COMPANY SECRETARY

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COMPANY SECRETARY

1.Registration/Dissolution & Compliance of Company:

A) ONE PERSON COMPANY (OPC): –With the implementation of Companies Act, 2013, a single person could constitute a company under the One-Person Company (OPC) concept. This is an innovative step towards leveraging extended benefits to individual entrepreneurs seeking benefits of Private limited companies. OPC is a one shareholder corporate entity, where legal and financial liability is limited to the company only.

CONSULTANTS MEMBER/PROMOTER:-Companies Act 2013 on OPC defines “Member” as the sole person required to form & operate an OPC.

Norm:

Shall be incorporated & operated by only one person to be called as “Member”.
Shall be operated as a private limited company.
Shall only be formed by a natural person who is Resident of India.
Should have a nominee for its sole member & its Memorandum.
Should also contain the name of the nominee.
Need not prepare a report on Annual General Meeting.
Need not to appoint Independent directors on its board.
One person cannot be a member or nominee for more than one OPC.
No Minor shall become a member or nominee or hold shares of the OPC.
Shall not carry out any non-banking financial investment activities including investment in corporate securities.
Shall not be incorporated or converted into section 8 company.

Modus Operandi:

Wherever the name OPC is printed, affixed or stamped, the word “One Person Company” shall be mentioned in the brackets, just below the name.Member of the OPC shall be considered as the first director of the company until the member appoints another person as the Director of the company.Company shall obtain consent from nominee in Form No. INC 3 & file with ROC along with Form No. INC 2 at the time of incorporation.Company shall file MOA, including the name of Nominee along with Form No. INC 2.OPC shall hold minimum two board meetings in every calendar year including one board meeting in every half calendar year. If company holds only two board meetings in a calendar year then minimum gap between two consecutive board-meetings shall not be less than 90 days.

Conditions:

Member of OPC may at any time replace the existing nominee with a new nominee. However, changing the name of nominee shall not be treated as change of memorandum.Nominee can also withdraw their consent from OPC at any time. In that case, sole member shall appoint a new Nominee and inform the company within 15 days along with the consent of new nominee in FORM NO. INC-Company should file the Form No. INC 4, along with written consent from the new Nominee in FORM NO.INC-3 with ROC within 30 days from receipt of notice.In case any Member or Nominee becomes a member or nominee in another OPC then they should withdraw their participation from existing or new OPC, within a period of one hundred and eighty days.OPC should be converted into a private or public company with-in six months in case its paid-up share capital exceeds fifty lakh rupees or average annual turnover during the relevant period exceeds two crore rupees. In any other case, it cannot be converted into private or public company before completion of 2 years of its incorporationRelevant period means the period of immediately preceding three consecutive financial years”A private limited company can also be converted into OPC by passing Special Resolution, provided they fulfill the entire eligibility criterion.

B) Private Limited Company (Pvt. Ltd.)

Conditions:

Private Company must have at least 2 members and 2 Directors;
Private Company has a minimum paid-up share capital of 1,00,000 or such higher paid up capital as may be prescribed;
Private company, maximum number of members can be 200, except for OPC;
Object clause of Memorandum:
Penalty will be imposed if wrong information is provided to obtain name for the company;
After obtaining Certificate of Incorporation, company has to intimate to the ROC about commencement of business in FORM NO. INC.21 within 180 days from the Date of Incorporation;

Steps to Be Taken to Get a Private Company Incorporated:

In order of preference, at least one suitable name up to a maximum of six names, indicative of the main objects of the company.
Apply to the concerned ROC to ascertain for reservation of name in e-Form INC.1 and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has applied for a fresh name on the same application.
After the name approval, the applicant can apply for registration of the new company by filing the required forms (that is FORM INC.7 Application for Incorporation of Company (Other than OPC), and FORM DIR-12 for Particulars of appointment of Directors and the key managerial personnel and the changes among them) within 60 days from the date of application.
Submit the FORM INC.7, FORM INC.22, and FORM DIR-12 after attaching the digital signature.
After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from ROC.
After obtaining Certificate of Incorporation, company has to apply for Certificate of commencement of business in FORM NO. INC.21 with the ROC within 180 days of the Date of Incorporation.
After obtaining Certificate of Incorporation, company has to intimate to the ROC about commencement of business in FORM NO. INC.21 within 180 days from the Date of Incorporation.
To intimate the ROC about Commencement of Business after incorporation of the company, the Private company has to make following compliance.
File a declaration in FORM NO. INC.21 and attach the declaration that the subscriber has paid their values of shares.
Verification of registered office address in FORM NO. INC.22.

Conditions for Public Company:

Public Company is a company which is not a private Company;
Public Company must have at least 7 members and 3 Directors;
Public Company has a minimum paid-up share capital of 5,00,000 or such higher paid up capital as may be prescribed;
Object clause of Memorandum:
Penalty will be imposed if wrong information is provided to obtain name for the company;
After obtaining Certificate of Incorporation, company has to intimate to the ROC about commencement of business in FORM NO. INC.21 within 180 days from the Date of Incorporation.

C) Dormant Company:

A company can be incorporated to hold assets & intellectual properties as a dormant Company.
In dormant company, there should not be transactions other than significant accounting transactions.

“Significant accounting transaction” means any transaction as mentioned below:

Payment of fees by a company to the Registrar.
Payments made by company to fulfil the requirements of this Act or any other law.
Allotment of shares to fulfil the requirements of this Act.
Payments for maintenance of company’s office and records.
Any company including companies registered under Companies Act 1956 can make application in Form No MSC-1 to the respective registrar of the companies.
ROC can also Suo-Moto convert a company into a dormant company if it is not filing the annual account from last 2 years or more.
Criteria of minimum number of Members or Director should be fulfilled by the dormant company as a Public, Private or One-Person Company.
If Company has not filed financial statements and annual returns during the last two financial years it cannot apply for a dormant company.

Eligibility Criterion for Dormant Company:

If company satisfies any of the following conditions then it can apply for dormant company:

Company is formed and registered under the companies act, 2013 for any future project;
Holding an asset or intellectual property;
Company has no significant accounting transactions since its incorporation or during the last two financial years.
Company has not carried any business or operations since its incorporation (more than one year).

Disqualifying Criterion:

Any inspection, inquiry or investigation has been ordered or taken up or carried out;
Any prosecution has been initiated or pending under any law;
Company has any outstanding loan. If there is any, then concurrence of the lender has to be obtained and enclosed with the application;
There is any dispute in management or ownership of the company;
Company has any outstanding statutory taxes, dues or duties etc. payable to central or state government or any local authorities;
Company has defaulted in the payment of workmen’s dues;
Securities of the company are listed on any stock exchange within or outside India.
The application has been made with an objective to deceive the creditors or to defraud any other person.

Process for Dormant Company:

Company should pass a special resolution.
Company should file an application with ROC in FORM NO. MSC-1.
ROC will verify that all the requirements have been duly complied with.
Post Due-Diligence ROC will register the company as Dormant Company& will issue a certificate of Dormant Company.
Dormant company shall file “a return of Dormant Company” annually reflecting the financial position duly audited by chartered accountant in FORM NO.MSC-3 within 30 days from the end of each financial year.
Further, Company shall continue to file the return(s) of allotment in the manner and within the time specified in the Act whenever the company allots any security to any person.

Power of ROC

If company does not fulfill the conditions of this section Registrar will strike off the company;

If Registrar finds any company registered as ‘dormant company’ under his jurisdiction functioning in any manner then registrar will either remove the name of such company from register of dormant companies and treat it as an active company or take action under chapter XVIII of the Act (Remove the name of company from register of company.

D) MERGER & ACQUISITION:

Updated copies of MOA & AOA of all the transferor & the transferee companies;
Complete set of annual accounts alongwith the notice, directors’ report and compliance certificate for 31st march 2013;
Complete set of annual accounts alongwith the notice, directors’ report and compliance certificate for 31st march 2012;
Complete set of annual accounts alongwith the notice, directors’ report and compliance certificate for 31st march 2011;
Complete set of annual accounts alongwith the notice, directors’ report and compliance certificate for 31st march 2010;
Complete set of annual accounts alongwith the notice, directors’ report and compliance certificate for 31st march 2009;
List of shareholders along with their consents of all the transferor & the transferee companies as on date;
List of directors of all the transferor & the transferee companies;
List of un-secured creditors with their consents along with chartered accountant certified (including the un-secured loans, sundry creditors, expenses payable, trade creditors etc.) of all the transferor & the transferee companies with amounts;
List of secured creditors with their consents along with chartered accountant certified of all the transferor & the transferee companies with amount due;
Details of director who shall sign the application, affidavit, vakalatnama etc., on behalf of each of the company;
Draft valuation report from chartered accountant giving the valuation of shares of each of the company and the swap ratio;
Name of the chartered accountant’ firm who shall certify the list of the creditors in each of the company;
Appointed date for amalgamation.

E) SECRETARIAL AUDIT:

What is a secretarial audit?

Secretarial audit is the most effective mechanism to ensure the compliance of the multifarious requirements by the corporate enterprises under a host of legislations. The benefits of such audit, its process and other related aspects have succinctly been brought out in this article including a check list of activities, format of audit report etc.

Who can be appointed as a secretarial auditor?

Only a member of the ICSI holding a certificate of practice can be appointed as a secretarial auditor.

Applicability of secretarial audit:-

The class of companies shall be as under-

Every public company having a paid-up share capital of fifty crore rupees or more; or
Every public company having a turnover of two hundred fifty crore rupees or more.
The format of the Secretarial Audit Report shall be in Form No.MR.3.
If a company or any officer of the company or the company secretary in practice, contravenes the provisions of Companies Act, 2013, the company, every officer of the company or the company secretary in practice, who is in default, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.