Legal & Industry Updates - August 2018
Amendment to the Companies (Prospectus & Allotment of Securities) Rules, 2014
The Ministry of Corporate Affairs on 7th August, 2018 has notified the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2018 to amend Rule 14 (Private Placement) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, .The broad changes made in Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 are as follows:
The provisions of Rule 14 sub-rule 2(c) wherein the requirement of the value of offer or invitation per person of INR 20,000/- of face value of the securities has been done away with. They do not specify such minimum investment size anymore.
The companies are now not permitted to utilize share application money received by it unless allotment is made and return of allotment is filed.
A company is required to file the return of allotment within 15 days of allotment instead of 30 days.
A private placements offer letter along with an application form needs to be in PAS-4 and shall be specifically addressed to the person to whom offer is made.
Amendment to the Companies (Accounts) Rules, 2014
Vide notification dated 31.07.2018, the Ministry of Corporate Affairs has amended the Companies (Accounts) Rules, 2014, issued under Section-134 of the Companies Act, by inserting clause (X) which mandatorily requires companies to include a statement in the annual report stating compliance with the constitution of the Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Amendment to Companies (Registration Offices & Fees) Rules, 2018
Ministry of Corporate Affairs on 21st August, 2018 has notified the Companies (Registration Offices and Fees) Fourth Amendment Rules, 2018 (“Registration Offices Rules”). Pursuant to the Registration Offices Rules no fee will be applicable for filing e-form DIR-3 KYC for current financial (2018-19) till 15th September, 2018 and fee of Rs. 5000 will be payable on/after 16th September, 2018.
Amendment to Insolvency & Bankruptcy Code (Second Amendment) Act, 2018
The Ministry of Law and Justice on 17th August, 2018 has notified the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, which was published by the Insolvency and Bankruptcy Board of India:
Section 2 of the Act amends Section 3(12) of the Insolvency and Bankruptcy Code, 2016 wherein the word "repaid" has been substituted with "paid" giving it a more wider meaning.
Section 8 of the Act amends Section 12 of the Insolvency and Bankruptcy Code, 2016 to re-calibrate voting threshold from seventy-five per cent. to sixty-six per cent.
Section 9 of the Act seeks to insert a new section 12A to allow the withdrawal of applications with the approval of 90% voting share of the committee of creditors in the manner as specified.
Section 19 of the Act seeks to insert a new section 25A to provide for rights and duties of authorised representative of financial creditors.
All the other amended/inserted sections are perused in the link mentioned herewith.
Extension of Concessional Financing Scheme (CFS)
The Union Cabinet has approved the first extension of Concessional Financing Scheme(CFS) to support Indian Entities bidding for strategically important infrastructure projects abroad. Under CFS, Government of India is supporting Indian Entities bidding for strategically important infrastructure projects abroad and has proposed to extend CFS for another five years from 2018 to 2023. Financial implication is towards payment of Interest Equalization Support (IES) to the lending Bank for which budgetary provision will be made by the Department of Economic Affairs every year.
Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified
CBDT has determined that the rate of exchange of conversion of foreign currencies specified in column (2) of Schedule I and Schedule II (in the link mentioned herewith), into Indian currency or vice versa, shall, with effect from 17th August, 2018, be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.
Commercial Courts (Amendment) Bill, 2018
This Bill passed by the Lok Sabha seeks to lower the pecuniary jurisdiction of Commercial Courts from Rs 1 Crore to Rs 3 lakhs. This is done through amendment to Section 2(h) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 which defines “specified value”. As per Section 6, Commercial Courts can try suits relating to commercial transactions having the “specified value”. The amendment will widen the scope of Commercial Courts, by bringing in more commercial disputes within its fold.
Digitization of Courts
The Supreme Court took a giant step towards digitization of courts across the country by launching three application namely e-courts services, E-pay and NSTEP(National Service and Tracking of Electronic Processes) to facilitate e-filing of cases, making digital payments and service of judicial notices through smartphones to the litigants paving the path of quality, quantity, affordability and cost effectiveness.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.