Government working on approving companies’ names in 24 hours: MCA

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The government is working on ensuring that the name of a new company is approved within 24 hours, a step towards improving ease of doing business and reducing overall transaction costs.

Corporate Affairs Secretary Tapan Ray said his Ministry is focused on reducing the problems faced by the industry and ensuring that ease of doing business becomes the “order of the day”.

“Incorporating a company is now much easier and will be made further easier as we go along the road. We are aiming to get a name (of a new company) approved within 24 hours,” Ray said.

The Corporate Affairs Ministry is fully geared up to improve ease of doing business, not only for starting a venture but also for the life cycle of companies as a whole, he noted.

Speaking at an event organised by the Institute of Cost Accountants of India (ICAI) here, Ray said speedier approval of names is itself a cost-cutting experiment because any delay adds to transaction costs.

“So ease of doing business is directly related to transaction costs. So the moment you make the ease of doing business better, transaction costs comes down and ultimately it has an affect on the product,” Ray said.

Stressing the need for becoming globally competitive, he said the dream of making India a manufacturing hub can be realised when costs are low.

“People will only start manufacturing in India if it is the cheapest,” he added.

Corporate Affairs Ministry, which is implementing the Companies Act, has been taking various steps to improve ease of doing business in the country.

Ray said setting up of the National Company Law Tribunal (NCLT) would further facilitate business in the country.

The Ministry has sought comments from stakeholders on draft rules pertaining to the proposed NCLT, which would replace the Company Law Board (CLB).

Source:
http://economictimes.indiatimes.com/articleshow/50785152.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

India Inc takes to social causes (CSR)

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The move to make corporate social responsibility (CSR) spending mandatory has resulted in a spurt in social spending by India Inc. Spending on CSR activities by the top 100 companies increased to Rs 5,240 crore in 2014-15. The figure had stood at Rs 3,000 crore in 2012-13, when CSR spending was voluntary. Corporate governance firm Institutional Investor Advisory Services (IiAS) projects spending will increase to Rs 8,500 crore in the current financial year.

The Companies Act, 2013, requires companies above a certain financial threshold to spend at least two per cent of their average net profit of the preceding three years on CSR. Although CSR spending is compulsory, the Act has taken a ‘comply or explain’ approach, where a company has to provide reasons if the spending is less than the stipulated amount.

According to IiAS, CSR spends in FY15 were 26 per cent lower than the prescribed amount.

“Even as CSR is entering corporate consciousness, the next two to three years will remain a ‘learning period’ for industry,” the governance firm said in a note on Tuesday.

India Inc takes to social causes
IiAS has tracked the spending of BSE 100 companies, where 95 companies qualify under the profitability criteria for mandatory spending. The remaining five companies were not required to spend as they made average losses in the preceding three years.

State-owned firms set aside lesser amount compared to private sector firms. In FY13, public sector units (PSUs) spent 0.6 per cent of their average profits in the preceding three years. In comparison, non-PSUs spent one per cent of their average profit before tax of the preceding three years.

The trend continued in FY15. The CSR spends of the S&P BSE 100 companies aggregated 1.5 per cent of their three-year average profits. Non-PSUs spent 1.6 per cent and the 21 PSUs spent 1.3 per cent of their average profit in the preceding three years, IiAS noted.

Close to Rs 61 crore of the CSR spends by India Inc in FY15 was towards the Prime Minister’s National Relief Fund and seven companies contributed Rs 47 crore towards Swachh Bharat Kosh.

Source: http://www.business-standard.com/article/companies/india-inc-takes-to-social-causes-116010500776_1.html

MCA extends last date of filing of AOC-4 and MGT-7 E-Forms to 30.01.2016 to Tamil Nadu & Pondicherry

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MCA

The Circular from Ministry of Corporate Affairs extends one more month time, for Annual Filings of MGT -7 , Annual Return & AOC-4, Audited Financial Statements, without additional fees, to Tamil Nadu & Pondicherry, which were affected by floods.

The extract of the circular issued today, i.e., 30 December, 2015 is as below:

 

In continuation of the ministry’s circular 15/2015 dated 30.11.2015, keeping in view the requests received from various stakeholders stating that due to heavy rains and floods in the State of Tamil Nadu and Union Territory of Puducherry, the normal life/work was affected, it has been decided to relax the additional fees payable for the State of Tamil Nadu and UT of Puducherry on e-forms AOC-4, AOC (CFS) AOC-4 XBRL and e- Form MGT-7 up to 30.01.2016, wherever additional fee is applicable.

The last date of filing forms AOC-4 (XBRL, non-XBRL & CFS) and MGT-7 till 30th Dec 2015, without additional fees, has ended.

 

The Ministry of Corporate Affairs, Government of India has earlier vide its General Circular No.15/2015 dated 31/11/2015, extended the last date for filing the Annual Returns by 30 days and relaxed the additional fees for the forms filed till December 31, 2015. This has ended now.

 

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SEBI relaxes listing, fund-raising norms for startups

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In a major boost for startups, capital markets regulator SEBI has relaxed its regulations for them to list and raise funds through a dedicated platform on domestic stock exchanges, rather than going overseas. Under the new norms approved by SEBI’s board, the stock exchanges would have a separate institutional trading platform for listing of startups from the new age sectors, including e-commerce firms, while the minimum investment requirement would be Rs 10 lakh.

For their listing, SEBI has relaxed the mandatory lock-in period for the promoters and other pre-listing investors to six months, as against three years for other companies. Besides, the disclosure requirements for these companies have also been relaxed, SEBI Chairman U K Sinha told reporters after the board meeting.

At least 25 per cent of their pre-issue capital would need to be with institutional investors for technology startups, while this requirement would be 50 per cent for companies from other areas. Sinha said “Indian startup space is very vibrant and the country is ranked number five as far as startups are concerned. More than 3,100 startups are there in the country and a large number of M&As have also happened.” “However, most of these startups were thinking of listing outside. We have made a very special provision for startups,” he added.

According to PTI, under the new norms, 75 per cent shares can be reserved for institutional investors, while allocation can be on discretionary basis for such investors. For non-institutional categories, it will be on proportional basis.

SEBI has also provided for reclassification of promoters as public investors provided they let go all their special rights, including voting powers, and do not own more than 10 per cent stake. However, an outgoing promoter can serve as a CEO or hold other senior positions for up to three years if the same is approved by the company’s board.

Source: http://yourstory.com/2015/06/sebi-startups-funding/

Integrated e-Form INC-29 for Company Incorporation and Ease of doing business

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INC 29Analysis of integrated e-Form INC-29 for Company Incorporation and Ease of doing business

With the introduction of the INC-29, the Ministry of Corporate Affairs (MCA) has begun to make good on its promise to improve India’s ranking on the World Bank’s Ease of Starting a Business Index to within the top 50 from the current 158.

The INC-29 form for company registration, combines the application for DIN allotment, name reservation, incorporation and even PAN & TAN, while making the process faster and simpler. As the entire incorporation process is in a single form, correct filing could mean approval in 48 hours. Compared to the old process, this helps in formation of company saving a lot of time, if properly implemented.

Purpose of the eForm – eForm INC-29 deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This eForm is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the eForm is processed and found complete, company would be incorporated with Corporate Identification Number (CIN) and the Certificate of Incorporation would be issued. Also DINs gets issued to the proposed Directors, who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for allotment of DIN while incorporating a company.

Key Features of e-form INC-29 

  1. The integrated e-Form INC-29 is available with effect from 01.05.2015 for One Person Company, Private Company as well as Public Company.
  2. INC-29 does away with filing of multiple applications/forms saving time and payable fees.

It combines the processes relating to:-

  • Allotment of Director Identification Number (DIN) (up to three Directors),
  • Incorporation of a company, and
  • Appointment of first Directors of the company.

3. The new e-Form does away with the need for reserving a name for the company prior to applying for its incorporation.

  1. Declarations are in-built in the e-Form. Separate attachments containing such declarations are not required.
  1. The e-Form is enabled for future integration with e-Biz platform of DIPP for generating applications for PAN, ESIC and EPFO numbers on the platform and therefore provides a single interface for these applications also.

 

Forms no longer to be filed individually as per the new Form INC 29:

Continued

Government wants to reduce time for registering company

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During the past one year, Corporate Affairs Ministry has taken a number of steps, and is further streamlining processes and regulatory framework, to reduce the overall time taken for incorporating a company as a part of ‘ease of doing business’ effort, Finance Ministry has said.
The Government of India proposes to bring down the average number of days required for incorporating a company to one to two days, a move aimed at further improving ‘ease of doing business’ in the country.

During the past one year, Corporate Affairs Ministry has taken a number of steps, and is further streamlining processes and regulatory framework, to reduce the overall time taken for incorporating a company as a part of ‘ease of doing business’ effort, Finance Ministry said in a statement.
As a result of the many steps, the average number of days taken for incorporation of a company has come down significantly from 9.57 days in December, 2014 to 4.51 days in November, 2015.
“It (Ministry of Corporate Affairs) is targeting that the average number of days would be further reduced to one to two days for approval in normal cases,” the statement said.

Giving details of the step, it said the introduction of an Integrated Incorporation Form INC29 and tighter monitoring of Registrar of Companies’ (ROCs’) performance has resulted in faster approvals and lesser number of clarifications being asked from the stakeholders.
The Corporate Affairs Ministry will soon introduce a new version of Form INC29, incorporating suggestions received from the stakeholders, allowing up to five directors to be appointed and greater flexibility in proposing a name for a company, it said.

“This will allow an even more wider use of this integrated Form, which is already gaining popularity,” the statement added.

Further, the rules with regard to reserving and approving of names for companies are also being simplified, and a centralised new process will be introduced soon for strictly time bound approval of names for companies.

Source: http://www.dnaindia.com/money/report-government-plans-to-reduce-average-time-for-registering-a-company-to-1-2-days-2154784

Punishment for Contravention on defaults relating to deposits

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Punishment for Contravention of Section 73 and Section 76 of Companies Act, 2013 for Acceptance of Deposits by Companies [New Section 76A inserted]

 

The Companies (Amendment) Act, 2015 has inserted a new Section 76A after Section 76 which introduces penal provisions for contravention of provisions of Section 73 and Section 76 (pertaining to acceptance of deposits by a company) or rules made thereunder, or if a company fails to repay deposits within the time specified.

As per the amended law:
A company, if it fails to repay deposits within the specified time, shall be punishable with a fine which shall not be less than Rs.1 crore but which may extend to Rs. 10 crores, in addition to the payment of the amount of deposit or part thereof and the interest due.
Every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with a fine which shall not be less than Rs. 25 lakhs but which may extend to Rs. 2 crore, or with both.
Thus, specific punishment is prescribed for non-compliance to norms governing deposits taking activities.