[PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,
SUB SECTION (i)]
GOVERNMENT OF INDIA
Ministry of Corporate Affairs
Notification
New Delhi, 10.07.2012
G.S.R. (E).- In exercise of the power conferred by sect ion 642 read
with Sub-sect ion (2) of sect ion 637A of the Companies Act , 1956 (1 of 1956),
the Central Government hereby makes the following rules further to amend the
Company Law Board (Fees on Application and Pet it ions) Rules, 1991, namely :-
1. (1) These rules may be called the Company Law Board (Fees on
Application and Pet it ions) (Amendment ) Rules, 2012.
(2) They shall come into force with effect from 12th August , 2012.
2. In Company Law Board (Fees on Application and Pet it ions) Rules, 1991,
in the Schedule, serial numbers 1, 2, 3, 13, 18 and the entries relating thereto
shall be omit ted.
[F No 1/ 1/ 2003-CL.V]
Renuka Kumar,
Joint Secretary to the Government of India
Note:- The principal regulations were published in the Gazette of India, Part II,
Section 3, Sub-section (i) vide number G.S.R. 290(E) dated the 31st January, 1991
and subsequently amended vide the following notifications:-
Serial
Number
Notification
Number
Notification
Date
1. GSR 787 (E) 29.9.1992
2. GSR 219 (E) 6.3.2000
3. GSR 510 (E) 22.7.2002
Company Law Board (Fees on Application and Pet it ions) (Amendment ) Rules, 2012
Written By Views maker on Thursday, July 12, 2012 | 9:56 PM
Indian corporate case details
Written By Views maker on Tuesday, August 23, 2011 | 6:18 AM
There is no verified information available to suggest that the cases of corporate frauds are on the increase.
Number of prosecutions filed for the violations of the provisions of the Companies Act, 1956 for the last three years are as under:-
Year No. of prosecutions Total fine imposed
2007-08 17080 Rs 111.84 lakh
2008-09 13971 Rs 110.58 lakh
2009-10 9021 Rs 92.30 lakh
Since 2006, this Ministry has implemented MCA-21, an e-Governance project, which has increased transparency as the data available in the public domain can be viewed by any person. The Ministry has also evolved a system generated ‘Early Warning System’ to help in detecting likely fraud at an early state. In the process of development of Early Warning System (EWS), the Ministry has identified certain Risk Parameters which can be run on the data available with the MCA, on financial statements furnished by the companies in e-forms developed by the Ministry.
Company Registration
The Ministry of Corporate Affairs has simplified procedures under MCA-21 to enable registration of a company within 24 to 48 hours where there is no difficulty about availability of name etc. The various elements of this process are;
(i) Director Identification Number is allotted online on the basis of verification certificate given by the practicing Chartered Accountant or Company Secretary or Cost Accountant.
(ii) New “Name Guidelines, 2011” have been issued whereby the name can be obtained online from the MCA 21 system if the application is certified by the practicing professionals that the proposed name is in conformity with the Name Guidelines.
(iii) Application and payment of fees is made online.
In order to prevent the registration of companies by fake promoters, the Companies Act, 1956 mandates obtaining of Director Identification Number (DIN) by an individual before becoming a director of the company. For obtaining DIN, one has to apply in an e-form giving his full identification such as name, father’s name, address, date of birth and permanent account number (PAN) etc with copy of documentary proof. The application has to be further certified by a professional. There are inbuilt checks in the system such as checking of given particulars with PAN database to prevent fake promoters from obtaining the DIN.
In addition to above, after allotment of DIN and name online, all such approvals are further re-checked manually by the “back office” and in case any discrepancies are found later on, the process of revocation of DIN and/or company’s name are initiated.
All incorporation e-forms are filed online but checked and approved manually by the Registrar of Companies.
Name Availability Guidelines, 2011
Written By Views maker on Friday, July 8, 2011 | 9:53 PM
General Circular No. 45/2011, Dated the 8th July, 2011
Subject: NAME AVAILABILITY GUIDELINES, 2011In supercession of all the previous circulars and instructions issued by Ministry of Corporate Affairs from time to time regarding name availability, the applicants and Registrar of Companies are advised to adhere following guidelines while applying or approving a name:
1. As per provisions contained in Section 20 of the Companies Act, 1956, no company is to be registered with undesirable name. A proposed name is considered to be undesirable if it is identical with or too nearly resembling with:
(i) Name of a company in existence and names already approved by the Registrar of Companies;
(ii) Name of a LLP in existence or names already approved by Registrar of LLP; or
(iii) A registered trade-mark or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.
2. While applying for a name in the prescribed e-form-1A, using Digital Signature Certificate (DSC), the applicant shall be required to furnish a declaration to the effect that:
(i) he has used the search facilities available on the portal of the Ministry of Corporate Affairs (MCA) i.e., www.mca.gov.in/MCA21 for checking the resemblance of the proposed name(s) with the companies and Limited Liability Partnerships (LLPs) respectively already registered or the names already approved.
(ii) the proposed name(s) is/are not infringing the registered trademarks or a trademark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999;
(iii) the proposed name(s) is/are not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time;
(iv) the proposed name(s) is not such that its use by the company will constitute an offence under any law for the time being in force.
(v) the proposed name is not offensive to any section of people, e.g., proposed name does not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity;
(vi) he has gone through all the prescribed guidelines, understood the meaning thereof and the proposed name(s) is/are in conformity thereof;
(vii) he undertakes to be fully responsible for the consequences, in case the name is subsequently found to be in contravention of the prescribed guidelines.
3. There is an option in the e-form 1A for certification by the practicing Chartered Accountants, Company Secretaries and Cost Accountants, who will certify that he has used the search facilities available on the portal of the Ministry of Corporate Affairs (MCA) i.e., www.mca.gov.in/MCA21 for checking the resemblance of the proposed name(s) with the companies and Limited Liability Partnerships (LLPs) respectively already registered or the names already approved and the search report is attached with the application form. The professional will also certify that the proposed name is not an undesirable name under the provisions of section 20 of the Companies Act, 1956 and also is in conformity with Name Availability Guidelines, 2011.
4(i) Where e-form 1A has been certified by the professional in the manner stated at ‘3’ above, the name will be made available by the system online to the applicant without backend processing by the Registrar of Companies (ROC). This facility is not available for applications for change of name of existing companies.
(ii) Where a name has been made available online on the basis of certification of practicing professional in the manner stated above, if it is found later on that the name ought not to have been allowed under provisions of section 20 of the Companies Act read with these Guidelines, the professional shall also be liable for penal action under
provisions of the Companies Act, 1956 in addition to the penal action under Regulations of respective professional Institutes.
(iii) Where e-form 1A has not been certified by the professional, the proposed name will be processed at the back end office of ROC and availability or non availability of name will be communicated to the applicant.
5. The name, if made available, is liable to be withdrawn anytime before registration of the company, if it is found later on that the name ought not to have been allowed. However, ROC will pass a specific order giving reasons for withdrawal of name, with an opportunity to the applicant of being heard, before withdrawal of such name.
6. The name, if made available to the applicant, shall be reserved for sixty days from the date of approval. If, the proposed company has not been incorporated within such period, the name shall be lapsed and will be available for other applicants.
7. Even after incorporation of the company, the Central Government has the power to direct the company to change the name under section 22 of the Companies Act, 1956, if it comes to his notice or is brought to his notice through an application that the name too nearly resembles that of another existing company or a registered trademark.
8. In determining whether a proposed name is identical with another, the following shall be disregarded:
(i) The words Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership;
(ii) The words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;
(iii) The plural version of any of the words appearing in the name;
(iv) The type and case of letters, spacing between letters and punctuation marks;
(v) Joining words together or separating the words, as this does not make a name distinguishable from a name that uses the similar, separated or joined words. Such as Ram Nath Enterprises Pvt. Ltd. will be considered as similar to Ramnath Enterprises Pvt. Ltd.;
(vi) The use of a different tense or number of the same word, as this does not distinguish one name from another. Such as, Excellent Industries will be similar to Excellence Industries and similarly Teen Murti Exports Pvt. Ltd. will be to Three Murti Exports Pvt. Ltd.;
(vii) Using different phonetic spellings or spelling variations, as this does not distinguish one name from another. For example, J.K. Industries limited is existing then J and K Industries or Jay Kay Industries or J n K Industries or J & K Industries will not be allowed. Similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;
(viii) The addition of an internet related designation, such as .COM, .NET, .EDU, .GOV, .ORG, .IN, as this does not make a name distinguishable from another, even where (.) is written as ‘dot’;
(ix) The addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc., as this does not make a name distinguishable from an existing name such as New Bata Shoe Company, Nav Bharat Electronic etc. Similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed. For example, ‘Unique Marbles Delhi Limited’ can not be allowed if ‘Unique Marbles Limited’ is already existing;
Such names may be allowed only if no objection from the existing company by way of Board resolution is produced/ submitted;
(x) Different combination of the same words, as this does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” should not be allowed;
(xi) Exact Hindi translation of the name of an existing company in English especially an existing company with a reputation. For example, Hindustan Steel Industries Ltd. will not be allowed if there exists a company with name ‘Hindustan Ispat Udyog Limited’;
9. In addition to above, the user shall also adhere to following guidelines: –
(i) It is not necessary that the proposed name should be indicative of the main object.;
(ii) If the Company’s main business is finance, housing finance, chit fund, leasing, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund/ Investment/ Loan, etc.;
(iii) If it includes the words indicative of a separate type of business constitution or legal person or any connotation thereof, the same shall not be allowed. For eg: cooperative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.;
(iv) Abbreviated name such as ‘BERD limited’ or ‘23K limited’ cannot be given to a new company. However the companies well known in their respective field by abbreviated names are allowed to change their names to abbreviation of their existing name (for Delhi Cloth Mills limited to DCM Limited, Hindustan Machine Tools limited to HMT limited) after following the requirement of Section 21 of the Companies Act, 1956. Further, if the name is only a general one like Cotton Textile Mills Ltd., or Silk Manufacturing Ltd., and not specific like Calcutta Cotton Textiles Mills Limited or Lakshmi Silk Manufacturing Company Limited, the same shall not be allowed;
(v) If the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding should not be allowed for a period of 2 years from the date of such dissolution since the dissolution of the company could be declared void within the period aforesaid by an order of the Court under section 559 of the Act. Moreover, if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 560 of the Act, then the same shall not be allowed before the expiry of 20 years from the publication in the Official Gazette being so struck off since the company can be restored anytime within such period by the competent authority;
(vi) If the proposed names include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., the name may be allowed with a declaration by the applicant that the requirements mandated by the respective Act/ regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant;
(vii) If the proposed name includes the word “State”, the same shall be allowed only in case the company is a government company. Also, if the proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited, the same shall not be allowed;
(viii) If the proposed name contains any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central or any State Government under any law for the time in force, unless the previous approval of Central Government has been obtained for the use of any such word or expression;
(ix) If a foreign company is incorporating its subsidiary company, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian state or city, if otherwise available;
(x) Change of name shall not be allowed to a company which is defaulting in filing its due Annual Returns or Balance Sheets or which has defaulted in repayment of matured deposits and debentures and/or interest thereon;
10. These guidelines and revised e-form 1A are likely to be implemented with effect from 24th July, 2011.
11. This issues with the approval of competent authority.
Yours faithfully,
-Sd/-
(Monika Gupta)
Assistant Director
Copy to: All concerned.
Proposed guidelines for strike off u/s 560 of companies act
Written By Views maker on Thursday, July 7, 2011 | 7:30 AM
Government of India, Ministry of Corporate Affairs, CL V Section, 5th Floor, A Wing, Shastri Bhavan,, Dr. R.P. Road, New Delhi
Dated
All Regional Directors,
All Registrar of Companies,
All Stakeholders
Sub : Proposed guidelines for strike off name under section 560 of the Companies Act, 1956 of companies (non profit companies) which have been granted license under section 25 of the Companies Act, 1956.
Sir,
The Ministry has been receiving representation from various stakeholders to develop a procedure for strike off name under section 560 of the Companies Act, 1956 of companies (non profit companies) which have been granted license under section 25 of the Companies Act, 1956. There are a number of section 25 companies which have not done any activity after obtaining license under section 25 or have stopped such activities, and now want to strike off their name under section 560 of the Companies Act, 1956.
2. At present Registrar of Companies are not taking action either suo-moto or on request of companies for striking off the name of section 25 companies (non profit companies) under section 560 of the Companies Act, 1956. The Ministry of Corporate Affairs has also not permitted for exit of section 25 companies under various exit schemes under section 560 of the Act announced by it from time to time.
3. Section 25 companies, being a non profit organization/company normally receive contribution from all sections of the society in the form of donations, contributions, etc for the furtherance of the charitable, philanthropic activities or for such other useful objects. Such non profit companies sometime also enjoy special status and benefit from various authorities such as Income Tax, Commissioner of Charity, any organization of Central Government or State Government, Municipal Body or any other recognized authority.
4. The Companies Regulation, 1956 also provides for distribution of assets of such companies on winding up as under: –
“If upon a winding up or dissolution of the company, there remains, after the satisfaction of all the debts and liabilities, any property whatsoever, the same shall not be distributed amongst the members of the company but shall be given or transferred to such other company having objects similar to the objects of this company, to be determined by the members of the company at or before the time of dissolution or in default thereof, by the High Court of Judicature that has or may acquire jurisdiction in the matter.”
5. In the background of above provisions, the Ministry of Corporate Affairs is considering to prescribe following guidelines for strike off name under 560 of the Companies Act, 1956 for section 25 companies as under : –
I. A section 25 Company may apply to Registrar of Companies in e-form (to be prescribed) for strike off name under 560 of the Companies Act, 1956 after satisfying following conditions : –
(a) The section 25 company should have passed a resolution in general meeting to apply Registrar of Companies to strike off name under 560 of the Companies Act, 1956 which should have been approved by all members/shareholders of the company.
(b) The section 25 company has not commenced any activity or operation since its incorporation or stopped activities for more than last 03 years.
(c) The company has not received any donation, grants or contribution etc., other than its members.
(d) Where the company has obtained any special status from any authority such as Income Tax, Commissioner of Charity or any organization or Department of Central Government, State Government, Municipal Body or any recognized authority then a “No Objection Certificate” has to be obtained from the concerned authority.
(e) The existing assets, if any has to be transferred to a similar object company (section 25 company) before applying to Registrar of Companies for strike off the name under section 560 of the Act.
(f) The company should have filed its all upto date Balance Sheets and Annual Returns and latest Balance Sheet should not have any Assets or Liabilities.
(g) The Directors have to file an affidavit and indemnity as required under present exit guidelines and confirming above compliances/ status.
(h) A certificate from practicing Chartered Accountants/ Company Secretary/ Cost Accountant certifying the above status / compliances by the company.
II. On receipt of above documents and being satisfied, the Registrar of Companies may consider to initiate action under section 560 of the Companies Act, 1956.
6. You are requested to examine the proposed guidelines and furnish your comments/recommendations to the Ministry by 15th July, 2011 by e-mail on following e-mail addresses.
monika.gupta@mca.gov.in
kamna.sharma@mca.gov.in
Yours faithfully,
(Monika Gupta)
Assistant Director
Section 25 conversion proposal
Government of India, Ministry of Corporate Affairs, CL V Section, 5th Floor, A Wing, Shastri Bhavan, Dr. R.P. Road, New Delhi
Dated the
Sub : Proposed guidelines for conversion of section 25 company (non profit company) to an ordinary company under Companies Act, 1956.
Sir,
The Ministry has been receiving representation from various stakeholders to develop a procedure under Companies Act, 1956 for conversion of section 25 company (non-profit company) to an ordinary company because there are a number of section 25 companies which have not done any activity after obtaining license under section 25 or have stopped such activities, and now want to convert themselves as an ordinary company.
2. At present there is no specific provision under Companies Act, 1956, where a company can apply for conversion of a section 25 company (non profit company) to an ordinary company. The Central Government is however empowered under section 25(7) of the Companies Act, 1956 to revoke the license granted under section 25(1) or 25(3) of the Companies Act, 1956. This may tantamount as conversion of section 25 (non-profit) company to an ordinary company subject to certain conditions.
3. Section 25 companies, being a non profit organization/company normally receive contribution from all sections of the society in the form of donations, contributions, etc for the furtherance of the charitable, philanthropic activities or for such other useful objects. Such non profit companies sometime also enjoy special status and benefit from various authorities such as Income Tax, Commissioner of Charity, any organization of Central Government or State Government, Municipal Body or any other recognized authority.
4. The Companies Regulation, 1956 also provides for distribution of assets of such companies on winding up as under : –
“If upon a winding up or dissolution of the company, there remains, after the satisfaction of all the debts and liabilities, any property whatsoever, the same shall not be distributed amongst the members of the company but shall be given or transferred to such other company having objects similar to the objects of this company, to be determined by the members of the company at or before the time of dissolution or in default thereof, by the High Court of Judicature that has or may acquire jurisdiction in the matter.”
5. In the background of above provisions, the Ministry of Corporate Affairs is considering to prescribe following guidelines for conversion of a section 25 company to an ordinary company: –
I. A section 25 Company may apply to Registrar of Company in e-form 61 for its revocation of license under section 25 (7) of the Act. Such section 25 Company should satisfy following conditions: –
(a) The company should have passed a resolution in general meeting to convert itself into a non section 25 company which should have been approved by all members/shareholders of the company by adopting revised Memorandum and Articles of Association.
(b) The company has not commenced any activity or operation since its incorporation.
(c) The company has not received any donation, grants or contribution etc., other than from its members.
(d) Where the company has obtained any special status from any authority such as Income Tax, Commissioner of Charity or any organization or Department of Central Government, State Government, Municipal Body or any recognized authority then a “No Objection Certificate” has to be obtained from the concerned authority.
(e) The existing assets, if any has to be transferred to a similar object company before converting it into a non-section 25 company.
(f) The company should have filed its all upto date Balance Sheets and Annual Returns.
(g) The Directors have to file an affidavit confirming above compliances/ status.
(h) A certificate from practicing Chartered Accountants/ Company Secretary/ Cost Accountant certifying the above status / compliances by the company.
II. On receipt of above documents and being satisfied, the Registrar of Companies can considered to revoke license in exercise of his power under section 25(7) of the Act on merits.
6. You are requested to examine the proposed guidelines and furnish your comments/recommendations to the Ministry by 15th July, 2011 by e-mail on following e-mail addresses.
monika.gupta@mca.gov.in
kamna.sharma@mca.gov.in
Yours faithfully,
( Monica Gupta )
Assistant Director
