MCA notifies Rules under Companies Act, 2013

The Ministry of Corporate Affairs has notified 11 Rules under Companies Act, 2013. They will be effective from April 1, 2014. The major sections of Companies Act, 2013 have already been notified on March, 26, 2014. The salient features of these Rules are as under:

1)  New Definitions: It incorporates definitions of ‘Certifying Authority’, ‘digital signature’, ‘Digital Signature Certificate’,  ‘electronic Mail’, ‘electronic mode’ , electronic record’, ‘electronic Registry’.

2)  One person company (‘OPC’): Only a natural person who is an Indian citizen and resident shall be eligible to incorporate a OPC.

3)  Cessation of OPC status: OPC’s status shall be ceased if-

a)  Its paid up capital exceeds fifty lakh rupees or

b)  Its average annual turnover exceeds two crore rupees.

4) Penalty: The OPC or any of its officer will be liable for penalty of upto Rs 10,000 and further a fine of Rs 1,000 per day if they contravenes any of the provisions of these rules.

5) Prospectus:  Following reports shall be required to be filed along with the Prospectus:

a) Auditor’s report on profits and losses and assets and liabilities.

b) The reports of preceding five financial years relating to profits and losses of the enterprise. Reports can be filed for less than five financial years if the enterprise was in existence for lesser period.

c) Auditor’s report in respect of business of the enterprise.

6) Annual Return: Every company is required to prepare its annual return in Form No. MGT.7. Companies satisfying the following criteria are required to certify its Annual Return from a Company Secretary in practice:

(i)    listed companies or

(ii)   Companies having paid-up share capital of Rs 10 crore or more or

(iii)  Companies with turnover of Rs 50 crore or more.