MCA AMENDS THE INCORPORATION RULES TO PROVIDE FOR THE RECENT AMENDMENTS MADE TO THE COMPANIES ACT, 2013

The Ministry of Corporate Affairs (MCA), vide its notification dated December 18, 2018, issued the Companies (Incorporation) Fourth Amendment Rules, 2018 to insert the following three Rules:

  1. Rule 23A – Declaration at the time of commencement of business

Form No. INC-20A is introduced which is a declaration by the Director that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration. The declaration shall be accompanied by approval received from sectoral regulator, if any, wherever required.

  1. Rule 40 – Application for change in Financial Year

An application for change in FY shall be made to the Regional Director in e-Form No. RD-1 along with the attachments required thereof which include the grounds, board resolution etc.

  1. Rule 41 – Application for conversion of public company into private company

Such application shall be made to the Regional Director, within sixty (60) days from the date of passing of special resolution, in e-Form No. RD-1.

For both the applications under Rules 40 and 41, one interesting provision is that if there is no order passed by the Regional Director within thirty (30) days from the date of filing of application or date of re-submission, whichever is later, it is deemed to have been accepted and an approval order shall be automatically issued. The same shall be filed with the ROC in Form INC-28.

These rules are issued by the MCA to be in line with the Companies (Amendment) Ordinance, 2018.

Mr Prakul Thadi is a Company Secretary and Cost Accountant and holds a Masters degree in Law. He co-founded VirtuaLaw in 2017 and is currently the Chief-Editor of the blog at VirtuaLaw. After having gained an industry experience of 3 years he’s currently pursuing Graduate Insolvency Programme (GIP) at the Indian Institute of Corporate Affairs (IICA), Manesar. His interests spread across varied fields of law and majorly corporate laws.