MCA Notifies Rules for Change in Financial Year and Conversation Public Company into Private Company

MCA Notifies Rules for Change in Financial Year and Conversation Public Company into Private Company
CompaniesAct.in

Dec 20, 2018

MCA vide Notification dated 18th December, 2018 has amended the provisions of the Companies (Incorporation) Rules, 2014 to provide new rules in connection with declaration of commencement of business, manner of obtaining approval in case of change in financial year and conversion of public company into private company. Key highlights of the amendments are:

Declaration at the time of commencement of business: The declaration under section 10A (as inserted by the Companies (Amendment) Ordinance, 2018) by a director shall be in Form INC-20A and the contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant, in practice. However, in case of a company pursuing objects requiring registration or approval from any sectoral regulators such as RBI, SEBI etc., the registration or approval, as the case may be, from such regulator shall also be obtained and attached with the declaration.
Application under section 2(41) for change in financial year:
1. The application for approval of concerned Regional Director (RD) under section 2(41), shall be filed in e-Form No.RD-1 along with the fee and shall be accompanied by the following documents:
  1. Grounds and reasons for the application;
  2. A copy of the minutes of the Board meeting at which the resolution authorising such change was passed, giving details of the number of votes cast in favour and or against the resolution;
  3. Power of Attorney or Memorandum of Appearance, as the case may be;
  4. Details of any previous application made within last 5 years for change in financial year and outcome thereof along with copy of order.
2. Where RD on examining the application, finds it necessary to call for further information or finds such application to be defective or incomplete in any respect, he shall give intimation of such information called for or defects or incompleteness, on the last intimated e-mail address of the person or the company, which has filed such application, directing the person or the company to furnish such information, or to rectify defects or incompleteness and to re-submit such application within a period of 15 days, in Form RD GNL-5.
  Note: Maximum of two re-submissions shall be allowed.
3. In case where the application is found to be in order, RD shall allow and convey the order within 30 days from the date of application or within 30 days from the date of last re-submission, as the case may be.
4. Where no order for approval or re-submission or rejection has been explicitly made by RD within the stipulated time of 30 days, it shall be deemed that the application stands approved and an approval order shall be automatically issued to the applicant.
5. The order conveyed by RD shall be filed by the company with RoC in Form No.lNC-28 within 30 days from the date of receipt of the order along with fee.
Application under section 14 for conversion of public company into private company:
1. The company shall, at least 21 days before the date of filing of the application advertise in Form INC 25A, in a vernacular newspaper in the principal vernacular language in the district and in English language in an English newspaper, widely circulated in the State in which the registered office of the company is situated.
2. An application under the second proviso to section 14(1) for the conversion of a public company into a private company, shall, within 60 days from the date of passing of special resolution, be filed with RD in e-Form No. RD-l along with the fee and shall be accompanied by the following documents, namely:
  1. Draft copy of MOA and AOA;
  2. Copy of the minutes of the general meeting at which the special resolution authorising such alteration was passed together with details of votes cast in favour and or against with names of dissenters;
  3. Copy of Board resolution or power of Attorney dated not earlier than 30 days, as the case may be, authorising to file application for such conversion;
  4. List of creditors, debenture holders, drawn up to the latest practicable date preceding the date of filing of application by not more than 30 days;
  5. Declaration by KMP that pursuant to the provisions of section 2(68), the company limits the number of its members to 200 and also stating that no deposit has been accepted by the company in violation of the Act and rules made thereunder;
  6. Declaration by KMP that there has been no non-compliance of section 73 to 76A, 177, 178, 185, 186 and 188 of the Act and rules made thereunder;
  7. Declaration by KMP that no resolution is pending to be filed in terms of section 179(3) and also stating that the company was never listed in any of the Regional Stock Exchanges and if was so listed, all necessary procedures were complied with in full for complete delisting of the shares in accordance with the applicable rules and regulations laid down by SEBI.
    Note: in case of such companies where no KMP is required to be appointed, the aforesaid declarations shall be filed any of the director.
3. Where no objection has been received from any person in response to the advertisement and the application is complete in all respects, the same may be put up for orders without hearing and the concerned RD shall pass an order approving the application within 30 days from the date of receipt of the application.
4. Where RD on examining the application finds it necessary to call for further information or finds such application to be defective or incomplete in any respect, he shall within 30 days from the date of receipt of the application, give intimation of such information called for or defects or incompleteness, on the last intimated e-mail address of the person or the company, which has filed such application, directing the person or the company to furnish such information, to rectify defects or incompleteness and to re-submit such application within a period of 15 days in e-Form No. RD-GNL-5.
  Note: Maximum of two re-submissions shall be allowed.
5. Where no order for approval or re-submission or rejection has been explicitly made by RD within the stipulated period of 30 days, it shall be deemed that the application stands approved and an approval order shall be automatically issued to the applicant.
6. The order conveyed by RD shall be filed by the company with RoC in Form No.lNC-28 within 15 days from the date of receipt of approval along with fee.