MCA vide notification dated 19th January 2015 has amended the Companies (Appointment and Qualification of Directors) Rules 2014 and the Companies (Corporate Social Responsibility Policy) Rules 2014. The details of the amendment are outlined below:

Amendment in the Companies (Corporate Social Responsibility Policy) Rules, 2014

In rule 4, in sub-rule (2), following shall be substituted

(i) for the words “established by the company or its holding or subsidiary or associate company under section 8 of the Act or otherwise’, the words “established under section 8 of the Act by the company, either singly or alongwith its holding or subsidiary or associate company, or alongwith any other company or holding or subsidiary or associate company of such other company, or otherwise shall be substituted;

(ii) in the proviso, in clause (i), for the words “not established by the company or its holding or subsidiary or associate company, it", the words “not established by the company, either singly or alongwith its holding or subsidiary or associate company, or alongwith any other company or holding or subsidiary or associate company of such other company” shall be substituted.

Existing rule 4(2)

(2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through a registered trust or a registered society or a company established by the company or its holding or subsidiary or associate company under section 8 of the Act or otherwise:

Provided that –

(i) if such trust, society or company is not established by the company or its holding or subsidiary or associate company, it shall have an established track record of three years in undertaking similar programs or projects;

(ii) The company has specified the project or programs to be undertaken through these entities, the modalities of utilization of funds on such projects and programs and the monitoring and reporting mechanism

Note:

The amendment is important in the sense the Companies can now also undertake CSR activities through trust, society or section 8 company, established by some other company for the similar purpose. So unrelated companies can also form such entities together for the purpose of incurring the CSR expenditure.

Amendment in the Companies (Appointment and Qualification of Directors) Rules, 2014

In rule 16, the following proviso shall be inserted, namely:-

“Provided that in case a company has already filed Form DIR-12 with the Registrar under rule 15 a foreign director of such company resigning from his office may authorise in writing a practising chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign Form DIR-11 and file the same on his behalf intimating the reasons for the resignation.

Existing rule 16

16. Copy of resignation of director to be forwarded by him. – Where a director resigns from his office, he shall within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR-11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

Note:

Though the amendment provides for filing of DIR-11 after the filing of DIR-12 but some instances has been reported where in case of resignation, the system is not accepting DIR-11 in case the DIR-12 has been filed first.