Draft Company Law Rules 2013 – Chapter II – Incorporation

 

1) The procedure for incorporation is more or less the same. The Rules lays down detailed guidelines for the same.
 
2) Rule 2.5(3) – if the company has changed its activities which is not reflected in its name, then it shall change its name in line with its activities by following the procedures for change of name – But who will certify or verify that the company has changed its activities – it is not clear, what constitutes change of activities. Private limited companies are allowed to carry on business specified in other objects as well. So does this mean that they are henceforth not allowed to do “other objects” business – clarity required on this clause
 
3) Rule 2.27(1)(h) – why there is a requirement of bank draft evidencing payment of fee – it can be made by online in the MCA 21 system and only the SRN quoted in the form.
 
4) Rule 2.27(2) Proviso – this is for change of registered office from one state to another – what happens when there is no Company Secretary in the company seeking change of registered office – therefore a PCS should be allowed to certify that the list of creditors is correct etc.
 
5) Rule 2.32 – definition of “electronic transmission” could very well have been made in the Act itself especially as (iii) says “any other means of electronic communication”. Besides the definition itself is appearing at two places in the same Rule
 
6) Lastly the devil lies in the forms – there are total 32 forms in this chapter itself – whether all the forms are required to be certified by professionals will be the moot question.
 
7) Remembering all the rules, sub rules, clauses, sub clauses is going to be one heck of a job!!
 
8) Lastly I feel that recognition given to chartered accountant and cost accountant while incorporating companies is ill advised – at the point of repeating ourselves we will say – it is not their core competency.
 
These are my observations on the Chapter II.     

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