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SEP 13, 2016

Relaxation of Additional Fee for Filling Form Iepf-1 and MCA Notified The Companies (Mediation and Conciliation) Rules, 2016 and Certain Provisions of The Companies Act, 2013 and Amendment To Schedule V

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General Circular for relaxation of additional fees for filling Form IEPF-1

MCA vide General Circular No. 10/2016 dated September 07, 2016, has provided relaxation to the Companies with due date of filing of Form 1- INV falling between the period March 25, 2016 to September 06, 2016. Such Companies may file new Form IEPF-1 (replaced Form 1-INV) as prescribed under Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, without additional fees on or before October 06, 2016. Further, the Companies whose due date do not fall under the above period and have also not filed the requisite information in Form 1 INV can file the information in Form IEPF-1 without any relaxation.

Click here to download the Circular

Notification to the Companies (Mediation and Conciliation) Rules, 2016

MCA vide notification dated September 09, 2016 has notified the Companies (Mediation and Conciliation) Rules, 2016 which shall be effective from September 09, 2016.

Key highlights of the rules are given below:

Formation of Panel

  1. The Regional Director to prepare panel of experts to be called as ‘Mediation and Conciliation Panel’.
  2. Any person fulfills the criteria may apply to the Regional Director for empanelment.
  3. A person may, suo motu, withdraw his name from the panel, or Regional Director may also delete the name of the person from the panel after giving opportunity.
  4. If any matter is referred for mediation or conciliation, a person from the panel will be appointed as mediator or conciliator.
  5. Any person appointed as mediator or conciliator in any matter will be independent or impartial to the matter referred to him.

Referring the matter to Mediation and Conciliation Panel

  1. Any matter pending before the Central Government, Tribunal or Appellate Tribunal under the Companies Act, 2013 may be referred by the parties to such Central Government, Tribunal or Appellate Tribunal.
  2. Central Government, Tribunal or Appellate Tribunal will appoint one or more persons from the panel as mediator or conciliator.
  3. The mediator or conciliator so appointed will dispose of the proceedings and refer the recommendations to Central Government, Tribunal or Appellate Tribunal, within three months from the date of appointment subject to the extension of further period of three months with the approval of Tribunal or Appellate Tribunal.
  4. The mediator or conciliator will fix the dates and time of session where all parties have to be present.
  5. The parties to the mediator or conciliator may be present in person or through authorized representation or counsel.
  6. All the proceedings under mediation or conciliation will be confidential and no recording is allowed.
  7. If any party fails, willfully or deliberately, to be present in two consecutive sessions, the mediation or conciliation will be failed.
  8. The mediator or conciliator will keep all the information furnished by the respective parties private and confidential. He is not allowed to disclose or divulge such information to the Tribunal or Appellate Tribunal or any other authority or any person.

    Even the communication between mediator/ conciliator and Central Government, Tribunal or Appellate Tribunal will be restricted only to few information such as attendance or failure of any party, consent of the parties to any settlement or failure to reach to any settlement.
  9. During the pendency of mediation or conciliation, the subject matter will not be referred to arbitration or judicial proceeding.
  10. In case of reaching to the settlement, the settlement agreement will be signed by the parties and the mediator or conciliator along with his covering letter will submit the settle agreement to the Central Government, Tribunal or Appellate Tribunal as the case may be. Even if no settlement is approved or possible, the same also be reported to the Central Government, Tribunal or Appellate Tribunal.
  11. The expenses of the mediation or conciliation will be borne by the parties or as may be decided by the Central Government, Tribunal or Appellate Tribunal.
  12. The matters regarding inspection, investigation, fraud, forgery or fabrication of documents or offences in the nature of criminal or non-compoundable, will not be referred to mediation or conciliation.

Click here to download the Notification

Notification of certain Sections of the Companies Act, 2013

MCA vide notification dated September 09, 2016 has notified the following Sections of the Companies Act, 2013, which shall be effective from September 09, 2016:

SL. NO. SECTION PARTICULAR
1. Sec 227 Legal advisers and bankers not to disclose certain information
2. Sec 242(1)(b) Power of Tribunal
3. Sec 242 (2)(c ) &(g) Power of Tribunal
4. Sec 246 Application of certain provisions to proceedings under Section 241 or Section 245 of the Companies Act, 2013
5. Sec 337 Penalty for frauds by officers To the extent of their applicability for Section 246 of the Companies Act, 2013
6. Sec 338 Liability where proper accounts not kept
7. Sec 339 Liability for fraudulent conduct of business
8. Sec 340 Power of Tribunal to assess damages against delinquent Directors, etc.
9. Sec 341 Liability under Section 339 and 340 to extend to partners or Directors in firms or Companies.

Click here to download the Notification

Amendment to the Schedule V of the Companies Act, 2013

MCA vide notification dated September 12, 2016 has amended the Schedule V of the Companies Act, 2013.

Key highlights of the amendment are stated below:

Sl. No. Where the effective capital is Limit of yearly remuneration payable shall not exceed (Rupees)
(i) Negative or less than 5 Crores 60 Lakhs
(ii) 5 Crores and above but less than 100 Crores 84 Lakhs
(iii) 100 Crores and above but less than 250 Crores 120 Lakhs
(iv) 250 Crores and above 120 Lakhs plus 0.01 % of the effective capital in excess of Rs. 250 Crores.

Provided that the above limits shall double if the resolution passed by the shareholders is a special resolution. Further the requirement of passing a special resolution both in the case of payment of normal remuneration and double the limits specified, in the aforesaid table has been removed. Now for payment of remuneration in accordance with the aforesaid table, ordinary resolution is required and in case the Company want to double the limits, special resolution required.

  1. In case of inadequate profits or losses, the Company is required to pay remuneration in accordance with the limits prescribed under item (A) of section II part II of schedule V of the Companies Act, 2013. Now, the limits as mentioned in item (A) has been made double and the new limits will be read as follows:-
  2. Further, the Ministry of Corporate Affairs has given exemption from the approval of central government for payment of remuneration to professional directors (Whole Time Director, Managing Director and Manager) in excess of the limits mentioned in schedule V of the Companies Act, 2013 subject to the below conditions:-
    1. Such managerial person is not having any interest in the capital of the company or its holding company or any of its subsidiaries directly or indirectly or through any other statutory structures. However, holding shares of the company not exceeding 0.5% of its paid up share capital under any scheme formulated for allotment of shares to such employees including employees stock option plan or by way of qualification will not be considered any interest in the capital.
    2. Such managerial person is not having any direct or indirect interest or related to the Directors or Promoters of the Company or its holding Company or any of its subsidiaries at any time during the last two years before or on or after the date of appointment and
    3. Such managerial person possesses graduate level qualification with expertise and specialized knowledge in the field in which the Company operates.

Click here to download the Notification