Recent Amendment (2019)

4. The Companies (Significant Beneficial Owners)
Amendment Rules 2019
Who shall disclose?
Every individual, who acting alone or together, or
through one or more persons or trust, possesses
one or more of the following rights in a company
shall be deemed to be a significant beneficial
owner (SBO):
holds indirectly, or together with any direct
holdings, at least 10% of the shares or voting
rights;
has the right to receive or participate (by virtue of
their indirect and/or direct holdings) in not less
than 10% of the total distributable dividend or any
other distribution; or
has the right to exercise significant influence or
control (through their indirect holdings only) on
the company.
What needs to be done?
To send notice of this requirement to all
non-individual members who hold not less
than 10% of its Shares, or voting rights, or
right to receive or participate in the
dividend or any other distribution payable in
a financial year seeking information in Form
BEN-4.
The company to identify any such individual
who is an SBO and obtain a declaration of
significant beneficial ownership in Form No.
BEN-1.
Non-applicability of this requirement:
These rules shall not apply if the shares of a reporting
company are held by the following entities:
Investor Education and Protection Fund
Holding Reporting Company of the Reporting
Company
the Central Government, State Government or any
local Authority
any entity controlled by the Central Government or
by any State Government or Governments or partly
by the Central Government and partly by one or
more State Governments;
Investment Vehicles such as mutual funds,AIF, REITs
,InVITs regulated by the Securities and Exchange
Board of India;
Investment Vehicles regulated by Reserve Bank of
India, or Insurance Regulatory and Development
Authority of India, or Pension Fund Regulatory and
Development Authority.

5. Companies (Incorporation) Amendment Rules, 2019
Pre-requisites
The Company before filing Form INC 22A Active
shall ensure that it has filed the following
pending forms as may be applicable:
Form AOC-4- Filing of Financial statements for
the previous financial year;
Form MGT 7- Filing of Annual Return for the
previous financial year;
Form DIR 12 & MR 1 as may be applicable for the
purpose of appointment of whole-time CS. This
is mandatory for the Companies whose paid-up
capital is more than 5 Crore.
Applicability:
Every Company incorporated on or before the
31 December 2017 shall file the particulars of
the Company and its registered office, in e-
Form INC-22A ACTIVE (Active Company Tagging
Identities and Verification)
Non-Applicability
The following companies are not required to
filed Form INC 22A Active:
Companies which have been Struck off or
Under process of striking off or
Under Liquidation or
Amalgamated or
Dissolved
Consequences of non-filing
The Company will be marked as Active non-
compliant and MCA would not allow to file
the following forms unless the Form INC-
22A Active is filed:
Form SH-7 (Change in Authorised Capital)
Form PAS-3 (Change in Paid up Capital)
Form DIR-12 (Changes in Director except
cessation)
Form INC-22 (Change in Registered office)
Form INC-28 (Amalgamation, De-merger)

6. Requirement of filing of MSME Form-I
With a view to support the growth of and to protect the interest of MSME's, the MCA has issued a notification dated 22 January 2019,
mandating all the Specified Companies4, whose supply of goods or services from registered MSME and the respective payments to these
registered MSME suppliers exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services, shall file
the Initial Return in MSME Form I with Ministry of Corporate Affairs
Details required to be collected from the MSME suppliers before filing the return with the MCA
Following details are required to be collected from MSME for the purpose of filing the said form:
1.Certificate of Registration issued by the Ministry of Micro Small and Medium Scale Enterprises to the MSME to ensure that the concerned
entity is an MSME.
2.Financial years to which the amount relates
3.Name of the MSME
4.PAN of MSME
5.Amount due
6.Date from which amount is due
7.Total outstanding amount due as on date of notification of this order (i.e. 22 January 2019)
8.Reason for delay
Filing of Half yearly return
Every company who receive goods or services from MSME and whose payments to MSME suppliers exceed forty-five days from the date of
acceptance or the date of deemed acceptance of the goods or services as per the provisions of the MSME Act 2006 shall file the half yearly
returns for the period ended April to September and October to March every year.

7. Every Company shall have to file Form DPT 3
providing particulars of transaction that has
not been considered as deposit7 or both.
Thus, all companies other than Government
Companies will have to file Form DPT-3 also
for transactions that are listed under
Deposit Rules.
Further the companies in its annual financial
statements, are required to disclose about
the money received from Directors (in case
of companies other than private companies)
and money received from Directors or
relatives of Directors (in case of private
companies only).

8. Dematerialization
Dematerialization is the
process of converting Physical
Securities into electronic
format.
A Shareholder intending to
dematerialize its securities
needs to open a Demat
account with Depository
Participant.
Investor Deface and surrenders
his Physical Securities and in
turn gets Electronic Shares in
his Demat Account
The Ministry of Corporate
Affairs in its drive to enhance
transparency, investor
protection and corporate
governance, has
notified Companies
(Prospectus and Allotment of
Securities) Third Amendment
Rules, 2018 on 10th September
2018 effective from
02nd October, 2018
Every unlisted public company
with effect from 02nd October
2018 shall-
Issue its securities only in
dematerialized form; and
Ensure dematerialization of all
its existing securities
1Except:
This rule shall not apply to an
unlisted public company which
is:—
A Nidhi;
A Government company or
A wholly owned subsidiary of
public Company

9. Under the new amendment Act, in case the number of members falls below 2 in case of
private company and 7 in case of public company and they continue to carry on the business
for a period of 6 months or more; then the existing members would be liable for the whole
debts of the company and can be sued for any default made thereon.

10. Registered Office(Section 6): The company
can register its office from the date of
commencement or any changes required to be
made in a previously registered office can be
made within 30 days under the new
amendments Act (previously 15 days under
the Companies Act,2013)
Several Others
Granting Loans by Directors (Section 61):
Now, the directors have power to approve and
credit loans to any person, by the approval of
a special resolution passed in the general
assembly meeting, provided that the loans to
be utillised for the “Principal Business Activity”
(of the borrower)
Managerial Remuneration (Section 67): The
directors of the company are now allowed to
receive “managerial remunerations” as per
the recommendations made by the
shareholders of the company (earlier it was as
per Central governments norms and was
capped at 11% of the net profits of the firm).
New provisions of Punishment to Directors: The
ordinance promulgates financial penalty clause (removing
imprisonment) in case of fraud, benefitting from the
company’s funds, and formation of company for
charitable purpose etc. These acts will now be considered
as compoundable offences under the jurisdiction of
regional directors from Rs/- 5 lakhs to Rs/- 25 lakhs. So,
the punishment of imprisonment has been substituted for
penalty
Annual General Meeting (Section 26): The new
amendment allows the unlisted companies to hold
their meeting at any place in the country with the
consent of all the members. But, the provision
remains same for other companies; it is to be
conducted either in the headquarters or any
registered office. So, the new amendment gave
more freedom to unlisted companies.
Disqualification of Directorship: As per the
new ordinance, a person cannot be a director
of more than 20 companies, in case of any
default contravening the provision will lead to
termination of directorship.
Fulfilling Corporate Social Responsibility (CSR)
Obligations: As per the new ordinance, the companies
have a duty to fulfill their Corporate Social Responsibility
in compliance with the provisions of the Act and in case of
failure, reasons have to be presented to the Board.
Further the companies are required to open an “Unspent
CSR Account” and deposit unutilized funds of that
financial year towards fulfilling their CSR obligations.
De-clogging the National Company Law
Tribunal (NCLT): The Central Government
delegated NCLTs jurisdiction to the registrar of
companies and the regional director (up to
Rs/- 25 lakhs) for speedy trial of the corporate
disputes.
Declaration of Interest: If any member or
director holds more than 25% of beneficial
interest from the shares of the company,
he/she is required to make a declaration.
Failure to comply with it will lead to a fine of 1
lakh to 10 lakh rupees, or imprisonment for 1
year, or both.

11. The changes are advancement towards a new model of futuristic Companies Act by
removing uncertainties and inefficiencies of the old enactment. It has likewise adjusted the
ineffective provisions of the Companies Act, 2013 in conformity to Security Act and RBI
guidelines in the new Act. Therefore, we welcome this new model for advancement of
corporate governance.
Khushi Vijay
CRO0584428
Mobile No.- 8947982161
E-mail id:- khushi.vijay.2016@gmail.com