Amendments issued by MCA & RBI

In this edition we have tried to bring to your notice the latest amendment that followed in the month of August, 2021 issued by MCA and RBI.

Amendments issued by MCA

Companies (Appointment and Qualification of Directors) Amendment Rules, 2021

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, & These rules may be called the Companies (Appointment and Qualification of Directors) Amendment Rules,2021 & they shall come into force on the date of their publication in the Official Gazette.

The Amendment provides that an individual shall not be required to pass the online proficiency self-assessment test to be included in independent directors databank 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 in the pay scale of Director or equivalent or above in any Ministry or Department, of the Central Government or any State Government, and having experience in handling matters relating to commerce, corporate affairs, finance, industry or public enterprises; or the affairs related to Government companies or statutory corporations set up under an Act of Parliament or any State Act and carrying on commercial activities. It is further provided that an individual who are or have been, for at least ten years either as an advocate of a court or in practice as a chartered accountant or in practice as a cost accountant or in practice as a company secretary, shall not be required to pass the online proficiency self-assessment test. Read more: https://mca.gov.in/bin/ebook/dms/getdocument?doc=MzU0MTU=&docCategory=Notifications&type=open

Companies (Creation and Maintenance of databank of Independent Directors) Second Amendment Rules, 2021.

In exercise of the powers conferred by section 150 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 (Creation and Maintenance of databank of Independent Directors) Rules, 2019, & These rules may be called the Companies (Creation and Maintenance of databank of Independent Directors) Second Amendment Rules, 2021 & they shall come into force on the date of their publication in the Official Gazette.

The institute shall within sixty days from the end of every financial year send an annual report to every individual whose name is included in the data bank and also to every company in which such individual is appointed as an independent director in the format provided in the Schedule to these Rules. The schedule consists of various entries namely Director’s Name, DIN Number, IDDB Registration Number, Subscription (1 year or 5 year or Lifetime), Membership Validity, Online Self-Assessment Proficiency Test Status (N.A if exempted), Participation during the Financial Year, and Total Participation. Read more: https://www.mca.gov.in/bin/dms/getdocument?mds=FQkrQysTnQxLA3y%252BNiOcdQ%253D%253D&type=open

Special Court Notification under Section 435 of the Companies Act,2013

In exercise of the powers conferred by section 435 of the Companies Act, 2013 (18 of 2013), the Central Government, with the concurrence of the Chief Justice of the High Court of Jharkhand hereby designates the Court mentioned in column (2) of the Table below as Special Court for the purpose of providing speedy trial of offences under clause (b) of sub-section (2) of section 435 of the said Act, namely:-

SI. No.	Court	Jurisdiction as Special Court
(1)	(2)	(3)
1	Court of Sub-Divisional Judicial Magistrate at Ranchi	State of Jharkhand.

Read more: https://www.mca.gov.in/bin/dms/getdocument?mds=%252BAD5OxLsNJTJMNmC9KYK4Q%253D%253D&type=open

Companies (Registration of Foreign Companies) Amendment Rules, 2021

In exercise of the powers conferred by clause (c) and clause (h) of sub-section (1) and sub-section (3) of section 380, clause (a) of sub-section (1) and sub-section (3) of section 381, section 385, clause (a) of section 386, section 389 and section 390, read with section 469 of the Companies Act, 2013 (18 of 2013), Central Government hereby makes the following rules to amend the Companies (Registration of Foreign Companies) Rules, 2014,& these rules may be called the Companies (Registration of Foreign Companies) Amendment Rules, 2021 & they shall come into force on the date of their publication in the Official Gazette. Read more: https://www.mca.gov.in/bin/dms/getdocument?mds=eqdkd0Ws%252FDyhNwsupZJTCw%253D%253D&type=open

Limited Liability Partnership (Amendment) Act, 2021.

MCA has notified the Limited Liability Partnership (Amendment) Act, 2021 which shall come into force on such date as the Central Government may, by notification in the Official Gazette. Both houses of Parliament has approved LLP Amendment Bill, 2021. Finally, the same got the approval of President of India on 13th August, 2021 and become LLP Amendment Act, 2021. The major Highlights are:

• MCA has introduced the concept of “small limited liability partnership” in line with the concept of “small company” under the Companies Act, 2013. 
• Certain sections of the Act are amended so as to convert offenses into civil defaults and to convert the nature of punishment provided in the said sections from fines to monetary penalties. 
• A new section 34A has been inserted to empower the Central Government to prescribe the “Accounting Standards” or “Auditing Standards” for a class or classes of limited liability partnerships. 
• Further, powers under Section 39 of the Act relating to “compounding of offenses” is granted to the Regional Director to compound any offense under this Act which is punishable with a fine only. 
• A new section 67A empowering the Central Government to establish or designate as many “Special Courts” as may be necessary for the purpose of providing speedy trial of offenses under the Act, has been inserted.

Read more: https://www.mca.gov.in/bin/dms/getdocument?mds=8ylTG8LOgTgQPakjVO2fRg%253D%253D&type=open

Notification under section 393A of the Companies Act, 2013

In exercise of the powers conferred by section 393A of the Companies Act, 2013 (18 of 2013), the Central Government hereby exempts, from the provisions of sections 387 to 392 (both inclusive), the following:- (a) foreign companies; (b) companies incorporated or to be incorporated outside India, whether the company has or has not established, or when formed may or may not establish, a place of business in India, insofar as they relate to the offering for subscription in the securities, requirements related to the prospectus, and all matters incidental thereto in the International Financial Services Centres set up under section 18 of the Special Economic Zones Act, 2005 (28 of 2005). Read more: https://www.mca.gov.in/bin/dms/getdocument?mds=Ylf%252BtJX8JoMuZrmN02TuvQ%253D%253D&type=open

Amendments issued by RBI

Notification as ‘Financial Institution’ under Section 2(1)(m)(iv) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

HFCs registered under Section 29A(5) of National Housing Bank Act, 1987 and having assets worth Rupees 100crore & above, as ‘Financial Institution’ under Section 2(1)(m)(iv) of SARFAESI Act, 2002.

Read more: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12151&Mode=0