1. Recent Amendments and Developments in Company Law
N. Palaniappan, B.Com., LL.B., F.C.S., A.C.M.A.,
Company Secretary & Sr. Manager – Finance
Blue Dart Aviation Limited

2. Form DIR-3 KYC
Form DIR-3-KYC -Every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status would be mandatorily required to file form DIR-3 KYC on or before 31st August, 2018-Extended to September 15, 2018
Personal mobile number and personal Id required to be entered in Form DIR-3 KYC. It has to be duly verified by One Time Password (OTP).
For this purpose, Directors includes Disqualified Directors also.
Requirements for filing DIR-3 KYC
The Directors should have a valid DSC
DIN should be obtained on or before 31st March,2018
The Director should possess Unique Personal Mobile Number and Personal ID 
Form required to be certified by a practicing professional (CA/CS/CMA).

3. Form DIR-3 KYC
Last date of Filing Form DIR-3 KYC shall be 31st August, Now it has extended to September 15, 2018.
After effects of Non-filing of Form DIR-3 KYC
Valid DIN’s allotted on on before 31st March 2018 will be deactivated with reason as ‘Non-filing of DIR-3 KYC’
Filing of DIR-3 KYC after 31st August,2018 shall be subject to payment fees as specified by the Ministry.

4. Form DIR-3 KYC
Important Points to be noted
The Director name should be entered as mentioned in PAN since the same shall be verified with PAN database.
Foreign nationals shall select the nationality as declared in the passport.
Mandatory to provide Aadhaar number if ‘Yes’ selected in the form
Enter your personal mobile number. Please note that the same will be verified by OTP. Country Code other than +91/91/0 shall be allowed only in case Whether resident in India is selected as ‘No’.
Enter your personal ID. Please note that the same will be verified by OTP.

5. Form DIR-3 KYC
Important Points to be noted
Verify OTP -Please note that the OTPs must be verified before you try to upload the form.
Ensure that the eForm is digitally signed by the same person i.e. applicant who is filing the application.
Please note that the PAN mentioned in the form and the PAN mentioned in the DSC affixed, must be same for successful validation.
In case of foreign nationals, who do not have PAN, the name mentioned in the form must be same as the name mentioned in the DSC affixed for successful validation.
Approval mail shall be sent to the ID of the applicant and to the user who has filed the eForm.

6. Form DIR-3 KYC
FAQ
Who is required to file Form DIR-3 KYC Form?
For Financial year Any person who has been allotted “Director Identification Number (DIN/DPIN)” on or before 31st March 2018 and the status of such DIN is ‘Approved’, needs to file form DIR-3 KYC to update KYC details in the system on or before 31st August For Financial year onwards - Every Director who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’, would be mandatorily required to file form DIR-3 KYC before 30th April of the immediately next financial year. After expiry of the respective due dates, system will mark all non-compliant DINs against which DIR-3 KYC form has not been filed as ‘Deactivated’.

7. Form DIR-3 KYC
FAQ
Is it Mandatory to enter a unique mobile number and e mail id in form DIR-3 KYC?
Yes.
It is mandatory to enter your personal mobile number and personal ID in the form DIR-3 KYC and the same has to be verified by an OTP process. Further, the mobile number and ID must be unique such that it is not already linked with some other person in the DIN holders’ database.

8. Form DIR-3 KYC
FAQ
How does the OTP functionality in DIR-3 KYC Work?
Send OTP button will be enabled only after successful Pre-scrutiny of the form. After successful Pre-scrutiny, user has to click on ‘Send OTP’ button.
Whether Disqualified Director required to file form DIR-3 KYC?
Yes.
Any person who has been allotted DIN and where the status of such DIN is ‘Approved’, is required to file form DIR-3 KYC. Hence, disqualified directors are also required to file form DIR-3 KYC.

9. Whether NRI Directors can provide Indian Mobile Numbers?
Form DIR-3 KYC
Whether DIN Status is Deactivated? Whether they need to file form DIR-3 KYC?
Form DIR-3 KYC can be filed for status ‘Deactivated’ on payment of fee of Rs only if the DIN was deactivated due to non-filing of form DIR-3 KYC.
Whether NRI Directors can provide Indian Mobile Numbers?
In case the DIN holder is a resident of India, the address must be an address in India and mobile number must be an Indian mobile number. In case DIN holder is non-resident, foreign address and foreign number shall only be allowed.

10. Whether Multiple filing form DIR-3 KYC is allowed?
System will not allow multiple filing of form DIR-3 KYC for an applicant. In case KYC is already filed for a DIN, and such DIN is entered again, system throws an error that the form is already filed.
Why is the “SEND OTP” button disabled?
Send OTP button remains disabled till successful pre-scrutiny of the form. After successful pre-scrutiny, the form must be saved and only after saving the form, the ‘Send OTP’ button gets enabled.
What is the validity of OTP?
Please note that, once OTP is successfully sent to the valid mobile number and ID entered in the form, ‘Send OTP’ button gets disabled. OTP is valid for 30 minutes

11. When OTP not received on email. Why is it so?
Form DIR-3 KYC
When OTP not received on . Why is it so?
The need to be check in the SPAM Folder in the mailbox for the OTP received.

12. Beneficial Ownership Definitions Rule 2 (c)
Registered Owner means a person whose name is entered in the register of members of a Company as the holder of shares in that Company but who does not hold beneficial interest in such shares;
Rule 2 (e)
Significant Beneficial Owner means an individual referred to in sub-section (1) of section 90 (holding ultimate beneficial interest of not less than 10%) read with sub-section (10) of section 89, but whose name is not entered in the register of members of a company as the holder of such shares, and the term ‘significant beneficial ownership’ shall be construed accordingly

13. Beneficial Ownership Section 89 90 Applicability
Declaration of Beneficial Interest in Share. 90
Register of significant beneficial owners in a Company.
Companies (Significant Beneficial Owners) Rules, 2018.
Applicability
Applicable to all the Companies except Government Companies
In case of pooled investment vehicles/investment funds such as Mutual Funds, Alterative Investment Funds (AIFs), Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) regulated under SEBI Act.
Hence all Public, Sec 8 and Pvt Companies need to comply with this provision.

14. Significant Beneficial Owner
Where the member is
Individual
S. 90(1) states every individual who is
(i) Acting alone or together, or
(ii) Through one or more persons or trust, including a trust and persons resident outside India.
Holds 25% or such percentage as prescribed in Rules (Rules mention it as 10 %) in the shares of a Company;
Exercises significant influence over the Company;
Exercises control over the Company.

15. Action Points-Significant Beneficial Ownership
Step 1 Declaration of Significant Beneficial Ownership by the SBO to Company:
Initial Declaration:
Form No. BEN – 1 : This Declaration has to be filed on or before 10th September 2018 (90 days from the commencement of the Companies (Significant Beneficial Owners) Rules, 2018) AND
Declaration for change in Beneficial ownership
Form No. BEN – 1 This Declaration has to be filed within 30 days from the date of any change/acquisition in Significant Beneficial Ownership.

16. Action Points-Significant Beneficial Ownership
Step 2: Return of Significant Beneficial Ownership in Shares
The Company shall file return in Form No. BEN – 2 within 30 days of receipt of declaration by the SBO in Form No. BEN – 1.
The penalty given for non filing of this Form in Sec. 90 (11) is not less than 10 lakhs and can extend upto 50 lakhs and for continuing offence the penalty is Rs 1000 per day. (This form is yet to be released by MCA and expected to be released in September).
Step 3 Maintain Register of Significant Beneficial Owners:
The Company shall maintain a register of significant beneficial owners in Form No. BEN - 3.

17. Significant Beneficial Ownership
Can the Company Suo moto seek Information from SBO?
A Company shall give notice in Form No. BEN - 4, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe—
(a) To be a SBO of the company;
(b) To be having knowledge of the identity of a SBO or another person likely to have such knowledge; or
(c) To have been a SBO of the company at any time during the three years immediately preceding the date on which the notice is issued, and who is not registered as a SBO with the company as required under this section.
Note: SBO/Concerned Person to reply to the Company within a period not exceeding 30 days from the date of notice

18. The Companies(Amendment) Act, 2017
The Companies (Amendment) Bill, 2017 is passed by Lok Sabha and Rajya Sabha on 27th July 2017 and 19th December, 2017 respectively. Received the assent of President of India on January 3, 2018.
The amendments under the Companies (Amendment) Bill, 2017, are broadly aimed at:
i. addressing difficulties in implementation owing to stringent compliance requirements;
ii. facilitating ease of doing business in order to promote growth with employment;
iii. harmonisation with accounting standards, the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder, and the Reserve Bank of India Act, 1934 and the regulations made thereunder;
iv. rectifying omissions and inconsistencies in the Act.

19. The Companies Amendment Act, 2017
Cost Accountant
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 2(28)
“Cost Accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);
“Cost Accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;

20. The Companies Amendment Act, 2017
Associate Company
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
2 (6)
'Significant influence' was defined as control of at least 20% of the total share capital or business decisions under an agreement.
Defines 'significant influence' referencing, control of 20% of the total voting power or control of or participation in business decisions.
No definition given for ‘Joint Venture’
Defines the term 'joint venture' as a joint arrangement whereby parties that have joint control of the arrangement have rights to the net assets of the arrangement.
2(41)
Financial year definition: Only holding & subsidiary companies of foreign companies were allowed to align their financial year.
Inclusion of Associate Company in the definition of 'financial year', allowing companies which are associates of foreign companies to make an application to align their financial years with the financial years of such foreign companies.

21. Key Management Personnel
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 2(51)
The term 'key managerial personnel' (KMP) was defined under the 2013 Act to mean the chief executive officer, managing director, manager, company secretary, whole time director and chief financial officer.
The Amendment Act expands the definition of KMP by giving the board of directors the power to designate an officer of the Company, one level below the director who is in whole time employment of the company, as a KMP.

22. The Companies Amendment Act, 2017
Public Offer (Prospectus)
Net-worth
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 2(57)
The phrase was missing
“Net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits, securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation.

23. The Companies Amendment Act, 2017 The Companies Amendment Act, 2017
Related Party
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 2(76)
As per the definition of 'related party' under the 2013 Act, only an Indian incorporated holding, subsidiary or associate company of an Indian company could be a related party of such a company.
The Amendment Act addresses this anomaly by providing that any body corporate (therefore including companies incorporated outside India) being a holding, subsidiary or associate company of an Indian company would be a related party of such company. (c) An investing company or a venturer shall also become a related party.
Subsidiary
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 2(87)
One half of “total share capital”
Now “total share capital” has been substituted with words “total voting rights” in order to consider only equity share capital for the same.

24. Effect of number of members falling below the minimum requirmeent
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 3A
If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefore.”

25. The Companies Amendment Act, 2017 The Companies Amendment Act, 2017
Registered Office
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 12 (1)
A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it
“A company shall, within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.”
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 12(4)
‘Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.’
Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same.”

26. The Companies Amendment Act, 2017 The Companies Amendment Act, 2017
Issue of shares at a Discount
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 53
Issue of shares at a discount to face value was prohibited under the 2013 Act.
Allows issue of shares at discount to its creditors when its debt is converted into shares in pursuance of RBI guidelines
Issue of sweat equity shares
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 54
Sweat equity shares could not be issued within 1 year of commencement of business of the company.
The act remove this restriction

27. The Companies Amendment Act, 2017 The Companies Amendment Act, 2017
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 26
The 2013 Act listed matters that needed to be stated in the prospectus while making a public offer.
The Amendment Act seeks to omit the provisions that require specific matters to be stated in the prospectus and proposes that the company should provide such information as required by the SEBI in consultation with the Central Government.
Key Management Personnel
Annual Return
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 92
An extract of annual return shall be form of Board’s report
Every company shall place a copy of the annual return on the website of the company and web link of such annual return shall be disclosed in the Board’s report

28. The Companies Amendment Act, 2017
General Meeting
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 100(1)
The Board may, whenever it deems fit, call an extraordinary general meeting of the company.’
In section 100 of the principal Act, in sub-section (1), the following proviso shall be inserted, namely:—
“Provided that an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India

29. Consolidation of Accounts
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 129
Associate word was missing.
Where a Company has one or more subsidiaries or associates it requires to prepare CFS in addition to SFS.
Associate word inserted that means if a company has joint venture then also it requires to prepare CFS, as in the definition of Associate, Joint venture was included.
Key Management Personnel
Appointment of Auditors
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 139
Requirement to ratify the appointment of auditor at every AGM is done away with.

30. The Companies Amendment Act, 2017
CSR
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 135
‗Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.‘
―Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

31. The Companies Amendment Act, 2017 The Companies Amendment Act, 2017
Resident Director
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 149(3)
The 2013 Act required every company to have at least one resident director, i.e., a director who has stayed in India for a total period of not less than 182 days during the previous calendar year.
The Amendment Act seeks to modify the residency requirement, by making it applicable to the current financial year instead of the previous calendar year.
It comes with an increased burden of compliance on the Indian company.
Independent Director
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 149(6)
Under the 2013 Act, a person appointed as an independent director and his relatives were not permitted to have any pecuniary relationship or transaction with the company in which such a person was appointed as an independent director.
The Amendment Act permits an independent director to have limited pecuniary relationships with the company without compromising his independence, such as receiving remuneration as an independent director and having transactions with the company not exceeding 10% of his total income.

32. The Companies Amendment Act, 2017
DIN NO.
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 153
Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.
Provided that the Central Government may prescribe any identification number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed.”

33. Number of Directorship
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 168
Under the 2013 Act, a person was not allowed to hold office as a director, including alternate directorship, in more than 20 companies.
The Amendment Act excludes directorship in dormant companies in determining the limit of 20 companies, so that directorships in dormant companies is not discouraged.
Alternate Director
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 161
The 2013 Act permitted a director of a company to be appointed as an alternate to another director of the company in case the latter is absent from India for a period of 3 months.
The Amendment Act prohibits the appointment of an existing director of the company as an alternate for a director during his absence.

34. Resignation of Director
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 165
The 2013 Act, required the resigning director to forward a copy of his resignation, along with reasons, to the ROC within 30 days of the resignation.
The Amendment Act makes such filing optional for the resigning director.
Disqualification of appointment of directors
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Sec 164(2)
Under the 2013 Act, a director could not be reappointed as a director in a company which had failed to file financial statements and annual returns for a continuous period of three years or had not repaid deposits or interest or redeemed debentures on the due date, etc. for a year or more.
The Amendment Act provides that a newly appointed director of a company in default should not incur such disqualification for a period of six months from his appointment, which gives him an opportunity to rectify the defect and avoid this disqualification within such period.

35. Loans to Associate Companies
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 185
No company shall, directly or indirectly, advance any loan, including any loan represented by a book debt to, or give any guarantee or provide any security in connection with any loan taken by,—
 any director of company, or of a company which is its holding company or any partner or relative of any such director; or any firm in which any such director or relative is a partner.
A company may advance any loan including any loan represented by a book debt, or give any guarantee or provide any security in connection with any loan taken by any person in whom any of the director of the company is interested, subject to the condition that—
(a) a special resolution is passed by the company in general meeting:
This would give big relief to the companies.

36. Managerial Remuneration
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 197(1)
Provided that the company in general meeting may, with the approval of the Central Government, authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V.’
“Provided that the company in general meeting may, authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V:”
No CG approval will be required for public companies for payment of remuneration to managing director even exceeding 11% of net profits.

37. Managerial Remuneration
Public Offer (Prospectus)
Section
The Companies Act, 2013
The Companies Amendment Act, 2017
Section 197(1)
Where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining the approval in the general meeting

38. Highlights-35
In case of Incorporation, Name shall be reserved for 20 days from the date of Approval instead of 60 days from the date from the date of application.
For registration of a Company 'Declarations' will be required instead of Affidavits.
Partnership Firm, LLP, Societies etc. may convert itself into a Private Company with 2 or more members only. (Earlier at least 7 members was required)
Objects of the Company can state that the company will do any lawful activity or business without giving any specific object.
In addition to Nidhi Companies, Mutual Benefit Society can also be registered under Chapter XXVI of the Act.

39. Highlights-35
Notice of every change of shifting of Registered Office (E-Form INC-22) is now required to file with ROC within 30 days instead of 15 days.
Sweat Equity Shares can now be issued at anytime, hence no need to wait for one year from commencement of business.
In addition to Directors and KMP, any employee can also authenticate documents.
Officers not more than one level below the Directors who are in full time employment of the Company can also be designated as KMP.
CSR from now onwards shall also apply to Foreign Companies with such exceptions as may be prescribed.

40. Highlights-35
For CSR Net worth/ Turnover/ Net Profit shall be considered for immediately preceding Financial Year instead of 3 preceding year.
Form MGT-10 with respect to change in promoters and 10 top ten shareholders shareholding is not required to file with ROC.
Now Central Government can provide any other number to be treated as DIN.
From now onwards every Company to have at least One Resident Directors who stays in India for a total period of 180 days during the Financial Year instead of Calendar Year.
Associate company of a company incorporated outside India can also apply to the Tribunal for a different financial year.

41. Highlights-35
Central Government approval is no more required for payment of remuneration in excess of 11% of net profits. It means it can be passed by passing Ordinary Resolution
If an appointment of Independent Director or Director is nominated by Nomination and Remuneration Committee then it is not required to deposit Rs. 1Lakh w.r.t to Nomination of such Director.
Director shall not be disqualified u/s 164 (2) for a period of 6 months from the date of his appointment.
If a Director is disqualified u/s 164 (2)  of Companies Act, 2013 then he will to vacate his office from All Companies except that the Company which is in default.
 Filing requirement of Form DIR-11 for resignation of Director is now Optional.

42. Highlights-35
Ratification of Appointment of Auditor at every Annual General Meeting is not compulsory.
Form MGt-14 with respect to section 180 (1) (a) and (c) is not required to filed with ROC.
Annual General Meeting of Unlisted Company may be held at any place in India if the consent is received in advance from all the members.
Abridged version of Annual Return for OPC & Small companies shall be prescribed.
Extract of the Annual Return (MGT-9) now can be placed on the website of the Company.

43. Highlights-35
Disclosures included in Financial Statements already, need not to be repeated in Board Report.
From now onwards CEO of the Company shall sign the Financial Statements of the Company.
Financial Statements for Joint Ventures shall not be Consolidated with the Financial Statements of the Company.
Wholly owned subsidy of foreign Company can hold EGM outside India also.
Now there are no restrictions on Companies to invest with respect to layers on Investment Companies.

44. Highlights-35
Private Placement is to be made to 'Identified Persons' (Board shall identify the same).
New format for Private Placement offer-cum application may be issued by the Government.
Amount received under private placement shall not be utilized unless the return of Allotment is filed with the ROC.
Return of Allotment (PAS-3) shall be filed within 15 days of Allotment instead of 30 days.
If Company defaults in filing of Return of Allotment (PAS-3) beyond 15 days then Co., its promoters and Directors are liable to pay penalty of Rs per day subject to maximum of Rs. 25 Lacs.

45. THANK YOU R.C. MISHRA, I.C.L.S REGISTRAR OF COMPANIES
ANDHRA PRADESH & TELANGANA
THANK YOU