7 October, 2017
Revised Secretarial Standards on Meetings of the Board of Directors (SS 1) and General Meetings (SS 2)
Secretarial Standards on Meetings of the Board of Directors (SS 1) and General Meetings (SS 2) which, inter alia, prescribes a set of principles for convening and conducting meetings of the board of directors and shareholders by a company registered in India were approved by the government on April 10, 2015 and were made effective from July 1, 2015. The government by a notification dated August 16, 2017 has now provided that the SS 1 and SS 2 shall stand withdrawn with effect from September 30, 2017 without affecting the enforceability of SS 1 and SS 2 during the period before such withdrawal. Further, the Institute of Company Secretaries of India which drafts and publishes the secretarial standards has got approval of the government for the revised SS 1 and SS 2 on June 14, 2017. The revised SS1 and SS 2 shall be applicable to all the companies, except some exempted class of companies, with effect from October 1, 2017 and accordingly all board meetings, including meetings of committees of board, and general meetings in respect of which notices are issued on or after October 1, 2017 shall be convened and conducted in accordance with the revised SS 1 and SS 2.
The National Company Law Tribunal (Amendment) Rules, 2017
The Ministry of Corporate Affairs (“MCA”) on July 5, 2017 has notified the National Company Law Tribunal (Amendment) Rules, 2017 thereby inserting a new 87A which, inter alia, provides for manner of filing an appeal with the National Company Law Tribunal under section 252 of Companies Act, 2013 against an order of the Register of Companies with respect to dissolution of a company by removing the name of company from its registers.
The Companies (Appointment and Qualification of Directors) Amendment Rules, 2017
The MCA on July 5, 2017 has notified the Companies (Appointment and Qualification of Directors) Amendment Rules, 2017 thereby exempting certain class of public companies from the requirement of mandatory appointment of independent directors on their board. The exempted class of public companies are (i) a joint venture company; (ii) a wholly owned subsidiary; and (iii) a dormant company as defined under Companies Act, 2013.
The Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017
The MCA on July 13, 2017 has notified the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017. The amendment relates to provisions regarding conducting of a meeting of the board through video conferencing and other audio video means and the manner of finalisation of minutes of such meeting. Further, by this notification Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 has also been amended to provide exemption to certain class of public companies from provisions of constitution of ‘Audit Committee’ and ‘Nomination and Remuneration Committee of the Board’.
The Companies (Incorporation) Second Amendment Rules, 2017
The MCA on July 27, 2017 has notified the Companies (Incorporation) Second Amendment Rules, 2017 thereby substituting Rule 28 and Rule 30 in the Companies (Incorporation) Rules, 2014. These amendments relates to the provisions regarding shifting of registered office by a company within the same State from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies and shifting of registered office from one State or Union Territory to another State.
The Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017
The MCA on August 24, 2017 has notified the Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017. By this Rule, the Serious Fraud Investigation Office (SFIO) now has been granted powers to arrest people for violations of provisions of companies law. Where the Director, Additional Director or Assistant Director of SFIO investigating into the affairs of a company other than a government company or foreign company has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under section 212 of the Act, he may arrest such person. The shot in the arm for the probe agency comes at a time when the government is cracking the whip on suspected shell companies being used for illegal activities, including money laundering and tax evasion.
Notification of sub-section (8), (9) and (10) of section 212 of the Companies Act, 2013
The MCA vide a notification dated August 24, 2017 has made effective sub-section (8), (9) and (10) of section 212 of the Companies Act, 2013 which grants power to SFIO to arrest a person guilty of an offence punishable under section 212 of the Companies Act, 2013.
FDI Policy 2017 – Impact on retail sector
Unlike its predecessor, the FDI Policy 2017 clears the ambiguity regarding decision making for “state of art” and “cutting edge” technology.
The Department of Industrial Policy and Promotion (“DIPP”) on August 28, 2017 has issued the Foreign Direct Investment Policy, 2017 (“FDI Policy”) effective from the date of issue. The extant FDI Policy shall replace the policy issued in 2016 with certain amendments to the various sectors it covers. The policy liberalization is carried out from time to time, in the form of press notes and is consolidated on an annual basis under the consolidated FDI policy.
In relation to the single brand retail trading sector, the extant FDI Policy provides setting up of a committee under the chairmanship of Secretary, DIPP, with representatives from NITI Aayog, the concerned administrative ministry (i.e. the DIPP) and independent technical expert(s), to examine the claim of foreign single brand retail trade companies planning to set up branded stores in India and claiming to have products with “state-of-the-art” and “cutting-edge” technology, for waiver of the 30% local sourcing norm.
Further, in terms of e-commerce activities, the erstwhile Policy prohibited an e-commerce entity from permitting more than 25% of the sales effected through its market place from one vendor or its group companies. The extant FDI Policy clarifies that the 25% of sales value must be computed per financial year.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
