Weekly Corporate Updates Saturday 15th April, 2017

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1 Law Solicitors and Advocates Weekly Corporate Updates Saturday 15th April, 2017 Contributing Team: CS Alok Kumar Kuchhal Corporate Consultant M.Com, LL.B., FCS CS Chanchal Yadav Corporate Consultant M.Com, LL.B., ACS CS Varun Kwatra Company Secretary B.Com, LL.B., ACS CS Narender Thakur Company Secretary B.com, ACS CS Surabhi Gupta Company Secretary B.com, ACS Concerns: M/s, Advocates & Solicitors, Noida M/s A.K. Kuchhal & Co., Company Secretaries, Noida M/s NPV & Associates, Chartered Accountants, Mumbai

2 MCA UPDATES Form INC-22, AOC-4 Addendum and SCP has been revised w.e.f 15th April MCA is actively considering Aadhaar Integration for availing various MCA21 related services. As a preparatory step, all individual stakeholders viz. DIN holders/directors/key Managerial Personnel/Professionals of the Institute of Company Secretaries of India- Institute of Chartered Accountants of India-Institute of Cost Accountants of India (whether in employment or in practice) are requested to obtain Aadhaar as early as possible for integrating their details with MCA21 and also ensure that the information in Aadhaar is in harmony with PAN. When implemented, all MCA21 services shall be available based on Aadhaar based authentication ONLY. The date of Aadhaar integration with MCA21 would be announced shortly. Stakeholders are requested to plan accordingly on PRIORITY so as to avoid future inconvenience. Form STK-2, application by company for removing its name from register of companies is available on MCA21. Forms CHG-1, CHG-4 and CHG-9 has been revised w. e. f. 10th April, 2017 wherein certain declarations and field level changes have been incorporated to capture details viz. (i) ranking of charges, (ii) particulars of the principal terms and conditions of the charge, (iii) particulars of the property or asset(s) charged (including complete address and location of the property), (iv) description of document by which the borrower/third party acquired the title etc. Stakeholders are advised to check the latest version before filing. Commencement of section 234 of Companies Act 2013 F. No. 1/37/2013CL.V. Dated: Ministry of Corporate Affairs (MCA ) has issued Notification No. S.O.(E) dated which states that the Central Government appoints as the date on which the provisions of section 234 of the Companies Act, 2013 shall come into force. Section 234 deals with the Merger and Amalgamation of company with foreign company.

3 Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2017 Notification Dated: April 12, 2017 Ministry of Corporate Affairs (MCA) has issued Notificatio n No. G.S.R.(E) dated and made amendment to the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, In the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2016 in Rule 7 (1) after the proviso, the following proviso shall be inserted: "Provided further that the publication of notice under clause (iii) of this sub-rule, in respect of cases falling under sub-section (1) of section 248 shall be in Form No. STK-5A." In principal rules, after Form STK-5, Form No. STK-5A is inserted. These rules may be called the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2017 They shall come into force on the date of their publication in the Official Gazette. Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017 Notification Dated: MCA has issued notification for commencement of section 234 of companies act MCA has issued notification and made amendment to the companies ( Compromise. Arrangement and amalgamation) rules By this amendment rule 25A merger and amalgamation of foreign company with a company and vice versa is inserted after rule 25 of the existing rules. These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, They shall come into force on the date of their publication in the Official Gazette. SEBI UPDATES Inclusion of Derivatives on Equity shares- IFSC Circular No : SEBI/HO/MRD/DRMNP/CIR/P/2017/31 Date: April 13, 2017 SEBI (IFSC) Guidelines, 2015 specifies the types of securities in which dealing may be permitted by stock exchanges operating in IFSC. Based on the recommendations of the Risk

4 Management Review Committee of SEBI, it has been decided to specify Derivatives on equity shares of a company incorporated in India (hereinafter referred to as Derivatives on equity shares ) as permissible security under sub-clause (vi) of Clause 7 of SEBI (IFSC) Guidelines, Accordingly, the recognized stock exchanges operating in IFSC may permit dealing in Derivatives on equity shares, subject to prior approval of SEBI Related Link: Setting up of IFSC Banking Units (IBUs) Permissible activities Notification No : RBI/ /273 DBR.IBD.BC.59/ / Date: April 10, 2017 RBI UPDATES The fixed deposits accepted from non-banks by the IBUs cannot be repaid prematurely within the first year. However, fixed deposits accepted as collateral from non-banks for availing credit facilities from IBUs or deposited as margin in favour of an exchange, can be adjusted prematurely in the event of default in repayment of the loan or meeting a margin call. Related Link: CBDT issues PAN and TAN within 1 day to improve Ease of Doing Business PRESS RELEASE New Delhi, 11th April, 2017 INCOME TAX In order to improve the Ease of Doing Business for newly incorporated corporates, CBDT has tied up with Ministry of Corporate Affairs (MCA) to issue Per manent Account Number (PAN) and Tax Deduction Account Number (TAN) in 1 day. Applicant companies submit a common application form SPICe (INC 32) on MCA portal and once the data of incorporation is sent to CBDT by MCA, the PAN and TAN are issued immediately without any further intervention of the applicant. The Certificate of Incorporation (COI) of newly incorporated companies includes the PAN in addition to the Corporate Identity Number (CIN). TAN is also allotted simultaneously and communicated to the Company. Till 31st March 2017, 19,704 newly incorporated Companies were allotted PAN in this manner. During March, 2017, of the 10,894 newly incorporated companies, PAN was allotted

5 within 4 hrs in 95.63% cases and within 1 day in all cases. Similarly, TAN was allotted to all such companies within 4 hrs in 94.7 % cases and within 1 day in 99.73% cases. CBDT s initiative in starting of a business is expected to significantly improve the ranking of India in the Ease of Doing Business Study conducted by World Bank by reducing the number of processes of registration before various authorities under law, reducing the time taken for allotment of the registration number (CIN, PAN, TAN) and making the entire registration process for new companies much simpler. CBDT has also introduced the Electronic PAN Card (E-PAN) which is sent by , in addition to issue of the physical PAN Card, to all applicants including individuals where PAN is allotted. Applicant would be benefited by having a digitally signed E-PAN card which they can submit as proof of identity to other agency electronically directly or by storing in the Digital Locker ( Related Link: PAN-TAN-within-1-day-improve-Ease-Doing-Business pdf Timelines for Closure of financial accounts under Rule 114H (8) of the Incometax Rules, 1962 under alternative procedure of FATCA. PRESS RELEASE New Delhi, 11th April, 2017 The Inter-Governmental Agreement (IGA) with USA for implementation of FATCA entered into force on 31st August Under the alternative procedure provided in Rule 114H(8) of the Income-tax Rules, 1962, the financial institutions need to obtain self-certification and carry out due diligence in respect of all individual and entity accounts opened from 1st July 2014 to 31st August Such self-certification and documentation was required to be obtained by the financial institutions by 31st August 2016, otherwise they were required to close the accounts and report the same if found to be a "reportable account" as per the prescribed due diligence procedure for preexisting account. In view of the difficulties highlighted by stakeholders in following the provision for "closure" of financial accounts, it was informed vide Press Release dated 31st August 2016 that the financial institutions may not close the accounts by 31st August 2016 in respect of which selfcertifications have not been obtained under the alternative procedure and a revised time line

6 shall be notified in due course. The financial institutions were also advised to continue to work on completing the required due diligence, including obtaining self-certifications. Queries are being received from the financial institutions regarding the revised time lines for completion of due diligence. The financial institutions are advised that all efforts should be made by the financial institutions to obtain the self-certification. The account holders may be informed that, in case self-certifications are not provided till 30 April 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts. The transactions by the account holder in such blocked accounts may, thereafter, be permitted once the selfcertification is obtained and due diligence completed. Related Link: Closure-financial-accounts-Rule-114H-8-Income-tax-Rules-1962-FATCA pdf Thanking You, Team Indiacorp , , Disclaimer: This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither India Corp Law nor any other member of the India Corp Law organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.