Thursday 24 November 2016

Meaning of any non-interest bearing amount received or held in trust

I would like to share my views on acceptance of interest free loan by the Companies in the ordinary course of Business and claiming the exemption from the compliance of deposit provisions by invoking the clause “any non-interest bearing amount received or held in trust”.

Pursuant to the Rule 2(1)(c)(XI) of the Companies (Acceptance of Deposits) Rules, 2014, any non-interest bearing amount received or held in trust is exempted from the definition of deposits.


Here the amount held in trust doesn't mean any non interest amount received in trust (on faith). It refers only the amount which is held by the company for any third party & which cannot be used by the company and kept in the books of account till who owes that amount approaches the company for payment. Important point here is the company cannot use the money which is held by it in trust. Eg unclaimed divided/Interest.


Recently the MCA issued the Companies (Acceptance of Deposits) Amendment Rules, 2016 on June 29, 2016, for amending and expanding the list of exempted Deposits. Through the amendment rule, the word ‘OR’ used in “any non-interest bearing amount received or held in trust” has been replaced with ‘AND’ to clarify that any non-interest bearing amount held in trust is exempt from the ambit of ‘Deposit’. It is very clear from the above amendment that the intention of the legislation is also to exclude the non-interest bearing amount received and held in trust from the purview of the deposits as the money received is not intended for any specific purpose/deployment.


Further, prior to the above deposits amendment rules, the Bangalore ROC has also clarified that here the term OR should be read as AND. Hence, any non interest bearing amount which is held in trust alone is not a deposit. Accordingly, company cannot take interest free loan from third parties by invoking above exemption.


In nutshell any non interest bearing amount which is held in trust by the company alone will be exempted from the definition of deposit and hence the unsecured interest free loan received from the third parties will be treated as deposits & compliance as specified under the Act/Rules shall be ensured.

Thursday 1 September 2016

State Legislatures that ratified the GST Bill till 01st September, 2016 are listed below:

S.No
Name of the State/UT
Date of Ratification
Ruling Party
1.       
Assam
12th  August 2016
BJP
2.       
Bihar
16th  August 2016
Janata Dal (United)
3.       
Jharkhand
17th  August 2016
BJP
4.       
Himachal Pradesh
22nd  August 2016
INC
5.       
Chhattisgarh
22nd  August 2016
BJP
6.       
Gujarat
23rd August 2016
BJP
7.       
Madhya Pradesh
24th   August 2016
BJP
8.       
Delhi   - UT
24th  August 2016
Aam Aadmi
9.       
Nagaland
26th   August 2016
Naga People’s Front
10.   
Maharashtra
29th   August 2016
BJP
11.   
Haryana
29th  August 2016
BJP
12.   
Telangana
30th  August 2016
Telangana Rashtra Samithi
13.   
Mozoram
30th  August 2016
INC
14.   
Sikkim
30th  August 2016
Sikkim Democratic Front
15.   
Goa
31st  August 2016
BJP
16.   
Orissa
1st Sep 2016
Biju Janata Dal


15 states have already ratified the constitutional amendment bill. With Odisha passing the bill in its legislature, this has now touched the magic number of 16, which is required to turn the bill into a law.

Friday 12 August 2016


Referencer on Venue and Place for holding various Meetings of the company:

Easy referencer for the Venue, Time, Date and Place for holding various Meetings of the company under the Companies Act, 2013 and Secretarial Standards issued by the ICSI in this behalf.

Sl.No
Name of the Meeting
Time and Date of the Meeting
Venue of the Meeting
Provisions Prior to SS*
Remarks
1.       
Board Meetings (Including the Adjourned BM)
at any time and on any day, excluding a National Holiday
At any place
Same provisions
-
2.       
AGM
Shall be called during business hours, i.e., between 9 a.m. and 6 p.m., on a day that is not a National Holiday.
Either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.

In case of Govt Companies AGM shall be held either at the registered office or such other place as the Central Government may approve in this behalf.
Same provisions
Provided in case of Section 8 companies, The time, date and place of each AGM are decided upon before-hand by the board of directors having regard to the directions, if any, given in this regard by the company in its general meeting.

If the quorum is not present within half-an-hour, the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine.
3.       
EGM
Shall be called during business hours, i.e., between 9 a.m. and 6 p.m., on a day that is not a National Holiday.
At any place within India
Anywhere in the World
If the quorum is not present within half-an-hour, the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine.
4.       
General Meeting called by the Requisitionists
on a working day
At the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
-
No concept of Adjournment for want of Quorum.


Thursday 11 August 2016

Cabinet approves foreign investment in other Financial Services sector
The Union Cabinet has given its approval to amend regulation for foreign investment in the Non- Banking Finance Companies (NBFCs).
In the Budget 2016-17 Speech, the Finance Minister had announced that “FDI will be allowed beyond the 18 specified NBFC activities in the automatic route in other activities which are regulated by financial sector regulators”. The present regulations on “Non-Banking Finance Companies” stipulates that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalisation norms mentioned therein. In the proposed regulations, FDI is allowed on automatic route for all “Other Financial Services” provided such services are regulated by any regulators (RBI, SEBI, PFRDA etc.) / Government Agencies. Foreign investment in “Other Financial Services”, which are not regulated by any regulators / Government Agency, can be made on approval route.
Further, minimum capitalisation norms as mandated under FDI policy have been eliminated as most of the regulators have already fixed minimum capitalisation norms. This will induce FDI and spurt economic activities. 

Wednesday 10 August 2016

Factories (Amendment) Bill, 2016 and amendments to the Maternity Benefit Act, 1961


The Union Cabinet has given its ex-post facto approval for The Factories (Amendment) Bill, 2016 and amendments to the Maternity Benefit Act, 1961.

The Factories (Amendment) Bill, 2016:

The Cabinet has given approval for amendment of Section 64 and section 65 and consequential amendment of section 115 of the Factories Act, 1948 by introducing the Factories (Amendment) Bill, 2016 in the Parliament.

The approved amendments will give boost to the manufacturing sector and facilitate ease of doing business with an aim to enhance employment opportunities.

These amendments relate to increase in overtime hours from the existing 50 hours per quarter to 100 hours (Section 64) and existing 75 hours per quarter to 125 hours (Section 65).

Amendments to the Maternity Benefit Act, 1961:

Govt proposed amendments to the Maternity Benefit Act, 1961 by introducing the Maternity Benefit (Amendment) Bill, 2016 in Parliament. The maternity benefit Act 1961 protects the employment of women during the time of her maternity and entitles her of a ‘maternity benefit’ – i.e. full paid absence from work – to take care for her child. The act is applicable to all establishments employing 10 or more persons. The amendments will help 1.8 million (approx.) women workforce in organised sector.

The amendments to Maternity Benefit Act, 1961 are as follows:

1.      Increase Maternity Benefit from 12 weeks to 26 weeks for two surviving children and 12 weeks for more than two children.
2.      12 weeks Maternity Benefit to a ‘Commissioning mother’ and ‘Adopting mother’.
3.      Facilitate ‘Work from home’.
4.      Mandatory provision of Creche in respect of establishment having 50 or more employees.

Compliance Calendar for the Month of March,2024

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