Section 8 companies are those companies which are incorporated on a no profit basis i.e. their income is not given to the shareholders of these companies. They are mostly incorporated for a charitable, social, educational, religious or such other purposes.
MCA had vide its notification dated 5th June, 2015 given a lot of exemptions to private companies from the stringent provisions of the Companies Act, 2013. The Act, when it was made and bought into force from 1st April, 2014 was extremely stringent in terms of compliance & reporting requirements which was hitherto not present in the old Act.
So the notification of 5th June, 2015 gives a lot of exemptions to the private companies. Now the MCA has vide another notification dated 13th June, 2017 amended this notification of 5th June, 2015 to provide that even section 8 companies will enjoy the benefit of these exemptions provided that the said section 8 company has not defaulted in the filing of its statutory annual documents i.e. the audited financial statements and the annual return.
So we have a notification amending another notification, which is getting cumbersome like you get in the Income Tax and Service Tax regime. Why the Government could not have provided for these amendments by way of a Regulation or an amendment to the Act itself is not clear. Ease of Doing Business includes clarity in the Government circulars, notifications, regulations etc.
The Companies Act, 2013 bought in the concept of auditors’ rotation every 5 years. Section 139 of the Act provided that all listed companies and “such other companies” shall rotate their auditors every five years. For “such other companies” we go to the Companies (Audit and Auditors), Rules, 2014, whereby Rule 5 provided that all unlisted public companies having paid up share capital of Rs.10 crore or more and all private companies having paid up share capital of Rs.20 crore or more and all companies below these two threshold limits but having public borrowings of Rs.50 crores or more are required to rotate their auditors.
Now vide a notification dated 22nd june, 2017 the MCA has enhanced the limit for private companies from Rs.20 crore to Rs.50 crore paid up share capital. Therefore private companies need to rotate their auditors only if their paid up share capital is Rs.50 crore or more.
That takes out all those private companies whose paid up share capital is between Rs.20 crore to Rs.50 crore from the requirement of rotating their auditors.
RBI has vide its notification dated 22nd June, 2017 asked banks to write clearly and legibly in the pass books and give more information in the statement of accounts in absence of which the customers are unable to cross check the transactions. RBI has issued an illustrative list of narrations to be recorded in the bank statement as below. This is a welcome move by the RBI, as many banks are not giving adequate information at all. For eg. when a cheque is deposited in my bank a/c, the bank does not give name of the remitter of the cheque. They only write the cheque no. which is grossly inadequate to determine who has paid the said amount. I only hope Bank follows these instructions scrupulously.
Illustrative narrations to be recorded in the Statement of Account/ Passbook
(iii) Name of the transferee bank, if the payment is made through clearing/ inter-branch transaction/ RTGS/ NEFT
Payment to ‘self’
(i) Indicate “Self” as payee
(ii) Name of the ATM/ branch if the payment is made by ATM/ another branch
Issuance of drafts/ pay orders/ any other payment instrument
(i) Name of the payee (in brief/ acronym)
(ii) Name of the drawee bank/ branch/ service branch
(i) Nature of the charges – fee/ commission/ fine/ penalty etc.
(ii) Reasons for the charges, in brief – e.g. return of cheque (number), commission/ fee on draft issued/ remittance (draft number), cheque collection charge (number), issuance of cheque book, SMS alerts, ATM fees, additional cash withdrawals, etc.
Reversal of wrong credits
(i) Date of the original credit entry reversed
(ii) Reasons for reversal, in brief
Recovery of instalments of a loan/ interest on loan
(i) Loan account number
(ii) Name of the Loan account holder
Creation of fixed deposit/ recurring deposit
(i) Fixed Deposit/ Recurring Deposit Account/ Receipt number
(ii) Name of the Fixed Deposit/ Recurring Deposit Account holder
Transactions at POS
(i) Transaction date, time and identification number
(ii) Location of the POS
(i) Provide adequate details on the same lines as mentioned above.
Note: In case of single debit in account with multiple credits, the payee name/ account number/ branch/ bank shall not be recorded. However, the fact of “multiple payees” will be indicated.
(i) Indicate that it is a “cash deposit”
(ii) Name of the depositor – self/ third party
Receipt from third parties
(i) Name of the remitter/ transferor
(ii) Mode – Transfer, inter-branch, RTGS/ NEFT, cash, etc.
(iii) Name of the transferor bank, if the payment is received through inter-branch transaction, RTGS/ NEFT
Proceeds of clearing/ collection/ draft etc. paid
(i) Name of the draft issuing bank
(ii) Date and number of the cheque/ draft
Reversal of wrong debits (including charges)
(i) Date of the original debit entry reversed
(ii) Reasons for reversal, in brief
Interest on deposits
(i) Mention if it is interest paid on the Savings Account/ Fixed Deposit
(ii) Mention the respective Fixed Deposit Account/ Receipt Number if it is interest paid on Fixed Deposit(s)
Maturity proceeds of fixed deposit/ recurring deposit
(i) Name of the Fixed Deposit/ Recurring Deposit holder
(ii) Fixed Deposit/ Recurring Deposit account/ receipt number
SEBI has vide its circular dated 15th June, 2017 levied penalties on listed entities for non compliance with certain provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2014. These provisions are relating to delay in completion of bonus shares, non allotment of shares on conversion of convertible securities within 18 months and issuer not approaching the exchange for listing of equity shares within 20 days from the date of allotment under clause 95(1), 75 and 108(2) respectively of the SEBI (ICDR) Regulations. The fine is Rs.20,000 per day of non compliance till the date of compliance. If non compliance continues for more than 15 days, then additional fine of 0.01% of the paid up capital of the listed entity or Rs.1 crore, whichever is less.
SEBI circular is available here i.e. http://www.sebi.gov.in/legal/circulars/jun-2017/non-compliance-with-certain-provisions-of-sebi-issue-of-capital-and-disclosure-requirements-regulations-2009_35112.html