CAIRR update 19 Aug, 2019

Summary of Notifications in the Companies Act, 2013 and IBBI Code, 2016 are listed below:

1. IEPFA (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019 w.e.f., 20.08.2019 except for rule 6(i),(iv),(v),(vi),(vii),(viii) effective from on 20.09.2019- issued on 14.08.2019:

   i. Rule 5 is amended, wherein companies which have transferred any amount to IEPF under the Companies Act, 1956 but have not filed the statement or have filed the statement in any format other than in the specified excel template, shall file the same in Form No- IEPF- 1A along with excel template within sixty days of this notification.
   ii. Rule 6 is amended, which requires every company to send a statement to the Authority in Form No. IEPF-4 within thirty days of transferring the shares to IEPF for which dividend is not claimed or paid for seven consecutive years or more.
   iii. Rule 7 is amended, which provides that upon submission for refund to claimants in Form IEPF- 5 the same shall be transmitted online to the Nodal Officer of the company for verification of claim. The rule now specifies that the Nodal Officer shall be a Director or Chief financial Officer or Company Secretary of the company.
   iv. The Schedule II (Documents to be submitted to the Authority to register transmission of securities), Schedule III (Documents to be submitted to the Authority in case of loss of securities held in physical mode) and Schedule IV (Procedure to be followed while disposing the claims) have been inserted. Read more…

2. The Companies (Share Capital and Debenture) Amendment Rules, 2019 issued on 16.08.2019:

   i. Rule 4(c ) has been substituted which required the companies limited by shares not to issue equity shares with differential rights as to dividend, voting or otherwise, in excess of 26% of the total post-issue paid-up equity share is now revised to ‘74% of total voting power at any point of time’.
   ii. Rule 12(1) is amended to extend the exemption period for start-up companies, for issue of Employee Stock Options to ‘its employee who is a promoter or a person belonging to the promoter group or a director who either himself or through his relative or through anybody corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company’ from five years to ten years from the date of its incorporation or registration.
   iii. Rule 18(7) has been substituted to revise the limits for maintaining the debenture Redemption Reserve (DRR) and investments or deposits. No DRR is required to be maintained by NBFCs registered with RBI and Housing Finance Companies registered with National Housing Bank in case privately placed debentures are issued. Read more…

3. The Insolvency and Bankruptcy Code (Amendment) Act, 2019 issued on 16.08.2019:
   In line with the IBBI (Amendment) Act, 2019 issued on 5^th August 2019 the Insolvency Board notifies that the provisions of this Act shall come into force with effect from 16^th August 2019. Read more…