The Ministry of Corporate Affairs has released the Companies Second & Fifth Amendment Rules, 2020. Read the official announcement and all the changes made in the Rules below:
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 18th December, 2020
G.S.R. 774(E). - In exercise of the powers conferred by section 149 read with section 469 of the
Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to
amend the Companies (Appointment and Qualification of Directors) Rules, 2014, namely:-
1. (1) These rules may be called the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2020.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Appointment and Qualification of Directors) Rules, 2014, in rule 6,-
(a) in sub-rule (4),-
(i) for the words “one year from” the words “two years from” shall be substituted;
(ii) for the first and second proviso, the following provisos shall be substituted, namely :-
“Provided that an individual shall not be required to pass the online proficiency self-assessment test when he has served for a total period of not less than three years as on the date of inclusion of his name in the data bank,-
(A) as a director or key managerial personnel, as on the date of inclusion of his name in the databank, in one or more of the following, namely:-
(a) listed public company; or
(b) unlisted public company having a paid-up share capital of rupees ten crore or more; or
(c) body corporate listed on any recognized stock exchange or in a country which is a member State of the Financial Action Task Force on Money Laundering and the regulator of the securities market in such member State is a member of the International Organization of Securities Commissions; or
(d) bodies corporate incorporated outside India having a paid-up share capital of US$ 2 million or more; or
(e) statutory corporations set up under an Act of Parliament or any State Legislature carrying on commercial activities; or
(B) in the pay scale of Director or above in the Ministry of Corporate Affairs or the Ministry of Finance or Ministry of Commerce and Industry or the Ministry of Heavy Industries and Public Enterprises and having experience in handling the matters relating to corporate laws or securities laws or economic laws; or
(C) in the pay scale of Chief General Manager or above in the Securities and Exchange Board or the Reserve Bank of India or the Insurance Regulatory and Development Authority of India or the Pension Fund Regulatory and Development Authority and having experience in handling the matters relating to corporate laws or securities laws or economic laws :
Provided further that for the purpose of calculation of the period of three years referred to in the first proviso, any period during which an individual was acting as a director or as a key managerial personnel in two or more companies or bodies corporate or statutory corporations at the same time shall be counted only once.”;
(b) in the Explanation, in item (b), for the words “sixty percent”, the words “fifty percent” shall be substituted.
[F. No. 8/4/2018-CL-I- Part I]
K. V. R. MURTY, Jt. Secy.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification number G.S.R. 259(E), dated the 31st March, 2014 and were last amended vide notification number G.S.R. 589 (E), dated the 28th September, 2020.
MCA releases the Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 17th December, 2020
G.S.R. 773(E).—In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with sections 230 to 233 and sections 235 to 240 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 namely :-
1. Short title and commencement.‐ (1) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1), after clause (d), the following clause shall be inserted, namely:-
"(e)" corporate action‖ means any action taken by the company relating to transfer of shares and all the benefits accruing on such shares namely, bonus shares, split, consolidation, fraction shares and right issue to the acquirer‖.
3. In the said rules, after rule 26, the following rule shall be inserted namely:-
"26 A. Purchase of minority shareholding held in demat form.
(1) 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, under section 236 of the Act, verify the details of the minority shareholders holding shares in dematerialised form.
(2) After verification under sub-rule (1), the company shall send notice to such minority shareholders by registered post or by speed post or by courier or by email about a cut-off date, which shall not be earlier than one month after the date of sending of the notice, on which the shares of minority shareholders shall be debited from their account and credited to the designated DEMAT account of the company, unless the shares are credited in the account of the acquirer, as specified in such notice, before the cut-off date.
(3) A copy of the notice served to the minority shareholders under sub-rule (2), shall also be published simultaneously in two widely circulated newspapers (one in English and one in vernacular language) in the district in which the registered office of the company is situated and also be uploaded on the website of the company, if any.
(4)The company shall inform the depository immediately after publication of the notice under subrule (3) regarding the cut-off date and submit the following declarations stating that:-
(a) the corporate action is being effected in pursuance of the provisions of section 236 of the Act;
(b) the minority shareholders whose shares are held in dematerialised form have been informed about the corporate action [a copy of the notice served to such shareholders and published in the newspapers to be attached];
(c) the minority shareholders shall be paid by the company immediately after completion of corporate action;
(d) any dispute or complaints arising out of such corporate action shall be the sole responsibility of the company.
(5) For the purposes of effecting transfer of shares through corporate action, the Board shall authorise the Company Secretary, or in his absence any other person, to inform the depository under sub-rule (4), and to submit the documents as may be required under the said sub-rule.
(6) Upon receipt of information under sub-rule (4), the depository shall make the transfer of shares of the minority shareholders, who have not, on their own, transferred their shares in favour of the acquirer, into the designated DEMAT account of the company on the cut-off date and intimate the company.
(7) After receiving the intimation of successful transfer of shares from the depository under sub-rule (6), the company shall immediately disburse the price of the shares so transferred, to each of the minority shareholders after deducting the applicable stamp duty, which shall be paid by the company, on behalf of the minority shareholders, in accordance with the provisions of the Indian Stamp Act, 1899 (2 of 1899).
(8) Upon successful payment to the minority shareholders under sub-rule (7), the company shall 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.
Explanation. - The company shall continue to disburse payment to the entitled shareholders, where disbursement could not be made within the specified time, and transfer the shares to the DEMAT account of acquirer after such disbursement.
(9) In case, where there is a specific order of Court or Tribunal, or statutory authority restraining any transfer of such shares and payment of dividend, or where such shares are pledged or hypothecated under the provisions of the Depositories Act, 1996 (22 of 1996), the depository shall not transfer the shares of the minority shareholders to the designated DEMAT account of the company under sub-rule (6).
Explanation. - For the purposes of this rule, if "cut-off date" falls on a holiday, the next working day shall be deemed to be the "cut-off date."
[F. No. 2/31/CAA/2013 – CL.V]
K. V. R. MURTY, Jt. Secy.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1134(E), dated the 14th December, 2016, and subsequently amended vide notification number G.S.R. 368(E), dated the 13th April 2017 and vide notification number G.S.R. 79(E), dated the 3rd February,2020.
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