Important updates in the Companies Act, 2013 during FY 2023-24

Amendments in the Companies Act, 2013 during the financial year 2023-2024

1. The Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023

In continuation of changes for the application for Strike off of the name of the Company, the following clarifications are made:

a. Before RoC Notice

The Company is to file only the Financial Statements & Annual Returns, up to the end of the FY  in which the company ceased to carry out its business operations; 

b. After RoC Notice

The Company is to file all pending financial statements and annual returns;

c. After the Strike off by RoC

The Company cannot apply 

2. Acceleration of Fast Track Merger (Merger of Small Companies, Holding- Wholly Owned Subsidiary Companies, etc)

MCA introduced the Companies (Compromises, Arrangements, and Amalgamation) Amendment Rules, 2023 to streamline the approval process for mergers and amalgamations.

Earlier, there was no time frame mentioned for RoC or RD to object to any Scheme of Merger for Fast Track Merger.

New Timeline

Now, in 30 days RoC or OL needs to raise the Objection or the Central Government must issue a confirmation order within 60 days of receiving the scheme.

If objections or suggestions are received from RoC or OL, the Central Government is obliged to evaluate whether the scheme serves the public interest or creditors’ interests and it will either issue a Confirmation Order or forward the application to the National Company Law Tribunal (NCLT) within a maximum of 60-days from the date of receipt of the Scheme.

Failure to comply within the 60-day timeframe implies no objection from the Central Government, resulting in the issuance of a Confirmation Order.

3. Extension for the holding of AGM/EGM through VC or OAVM

Companies are allowed to conduct their Annual General Meetings (AGM) and Extra Ordinary General Meetings (EGM) which are due in the year 2024 through Video Conferencing (“VC”) or Other Audio-Visual Means (“OAVM”) facilities, on or before September 30, 2024. It is also allowed to transact items through the postal ballot in accordance with the framework provided up to September 30, 2024.

4. Approval to shift the Registered Office of the Company after approval of Resolution Plan

The Company where the management has changed due to Resolution Plan approved u/s 31 of Insolvency and Bankruptcy Code, 2016, and the new management wishes to relocate the registered office, it may be allowed if:

  • No appeal against the Resolution Plan is pending in any Court or Tribunal; and
  • No inquiry, inspection, or investigation is pending or initiated after the approval of the said Resolution Plan

5. Mandated Dematerialization of securities for issuance and transfer of securities by all Private Companies (except Small Companies)

All private companies, except small companies and government companies, are required to dematerialize their securities in 18 months from the end of FY on or after 31.03.2023 and thereafter any securities issued or transferred must be in dematerialized form only.

Private companies planning to issue or buy back securities after the above period must ensure the dematerialization of holdings of promoters, directors, and key managerial personnel beforehand.

6. Maintenance of Register of Partner and Declaration with respect to Beneficial Interest by Limited Liability Partnership (LLP)

Every LLP shall, from the date of its incorporation, maintain a Register of its partners in Form 4A which shall be kept at the registered office of the LLP and take a declaration in respect of a beneficial interest in any contribution from the Partner whose name is entered in the Register of Partner.

7. Appointment of a Designated Person to provide information regarding beneficial interests in the Company’s shares

Every Company is now required to designate a responsible person, which may include a company secretary, key managerial personnel (other than the company secretary), or every director (if there is no company secretary or key managerial personnel) for providing information to the Registrar or any authorized officer regarding beneficial interests in the company’s shares. Every company shall inform the details of the designated person in the Annual return; and in case of any change in the designated person, the company shall inform the Registrar vide E-Form GNL-2.

8. The Companies (Listing of Equity Shares in permissible jurisdictions) Rules, 2024

MCA introduced the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 allowing the direct listing of Equity Shares by Indian public companies on International Exchanges. These Rules apply to:

  1. Unlisted public companies, and
  2. Listed public companies, to the extent that they align with regulations or directives established by the SEBI or the Authority, which issues their securities for listing on permitted stock exchanges in permissible jurisdictions.

Permissible Jurisdiction refers to the International Financial Services Centre in India and Permitted Stock Exchange refers to the India International Exchange and NSE International Exchange.

Such an unlisted public company is required to file the prospectus in e-Form LEAP-1 along with the applicable fees within 7 days after the prospectus is finalized and submitted to the permitted exchange.

The following companies are not be eligible to issue equity shares in the permissible jurisdiction

  1. Section 8 companies or a Nidhi company;
  2. Company limited by Guarantee having a share capital;
  3. Company having any outstanding deposits accepted from the public as per Chapter V of the Companies Act, 2013;
  4. Company having a negative net worth as defined under section 2(57) of the Companies Act, 2013;
  5. Company has defaulted in payment of dues to any bank, public financial institution, non-convertible debenture holder, or any other secured creditor. However, if the company has repaid the amount owed and two years have passed since the repayment, this rule doesn’t apply;
  6. The company has made an application for winding up under the Companies Act, 2013 or for resolution or winding up under the Insolvency and Bankruptcy Code, 2016, and any proceedings against the company for winding up under the Companies Act or for resolution or winding up under the Insolvency and Bankruptcy Code, 2016 is pending;
  7. The company has defaulted in filing the Annual Return under section 92 or the Financial Statement under section 137 of the Companies Act, 2013.

9. The Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023

The Rule applies to all the LLPs and directs to regulate and identify significant beneficial owners in LLP and such individuals to make a declaration in Form No. LLP BEN-I. 

An SBO concerning a Reporting LLP entity is an individual who whether acting alone or through one or more persons or trusts, indirectly or together with any direct holdings exceeding 10% of:

  1. The contribution or
  2. The voting rights in respect of the management or policy decisions or
  3. The right to receive or participate in distributable profits, or any other distribution, or
  4. The right to exercise or actually exercise, significant influence or control in the Reporting LLP.

However, any individual directly holding any right or entitlement exceeding 10% of (a) to (d) mentioned above is not an SBO.

Scroll to Top