Changes to Companies Incorporation Rules 2014

The Ministry of Corporate Affairs through the Companies (Incorporation) Second Amendment Rule 2015 has made changes to the Companies Incorporation Rules, 2014. The Companies Amendment Rule 2015 will come into force from the date of publication in the Official Gazette. In this article, we look at the major changes made by the Companies Amendment Rule, 2015.

Companies Incorporation Second Amendment Rule 2015

Following changes to the Companies Act, 2013 by the Companies Amendment Act, 2015, the Ministry of Corporate Affairs has made changes to the Companies Incorporation Rules, 2014 by publishing the Companies Incorporation Second Amendment Rule, 2015. The Companies Incorporation Second Amendment Rule, 2015 is set to be published in the Official Gazette shortly, at which time it shall come into effect.

Approval & Declaration for Objects requiring Sectoral Approval

The Companies Incorporation Second Amendment Rule, 2015 has added the following to rule 12 of the Companies Incorporation Rules, 2014.

Addition to rule 12 of Companies Incorporation Rules, 2014:

"Provided that in case pursuing of any of the objects of a company requires registration or approval from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board, registration or approval, as the case may be, from such regulator shall be obtained by the company before pursuing such objects and a declaration in this behalf shall be submitted at the state of incorporation of the company."

Erstwhile Companies Incorporation Rules, 2014 - Rule 12:

"An application shall be filed, with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC.2 (for One Person Company) and Form no. INC.7 (other than One Person Company) along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 for registration of a company."

Therefore, if a company being incorporated required approval from sectoral regulators then a copy of the approval must be filed along with the incorporation application, in addition to a declaration from the Directors stating that approval from applicable sectoral regulator has been obtained.

Commencement of Business Certificate NOT Required

The Companies Incorporation Amendment Rule, 2015 omits rule 24 of the Companies Incorporation Rules, 2014 relating to commencement of business certificate. Erstwhile Companies Incorporation Rules, 2014 - Rule 24:

"Declaration at the time of commencement of business The declaration filed by a director shall be in Form No.INC.21 along with the fee as and the contents of the form shall be verified by a Company Secretary in practice or a Chartered Accountant or a Cost Accountant in practice: Provided that in the case of a company requiring registration from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board of India etc, the approval from such regulator shall be required."

Therefore, a company would no longer require Form No.INC 21 to be filed by the Director for commencement of business.

Changes to Memorandum of Association of Section 8 Company

The Companies Incorporation Amendment Rule, 2015 has proposed certain changes to the Memorandum of Association of a Section 8 Company, Form INC-13. Further, changes have also been made to Form INC-16, License under Section 8 (1) of the Companies Act, 2013.

A Section 8 company is established for “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”, provided it “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members.”.