MCA: 

MCA vide its General Circular has issued much needed Clarification on matters relating to Related Party Transactions falling under the provisions of the Section 188 of the Companies Act, 2013. MCA on the basis of the representations received from stakeholders and after examining the issues has issued the following clarifications :-

1. Scope of second proviso to Section 188{1) :- It is clarified that ‘related party’ referred to in the second proviso has to be construed with reference only to the contract or arrangement for which the said special resolution is being passed. Thus, the term ‘related party’ in the above context refers only to such related party as may be a related party in the context of the contract or arrangement for which the said special resolution is being passed. In other words in all other resolution, shareholders of the Company can participate & vote even if member is a related patty.

2. Applicability of Section 188 to Corporate Restructuring – Amalgamations etc– :- It is clarified that transactions arising out of Compromises, Arrangements and Amalgamations dealt with under specific provisions of the Companies Act, 1956/Companies Act, 2013, will not attract the requirements of section 188 of the Companies Act, 2013.

3. Requirement of fresh approvals for past contracts under Section 188:- Contracts entered into by companies, after making necessary compliances under Section 297 of the Companies Act, 1956, which already came into effect before the commencement of Section 188 of the Companies Act, 2013, will not require fresh approval under the said section 188 till the expiry of the original term of such contracts. Thus, if any modification in such contract is made on or after lst April, 2014, the requirements under section 188 will have to be complied with.

MCA: 

1. MCA with an intention to simplify procedures and with a view to ensure timely disposal of E-Forms in the office of Registrars of Companies and keeping in view the penal provisions for false declaration as contained in section 448 read with section 447, has now instructed that with effect from21-07-2014 all E-Form MGT – 14 except for change of name, change of object, resolution for further issue of capital and conversion of companies will be processed and taken on record using the Straight Through Process (STP) mode. Now onus to comply with the provisions and to attach all mandatory documents will be on certifying professionals.

2.  MCA has issued the Companies (Removal of Difficulties) Fifth Order, 2014 which shall came into force on the date of its publication in the official Gazette. The order has been issued to remove the difficulties arisen regarding compliance with the provision of clause (76) of section 2 of the said Act define the term ‘related party’. In sub clause (v) of clause (76) of section 2, for the word “or”, the word “and” shall be substituted.

MCA: 

1. MCA has issued General Circular to Extend the last date of Filing of DPT4 under the provisions of the Sec 74 (1)(a) of the Companies Act, 2013. It has been decided to grant extension of time for the period of 2 months i.e. up to 31-08-2014 without any additional fee in terms of section 403 of the Act to enable the companies for filing of statement under Form DPT4 with the Registrar. However, MCA has not clarified what exactly falls under the definition of “Deposits existing as on the date of the commencement of the Act” as it has only extended the last date for filing of the Form DPT – 4.

2. MCA has issued the much awaited notice relating to filing of Form 23C & Form 23D belatedly after expiry of last date of filing of these Forms i.e 29-06-2013. Most of the companies have already opted for the same and have filed these forms due to the non availability of Cost Rules & clarification from the Ministry. MCA has now clarified that Form 23C and Form 23D are not applicable for filing in relation to appointment of Cost Auditor under the provisions of the Section 148 of the Companies Act, 2013. New Form required pursuant to new Cost Records & Audit rules shall be made available shortly.

MCA: 

MCA has issued clarification relating to Incorporation of a Subsidiary Company by a Company incorporated outside India. Attention has, in particular, been drawn to the absence of the deeming provision of sub-section (7) of section 4 of the Companies Act, 1956 in the Companies Act, 2013 (New Act). It has been clarified that there is no bar in the new Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company, as the case may be, without any change in the incorporation status of such company.

MCA: 

MCA has issued Clarification with regard to holding of shares in a fiduciary capacity by associate company under section 2(6) of the Companies Act, 2013 and clarified that the shares held by a company in another company in a ‘fiduciary capacity’ shall not be counted for the purpose of determining the relationship of’ associate company’ under section 2(6) of the Companies Act, 2013.