Companies Act 2013

In order to simplify and expedite (fast track) the company registration procedure in India, the Ministry of Corporate Affairs (MCA) has introduced an integrated incorporation form – Form INC-29. The process of getting Company Name Approval, Director Identification Number (DIN) and Incorporation application in Company Registration Form INC-29 has been merged into a single process that has accelerated the process of starting a company in India. The Ministry of Corporate Affairs (MCA) has introduced Form INC-29 to expedite the process of company registration in India. INC-29 is an integrated incorporation form and merges the process of obtaining the Director Identification Number (DIN), Name Approval, and Incorporation application into one single process. It is a single-window clearance for the incorporation of the company. The integration helps in reducing the time taken to start a company in India. Form INC – 29 is a single online application that can be used, and the company can reserve the name, incorporate the new company, and/or apply for the allotment of DIN. The Form is also accompanied by supporting documents and includes details of Directors & Subscribers, Memorandum of Association (MOA), Articles of Association (AOA), etc. On submission and approval of the Form, the company will be registered. This Form can be used for obtaining DIN for a maximum of three directors. Form INC-29 With eForm INC-29 you can apply for reservation of name, allotment of DIN, & incorporation of a new company in one go only. The supporting documents like details of Directors, subscribers, MoA & AoA, etc. attached with the eForm if found complete, would lead to company registration. Also, the proposed Directors have issued DINs, if they do not possess a valid DIN. However, there is an upper limit to the number of directors allowed for using the Form INC-29 for the allotment of DIN during the process of fast track company registration. In this case maximum of 3 directors can apply for the DIN through Form INC-29 during the incorporation process of the company where a minimum of 1 DIN is required or is compulsory for signature. Who can use Form INC – 29? The Form can be used by the following companies for registration: Private Limited Company One Person Company Public Limited Company Producer Company Procedure for Fast Track Company Registration using Form INC-29 Step 1 – Obtain Digital SignatureDigital Signature will be required as the company incorporation is now done online. Hence the first step is to obtain the Digital Signature for one of the proposed directors of the Company. Class III Digital Signature will be required for the same. This can be obtained from certifying authorities appointed by the MCA.To obtain the Digital Signature Certificate (DSC), the Class III DSC application form must be submitted along with a self-attested copy of the PAN card and address proof for resident Indians. NRI’s and foreign nationals would have to get their documents notarised if they reside in a non-Commonwealth country and apostilled if they reside in a Commonwealth country. Step 2 – Check availability of name of the CompanyThe name of the company must be carefully chosen and must be in accordance with the guidelines for naming a company as per the Companies Act 2013. Only one name can be given, and if rejected, it will add to the hassle of preparing many incorporation documents once again. The following must be kept in mind while applying for the name using INC – 29: Check if the proposed name is in the format that is required as per the Companies Act,2013. Confirm if any of the subscribers are carrying on the business in the same name as a Proprietorship or Partnership. Check if the proposed company name contains the name of any blood relative. Confirm if the proposed name requires any approval from a Sectoral Regulator like RBI/SEBI/Others. Check that the proposed company name is not similar or identical to the existing company name or LLP of a foreign company. Confirm if the name is not similar to a registered or filed trademark. Step 3- Drafting of MOA and AOAOn approval of the name by the MCA, further definition of the proposed company will be required by the MCA. These will be provided through the MOA and AOA. Both documents need to be self-attested. Step 4- Documents to be attached to INC-29The following documents are required to be prepared/signed by the Directors/ Subscribers and attached to Form INC – 29: Memorandum of Association (MOA) Articles of Association (AOA) Affidavit and declaration by First Subscribers and Directors Registered Office Address Proof – Rental Agreement/ Sale Deed Copy of utility bills which are not older than two months Step 5 – Filing of INC -29Form INC- 29 can be prepared as follows:a) Directors cum Subscribers who have a Director Identification Number (DIN) – If there are Directors cum Subscribers who already possess the DIN, then the same must be inputted in the appropriate field.b) Directors cum Subscribers who do not have a Director Identification Number (DIN) – In there are no Directors cum Subscribers possessing the DIN, then the DIN application can also be made in the Form INC-29 by submitting the following documents and information: Details relating to the person, education, and occupation PAN Number in case of Director being an Indian National In the case of Foreign National – Passport Number The email address of the Director Address details of the Director Proof of Address – Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement Identity Proof – Aadhar card/ Passport/Driving License/ Voters Id. The form needs to be carefully filled, and the RoC and stamp duty must be paid electronically. Step 6 – Verification by ROC & Issue of Certificate of IncorporationThe documents will be verified by the ROC. If modifications are required, then the same will be notified. If everything is in order, then the Certificate of Incorporation will be issued within 7 to 8 working days. The Digital Certificate will be mailed to the directors. FAQs What is Form INC-29? Form INC-29 is a single application form introduced

Section 108 of Indian Companies Act 2013 contains provisions for ‘Voting through electronic means’,  Section 109 of Indian Companies Act 2013 contains provisions for ‘Demand for poll’ and Section 110 of Indian Companies Act 2013 contains provisions for ‘Postal ballot’.Section 110 of the Indian Companies Act, 2013 contains the provisions of the ‘postal ballot’, Section 109 of the Indian Companies Act, 2013 contains the provisions of ‘Demand for poll’, and Section 108 of the Indian Companies Act, 2013 contains the provisions of ‘Voting by Electronic means’ Section 110 of the Companies Act, 2013 According to the provisions of section 110 (1) of the Companies Act, 2013 read with Act 22 (16) of the Companies (Management and Administration) Act, 2014, the following business transactions shall be effected only by postal ballot:  amendment of the purpose of a memorandum of intent;  the modification of portions of the organization in respect of the insertion or removal of provisions, under subsection (68) of section 2, which are required to be included in company records to form an independent company;  to replace a registered office outside the local boundaries of any town or village as contemplated in subsection (5) of section 12;  a change in the purposes for which the company has raised money from the public through the prospectus and still has any potential expenditure on money collected under subsection (8) of section 13;  the issuance of shares with different voting rights or shares or otherwise under subsection (ii) of subsection (a) of section 43; exceptions to rights relating to the category of shares or dues or other securities as defined under section 48;  repurchase of shares by a company under subsection (1) of section 68;  directors’ election under section 151 of the Act;  the sale of all or all of the company’s operations as defined under subsection (a) of subsection (1) of section 180;  to provide a loan or extended guarantee or to provide security above the threshold referred to under subsection (3) of section 186 However, the following businesses are not transacted by postal ballot:  Ordinary business (in terms of section 102 (2) of the Act:  The following matters are considered at the annual general meeting:  Review of financial statements and board report and auditor report;  dividend declaration; appointments of directors; appointment and fixing of auditor’s remuneration Any business in which directors or auditors are entitled to be heard at any meeting (directors are entitled under section 169 (3) and Auditors under sections 140 (1) and 146) However, the ordinary business as mentioned can be done through the e-voting process. Section 109 of the Companies Act, 2013 The Legislature’s experience of the Demand for Poll, Section 109 seeks to bring about the declaration of the result of the vote on any such ‘raising of hands’. It complies with ‘sections 179, 180, 184, and 185’ of the Companies Act, 2013. This clause also provides that applicants may withdraw an unchanging request/demand. To this end, the chairperson of the Assembly shall appoint an inspector who will monitor the votes cast in the survey and report on them and the voting process. In addition, the conference’s hearing about that decision was taken as a result of voting. The chairperson will take control of how the voting will take place. In the case of a Demand for Poll, subsection (1) of section 109 aims to provide for the Chairperson of the Assembly alone or as required by a vote of the member, at any decision ‘by the raising of hands’ thereafter or by the announcement of the voting result. In addition, when using the ‘suo motu,’ such polling power is intended to be optional. If the stated number makes the demand for members, this decision is intended to be taken or finalized. There are estimated numbers of members responsible for applying for voting, which is as follows: – In cases where a registered company has a budget, by self-employed members or by the representative, where permitted, and with a power of not less than 1/10 of all voting power or shares in which the total amount is not less than 5 lakh rupees or such higher/larger amount much that can be planned has been paid/compensated; In cases where other companies by any member or members have attended in person or by the representative, where permitted, and not less than 1/10 of the total voting power. Any requirement to vote may be waived by the applicants, provided for in subsection (2) of the Act. Except a business where the survey (as required) is incomplete, it can be expected that any business can thrive without coming up with such a business of the desired survey results. Whenever the Appointment of the Chairperson of the Meeting or voting is required to be adjourned to the Meeting, voting shall be taken immediately. It will be taken within 48 hours of seeking the vote as the chairperson may direct it if it concerns any other question. The chairperson has the power to control the conduct of voting under subsection (6) of section 109. In this regard, this power falls within the other provisions of the section. In terms of Level 2 of the Secretary in terms of section 9.2, you have the power to allow any member to appear during the counting of votes at the Assembly. In the light of the votes cast in the survey, the referendum process, and the report, the Chairman of the Meeting shall appoint a company inspector at the Meeting. The outcome of the survey will consider the decision of the Assembly, depending on the solution. In addition, the chairperson will oversee the conduct of the survey. The result of the poll will be considered as a decision of the meeting by a decision taken to vote. Section 108 of the Companies Act, 2013 This section comes into force when voting on any decision or action to be taken at any company meeting. This section increases the desire for voting power by the company’s shareholders. Electronic voting gives members greater flexibility

Equity shares are the most common form of ownership in a company. They represent a proportional ownership in the company’s profits and assets. However, in recent times, there has been a growing trend in companies offering equity shares with differential rights. Equity shares with differential rights, also known as DVRs, are shares that have different rights attached to them than ordinary shares.   Meaning of Equity Share Equity shares are a crucial component of a company’s capital structure and are considered the most important type of stock for a company. The Companies Act, 2013 defines equity shares as a type of security that represents ownership in a company and provides voting rights to the shareholder. These shares can be traded on stock exchanges, and their value is dependent on the financial performance of the company.  Key Features of Equity Shares The following are the key features of Equity Shares: Represent Ownership: Equity shares represent ownership in a company and provide the shareholder with a portion of the company’s profits and assets. Voting Rights: Equity shareholders have the right to vote on important matters such as the appointment of directors, changes to the company’s articles of association, and major business decisions. Dividends: Equity shareholders are entitled to receive dividends declared by the company. The amount and frequency of dividends are determined by the company’s board of directors. Residual Claims: In the event of liquidation, equity shareholders are considered residual claimants and are entitled to any remaining assets after all debts and obligations have been satisfied. Transferable: Equity shares are transferable, which means they can be sold or traded on stock exchanges. Equity Shares with Differential Rights under Companies Act, 2013 Equity shares with differential voting rights (DVRs) are the kind of shares issued by a company that offers shareholders varying levels of the voting power. This means that some shareholders have more voting power than others and this can significantly impact the control and decision-making capabilities of the company. In India, the Securities and Exchange Board of India (SEBI) first introduced the concept of DVRs in 2000. However, they are not so popular in India. Companies can issue DVRs with different voting rights in two ways: Inferior Voting Rights: Under this scheme, a company can issue shares with fractional voting rights. For example, a shareholder may be given 1:5 rights, meaning they get 1 vote for every 5 shares owned. Superior Voting Rights: Under this scheme, a company can issue shares that offer multiple votes per share. For example, shareholders may be given 5:1 rights, which makes it 5 votes per share owned. Section 43 of the Companies Act, 2013 deals with the issuance of equity shares with differential rights. It states that a company may issue equity shares with differential rights, including the right to receive dividends, voting rights, or any other rights, in accordance with the rules prescribed by the central government. The central government, in turn, has prescribed the rules for the issuance of equity shares with differential rights through the Companies (Share Capital and Debentures) Rules, 2014. These rules set out the conditions and requirements that companies must follow when issuing such shares. Conditions to be complied with the company in this regard provision of Companies Act, 2013 Conditions for issuing shares with differential rights (Rule 4) Companies (Share Capital and Debentures) Rules, 2014: Only a company limited by shares can issue equity shares with differential rights as to dividend, voting or otherwise. Such company has to comply with the following conditions, namely:- The articles of association of the company authorize the issue of shares with differential rights; The issue of shares is authorized by an ordinary resolution passed at a general meeting of the shareholders. When the equity shares of a company are listed on a recognized stock exchange, the issue of such shares shall be approved by the shareholders through a postal ballot. Though with Companies (Amendment) Act, 2017 coming into force, any item of business required to be transacted by means of postal ballot, may be transacted at a general meeting by a company that is necessary to provide the facility to members to vote by electronic means under section 108). The shares with differential rights shall not exceed 74% of total voting power, including voting power in respect of equity shares with differential rights issued at any point of time; (MCA Notification G.S.R. 574(E) dated 16th August 2019 the company has not defaulted in filing financial statements and annual returns for three financial years immediately preceding the financial year in which it is decided to issue such shares. the company has no subsisting default in the payment of a declared dividend to its shareholders or repayment of its matured deposits or redemption of its preference shares or debentures that have become due for redemption or payment of interest on such deposits or debentures or payment of a dividend; the company has not been penalized by Court or Tribunal during the last three years of any offence under the RBI Act, 1934, the SEBI Act, 1992, the Securities Contracts Regulations Act, 1956, the Foreign Exchange Management Act, 1999 or any other special Act, under which such companies being regulated by sectoral regulators. The company has not defaulted: in payment of the dividend on preference shares or repayment of any term loan from a public financial institution or State level financial institution or scheduled Bank that has become repayable or interest payable thereon or dues with respect to statutory payments relating to its employees to any authority or default in crediting the amount in Investor Education and Protection Fund to the Central Government; Benefits of Equity Shares with Differential Rights Flexibility in Capital Structure: Equity shares with differential rights provide companies with the flexibility to raise funds without diluting the control of existing shareholders. Increased Voting Rights: Equity shares with differential rights allow companies to provide their promoters or founders with higher voting rights, enabling them to have better control over the company’s affairs. Reduced Dividend Payout: Equity shares with differential rights

Every company eventually needs more money to run it. This fund might be required both immediately and later. A short-term requirement can be satisfied by loans and advances. However, in the long run, it will demand more money. This can be done for a Private Limited Company by increasing the company’s authorized capital. Any changes to the structure must comply with the Act and the guidelines outlined in the Companies Act, 2013, since the Private Limited Company is regulated and governed by the Company Act. When a company is in its incorporation stages, one of the most important decisions that have to be made by the promoters is the amount of capital to invest in the company. As the business begins to pick up, the company may look to expand its operations, expand in size, scale or structure. To make that dream a reality, it may require the pumping in of more funds into the company, basically increasing the share capital of the company. Sometimes, the amount of capital required might surpass the limit of the authorised capital at the time. The authorised capital is the maximum amount of capital for which the Company can issue shares to the shareholders. As per Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is specified in the Memorandum of Association under the Capital Clause. A company may take the necessary steps required to increase the authorised capital limit in order to issue more shares, but it cannot issue shares exceeding the authorised capital limit in any case. What is Authorized Share Capital? The maximum number of shares that a company is allowed to issue to shareholders in accordance with its bylaws is known as authorized share capital. It’s possible that some of the capital has not been sold yet. The shareholders’ consent is required to change the authorized capital. According to Section 2(8) of the Companies Act, 2013, the Authorized Capital limit is stated in the Memorandum of Association under the Capital Clause. In order to issue more shares, a business may take the appropriate steps to increase the approved capital limit, but it may never issue more shares than the authorized capital limit allows. The MOA must be amended, however, if the company wants to raise the amount of allowed capital. What are the characteristics of authorized capital? When a company is formed and incorporated, the permitted capital is determined. The amount of approved capital will determine how much the ROC fees will increase. The MOA and AOA of a business must specify the authorized capital of the company. The nominal value of each share is based on the authorized share capital, which is the maximum amount of capital that a business can maintain. It can be changed at any time after the company is established. The permitted capital cannot be used to determine the Company’s net worth. A company is not required to issue shares equal to its authorized capital; instead, it may issue shares with a lower value. Procedure to Change the Authorised Capital 1. Amend the Articles of Association Determine if there is a provision in the current AOA that allows for changes in the authorized capital. If no such provision exists, amend the AOA following the guidelines outlined in Section 14 of the Companies Act, 2013. 2. Conduct a Board Meeting Send the meeting agenda to the directors at least 7 days prior to the meeting, to their respective registered addresses. Pass a Board Resolution to call for an Extraordinary General Meeting (EGM) and issue a notice as per Section 101 of the Act. During this EGM, present the altered clause on authorized capital in the Memorandum of Association for approval by passing an Ordinary Resolution, complying with the provisions outlined in Section 60 of the Act. Notify shareholders of the meeting details, including the agenda, date, time, and location. Specify the voting method to be used in the notice. Notify the auditors directors, & shareholders about the EGM. Ensure that the notice of the EGM is sent at least 21 days before the EGM date, unless consent from at least 95% of eligible voting members is obtained. Consent can be obtained electronically or in writing. 3. Hold the Extraordinary General Meeting (EGM) During the meeting, discuss the proposal to increase the share capital. Conduct a vote in a predetermined order to reach a decision. Once approval is obtained and the resolution is passed, attach the explanatory statement and increase the Authorized Capital. 4. File Forms with ROC (Registrar of Companies) File eForm SH-7 and eForm MGT — 14 (if applicable), along with the prescribed fees, with the Registrar within 30 days of passing the resolution. Form MGT — 14: File this form with the ROC within 30 days of passing the resolution. Submit the form on the MCA portal with the following information: Company information, including its CIN. Reason for filing the form. Dispatch date of the notice. Date of passing the resolution. Details about the resolution. DIN and Digital Signature, where required. Attach the following documents with Form MGT 14: Notice of the EGM and the Explanatory Statement required by Section 102 of the Companies Act, 2013. A certified copy of the EGM resolution. A copy of the new MOA. A copy of the new AOA (if it includes provisions for increasing authorized share capital). Form SH — 7: File this form with the ROC within 30 days of passing the resolution. Use the MCA portal and provide the following information: Company information, including its CIN. Resolution type. Meeting date. Reference to Form MGT — 14 with its Service Request Number (SRN). Details of the original authorized share capital and the new authorized share capital. Details on how the additional share capital will be allocated. Particulars of the Stamp Duty Fees Paid. Whenever possible, use digital signatures and DIN (Director Identification Number). Attach the following documents with Form SH 7: A certified true copy of the resolution for capital change. A copy

The Companies Act of 2013 is the law that governs each and everything regarding corporate entities. Corporate entities include one-person companies, private limited companies, subsidiary companies, holding companies, government companies, banking companies, public limited companies, limited liability partnership firms, etc. For every operation and management of these companies, a procedure has been prescribed under the Companies Act. To complete those procedures, certain forms under the Companies Act 2013 are given under this act. These forms can be with respect to company registration, change of address of the company, change of directors, the appointment of directors, director KYC, commencement of business, etc. What are the Key Forms Under the Companies Act 2013? Forms under the Companies Act 2013 that have been given to complete the various procedures. These forms under the Companies Act 2013 have their own importance, and it is really important to know about them, especially for those who have registered their entity under the Companies Act. Forms for the Incorporation of the Entity  INC-32 is for the preservation of the name of the entity  INC-33 concerns the Memorandum of Association of the company  INC-34 is for the Articles of Association of the company  INC-35 is a part of Spice+Part B, which is also known as the Agile-pro form INC-9 is a form for the declaration of the first director and the first shareholder of the company  INC-8 is the declaration of the professional person that all the directors comply with the law   Forms for the Compliance of the Company  ADT-1 is a one-time compliance which is related to the appointment of the auditor of the company which is one of the important forms under the Companies Act 2013  INC-20A is a form that needs to be filed within 180 days of the incorporation of the entity. This form is related to the commencement of the business.  If any of the directors of the company have an interest in another company, then they have to show that through Form MBP-1.  Through Form DIR-8, directors need to show that they are qualified enough to become the director of the company and not disqualified to become the director of the company.  MSME-1 needs to be filed only when there is a pending amount of the MSMEs from the last six months To show regarding the deposits which the company is not treating as deposits but as loans, the company needs to file DPT-3  AOC-4 needs to be filed within 30 days of the annual general meeting of the company  MGT-7 needs to be with respect to the board of meetings, committee meetings, shareholding transactions, etc within 60-days of the AGM  If any kind of change has been done or introduced in the company, then Form MDT-14 must be filed.  DIR-3 needs to be filed for the KYC of the directors of the entity.  If a company wants to return the deposits as loans, they need to fill out one of the forms under the Companies Act 2013, which is known as DPT-3 List of Important Forms Under the Companies Act 2013 Form Detail  Types of Forms  CRA-1 Cost record maintenance   Physical Form  CRA-2 Appointment of cost auditor  E-Form  CRA-3 This form is pertaining to the format of the cost auditor report  Physical Form  CRA-4 Filing of the cost auditor report  E-Form  INC-20A Commencement of the business activities E-Form  MBP-1 Declaration of interest by the directors of the company E-Form  SH-7 Change in the company’s authorised capital must be addressed to the ROC E-Form  STK-1 Companies name removal related notice  Physical Form  STK-2 Application of removal of the name of the company from the ROC by the company itself  E-Form  RSC-1 To confirm whether there is any reduction in sharecapital or not an application through this form will be made before the tribunal  Physical Form  PAS-3 Allotment of the shares Physical Form  ADT-1 With respect to the appointment of the permanent or temporary auditor of the company  E-Form  ADT-2 Through this form application for the removal of the auditor before the expiry of its tenure has been filed before the registrar of the companies  E-Form  ADT-3 With respect to the resignation of the appointed auditor of the company  E-Form  ADT-4 Tis this form company can report any suspected fraud by the auditor of the company to the central goverment directly  Physical Form  INC-1 Reservation of the name of the entity  E-Form  INC-3 Nominee’s consent-related form with respect to OPC  E-Form  INC-4 Change of the nominee of the OPC  E-Form  INC-5 Intimation by the OPC regarding exceeding the share capital of the company  E-Form  INC-6 OPC conversion into Pvt. Ltd. Company or Ptv. Ltd. Company into OPC  E-Form  INC-11  After the registration process, ROC issues an incorporation certificate through this form.  Physical Form INC-11A When the unlimited company was converted into a limited company then an incorporation certificate through this form was issued   Physical Form INC-11B When the company is limited by guarantee got converted into a company limited by shares, then an incorporation certificate through this form will be issued  Physical Form INC-13 MOA of the company  Physical Form INC-14  Declaration of professionals  Physical Form INC-15 Declaration of the person who is making application  Physical Form INC-16/17 Isuence of license for the section 8 companies which are a form of NGO  Physical Form INC-22 Change in the premises or registered address of the company  E-Form  INC-22A Verification of the companies which are active as well as their tagging  E-Form  INC-24 Application for the change with respect to the name of the company  E-Form  INC-25 After the name got changed a new certificate of incorporation got issued under this form  Physical Form INC-25A Advertisement regarding the conversion of a public company into a pvt. Ltd. company  Physical Form INC-26 Change in the registered address of the company from one state to another or one UT to another  Physical Form INC-27 Either transformation of public company into private or private company into public  E-Form  INC-28 Notice regarding or with respect to court as well as other competent authorities  E-Form  INC-32 Simplified proforma  E-Form  INC-33 e-MOA  E-Form  INC-34 e-AOA  E-Form  INC-35 Application for the GST Registration, ESI registration, PF Registration etc.  E-Form  RD-1

A company acquires the Dormant Company status when the Registrar approves an application in Form MSC-1 of Companies. There are several reasons why a company seeks dormant status. Please refer to our detailed discussion on the procedure to convert an active company as a dormant company; click here. A company can remain dormant only for up to five years, and if a company remains in dormant status beyond the five years, then the ROC shall strike off the company itself. Hence the company should apply to the ROC for obtaining the Active Company Status within five years from the date the company was declared to be a Dormant Company. In case of any event in breach of conditions for a dormant company, the company’s directors must apply for the restoration of the company as an active company within seven days of such event. The primary objective of the revisions made to the Companies Act 1956 was to have a simplified law that will be able to address the changes taking place in the national and international scenario, enable the adoption of internationally accepted best practices and also provide flexibility in response to the ever-changing business models. One such aspect which was introduced in the Companies Act 2013 was the concept of Dormant Companies in section 455 of this act. In common parlance, the word “Dormant” means inactive or inoperative. A dormant company is an excellent opportunity to start a company for a future project or hold an asset/intellectual property without having significant accounting transactions. On the other hand if a company has not filed its annual returns for two consecutive years then such a company will also be called as a dormant company. What is a Dormant company? A Dormant company is one that does not have: Been undertaking or carrying on any activity, Carrying out any accounting operations, Saved financial statement Previous two years financial returns report. The benefit of Dormant Company The inoperative company that does not do any business now can, by converting as a dormant company, continue as a going concern and remain valid as a legal entity for a future project or use. One of the objectives of converting an active company into a dormant company is to reduce the company’s compliance requirements under the Companies Act, 2013. Here is the list of advantages as a dormant company. To Protect the Company Name during inactivity Board Meeting to be held once in every six month To Reduce Regular Compliance Burden Option to Revive when the company has business Few provisions of the company act apply Simplified Annual Return Filing obtain the status of Dormant Company Suo-Moto (Voluntary): A company can apply Suo-Moto to the Registrar of Companies for ‘Dormant company’ status in Form MSC-1 along with the fee as specified in the Companies (Registration Authorities and Fees) Rules, 2014. ROC can declare a company a Dormant company; The Registrar can issue a notice to the company if the company has not filed financial statements or annual returns for two consecutive financial years. The ROC shall enter the name of such a company in the register maintained for companies that have acquired the status of dormant Company. The exemptions enjoyed by the Dormant companies Dormant companies do not contain cash flow statement in its financial statements. The provision on the rotation of auditors does not apply. Dormant Company status remains for five consecutive years. Fewer legal requirements apply, resulting in lower compliance costs. The company can revive and operate as it intends to in the future. To protect the interests and reputation of the independent trader. Stepwise Process To Convert an Active Company as Dormant STEP 1 – Convene Board Meeting The Board of Directors shall pass a resolution approving the filing of an application for conversion of the company’s status as Dormant Company in the Board Meeting. The Board shall also authorise one director to act on this behalf and send Notices to all shareholders for the Extra Ordinary General Meeting. STEP 2 – EGM Notice Issue appropriate Notice calling the EGM along with an explanatory statement, clearly stating the reasons as to why the Board of directors proposes a change in status of the company and as “Dormant Company STEP 3 – CA Certification of Statement of Affairs While the EGM is scheduled, the authorised director needs to work with the Statutory Auditor or a Chartered Accountant in practice for certification of the Company’s Statement of affairs (Financials). STEP 4 – Conduct of EGM On the designated EGM Date, the meeting of shareholders to be conducted per secretarial standards and with the requisite quorum, a Special Resolution approving the filing of an application for conversion of the status from Active to Dormant Company need to be passed. STEP 5 – Filing of MGT-14 Every special resolution passed in EGM needs to be filed with the Registrar of Companies in the prescribed form MGT-14 with the certified true copy of the resolution along with EGM Notice within 30 days of EGM. STEP 6 – Application for Change in Status After the MGT-14 is filed with the ROC, an application in the Form MSC-1 along with the scan copy of all resolutions, declarations, consent of creditors and CA Certificate is filed with the ROC for its approval. STEP 7 -Change of Status From Active to Dormant Company The registrar of companies examines the application made in MSC-1 and, if finds it in order, then issues a Certificate in form MSC-2. With the issue of the MSC-2 form the status of the company is changed as Dormant Company Reactivation of Dormant Dormant companies must file an application for the conversion of Dormant company status to active company status by filling MSC-4 form. The fees recommended under the Companies (Registration Authorities and Fees) Rules, 2014, should also be paid along with the application for conversion of a dormant company into an active company. The MSC-4 should be accompanied by the Dormant Company Return Form MSC-3. After reviewing the application as for

Nidhi Company, formed under Section 406 of the Companies Act, 2013, is a type of finance company that is formed for the mutual benefit of its members. It accepts deposits from its members and grants loans to them for different purposes. Nidhi companies must fulfill certain compliance requirements prescribed under the Companies Act, 2013, compliances of Nidhi Company are important To generate accurate insights about the performance and working of the company Every company which is registered under Companies Act, 2013 has to mandatory file the required compliances for the smooth operations of the business. Being a Public Company, Nidhi Company has to safeguard the interests of the stakeholders. Compliances for Nidhi Company One-Time Compliances A Nidhi Company has to fulfill the following requirements only once, known as one-time compliances.  Pre-Incorporation Requirements The following are the requirements for forming a Nidhi Company, that shall be fulfilled before incorporation –  Post-Incorporation Requirements For this purpose, Nidhi Companies are divided into the following two categories based on their date of incorporation –  Companies Incorporated Before Commencement of Nidhi (Amendment) Rules, 2022 Nidhi Companies that are incorporated before the commencement of Nidhi (Amendment) Rules, 2022 i.e., 19th April 2022, must comply with the following requirements within one year of their incorporation –  It shall have at least 200 members.  The Net Owned Funds of the company shall be equal to Rs. 10 lakhs or more  Unencumbered term deposits shall be a minimum of 10% of the outstanding deposits (as of the last working day of the 2nd preceding month) of the company.  The ratio of Net Owned Funds to Deposits cannot be more than 1: 20.  Companies Incorporated After Commencement of Nidhi (Amendment) Rules, 2022 Nidhi Companies that are incorporated on or after the commencement of Nidhi (Amendment) Rules, 2022 i.e., 19th April 2022, must comply with the following requirements within 120 days of their incorporation –  It shall have at least 200 members.  The Net Owned Funds of the company shall be equal to Rs. 20 lakhs or more.  However, according to Nidhi Rules, 2014, every Nidhi Company (irrespective of its date of incorporation) shall keep a minimum of 10% of its outstanding deposits (as on last working day of 2nd preceding month) as unencumbered term deposits with scheduled commercial bank or post office. In addition, a Nidhi Company can accept deposits only up to 20 times its Net Owned Funds (as per the latest audited financial statements).  Note – Net-owned funds represent the total sum of paid-up capital and free reserves, with adjustments made for accumulated and intangible assets as reported in the latest balance sheet.  Forms to be filed A Nidhi Company shall file the following forms after incorporation –  S. No.   Form No.  Form Type/ Purpose  Due Date  Authority with which form/ return is to be filed or application is to be made  1. NDH – 1  Return of Statutory Compliances  To furnish details regarding members, deposits, loans, reserves, etc. for the financial year  This form should be certified by Practising CA/CS/CMA  Note – Nidhi Companies incorporated on or after 19th April 2022 are not required to file this form.  Within 90 days from the end of the first financial year and wherever applicable, the second financial year as well  ROC  2. NDH – 4  Application for declaration as Nidhi Company Application by companies desirous of declaring themselves as a Nidhi Company Within 120 days of incorporation of the company Central Government  3. INC-20A  Declaration of Commencement of Business  Declaration by a Director that all the subscribers to the memorandum have paid the full value of their shares Note – This form should be certified by Practising CA/CS/CMA  Within 180 days of incorporation  ROC  4. ADT – 1 Appointment of Auditor  Within 15 days of the appointment of the auditor (The first auditor shall be appointed within 30 days of incorporation)  ROC  Other One-Time Compliances Apart from filing the above forms, a Nidhi Company shall fulfill the following requirements after its incorporation –  Conduct a board meeting within 30 days of incorporation.  Open a bank account of the company.  Issue share certificates within 2 months from incorporation.  Obtain registration under different applicable laws such as GST registration, Trademark registration, etc.  Printing of letterhead of the company containing details like name, registered office address, CIN, contact details, etc.    Annual Compliances A Nidhi Company shall comply with the following requirements every year.  Forms to be filed A Nidhi Company shall file the following forms on an annual basis –  S. No.   Form No.  Form Type/ Purpose  Due Date  Authority with which form/ return is to be filed or application is to be made  1. NDH – 3  Half Yearly Return  To furnish details regarding members, deposits, loans, reserves, etc. for each half-year  Note – This form should be certified by Practising CA/CS/CMA  For 1st April to 30th September – 30th October  For 1st October to 31st March – 30th April  ROC 2. AOC – 4  Annual Financial Statements  Within 30 days of holding of Annual General Meeting ROC 3. MGT – 7  Annual Return  Within 60 days of holding of Annual General Meeting or the due date of the Annual General Meeting, whichever is earlier ROC 4. DIR – 3 KYC Director KYC  30th September of each year ROC  5. DPT – 3 Return of Deposits  30th June of each year ROC 6. MBP-1 Disclosure of Interest by the Director to the Company  In the first board meeting of each financial year  – 7. DIR-8 Disclosure of Non-Disqualification by the Director to the Company  In the first board meeting of each financial year  – 8. ADT-1 Reappointment of Auditor or Casual Vacancy of Auditor In case of reappointment, within 15 days from the Annual General Meeting in which the Auditor is reappointed In case of a casual vacancy, within 15 days from the Extraordinary General Meeting in which a new auditor is appointed ROC  9. IEPF-2 Statement of Unpaid and Unclaimed Amounts if any Within 60 days of holding of

Every LLP incorporated needs to have a principal place of business activities called the registered office. The registered office of a LLP is that to which official correspondence and all formal legal notices addressed to the LLP will be sent. The registered office of a LLP can be situated anywhere in the India. In addition to a registered office, a LLP can have corporate office or administrative office or branch office. A LLP can change its registered office address within or outside the local limits of any city, town and village or from one State to another State. The notice of change of the situation of the registered office must be given to Registrar of Companies within 30 days. The amendment in the LLP Agreement is also required to be filed with the Registrar of Companies within 30 days of the change of registered office. What is Limited Liability Partnership?  Limited Liability Partnership (LLP) is a form of alternative corporate business structure that combines the advantages of a company’s limited liability with the flexibility of a partnership. Even if the partners change, the LLP can continue to exist. It has the ability to enter into contracts and own property in its own right. The LLP is a separate legal organisation with full accountability for its assets, but the partners’ liability is limited to their agreed-upon contribution to the LLP. Furthermore, no partner is liable for the autonomous or unauthorised activity of other partners; thus, individual partners are shielded from shared liability stemming from another partner’s illegal business decisions or fraud. An agreement between the partners, or in the case of an LLP, between the partners and the LLP, governs the reciprocal rights and obligations of the partners in an LLP. On the other hand, the LLP, as a separate entity, is not excused from responsibility for its other obligations. An LLP is referred to as a “hybrid” between a corporation and a partnership since it combines elements of both a “corporate structure” and a “partnership firm structure.” REGULATORY PROVISIONS:- Section 13(3) of LLP Act, 2008 and Rule 17 of LLP Rules, 2009 I. CHANGE OF REGISTERED OFFICE WITHIN THE SAME STATE/ WITHIN THE SAME OUTSIDE THE JURISDICTION OF SAME REGISTRAR 1. The partners need to check the LLP agreement, in case it provides for procedure for shifting the registered office of the LLP. In case no procedure is prescribed, obtain consent of all partners regarding change of registered office. 2. Filing of Form- 15 LLP with the Registrar of Companies having respective jurisdiction within 30 days of obtaining consent of all partners along with following attachments:- Proof of proposed address of registered office along with the no objection to use the premises as the registered office.Either ‘copy of the minutes of decision/ resolution/ consent of partners’ or ‘the extracts of the relevant provisions of the Limited liability Partnership Agreement’ is to be provided.3. A supplementary agreement with regard to such change shall be prepared. 4.Filing of Form-3 LLP within 30 days of change of Registered office along with following attachments:- Supplementary LLP AgreementOriginal LLP Agreement (optional)II. CHANGE OF REGISTERED OFFICE FROM ONE STATE TO ANOTHER 1. The partners need to check the LLP agreement, in case it provides for procedure for shifting the registered office of the LLP. In case no procedure is prescribed, obtain consent of all partners regarding change of registered office. 2. Obtain consent of secured creditors:- Publish a general notice, not less than 21 days before filing any notice with the ROC, in a daily newspaper published in English and in the principal language of the district in which the registered office of LLP is situated and circulating in that district, giving notice of change of registered office; Filing of Form-15 LLP with the Registrar of Companies having respective jurisdiction within 30 days of obtaining consent of all partners along with following attachments :- Proof of proposed address of registered office along with the no objection to use the premises as the registered office.Either ‘Copy of the minutes of decision/ resolution/ consent of partners’ or ‘the extracts of the relevant provisions of the Limited liability Partnership Agreement’ is to be provided.Enclose copies of public notice.Consent of secured creditor, if any.4. A supplementary agreement with regard to such change shall be prepared. 5. Filing of Form- 3 LLP within 30 days of change of Registered office along with following attachments:- Supplementary LLP AgreementOriginal LLP Agreement (optional)Further, it is important to note that both the forms i.e. Form 15 and Form 3 needs to be separately uploaded and accordingly, Different Challans shall be generated for both the forms. PRACTICAL ISSUES  :- There shall no physically filing of any documents like in the case of shifting of registered office of a Company.There is no prescribed format for public notice to be published in newspaper in the LLP Act and accordingly, the notice in case of shifting of registered office of an LLP shall be in format as provided in INC-26.The jurisdictional authority to order shifting of registered office is the Registrar of Companies onlyand no approval is required from the office of the Regional Director.It shall be mentioned in the Form 15 LLP whether there is any conviction, ruling, order or judgment of any court, tribunal or any other authority against the limited liability partnership and their particulars. Requirements before registering a Limited Liability Partnership (LLP) A minimum number of Two Designated Partners: Partners are the LLP’s owners and its managers, and they must be private individuals. Additionally, at least one of the partners must live in India. Maximum Number of Partners: The maximum number of partners for an LLP is unrestricted. The number of partners is hence unlimited. Pan Card: All partners must have their own PANs in order to proceed with becoming LLP partners; failure to do so will result in disqualification. Digital Signature Certificate (DSC): For at least one Designated Partner, a Digital Signature Certificate (DSC) is required: To digitally sign the e-forms necessary to create an LLP, at least

As per Section 62(1) of the Companies act, 2013 if the Company decides to issue fresh shares, these should be offered to existing shareholders in proportion to existing persons who are holders of equity shares. ‘Right Issue’ means offering shares to existing members in proportion to their existing share holding. The object is, of course, to ensureequitable distribution of Shares and the proportion of voting rights is not affected by issue of Fresh shares. Section 62(1) of the Companies Act, 2013 (‘CA, 2013’) to ‘Preference Shares’. First, it is necessary to know the scope of Section 62 of the CA, 2013 which provides for issue of rights shares to existing equity shareholders. It also provides for issuance of shares to employees under Employees Stock Option Scheme and issue of shares on Preferential Basis. Sub-section (4) to (6) relate to conversion of Loans granted/Debentures subscribed by the Central Government into shares of the company. Overview of Section 62 of Companies Act, 2013 Section 62 of the Act deals with the further issue of share capital in the company. A company that is limited by shares can increase its capital by issuing new shares according to the Articles of Association of the company. The companies usually do not issue all of their shares at once. They do so whenever there is a need for additional funds for the expansion, diversification, or modernization of the company. However, the directors of the company cannot issue shares at their discretion. If this power is given to them, they may misuse it by issuing and allotting the shares to their family members and relatives. In order to curtail this misuse, the Act under Section 62 provides certain conditions for the issuance of shares.  This Section provides for the further issue of shares that are to be first offered to the existing members of the company. These are known as right shares, and this right of the members is known as the right of preemption. Applicability of Section 62(1) of Companies Act, 2013 The meaning of Section 62 of the Companies Act, 2013, which provides for the issuance of rights shares to existing equity shareholders, must be understood. It also allows for the issuance of shares to employees through the Employees Stock Option Scheme and the issuance of shares on a preferential basis. Subsections (4) to (6) deal with the conversion of loans granted/debentures subscribed for by the Central Government into company shares. By virtue of the provisions of clause (a) of section 62(1) of the Companies Act, 2013, which speaks to offer to holders of equity shares, it may be inferred that issue of preference shares falls outside the ambit of this section. The opening part of section 62(1) of the Companies Act, 2013 generally refers to an increase in the subscribed capital of the company by allotment of further shares, without restricting the same to the equity shares. Since capital includes both Equity Share Capital and Preference Share Capital, it would appear that Section 62(1) of the Companies Act, 2013 would apply in the event of the issuance of additional shares (i.e., Preference Shares). Increase in subscribed capital According to Section 62(1), when a company having a share capital wants to increase its subscribed capital by issuing further shares, it can be done so following the procedure given therein. It provides a procedure for the issuance of rights shares, shares under the ESOP Scheme and shares that are given on the basis of preference.  Provisions related to right issue or rights shares Whenever a company wishes to increase its subscribed capital, it can do so by offering the shares first to the existing members of the company or to its members holding equity shares in proportion to the paid-up shares. These are known as “rights shares” and are given under Section 62(1)(a). In order to do so, the following conditions must be satisfied: The offer must be made by issuing a notice which specifies the number of shares offered.  It must contain a limiting time period which must not be less than 15 days and not exceed 30 days from the date of the offer. If the offer is not accepted within this time period, it will be deemed to have been declined.  The existing shareholder has the right to renounce the shares that are offered to him in favour of any other person unless the articles otherwise provide and so the notice will also contain a statement regarding this right as mentioned under Section 62(1)(a)(ii) of the Act.  After the expiry of the above-mentioned time period or if the shareholder declines to accept the shares offered to him, the board of directors will dispose of them in a manner which is not harmful or disadvantageous to the shareholder and the company. This is provided under Section 62(1)(a)(iii).  Exception When 90% of the members of the private companies have given their consent either in writing or in electronic mode then the lesser periods shall be applicable than those which are mentioned under these provisions. In the case of R. Khemka v. Deccan Enterprises (P) Ltd. (1998), it was held by the Andhra High Court that if a member or shareholder does not respond to the offers made by the company, it means that he is not inclined to subscribe to additional shares offered to him and thereby gives implied consent for the allotment of shares to others. Further, in the case of M.S. Madhusoodanan v. Kerala Kaumudi (P.) Ltd. (2003), the Supre Court held that if shareholders are not given the notice to apply for allotment of shares, then subsequent allotment of shares to others is invalid.  Benefits of Rights Issue Making a rights issue, compared to raising capital through a preferential allotment or private placement, provides the company with two additional advantages. First, unlike a private placement or preferential allotment, a rights issue does not require shareholder approval by special resolution. Second, the board of directors has absolute discretion in determining the price of the securities, which need

The board of directors are can be called the brain of the company. They are responsible for taking all the big decisions and making policy changes. These decisions are taken in special meetings members of the board hold together, called ‘Board Meetings’. Section 149 of the Companies Act states that every company’s board of directors must necessarily have a minimum of three directors if it is a public company. two directors if it is a private company and one director in a one person company. The maximum number of members a company can assign as directors is fifteen. However, the company can pass a special resolution in a general meeting to allow for assigning more than fifteen members to the board of directors. The maximum number of companies that an individual can become a director of, is 20 companies. At least one director, who has lived in India for a minimum of 182 calendar days of the previous year, shall be appointed by every company’s board. It is a mandatory rule. At least, one woman director must be appointed by the company.All listed companies must have at least one-third proportion of their board of directors as independent directors. Under LODR for Listed Companies(Listing Obligations and Disclosure Requirements) The members of the board shall have an optimum combination of executive and non-executive directors and at least one woman director. At least 50% of the board of directors must be non-executive directors. When the board chairman is a non-executive director, a minimum of one-third directors shall be made up of independent directors. In case of the board chairman being an executive director, a minimum of half of the board of directors shall comprise of independent directors. However, in case a non-executive chairman is a promoter of the said listed company or directly related to a promoter or a high-level manager, at least half of all directors will comprise of independent directors. Board of Directors and its Composition The board of directors can be knowns as the brain of the company as they are responsible for taking all the big decisions and making policy changes for the company. The decisions are taken in the special meetings members of the board held together, which meeting is known as ‘Board Meetings’. Section 149(1) of the Companies Act,2013 talks about the minimum and maximum number of directors in a company. The following points are in the section: The minimum number of directors in a Private Limited Company is 2; For the Public Company it is 3 directors; and, An OPC shall have a minimum of 1 director. However, the maximum number of directors a company have is 15. The no of directors can raise the number of directors beyond 15. And the change in the number of the director is by passing a special resolution in the general meeting. Structure of Board of Directors The size of the directors has certain limits as per a company as the minimum and maximum limit in its Articles of Association. Companies commonly have 3 to 31 directors. Following are some designations and positions common to a Board of Directors in public companies: Chairman of the Company: A chairman of a company leads the board and thus heads the committee or board meetings. The chairperson is elected by the votes of the Board of Directors. Generally, the company’s chief executive officer is the chairman. Executive Director of the Company: Executive director is an individual who takes active participation in the company’s administration, business procedures, sales, and finances. An executive director is a part of the board and also gets a salary for the company. Non-Executive Director of the Company: A non-executive director doesn’t belong to the organization but is a part of the board. Such directors provide critical opinions and advice by charging a certain fee. In addition, they give voice to stakeholders outside a firm. Managing Director of the Company: There are no restrictions on the number of directors in a company by law. A managing director is an individual whose selection is by the company’s executive directors for managing, guiding, and monitoring business functioning. Other designations in the company are: Vice Presidents, CFOs, treasurer, zonal head, vigilance chief, audit chief, etc., are some other designations common to a BOD. Composition of Board of Directors in a Listed Company According to Regulation 17 of Securities and Exchange of India (Listing Obligations and Disclosure Requirement) 2015, the following are the composition of the Board of Directors in a listed company: Board of directors shall have a mixture of executive and non-executive directors with at least one-woman director and not less than 50% of the board of directors shall constitute non-executive directors. If the chairperson of the board of directors is a non-executive director, then at least one-third of the board of directors shall constitute independent directors and if the listed entity has an executive chairperson, then at least half of the board of directors shall comprise of independent directors. Other Requirements for Composition The maximum number of companies that an individual can become a director of, is 20 companies. At least one director, who has lived in India for a minimum of 182 calendar days of the previous year, shall be appointed by every company’s board. It is a mandatory rule. At least, a one-woman director must be there in the company. All listed companies must have at least one-third proportion of their board of directors as independent directors. FAQs What is the maximum number of directors allowed on the board of a listed company? The maximum number of directors allowed on the board of a listed company in India varies depending on the company’s Articles of Association. However, the Companies Act, 2013, stipulates that a public company can have a maximum of 15 directors, which can be increased further by passing a special resolution. Are there any requirements regarding the independence of directors on the board of a listed company? Yes, as per the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, listed companies are required to have a certain percentage of independent directors on