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published on 31 January 2024 I reading time approx. 6 minutes
 

Company Law Updates

1. The Companies (Incorporation) Rules, 2014

The Ministry of Corporate Affairs (MCA) vide its notification (no. G.S.R. 790(E). dated 20 October 2023) has allowed the shifting of registered office when the management of the company has been taken over by a new management under a resolution plan approved under section 31 of the Insolvency Bankruptcy Code, 2016 and no appeal is pending in any Court or Tribunal and no inquiry, inspection, investigation is pending or initiated after the approval of the resolution plan.


2. Designation of Responsible Persons in the Company

MCA vide its notification (no. G.S.R. 801(E). dated 27 October 2023) has cast an obligation on every company to designate a person who will be responsible for providing information to registrar of companies regarding the beneficial interest in the shares of Company.

The amendment further identifies certain persons as deemed responsible person if the company has not designated any person. The deemed responsible person may be the Company Secretary, Managing Director or Manager depending on company’s specific circumstances.  Additionally, every Company is obliged to dislcose the details of Designated Person in its Annual Report and intimate the changes in the designated person to the Registrar in Form GNL-2.


3. Maintenance of Register of Partners and Disclosure of beneficial interest in LLPs

MCA vide notification (no. G.S.R. 801(E). dated 27 October 2023) amended the LLP Rules by inserting Rule 22A and Rule 22B. Rule 22A requires the limited liability partnership(s) to maintain a Register of its Partners in Form 4A which shall be kept at the registered office of the Limited Liability Partnership. Rule 22B requires making of declaration in cases where the registered partner and beneficial partner of contribution in LLP are two different persons. 

This rule further mandates the disclosure of beneficial interest in the contribution of LLPs in the manner as prescribed under the relevant provisions of LLP Rules. Additionally, every designated partner shall be deemed to be responsible for providing information to Registrar until a person is so designated.

4. Issue of securities in dematerialised form by private companies
MCA vide notification (no. G.S.R. 802(E) dated 27 October 2023) amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 by inserting Rule 9B wherein it has been mandated for private companies (other than a Small Company) to issue the securities only in dematerialised form and facilitate dematerialization of its securities within eighteen months of closure of financial year ended 31 March 2023.

Further, the private companies have to ensure that the entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised before making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer etc.

Every holder of securities of such private company (after completion of the aforesaid timeline) is required to get securities dematerialized before its transfer and the one who subscribes to securities issued by such private company shall ensure that all his securities are held in dematerialized form before such subscription.

5. Introduction of Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023

MCA vide notification (no. G.S.R. 832 (E) dated 9 November 2023) notified the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023 specifying the definition of Significant Beneficial Ownership (SBOs) along with procedure and steps for the LLP to identify SBOs in the LLP and causing such SBOs to make a declaration in Form LLP BEN-1. 

Further, the reporting LLP is required to file a return in Form LLP BEN-2 with the Registrar within 30 days of receipt of such declaration and also maintain a register of SBOs in Form LLP BEN-3. Additionally, the reporting LLP is required to give notices in Form LLP BEN-4 to the partners holding 10 per cent or more stake seeking the information about beneficial interests.

Company Secretarial (CS) Compliance for Private Limited Companies

Below is a summary of the compliances that need to be adhered to in the next quarter 

(January – March 2024):


ParticularsDue Date 

Hold at least 1 (one) Board Meeting in quarter January 2024 - March 2024, in the following scenario:

1. the last board meeting held in the month of November 2023

2.only three board meeting held till December 2023.

31 March 2024

Form AOC-4

(For the Companies holding their first annual general meeting on or before 31 December 2023 or obtained 3 (three) months extension for holding of annual general meeting)

30 days from the date of annual general meeting

Form MGT-7

(For the Companies holding their first annual general meeting on or before 31 December 2023 or obtained 3 (three) months extension for holding of annual general meeting)

60 days from the date of annual general meeting

Form CSR-2

(Report on Corporate Social

Responsibility (CSR))

 

Post furnishing the Form AOC-4 or Form AOC-4XBRL or Form AOC-4 NBFC (Ind AS) and on or prior to the date 31 March 2024.
ECB-2 Returns
In case External Commercial Borrowings (ECB), that is, commercial loans are availed by eligible resident entities from recognized non-resident lenders, such resident entities are required to file Form ECB-2 return within 7 (seven) working days from the closing date of each month.


Environmental Law Updates

1. The Battery Waste Management (Amendment) Rules, 2023

The Ministry of Environment, Forest, and Climate Change has issued a notification (no. S.O. 4669 (E) dated 25 October 2023) under the Battery Waste Management (Amendment) Rules, 2023. The said rules mandate registration under the Central Pollution Control Board to every producer, dealer, consumer, and entities involved in collection, segregation, transportation, re-furnishment and recycling of expired batteries.  

The revised definition of battery includes new or refurbished cell and disposable batteries. The amended rules state that registration once obtained by a producer of battery waste will be valid till perpetuity until it is cancelled or withdrew by him. The producers are no longer required to submit the Extended Producer Responsibility Plan to the Central Pollution Control Board for the batteries manufactured by them. Furthermore, the recyclers should maintain information related to total weight of battery waste generated by them and deal with only registered entities for battery waste recycling. 

2. Plastic Waste Management (Amendment) Rules, 2023

The Ministry of Environment, Forest, and Climate Change has issued a notification (no. G.S.R. 74 (E) dated 
16 October 2023) under the Plastic Waste Management (second Amendment) Rules, 2023. These rules mandate every manufacturer, waste generator, producers, and importers of products with plastic packaging to registers themselves and comply with Extended Producer Responsibility obligations.

As per the recent amendment every producer, importer, or brand owner whose products have plastic packaging should ensure that the name and registration certificate number of the company is printed on their plastic packaging, and to collect the used multi-layered plastic sachet or pouches or packaging of the products they introduce in the market and prevent mixing of the plastic packaging waste with solid waste. 

Further, the amendment directs that, the carry bags and plastic sheets used for packing of commodities should be made of biodegradable plastic. The plastic raw materials should be sold only to the sellers registered on the centralized online portal. 


Labour Law Updates 

Tamil Nadu Labor and Skill Development Department on public utility service

The Governor for the state of Tamil Nadu published a notification dated 18 October 2023, thereby declaring the industry manufacturing steam generation equipment like high pressure boilers, valves and fittings, pressure vessels and package boilers under the category of public utility service for a period of six months starting from 26 September 2023.

 

Pursuant to the same, employers of such industries are required to provide their services without any kind discrimination and at a reasonable price. Further, these industries are prohibited from inflating their prices and indulging into unfair trade practices.  The employer and employees under the public utility service are prohibited of strikes and lockout without giving notice of prescribed period to the Tamil Nadu Labor department. 


Consumer Protection Law Updates 

Tamil Nadu's Mechanism to monitor or supervise the activities of direct sellers and direct selling entities

Based on the relevant provisions of Consumer Protection (Direct Selling) Rules, 2021, the Governor of Tamil Nadu issued a notification vide notification (no. G.O Ms. No. 160 dated 27 December 2023), thereby introducing the Monitoring Mechanism to monitor or supervise the activities of direct selling entities and direct sellers. The direct seller implies to a person authorized to undertake direct selling business on principal-to-principal basis.

All the entities engaged in direct selling business such as entities engaged in pyramid schemes shall make an application for enrolment before the Tamil Nadu monitoring authority set under the Rules. The direct sellers shall ensure that the advertising of goods or services are consistent with the actual characteristics, access and usage conditions of such goods or services. Further the direct sellers shall establish a mechanism for addressing the consumers grievances.

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