MCA has further simplified the provisions of the Companies Law with respect to the remuneration to the Managing/Whole time Directors. Pursuant to latest updation in this respect, listed companies and their subsidiary companies, not having adequate profits and who seek to remunerate the managerial person in excess of Rs. 4,00,000/- per month, are not required to obtain sanction of Central Government, subject to the following:

Prior to this Circular, all the listed companies and its subsidiaries not having profits or having inadequate profits had to obtain prior permission from Central Government in case the managerial person was to be paid in excess of Rs. 4,00,000/- per month.

In view of above, in Schedule XIII, Part II, Section II, Sub Para (C), following proviso is inserted after fourth proviso:

“Provided that no approval of the Central Government is required if the managerial person is not having any interest in the capital of the Company or its holding company, directly or indirectly or through any other statutory structures and not having any direct or indirect interest or related to the directors or promoters of the company or its holding company at any time during the last two years before or on the date of appointment and is having a graduate level qualification with expert and specialized knowledge in the field of his profession.”

Further, after explanation VI to the Section II in Part II of Schedule XIII, following shall be inserted:

“Explanation VII: For the purpose of Section II of this part, “Statutory Structure” means any entity which is entitled to hold shares in any company formed under any statute”.

The amendment, besides other things, will ensure professional representation in the management of the Company which definitely is in the best interest of the stakeholders.

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• GSR_15july2011
• Circular_46-2011_14july2011

General Circular No: 47/2011 dated 14.07.2011]

The Circular has been issued in furtherance to the Ministrys General Circular No. 08/2011 dated 25.03.2011.

The previous circular exempted following Directors, viz:

• 
  Nominee directors Securities and Exchange Board of India or
• Government nominated Directors in PSUs or
• Nominated by public sector financial institutions having participation in equity or
• Directors nominated by the Government u/s 408 of the Companies Act,
  

from the liability for any act of omission or commission by the company or by any officers of the company which constitute a breach or violation of any provision of the Companies Act, 1956, and which occurred without his knowledge and without his consent or where he acted diligently in the Board process.

Vide the present circular, the nominee director on behalf of Public Financial Institutions, Financial Institutions and banks, on the board of companies, have also been included to be exempted as above.

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• Circular_47-2011_14july2011

[Notification dated 14.07.2011]

The Ministry introduced Companies (Central Governments) General Rules and Forms (Amendment) Rules, 2011 to be effective from 24.07.2011.

The Amendment Rules shall have the effect of following changes in the Companies (Central Governments) General Rules and Forms, 1956:

• The fees for Form 1A has been increased to Rs. 1000/-
• Instead of the Company providing for the information as to whether the changed name or the proposed name is undesirable under Section 20, the Registrar shall cause to examine the application as to whether the changed name or the proposed name is undesirable under Section 20.
• In case the name is undesirable, Registrar may reject the application or ask for resubmission or additional information, within 3 days of receipt of application. Opportunity of resubmission, by Registrar, may be given for not more than two chances after which the application shall be rejected.
• If the application is certified by a practicing CA/CS/CWA, the application will be processed and approved online.
• In case the name is approved by the Registrar, the same shall be adopted by the promoters/ company within 60 days of such approval as against 6 months according to the Rules prior amendment. Further, no extension is allowable.
• Names approved prior to these amendments, shall lapse after the expiry of 60 days from the date of their approval and further 30 days, if renewed.

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• GSR(E)_14july2011