CAIRR Update December 21, 2020

December 21, 2020

Summary of the Notification and Order issued by MCA on 17/12/2020 and 18/12/2020

1. MCA notifies applicability of Companies (Auditor’s Report), Order 2020 with effect from FY 2021-22

The Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2021-2022 instead of being applicable from the already revised timeline of FY 2020-2021, as notified earlier.

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2. MCA amends provisions with respect to online assessment exam to be cleared by the Independent Directors under the Companies Act, 2013

Through this amendment, the Independent Directors-

i. shall pass an online proficiency self-assessment test conducted by the institute, obtaining a minimum of 50% (as against 60%) in aggregate, within a period of 2 years (as against 1 year) from the date of inclusion of one’s name in the data bank

ii. are not required to take the online proficiency self-assessment test when he has served for a total period of not less than 3 years (as against 10 years) in the prescribed list of entities as on the date of inclusion of one’s name in the data bank

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3. MCA notifies the procedure to purchase shares from minority shareholders holding shares in DEMAT form under Companies Act, 2013

Through this amendment to Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the company shall within two weeks from the date of receipt of the amount equal to the price of shares to be acquired by the acquirer shall notify the minority shareholders through necessary means, including publishing of such notice in the newspaper, indicating the cut-off date by which the shares shall be debited from the minority shareholders’ accounts and instruct the Depository accordingly to initiate the necessary action towards transfer of the minority shares to the DEMAT account of the Company.

Upon debiting the shares from the minority shareholders’ accounts, the Company shall immediately disburse the price of the shares so transferred and inform the depository to transfer the shares of such shareholders, kept in the designated DEMAT account of the company, to the DEMAT account of the acquirer.

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These amendments are available for reference on our free to use website www.ca2013.com for your quick reference.