MCA amends MGT Rules- alignment with Companies (Amendment) Act, 2017
By Megha Saraf (megha@vinodkothari.com),(corplaw@vinodkothari.com)
Introduction
Subsequent to the Ministry of Corporate Affairs (“MCA”) notifications dated 9th February, 2018 and 7th May, 2018 through which MCA hadenforced 43 sections and 28 sections of the Companies (Amendment) Act 2017, (“Act, 2017”),it has once again come up with another set of notificationsvide its notification dated 14th May, 2018 bringing 5more sections of Act, 2017 to life and amending corresponding Rules that are prescribed.
The Article is an attempt to capture the changes and its implications brought in the Companies (Management and Administration) Second Amendment Rules, 2018.
Companies (Management and Administration) Second Amendment Rules, 2018
| Prior to Amendment (“Act, 2013”) | Nature of Amendment | Implications of the Amendment |
| Rule 13 – Return of changes in shareholding position of promoters and top ten shareholders | ||
| Every listed company shall file with the Registrar, a return in Form No. MGT-10, with respect to changes in the shareholding positions of promoters and top ten shareholders of the company, in each case, representing increase or decrease by two per cent or more of the paid-up share capital of the company, within fifteen days of such change. | This Rule is omitted. | The amendment is consequential to the enforcement of section 24 of the Act, 2017 which states that Section 93 of the Act, 2013 is to be omitted.
The omission of filing e-Form MGT-10 shall act as a relief to the companies as the same was a very strict compliance considering filing was to required be made within 15 days of change.
|
| Rule 15(6) – Preservation of register of members etc. and annual return | ||
| A copy of the proposed special resolution in advance to be filed with the registrar as required in accordance with first proviso of sub-section (1) of section 94, shall be filed with the Registrar, at least one day before the date of general meeting of the company in Form No. MGT-14. | This sub-rule has been omitted. | The omission of the sub-rule is consequential to the enforcement of Section 25 of the Act, 2017. It states for removal of part of the proviso from Section 94(1) of the Act, 2013 which requires for filing the proposed special resolution which is to be passed for keeping the register or copies of return at any other place in India, with the ROC.
As the above part of the proviso has been omitted, change has been brought in the corresponding rules to align it with the section.
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| Explanation after clause (ix) to Rule 18(3) – Notice of the meeting | ||
| For the purpose of this rule, it is hereby declared that the extra ordinary general meeting shall be held at a place within India. | The explanation has been omitted. | Act, 2017 has already enforced Section 27 of the Act, 2017 which has amended Section 100 of the Act, 2013 to insert a proviso w.r.t holding an EOGM at any place within India except in case the company is a WOS incorporated outside India.
Considering that there is specific provision in section 100 w.r.t place of holding an EOGM, the Rule has been amended to this effect.
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| Proviso to 22 (16) – Procedure to be followed for conducting business through postal ballot | ||
| Provided that One Person Company and other companies having members upto two hundred are not required to transact any business through postal ballot. | Addition of proviso-
Provided that any aforesaid items of business under this sub-rule, required to be transacted by means of postal ballot, may betransacted at a general meeting by a company which is required to provide the facility to members to vote by electronic means under section 108, in the manner provided in that section.
Provided that One Person Company and other companies having members upto two hundred are not required to transact any business through postal ballot. |
MCA has already enforced section 29 of the Act, 2017 which provides for adding to Section 110 of the Act, 2013 that items of postal ballot as prescribed under the rules can now be dealt in a general meeting wherein e-voting facility is provided.
Considering the change brought in the Section itself, specific provision in the Rules has now been inserted to align it with the Section. |
| Omission of E-form MGT-10 | ||
| E-form was prescribed | E-form MGT-10 removed. | Consequential to the enforcement of Section 24 of the Act, 2017 which has omitted Section 93 of the Act, 2013, the requirement of filing E-form MGT-10 with the ROC for the change in shareholding of the promoters and top ten shareholders within 15 days of the change has been done away with.
Accordingly, in respect of the same, the E-form MGT-10 has been withdrawn from the MCA.
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