The MCA has notified the Companies (Incorporation) Amendment Rules, 2021

The Ministry of Corporate Affair (MCA) has notified the Companies (Incorporation) Amendment Rules, 2021 which sought towards amending the Companies (Incorporation) Rules, 2014.

The notification had amended Rule 41 of the Companies (Incorporation) Rules, 2014 which relates towards the Application under section 14 of the Companies Act, 2013 intended for conversion of a public company into a private company.

The notification stated that:

G.S.R. 44(E). In exercising the powers as conferred by section 3, sub-section (1) of section 7 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further towards amending the Companies (Incorporation) Rules, 2014, namely: –

1. (i) These rules might be called the Companies (Incorporation) Amendment Rules, 2021.

(ii) They shall be effective on the date of their publication in the Official Gazette.

2. In the Companies (Incorporation) Rules, 2014, in Rule 41-

(a) in sub-rule (6),

(i) in clause (c), for the words, brackets as well as the figure “sub-rule (6)” the words, brackets, and letter “clause (b)” would be substituted;

(ii) clause (d) would be omitted;

(iii) the existing sub-rule (9), (10), (11) would be renumbered as sub-rules (7), (8), and (9) respectively;

(b) for sub-rule (7) as so renumbered, the following sub-rule would be substituted with the following rule, namely:

The notification had also specified that where an objection was received or Regional Director on examining the application had particular objection under the provisions of the Act, the same would be recorded in writing and the Regional Director will hold a hearing or hearings within a period of 30 days as needed and direct the corporation towards filing an affidavit to record the harmony reached at the hearing, on executing which, the Regional Director will pass an order either approving or refusing the application together with the explanations within 30 days from the date of hearing.

In the event where no harmony has been received the Regional Director shall approve the conversion, if the Regional Director is satisfied relating to all the circumstances of the matter, that the conversion shall not be against the interests of the corporation or is not being made with a view to breach or to avoid complying with the provisions of the Companies Act, 2013, with explanations to be recorded in writing.

Though, the conversion would not be allowed if any inquiry, inspection, or investigation was initiated against the corporation or any trial is pending against the corporation under the Companies Act, 2013.

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Author:

eStartIndia Team