Category: Company Law

Summary of Ministry of Corporate Affairs Announcement

1. Strengthening Corporate Governance and Transparency:

The Companies Act, 2013, contains provisions for ensuring corporate governance and transparency in company management.

It mandates compliance through key managerial personnel, the Board of Directors, and shareholders.



2. Maintenance and Disclosure Requirements:

Companies are required to maintain financial records, returns, and registers.

Notices, explanatory statements, and financial reports must be shared with shareholders.

Annual filings with the Registrar ensure regulatory oversight.



3. Corporate Social Responsibility (CSR) Provisions:

Section 135 of the Companies Act, Schedule VII, and CSR Policy Rules, 2014, provide the legal framework for CSR.

CSR activities must align with the eligible activities listed in Schedule VII.



4. CSR Governance and Monitoring:

CSR is board-driven, with decisions based on the CSR Committee’s recommendations.

Companies must report CSR activities annually in the MCA21 registry.

CSR expenditure details must be included in the Annual Financial Statements.



5. Audit and Compliance:

Auditors are required to report any unspent CSR amounts under CARO, 2020, applicable from FY 2021-22.

Companies must publish their CSR Committee composition, CSR Policy, and approved projects on their websites.



6. Enforcement and Accountability:

Non-compliance with CSR provisions results in regulatory action under the Act.

The legal framework ensures the effective use of CSR funds and maintains corporate transparency.



7. Government Statement:

Minister of State Shri Harsh Malhotra provided this information in a written reply in the Lok Sabha. (11 March 2025)

Prime Minister Internship Scheme Launched to Provide 1 Crore Internships in Top Companies Over Five Years

Successful Migration of MCA21 from Version 2 to Version 3 for Streamlined Compliance

Jan Vishwas Initiatives Simplify Share Transmission and Lost Share Certificate Processes, Eliminates Surety Requirements for Duplicate Physical Security Certificates

IEPFA Launches Enhanced Grievance Redressal Mechanism with Multilingual IVRS Facility

Integrated Technology Platform Proposed Under Insolvency and Bankruptcy Code for Better Efficiency

IBC Resolves Rs. 10.22 Lakh Crore Default Cases Pre-Admission with Record Resolution Rates

Competition Commission of India (CCI) Disposes 99% of Combination Cases by September 2024

Central Processing Centre (CPC) Launched for Nationwide E-Form Processing

CPACE Reduces Corporate Exit Processing Time to 90 Days

Amendments Introduced in Indian Accounting Standards (Ind AS 116 and Ind AS 117)

Faceless Adjudication Mechanism Introduced for Decriminalized Corporate Defaults

The major initiatives and achievements of the Ministry of Corporate Affairs during the Year 2024 are as follows:

Prime Minister’s Internship Scheme – Pilot Project

The Prime Minister’s Internship Scheme in Top Companies has been announced in the Budget 2024 aiming to provide internship opportunities to one crore youth in top 500 companies over five years.
Through this Scheme, youth will gain exposure to real-life business environment, across varied professions and employment opportunities.
The interns will be provided with financial assistance of Rs. 5,000 per month, of which Rs. 4500 would be disbursed by the union government, and Rs. 500 per month would be paid by the company from its CSR funds.
Additionally, a one-time grant of Rs. 6,000 for incidentals would be disbursed by Ministry of Corporate Affairs (MCA) to each intern, upon joining the place of internship.
Duration of the internship under the PM Internship Scheme is of 12 months.
A Pilot Project of the Scheme, targeted at providing 1.25 lakh internship opportunities during FY 2024-25, has been launched on 3rd October 2024 through an online portal, accessible at http://www.pminternship.mca.gov.in.
Partner companies have posted approximately 1.27 lakh internship opportunities on the portal.
Approximately 4.87 lakh youths have completed their KYC and registered themselves on the portal.
Approximately 6.21 lakh applications have been received against 1.27 lakh Internship Opportunities. The selection process for internship is ongoing.


Migration of MCA V2 to V3: Enhancing Efficiency and Compliance

IEPFA has successfully migrated forms from MCA 21 Version 2 to Version 3, introducing significant improvement to streamline the compliance process.
The number of compliance forms has been reduced from 5 to 3, simplifying submission requirements for companies.
Additionally, the process of transferring funds has been made fully online, with all company forms now integrated into a Straight Through Process (STP), eliminating the need for manual intervention.
To further facilitate this change, a dedicated dashboard has been implemented for Nodal Officers, allowing them to easily track and file verification reports for claims.


Major Initiative Under Jan Vishwas

(1)-Recognition of Legal Heirship Certificate for Share Transmission

The legal heirship certificate has been officially recognized as a valid instrument for registering the transmission of shares. This important development, applicable to shares transferred to the IEPF by companies under Section 124(6) of the Companies Act, 2013, eliminates the need for a monetary threshold.
This reform significantly reduces the burdens on individuals by removing the requirement to obtain a succession certificate, letter of administration, or probate of a will. As a result, beneficiaries can save both time and costs that were previously associated with civil court procedures. This initiative not only simplifies the transmission process for shares but also enhances accessibility and efficiency for families experiencing complexities of inheritance.

(2)Simplification of Processes for Lost Share Certificates

In a progressive move aimed at claimants, the requirement to file an FIR for the loss of physical share certificates for securities valued up to Rs. 5 lakhs have been eliminated. This change streamlines the process for individuals who may have lost their share certificates, reducing the bureaucratic hurdles they face.


(3)Elimination of Surety Requirements for Duplicate Physical Security Certificates

In a significant reform, the requirement for sureties when applying for duplicate physical security certificates has been eliminated for all values. This crucial change aims to simplify the process for claimants who may need to replace lost or damaged certificates, thus removing unnecessary barriers and enhancing accessibility.


Enhanced Grievance Redressal Mechanism

IEPFA has augmented its grievance redressal mechanism to provide a more effective and user-friendly experience for stakeholders.
The Authority has introduced an intuitive call centre solution equipped with Interactive Voice Response System (IVRS) facilities available in six languages, ensuring accessibility for a diverse audience.
Additionally, the call centre operates through a convenient five-digit short code – 14453, simplifying the process for users to seek assistance and address their concerns. This enhancement reflects IEPFA’s commitment to improving communication and support for claimants, ensuring that their grievances are addressed swiftly and efficiently.


To enhance accessibility, increase interactivesness; bring financial inclusiveness and engagement with stakeholders, IEPFA successfully conducted

Niveshak Sunwai Initiatives in Mumbai and Ahmedabad;
Niveshak Panchayat: Bridging the Gap Between Claimants and IEPFA;
Niveshak Didi: Empowering Women through Financial Literacy;
Niveshak Saarthi: Embracing Financial Inclusivity.


Setting of an Integrated Technology Platform under the IBC:

The Government is considering setting up an Integrated Technology Platform under the Insolvency and Bankruptcy Code, 2016.
It may provide for an integrated case management system for processes under the IBC, automated processes to file applications with the Adjudicating Authority, delivery of notices, enable interaction of Insolvency Professions with stakeholders, storage of records of the corporate debtor, and incentivise effective participation of stakeholders.
The Integrate Technology Platform would lead to better transparency, minimisation of delays, effective decision making and better oversight of the processes by the authorities.


Achievements/performance of the Insolvency and Bankruptcy Code, 2016:

The IBC has introduced a new era of transparency and fairness in insolvency resolutions.
It ensures equitable treatment of all stakeholders, with a clear and predictable resolution process.
Till March 2024, 28,818 applications for initiation of CIRPs, having underlying default of Rs. 10.22 lakh crore were resolved before their admission. This is attributed to the behavioural change in debtor creditor relationship effectuated by the Code.
Till September 2024, 1068 CIRPs have culminated in resolution plans, achieving on average 86.13% of the fair value of the Corporate Debtor (CD). Creditors have realised Rs. 3.55 lakh crore under the said resolution plans.
By June 2024, the IBC successfully navigated 3,409 CDs through the insolvency process, with 1068 achieving resolutions through plans and the remainder through appeals, reviews, settlements, or withdrawals. The resolution of these CDs has led to a realization rate of over 161% against liquidation value. The average expense incurred in the resolution processes is remarkably low, standing at only 1.37% of the liquidation value and 0.83% of the resolution value.


Competition Commission of India (CCI) achievements:

Since its inception, the Competition Commission of India (CCI) has received 1289 antitrust matters (Sections 3 & 4) and has disposed of 1157 (90% approx.) cases till September, 2024.
Further, from January 2024 to September 2024, the Commission received 30 new cases and disposed 30 cases (including carry forward cases from previous year).
The Commission considered and approved mergers and acquisitions relating to various sectors of the economy such as Financial Markets, Power & Power Generation, Pharmaceuticals & Healthcare, and Digital Markets.
Since its inception, the Commission has received 1191 combination matters (Sections 5 & 6) and has disposed of 1179 (99 % approx.). Further, from January 2024 to September 2024, the Commission received 91 new cases and disposed 101 cases (including carry forward cases from previous year). Seventeen (17) letters were issued to the parties out of Two hundred and ninety-one (291) transactions seen in Media scanning.


CCI initiated a Study on “Competition Issues in Renewable Energy Sector across BRICS Nations”.

The study report is being prepared based on inputs received from the competition authorities of BRICS nations.


Increased Compliance and Filing Rates:

Over the past two years, the Ministry has significantly improved compliance with Section 148 of the Companies Act, 2013.
This progress is evident from a substantial increase in the filings of e-Form CRA-2(Intimation of Appointment of Cost Auditor) and e-Form CRA-4 (Filing of Cost Audit Report). Specifically, there has been a 35% increase in e-Form CRA-2 filings and a 36% rise in e-Form CRA-4 filings in the fiscal year 2023-24 compared to2021-22.


Proactive Advisory Initiatives:

From the financial year 2023-24, the Ministry has proactively issued regular advisories to companies, emphasizing the importance of adhering to the prescribed timelines for filing Cost Audit Reports.
This initiative has led to a 14% increase in the timely submission of Cost Audit Reports during 2023-24 compared to the previous year.


Examination of Existing Framework of Cost Audit and its Rules:

To review the existing framework of Cost Records and Cost Audit and to improve the usefulness of the Cost Audit Reports in various sectors of the economy, a Committee was constituted in October, 2023 by MCA.
The Committee’s report has been placed on the website of MCA inviting comments from the stakeholders.
Based on the stakeholders comments, recommendations of the Committee will be examined and framework governing Cost Record and Audit will be amended.


Newly established office i.e., Central Processing Centre (CPC) in the year 2024.

The Central Processing Centre (CPC) was launched in 2024. CPC was established for discharging or carrying out the function of processing and disposal of such e-forms, as may be prescribed under the provisions of the Companies Act, 2013.
The CPC shall also exercise functional jurisdiction of processing and disposal of e-forms and all related matters pertaining to statutory compliances under the Companies Act, 2013 having territorial jurisdiction all over India and any other e-forms as may be notified by the Central Government, filed along with the prescribed fee as provided in the Companies (Registration of Offices and Fees) Rules, 2014″.


Empowering the Regional Directors

Rule 25A of Companies and (Compromises, Arrangements Amalgamations) Rules, 2016 [CAA Rules] has been amended on 9th Sep. 2024 (effective from 17.9.2024) empowering the Regional Directors (RDs) to approve petitions for mergers between a holding company incorporated outside India with a wholly owned subsidiary incorporated in India in a time bound manner, instead of NCLT.
The Ministry has also issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 on 24th January, 2024 to allow Indian companies to list their equity shares on Gift IFSC International stock exchanges. The “Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme” has also been issued by D/o Economic Affairs.


Amendment in Companies (Indian Accounting Standards) Rules, 2015 has been effected to bring changes in Ind AS 116 and introduction of Ind AS 117 as follows:

Ind AS 116: Amendment in Ind AS 116 has been made vide G.S.R. 554(E) dated 09.09.2024, which involves the treatment of leaseback transactions. A new paragraph, 102A, has been added to Ind AS 116, for right-of-use assets and lease liabilities arising from sale and leaseback transactions.
Ind AS 117: Vide the notification no. G.S.R. 492 (E) dated 12th August 2024, the Indian Accounting Standard (Ind AS) 117 has been introduced, in respect of insurance contracts.


Centre established for Processing Accelerated Corporate Exit (CPACE)

Fulfilling budget and announcement (2022-23), a Centre established for Processing Accelerated Corporate Exit (CPACE) for expeditious processing of applications filed for voluntary closure of companies, with an aim of bringing down the number of days taken for such closure from about 2 years to less than 6 months.
Since commencement of C-PACE on 01.05.2021, the average number of days for closure has reduced to about 90 days during the FY 2023-24. It is now centralized and the applications filed for voluntary closure of L.L.Ps are also with C-PACE to ensure their expeditious processing as well.
The CPACE for processing closure applications of LLPs was notified on 05th August, 2024 effective from 27th August, 2024.Since inception on 27th August, 2024 and upto 7th December, 2024, 4640 applications of LLP closure have been disposed of by the CPACE.


Amendments in Companies Act, 2013, and L.L.P Act 2008,

Through gradual amendments in Companies Act, 2013, and L.L.P Act 2008, 63 provisions have been decriminalized bringing defaults under such provisions under in-house adjudication mechanism. At present, Registrar of Companies (RoC) are adjudicating cases of defaults, wherein representatives of corporates have to attend hearings ‘in person’. The adjudication mechanism has been made electronic and faceless to eliminate interactions in person during adjudicatory process at RoC level.
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NB/AD

Release Id :-2088711

ROC imposes 7 Cr. Penalty for violation of Section 42 (Private Placement)- Unauthorised issuance of securities, Misleading valuation report, Exceeding limit of 200 persons, improper use of Co. platform for securities transactions etc. (Order dated 03 April 2024)

Grounds considered for reducing the penalty :

👉 No business income during the period of default

👉 Other income was only notional income on OFCD

👉 Interest on OFCD not paid till repayment of entire term loan

👉 No fund available to pay remuneration to CS as per the market standards

👉 Appointment of whole time company secretary in July 2017 (Vacant since Dec 2014)

In the framework of corporate governance, the Ministry of Corporate Affairs (MCA) continues to focus on bolstering ‘ease of compliance’ and ‘ease of doing business’ in the year 2023.

The establishment of Central Processing for Accelerated Corporate Exit (C-PACE) signifies a proactive approach to facilitate swift approvals for companies opting for voluntary closures. Notably, during the year 2023, 1,96,028 companies and LLPs were incorporated, showcasing a robust growth compared to the corresponding period in the previous fiscal year.

In an important development, the amendment to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 empowers Regional Directors (RDs) to expedite merger approvals. The groundbreaking Competition (Amendment) Bill, 2023, passed by both Houses of Parliament and received Presidential assent, introduces pivotal changes, including CCI’s approval for transactions over Rs 2,000 crore and a reduced timeline for final orders to 150 days.

The MCA also introduced amendments in key accounting standards with the Companies (Indian Accounting Standards) Amendment Rules, 2023, enhancing disclosure requirements. Additionally, strategic amendments in Companies (Incorporation) Rules, 2014, signify a commitment to minimising bureaucratic hurdles.

Promoting flexibility in corporate procedures through General Circular no. 09/2023, MCA extended timelines for conducting Annual and Extraordinary General Meetings through virtual means. The removal of processing costs in shifting registered offices and enabling such shifts after resolution plan approval under the Insolvency and Bankruptcy Code highlights a pragmatic regulatory environment.

The adoption of Straight Through Process (STP) for additional e-forms eliminates manual intervention, expediting electronic approvals and streamlining operations.

Lastly, the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023, introduce mandatory dematerialisation of shares for larger private companies, aligning regulations with contemporary market trends. These achievements collectively underscore the MCA’s commitment to fostering a dynamic, efficient, and responsive corporate ecosystem in India.

Following are some of the major achievements of the Ministry of Corporate Affairs, in 2023:

The processing type of additional e-forms have been changed to STP (Straight through Process) from Non-STP i.e, these forms can be approved electronically without human intervention and hence would lead to ‘ease of compliance’ and ‘ease of doing business’.







Central Processing for Accelerated Corporate Exit (C-PACE) has been operationalised w.e.f. 01.05.23 pursuant to Union Budget announcement in 2022, as a measure to provide expeditious approval of applications filed by the companies with intention to close operations voluntarily.









During Calander Year 2023, 1,96,028 companies and LLPs got incorporated as on 30th November 2023 as against 1,88,364 companies and LLPs for the corresponding period during Calander Year 2022.







The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 have been amended in May, 2023 pursuant to which, in case a Regional Director (RD) does not file an application before NCLT for considering the scheme of merger under section 232 or does not issue confirmation order for approval of merger u/s 233 within the time limit provided, it shall be deemed that RD has no objection and the confirmation order shall be issued accordingly.







The Competition (Amendment) Bill, 2023 had been passed by both the Houses of the Parliament (Lok Sabha on 29th March, 2023 and Rajya Sabha 3rd April, 2023) and received the Presidential assent (on 11th April, 2023).

Some highlights of the Amendment Act, 2023 are as under: –

Deals with transaction value of more than Rs 2,000 crore will require CCI’s approval. The timeline for the CCI to pass a final order on combination transactions has been reduced to 150 days from 210 days.
The Act expands the scope of entities that can be adjudged to be a part of anti-competitive agreements. Currently, enterprises or persons engaged in similar businesses can be held to be a part of anti-competitive agreements. The Act expands this to also include enterprises or persons who are not engaged in similar businesses.
The Act provides a framework for settlement and commitment for faster resolution of investigations of anti-competitive agreements (except cartels) and abuse of dominant position.
For the purpose of regulation of combinations, the Act modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.


The MCA had notified the Companies (Indian Accounting Standards) Amendment Rules, 2023 vide G.S.R. No.242(E), dated 31.03.2023 effective from 01.04.2023. The said rule inter-alia brings amendments to IndAS 1, IndAS 8 and IndAS 12 relating to disclosures of material accounting policies, definition of Accounting estimates and deferred Tax related to Assets and Liabilities arising from a Single Transaction respectively along with other consequential amendment in IndAS 107, IndAS 34 and IndAS 101. Further, some editorial corrections have also been carried out in IndAS 101, IndAS 102, IndAS 103, IndAS 109 and IndAS 115.







The MCA vide General Circular no. 09/2023 dated 25.09.2023 has extended the time line to conduct Annual General Meeting (AGM) and Extra- ordinary General meeting (EGM) through Video Conference (VC) or other Audio visual (OVAM) or transact items through postal ballot for the year 2023 or 2024 on or before 30th September, 2024.







The MCA vide notification number G.S.R. 790 (E) dated 20.10.2023 has amended the Companies (Incorporation) Rules, 2014 through which imposition of cost at the time of processing of application filed for shifting of registered office has been removed.







When the management of the company has been taken over by new management under a resolution plan approved under section 31 of the Insolvency Bankruptcy Code, 2016 (31 of 2016) and no appeal against the resolution plan is pending in any Court or Tribunal and no inquiry, inspection, investigation is pending or initiated after the approval of the said resolution plan, the shifting of the registered office has been allowed.

A new rule has been inserted vide Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 issued vide notification no. GSR 802(E) dated 27.10.2023 which provides for mandatory dematerialisation of shares of bigger private companies (i.e. private companies other than small companies). Adequate transitional period has been provided for such purpose.

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NB/VM/KMN

Release Id :-1991275
MCA Press Release 28 Dec 2023

 *Chandigarh ROC order dated  28 Dec 2023* *Adjudication order for violation of section 137 (Failed to file Financial statements) of the companies Act, 2013 the matter of M/s. Beckons Industries Limited* : Penalty imposed Rs. 6,13,400

 *Chandigarh ROC order dated  28 Dec 2023* *Adjudication order for violation of section 137 (Failed to file Annual Returns) of the companies Act, 2013 the matter of M/s. Beckons Industries Limited* : Penalty imposed Rs. 4, 98,560

 *Chandigarh ROC order dated  28 Dec 2023* *Adjudication order for violation of section 12(1) (Failed to maintaining  RO) of the companies Act, 2013 the matter of M/s. Beckons Industries Limited* : Penalty imposed Rs. 200,000

In our continuous endeavour to serve you better, the Ministry of Corporate Affairs is launching Second set of Company Forms covering 56 forms in two different lots on MCA21 V3 portal.

10 out of 56 forms will be launched on 09th January 2023 at 12:00 AM and the remaining 46 forms on 23rd January 2023.

Following forms will be rolled-out on 09th January 2023:

SPICe+ PART A, SPICe+ PART B, RUN, AGILE PRO-S, INC-33, INC-34, INC-13, INC-31, INC-9 and URC-1.

46 forms which will be rolled-out on 23rd January 2023 ( List given).

To facilitate implementation of these forms in V3 MCA21 portal, stakeholders are advised to note the following points:

(1) Company e-Filings on V2 portal will be disabled from 07th January 2023 12:00 AM to 08th January 2023 11:59 pm for 10 forms which are planned for roll-out on 09th January 2023.

(2) Company e-Filings on V2 portal will be disabled from 07th January 2023 12:00 AM to 22nd January 2023 11:59 pm for 46 forms which are planned for roll-out on 23rd January 2023.

(3) All stakeholders are advised to ensure that there are no SRNs in pending payment and Resubmission status.

(4) Offline payments for the above 56 forms in V2 using Pay later option would be stopped from 28th December 2022 12:00 AM. You are requested to make payments for these forms in V2 through online mode (Credit/Debit Card and Net Banking).

(5) In view of the upcoming launch of 56 Company forms, V3 portal will not be available from 07th January 2023 12:00 AM to 08th Jan 2023 11:59 pm due to 10 company forms roll-out and from 21st January 2023 to 22nd January 2023 for 46 company forms roll-out.

(6) V2 Portal for company filing will remain available for all the forms excluding above mentioned 56 forms.

Stakeholders may plan accordingly.