in repayment of such borrowings subsisting at time of giving loan.
20 November 2018
J J Gandhi & Co.

18. From Promoters and Relatives
Promoter and Relatives can give unsecured loan to the Company if stipulated by Banks/ FI as per the terms of sanction. But such loan can continue with the Company till the loan is repaid to the Bank.
Customer Advance: It is required to be adjusted within 365 days.
20 November 2018
J J Gandhi & Co.

19. Registration of Charge
20 November 2018
J J Gandhi & Co.

20. Registration of Charge
Charge created on movable or immovable assets/ properties of the Company requires to be registered. i.e. Hypothecation of Stock, Book debts, movable machineries, mortgage of fixed assets of the Company. But charge created on personal properties of Director does not require registration with MCA portal.
Registration of charge or modification of charge is filed/ uploaded through Form CHG 1. It is required to be registered within 30 days by the Company.
20 November 2018
J J Gandhi & Co.

21. Registration of Charge ….
On Registration of charge a Certificate of Registration will be issued by the ROC.
If the Company fails to Register within 30 days then after 30 days charge holder i.e. Bank can apply for charge Registration with additional filing fees. Here, digital signature of Director of a Company is not required. Registrar will inform the Company and Register the charge. Here, as per Section 78 Bank is entitled to recover fees and additional fees from the Company.
20 November 2018
J J Gandhi & Co.

22. Registration of Charge ….
If charge is not registered within 300 days of its creation or modification then as per Rule 12 application for condonation of delay (for permitting delayed filing) will be made to the RD.
The order of RD will be filed with Form INC 28.
If Company acquires any property which is subject to charge then also charge required to be registered. e.g. Merger, conversion of Partnership firm into company etc.
20 November 2018
J J Gandhi & Co.

23. Registration of Charge ….
Registration and Modification of charge
Can be filed by charge holder or Co.
Attachment instrument creating charge – stamp duty amount should be visible
For joint charge holder list to be attached
DSC of Director, Banker and certifying professional are required
In case of Public Co. for borrowing Board resolution must have been filed
20 November 2018
J J Gandhi & Co.

24. Satisfaction of Charge
A Company shall give intimation to the Registrar in Form CHG 4 for satisfaction of charge within 30 days along with No Due Letter (NOC) of Bank.
The ROC will serve notice on the Charge holder, if he has objection against satisfaction of charge.
On Registration of Satisfaction of Charge a Certificate of Satisfaction of charge will be issued by the ROC.
20 November 2018
J J Gandhi & Co.

25. Satisfaction of charge …
To be filed within 30 days of repayment in full
After 30 days Petition to be made to RD
Can not be regularized filing by paying additional filing fees. Order of RD is required.
The order of Regional Director will be filed with Form INC 28.
NOC of Bank should mention date on which loan is repaid in full.
Signed by Director, Bank and Certifying professional
Satisfaction is not possible in part
20 November 2018
J J Gandhi & Co.

26. Loans & Investments
20 November 2018
J J Gandhi & Co.

27. Loans & Investments Sec. 186
If loans are given to 100% wholly owned subsidiary Co. it should be used only for its principal busi. activities
Consent of all Directors present at the Board meeting is required for giving loans or making investments Sec. 186(5)
If any Term Loan is subsisting – prior approval of public FI is required. However, approval is not required if loans and investments are within the following limits and default has not been made in repayment of principal or interest.
20 November 2018
J J Gandhi & Co.

28. Loans & Investments ….
Total of Loans and Investments (along with existing) shall not exceed
60% of its paid up capital, free reserves and premium account or
100% of its free reserves and premium account - whichever is more.
If Loans and Investments exceed above limits prior approval of Shareholders by special resolution is required. Resolution should mention amount of loans or investments.
20 November 2018
J J Gandhi & Co.

29. Loans & Investments ….
The limit (i.e. 60% or 100%) does not apply if loans given to or investments made in 100% subsidiary Company.
Loan shall not be given at a rate of interest lower than the yield rate of Govt. Security.
Disclosure is required in financial statement mentioning proposed utilization by the recipient company.
20 November 2018
J J Gandhi & Co.

30. Increase in Autho. capital Sec. 61
Increase in Authorized share capital attracts Registration fee and stamp duty
Attachments - Special Resolution & Expl. St. and MOA with modified capital clause
Proof of earlier payment of stamp duty
Certifying professional certifies payment of stamp duty
Registration fee and stamp duty challan attracts 2.5% p.m. and 3% p.m. late fee, if filed late.
20 November 2018
J J Gandhi & Co.

31. Increase in Paid up capital
File MGT 14 for filing Special Resolution with Explanatory Statement
File GNL 2 for filing PAS 4 (Letter of Offer contains all details) attachment Board Resolution and Special Resolution
File PAS 3 for filing List of Allottees attachments - Board Resolution for Allotment
Filing GNL 2 for filing PAS 5 (i.e. record name, address, from which Account money has come etc.)
File MGT 14 for filing Board Resolution of Allotment
20 November 2018
J J Gandhi & Co.

32. Change of Regd. office Address
Whether premises owned by Director or others
Whether taken on Lease
Attachment – Sale deed, lease deed, rent agreement, latest rent receipt, NOC of owner, Latest proof like electricity bill/ phone bill (not older than 2 months)
List of all companies having same registered office address, if any.
Professional certify that he has personally visited the registered office and verified that it is functioning for the business purpose of Co.
20 November 2018
J J Gandhi & Co.

33. Mandatory for every Company Even if there is no activity
Annual compliance
Mandatory for every Company
Even if there is no activity
20 November 2018
J J Gandhi & Co.

34. compliance/ Submission Section/ Rules Qly Hly Annual Time limit
Nature of
compliance/ Submission
Section/ Rules
Qly
Hly
Annual
Time limit
Disclosure of interest MBP1
Sec. 184(1) Rule 9(1)
To receive from Directors MBP1. To be placed in the first BM of FY
Declaration DIR8
Sec.164(2) Rule 14(1)
To receive from Directors DIR8 that not attached to any disqualification
Declaration of Independent Director
Sec.149(7)
To receive declarations from ID for satisfying criteria of independence
20 November 2018
J J Gandhi & Co. 34

35. Notice of BM Sec.173(1) SS1 Qly
7 days before BM. Excluding day of dispatch and BM (add 2 days for dispatch time) To have record of proof of delivery.
If shorter notice given to mention in BM Notice.
Other business can be transacted only with the consent of chairman and majority of Directors including one ID.
Before close of quarter and before expiry of 120 days from its previous BM
20 November 2018
J J Gandhi & Co. 35

36. Take on record disclosure of interest i.e. MBP1.
First BM of every FY
SS1
Annual
Decide time limit for Unpublished Price Sensitive Information to be give on shorter notice (1.3.7)
Take on record disclosure of interest i.e. MBP1.
Agenda of BM. Explaining agenda in detail with supporting. Include all draft Board resolutions.
Qly
7 days before BM. Excluding day of dispatch and day of BM (add 2 days for dispatch time)
Board Meeting Minutes
All BM
Minutes to mention BM No.
Commencement and conclusion time
No leave of absence can be granted without request
20 November 2018
J J Gandhi & Co. 36

37. Filing of Resolutions MGT14 Sec. 179(3)
Board Report
Sec.134
Annual
Include all disclosure required as per Sec Signed by Chairperson or two Directors
Filing of Resolutions MGT14
Sec. 179(3)
Within 30 days of BM
Board Resolution approving Financials Statement and Boards Report
Appointment of Secretarial Auditor
Appointment of internal auditor
Not required for Private Co.
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J J Gandhi & Co. 37

38. Draft Minutes to circulate to all Directors
(Even to absentee Director)
SS1
For every BM
Draft Minutes required to be circulated within 15 days inviting comments. Proof of delivery to be preserved for 8 years.
Directors to comment within 7 days.
Absentee Director is entitled to offer his comment on Minutes
Signed Minutes of BM to circulate to all Directors
After signed by Chairman signed BM minutes to circulate to all Directors.
Proof of delivery to be preserved for 8 years.
20 November 2018
J J Gandhi & Co. 38

39. Notice of AGM prepared as per Section 101 and SS 2.
Annual
Notice of AGM prepared as per Section 101 and SS 2.
Include agenda if additional Director appointed or term of ID/ MD/ WTD expires.
Notice to be sent to all Directors, Members, (Nominee/ legal rep. of deceased) Statutory Auditor, Secretarial Auditor, Debenture Trustee, if any.
20 November 2018
J J Gandhi & Co. 39

40. Include route map and prominent land mark of AGM venue SS2 1.2.4
Content of AGM Notice
SS2
Annual
Include route map and prominent land mark of AGM venue SS
To accompany attendance slip (even necessary for Pvt. Co.)
Proxy Form to facilitate For and Against for each resolution and a note that proxy exceeding 50 and not more than 10% can not be accpted unless given by single shareholder.
20 November 2018
J J Gandhi & Co. 40

41. Host AGM Notice on website SS2 Annual
Unlisted Co. having website should display AGM Notice as per SS2.
Advt. for evoting after completion of dispatch of AGM Notice
Applicable to unlisted company only if shareholders are 1000 or more SS
Atleast 21 days before AGM
Advt. to appear in regional language in regional news paper and in English language in English news paper
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J J Gandhi & Co. 41

42. Atleast 21 days before AGM
Host Advt. of evoting on website. Applicable only if E-voting given (shareholders 1000 or more)
SS2
Annual
Atleast 21 days before AGM
SS2 specific point of AGM
SS2 4.1
Chairman need to explain absence of Director. This is to be included in Minutes. Auditor/ Rep. and Audit Committee Chairman to attend AGM
Appointment of Auditor ADT1
Sec. 139
Auditor is appointed for 5 years and ADT-1 is filed for 5 years. Thereafter, every year in AGM Shareholder will ratify appt. No need to file ADT1 for ratification
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J J Gandhi & Co. 42

43. Filing of Financial Statement Form AOC 4/ AOC4 XBRL Sec. 137 Annual
Within 30 days from AGM
To file Balance Sheet along with statement of profit and Loss account and Director Report. XBRL filing for
Listed co and its subsidiaries
Paid up cap. Rs. 5 Cr. +
Turn over Rs. 100 Cr. +
Filing of DIR 12
Annual or event based
Change in Designation/ Appointment/ Resignation of Director/ KMP
Filing of MGT 14 for any Special Resolution passed, if any.
Sec. 179(3)
Filing of all type of Special resolution passed at AGM EOGM
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J J Gandhi & Co. 43

44. Filing of Annual Return MGT7 Sec. 92 Annual Within 60 days of AGM.
Period 1st April to 31st March. Annual Return of Every Company (Except OPC and Small Company) should be signed by PCS
Report in Format MGT 8
Attachment to MGT7
Applicable to company having paid up share capital of 10 Crore or more or Turnover of Rs. 50 crore or more.
Certified by PCS.
20 November 2018
J J Gandhi & Co. 44

45. Companies Amendment Bill, 2016
Key Highlights
Companies Amendment Bill, 2016
20 November 2018
J J Gandhi & Co.

46. Universal object companies will be permitted
Universal object companies will be permitted. Allow unrestricted object clause in the Memorandum of Association dispensing with detailed listing of objects
The company is free to give negative list of businesses that it may not want to do.
Big heap of unwarranted “objects” which the company may not even want to engage in in foreseeable future
20 November 2018
J J Gandhi & Co.

47. Approval of reservation of name of a proposed company will expire within 20 days from the date of approval (presently it expires after 60 days)
In the process of incorporation presently many notorised affidavits are required to be given by subscribers/ first Directors – this is replaced by declarations.
20 November 2018
J J Gandhi & Co.

48. Co. can pay remuneration in excess of limit prescribed in Schedule V, after seeking approval of shareholders by special resolution.
However, if appointee do not satisfy the eligibility condition then Govt. approval is required.
Prior approval of Bank/ FI or non-convertible debenture holder or secured creditor is required, before taking approval from shareholders.
20 November 2018
J J Gandhi & Co.

49. CEO who is not Director can sign Financial Statement.
A company may give loans to entities in which directors are interested after passing special resolution and adhering to disclosure requirement;
CEO who is not Director can sign Financial Statement.
20 November 2018
J J Gandhi & Co.

50. It is to become optional to file DIR11 by the resigning Director
removal of requirement for annual ratification of appointment or continuance of auditor
It is to become optional to file DIR11 by the resigning Director
20 November 2018
J J Gandhi & Co.

51. EOGM can be held any where in India
Unlisted companies can hold AGM anywhere in India, if permitted in advance by all members. This will help subsidiary companies & closely held companies to hold their AGM.
EOGM can be held any where in India
Wholly-owned subsidiaries of foreign companies will be permitted to call their extra ordinary meetings outside India.
20 November 2018
J J Gandhi & Co.

52. Section 185 of the 2013 Act, prohibiting loans and guarantees by companies to entities in which directors are interested, is narrowed down, to permit companies to given loans and provide guarantees on the basis of a shareholders’ resolution
20 November 2018
J J Gandhi & Co.

53. PAS3 required to be filed within 15 days from the date of allotment.
Prohibits the use of money until the shares are allotted and return of allotment has been filed with the ROC. There is no logic to link use of money with filing of a document.
PAS3 required to be filed within 15 days from the date of allotment.
20 November 2018
J J Gandhi & Co.

54. ?
welcome
20 November 2018
J J Gandhi & Co.

55. Thank You
CS J.J. Gandhi Practising Company Secretary 231, Phoenix Complex, Sayajigunj, Vadodara Mobile
20 November 2018
J J Gandhi & Co. 55