Changes to the Companies (Incorporation) Rules, 2014

For the sake of simplicity, we have decided to tabulate the changes made to the Incorporation rules. The were two amendments issued in May by the Ministry of Corporate Affairs, one dated May 1, 2015 and the other dated May 29, 2015. All the amendments have been effected from the dates the amendments were issued.

Please find below the table with the changes:Sub-head & corresponding numberOld provision New provision & Comments, if anyVide notification dated May 1, 2015

Rule 5: PenaltyOmitted

New Rule 7A:

If a One Person Company or any officer of such company contravenes any of the provisions of these rules, the One Person Company or any officer of such a Company shall be punishable with fine which may extend to five thousand rupees and with a further fine which may extend to five hundred rupees for every day after the first offence during which such contravention continues.

Note: The maximum penalty has been halved for any offence committed by a one person company or any of its officers and for each day of contravention after the first offence.

Rule 7: Conversion from private company into one-person company

Requirement of private company:

paid up share capital of a maximum of INR 50 lakh;

or

an average annual turnover of a maximum of INR 2 crore.

Requirement of private company:

paid up share capital of a maximum of INR 50 lakh;

and

an average annual turnover of a maximum of INR 2 crore.

Rule 16: Particulars of every subscriber to be filed with the Registrar at the time of incorporation

Rule 16(1)(q)

the specimen signature and latest photography duly verified by the banker or notary shall be in the prescribed Form No. INC 10

New Rule 16(1)(q)

The promoter or first director shall self attest his signature and latest photograph in Form No. INC 10Rule 36

Original process (after obtaining the digital signature)

Step 1: Allotment of a Director Identification Number (DIN)

Step 2: Application for change name

Step 3: Approval of incorporation documents (Memorandum of Association and the Articles of Association)

Alternate incorporation process

Steps

Filing of Form No. INC 29 that incorporates Step 1 to 3 of the original process.

Comments

Ø  Specify only one name for the proposed company;

Ø  Filing of e-form INC 28 not necessary;

Ø  Those opting for this route shall not be subject to the provisions of Section 4(5)(i) and Rule 9 of the Companies Act, 2013 and corresponding Rules.Changes to forms–(a) changes to Form INC 7, 10, 11, and 22;

(b) New forms added: INC 29, 30, and 31.Vide Notification dated May 29, 2015Rule 12: Application for incorporation of companies

New proviso added:

Provided that in case pursuing of any of the objects of a company requires registration or approval from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board, registration or approval, as the case may be, from such regulator shall be obtained by the company before pursuing such objects and a declaration in this behalf shall be submitted at the stage of incorporation of the company.

Rule 24: Declaration at the time of commencement of business

The declaration filed by a director shall be in Form No.INC 21 along with the fee as and the contents of the form shall be verified by a Company Secretary in practice or a Chartered Accountant or a Cost Accountant in practice:

Provided that in the case of a company requiring registration from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board of India etc, the approval from such regulator shall be required.Omitted Changes to forms–(a) changes to Form INC 13 and Form INC 16;

(b) Form INC 21 omitted.