Latest Updates from Ministry of Corporate Affairs – January 2020

MCA amends limit for appointment of Whole Time Company Secretary and Secretarial Audit MCA had vide its notification dated 3^rd January 2020 issued on 6^th January 2020 amended the provisions of Rule 8A and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and had brought in force Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 to bring out changes in the scope of appointment of Company Secretary and Secretarial Audit. The details of the amendment are as under:

Sr. No.	Rules	Existing provisions	Amended provisions	Impact of amendment	Effective date
1.	Rule 8A	The appointment of whole -time company secretary is  mandatory for private companies having paid up share capital of  INR 5 (five) crore or more.	The appointment of whole -time company secretary is mandatory for private companies having paid up share capital of  INR 10 (ten) crore or more.	Post amendment, the threshold limit to trigger the mandatory appointment of a whole -time company secretary in private companies has been increased to INR 10 crore paid up share capital from existing INR 5 crore paid up share capital.	FY commencing from 1st April 2020
2.	Rule 9	Secretarial Audit of companies are mandatory for following classes of companies: (a) every public company having a paid-up share capital of  INR 50 (fifty) crore or more; or (b) every public company having a turnover of INR 250 (two hundred fifty) crore or more.	Secretarial Audit of companies are mandatory for following classes of companies: (a) every public company having a paid-up share capital of  INR 50 (fifty) crore or more, existing on the last date of latest audited financial statement; or (b) every public company having a turnover of INR 250 (two hundred fifty) crore or more, existing on the last date of latest audited financial statement or (c) every company having outstanding loans/ borrowings from banks/ public financial institutions of INR 100 (one hundred crore) or more, existing on the last date of latest audited financial statement.	Post amendment, the scope of Secretarial audit is extended to all companies with outstanding loans/ borrowings from banks/ public financial institutions of INR 100 (one hundred crore) or more, existing on the last date of latest audited financial statement	FY commencing from 1st April 2020

  The text of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 can be viewed at below link: http://www.mca.gov.in/Ministry/pdf/AmdtRules_06012020.pdf   Extension of Time for filing Cost Audit Report On the basis of the several representations received from various stakeholders, Ministry of Corporate Affairs (MCA) had on 30^th day of December 2019 extended the last date of filing of Form CRA-4 (Cost audit report) for all eligible companies pertaining to the financial year 2018-19, without payment of additional fee up to 29^th day of February 2020. The copy of the general circular no. 17/2019 dated 30^th day of December 2019 can be referred at below link: http://www.mca.gov.in/Ministry/pdf/Circular17_30122019.pdf   Extension of Time for filing Form BEN-2 The MCA had on the 1^st day of January 2020, extended the due date of filing of Form BEN-2 for all companies in India to report their significant beneficial owner up to 31^st day of March 2020, without levy of additional fee providing much-needed relief to the stakeholders. The copy of the general circular no. 1/2020 can be referred at below link: http://www.mca.gov.in/Ministry/pdf/Circular1_01012020.pdf   Last Updated: 7^th January 2020 This article is contributed by:  Luv Malhotra Senior Manager, Legal

Tag: Audit, Cost Audit Report, Date Extension, MCA, Ministry of Corporate Affairs