[IDR rules amended]Non residents can invest, if issuing company gets RBI approval & Can be redeemed after issue

G.S.R 35 (E) - Companies (Issue of Indian Depository Receipts) (Amendment) Rules, 2009 (Amendment of Companies (Issue of IDRs) Rules, 2004) - Click here for the amendment

IDRs issued by an issuing company may be purchased, possessed and transferred by a person other than a person resident in India [in addition to person resident in India as earlier] if such Issuing Company obtains specific approval from Reserve Bank of India in this regard or complies with any policy or guidelines that may be issued by RBI on the subject matter".

• The words "Indian resident" wherever occurring shall be substitued with the words "holder of IDRs".
• No letter of offer for issue of IDR, only prospectus shall be filed with SEBI.
• IDRs may be redeemable into the underlying equity shares even before the expiry of the erstwhile one year period from the date of the issue of the IDRs.
• Depository as per Depositories Act is not connected with the rules and hence the definition is deleted. The IDR rules is concerned only with the "Domestic Depository" which means custodian of securities registered with SEBI and authorised by the issuing company to issue IDR.

The new definition of "Overseas Custodian Bank": Overseas Custodian Bank means a banking company which is established in a country outside India and which acts as custodian for the equity shares of Issuing Company, against which IDRs are proposed to be issued by having a custodial arrangement or agreement with the Domestic Depository or by establishing a place of business in India.".

The existing "Continuous Disclosure Requirements" such as issuer company to get certificate from Chartered Accountant about utilization of funds and its variation from the projections of utilization of funds in quarterly intervals and shall also publish it or cause to be published in one of the English language newspapers having wide circulation in India is dispensed with. Continuous Disclosure Requirements may be prescribed by SEBI.

There are following amendments in the Schedule,
Where the law of a country, in which the Issuing company is incorporated, requires annual statutory audit of the accounts of the Issuing company, a report by the statutory auditor of the Issuing company, in such form as may be prescribed by SEBI on -
(A) the audited financial statements and financial status of the Issuing Company in respect of 3 financial years immediately preceding the date of prospectus, and
(B) the financial status of the company for the period between the last date of the period for which latest audited financial statements are made and the date of prospectus:
Provided that in case of an Issuing Company which is a foreign bank incorporated outside India and which is regulated by a Central Bank which, in turn, is a member of Bank for International Settlements, the requirement under this paragraph, in respect of period beginning with last date of period for which the latest audited financial statements are made and the date of prospectus shall be satisfied, if the relevant financial statements are based on limited review report of such statutory auditor.

Where the law of the country, in which the Issuing company is incorporated, does not require annual statutory audit of the accounts of the Issuing company, a report, in such form as may be specified by SEBI, certified by a Chartered Accountant in practice within the terms and meaning of the Chartered Accountant Act, 1949 on -
(A) the financial affairs of the Issuing Company, in particular on the profits and losses for each of the 3 financial years immediately preceding the date of prospectus and upon the
assets and liabilities of the Issuing Company and
(B) the financial status of the company for the period between the last date of the period for which the latest financial statements are made and the date of prospectus.

Further in both the cases, the gap between date of opening of issue and date of reports under the said subparagraphs shall not exceed 120 days.

Understand or read about IDR in http://yehseeyes.blogspot.com/2008/09/sebi-idrlets-learn-indian-depository.html

Thats it, enjoy reading http://www.mca.gov.in/MinistryWebsite/dca/notification/pdf/GSR35(E)_20jan2009.pdf

[LLP Act download]Similarities & Distinctions with Company + Partnerships

Limited Liability Partnership Act, 2008 - LLP's are now possible in India too. Click here to download the Act http://mca.gov.in/MinistryWebsite/dca/actsbills/pdf/LLP_Act_2008_15jan2009.pdf

Yes, LLP is formed & regulated by Limited Liability Partnership Act, 2008 which received President's assent on 7th January 2009.

Ministry of Corporate Affairs (MCA) is administrating ministry - Ministry of Corporate Affairs, Government of India is the administrating ministry. Registrar of Companies (RoC) of respective State is the administrative authority where all documents are to be filed.

Provisions of Companies Act can be made applicable - Central Government can make applicable any provision of Companies Act to LLP with suitable modifications by issuing a notification [Section 67 of LLP Act, 2008]

However, provisions of Indian Partnership Act will not apply to LLP [Section 4 of LLP Act, 2008].

Individual or body corporate can be partner, that too with a limited liability protection now - Any individual (who is of sound mind and is solvent) and any body corporate can be partner of LLP. There should be minimum two partners. Personal liability if number falls below two. No upper limit on number of partners [Section 5 and 6 LLP Act, 2008].

LLP must have two 'designated partners' who must be individuals. If a body corporate is partner of LLP, it can nominate a person as 'designated partner'. He has to give consent to act as designated partner. He has to obtain DPIN [Designated Partner Identification Number] from Central Government [Section 7 of LLP Act, 2008]. The designated partner is liable for all compliances as required under the Act and is liable to penalty for contravention of those provisions [Section 8 of LLP Act, 2008].

Comparison between traditional partnership and LLP

Traditional Partnership	Limited Liability Partnership
Distinctions
Unlimited personal liability of each partner for dues of the partnership firm. Personal property of each partner also liable.	No personal liability of partner, except in case of fraud.
Written agreement not essential.	Incorporation document essential.
Partnership can be registered under Partnership Act. Registration is not mandatory.	LLP is incorporated under LLP Act. Incorporation is mandatory.
Not a legal entity separate from its partners	It is a legal entity separate from its partners, having perpetual succession
Property cannot be held in name of partnership firm.	Property can be held in name of LLP.
Partnership deed/agreement is executed. Even verbal agreement is valid.	'Incorporation Document' is required to be executed. In addition, LLP Agreement is required in almost all cases, though such LLP agreement is not mandatory.
Documents are required to be filed with Registrar of Firms (of respective State)	Registrar of Companies (ROC) is the administrating authority.
Death of partner dissolves a firm, in absence of agreement	Death of partner does not dissolve LLP.
Minimum two and maximum twenty partners	Minimum two partners. No limit on maximum number of partners
Each partner can take part in business of firm.	Each partner can take part in business of firm, but LLP Agreement can provide to the contrary.
All partners are liable for statutory compliances under Partnership Act	Only designated partners are liable for statutory compliances as are required under LLP Act (not necessarily in respect of other Acts).
Partner cannot enter into business with firm, though he can give loan to firm.	Partner of LLP can enter into business with LLP. He can also give loans to LLP.
Every partner of firm is agent of firm and also of other partners. He can bind partnership firm as well as other partners by his acts.	Every partner of LLP is agent of LLP but not of other partners. Thus, he can bind LLP by his acts but not other partners. However, LLP agreement can restrict powers of individual partner.
Filing of accounts, statement of solvency and annual return not required.	Filing of accounts, statement of solvency and annual return not required.
Partnership can be 'at will' i.e. any partner can resign or dissolve firm	Individual partner can resign but cannot dissolve the LLP.
Death of partner dissolves partnership unless there is contract to contrary	Death of partner does not dissolve LLP.
Public notice is required for retirement of a partner.	Filing of return of retirement of partner with ROC is required, but no provision for public notice of retirement of partner.
Partnership firm can be dissolved.	LLP can be would up.
No specific provision to enter into compromise, arrangement, amalgamation, reconstruction etc. This can be done only under civil laws.	LLP can enter into compromise, arrangement, amalgamation, reconstruction etc.
Minor can be admitted to benefit of partnership.	There is no specific provision to admit minor to benefit of partnership. It is doubtful if this can be done.
Similarities
Partner is not employee of firm	Partner is not employee of LLP.
Liability of a person for 'holding out', i.e. representing himself as partner, though he is not	Liability of a person for 'holding out' i.e. representing himself as partner, though he is not [clause 29 of LLP Bill, 2008]
Partner of firm entitled to remuneration only if partnership agreement so provides	Partner of LLP entitled to remuneration only if LLP agreement so provides
New partner can be introduced only with consent of all existing partners	New partner can be introduced only with consent of all existing partners, unless LLP Agreement provides otherwise.
Insolvent person cannot continue as partner of firm.	Insolvent person cannot continue as partner of LLP.
Rights of partnership can be assigned.	Rights of partnership can be assigned.
Partner liable to firm for any personal profits made by him by use of property, name or business connection of firm.	Partner liable to LLP for any personal profits made by him by use of property, name or business connection of LLP
Partner cannot undertake competing business without consent of other partners	Partner cannot undertake competing business without consent of LLP. Otherwise, liable to account for and pay profits to LLP
Partner liable to firm if he commits fraud.	Partner liable to LLP if he commits fraud.

Comparison between company and LLP

Company under Companies Act	Limited Liability Partnership
Distinctions
Memorandum is to be filed with ROC	Incorporation Document is required to be filed.
Memorandum should contain State in which incorporated.	Incorporation Document is not required to contain State in which incorporated. Thus, registered office can be changed to any place in India just by informing ROC subject to prescribed conditions.
Name to contain 'Limited' or 'Private Limited' as suffix	Name to contain 'Limited Liability Partnership' or 'LLP' as suffix
Articles are to be filed at the time of incorporation. Private company must have Articles. In case of public company, provisions of Table A apply if there are no Articles.	LLP Agreement is required to be filed later. In absence of LLP Agreement, mutual rights and duties will be as specified in first schedule to LLP Act. Thus, practically, each LLP must have LLP Agreement, though not mandatory.
Managing Director and Wholetime Director to look after day to day administration..	Designated Partner to look after statutory compliances. Otherwise, all partners can look into affairs of the LLP. However, LLP can delegate powers to some partners who may be designated as 'Managing Partner', or 'Executive Partner' or any other name.
Individual director or member does not have authority in conduct of business of company.	Every partner has authority to conduct business of LLP, unless the LLP Agreement provides to contrary.
Restrictions on remuneration to director as per Companies Act	No restriction on remuneration to partner. Remuneration should be provided in LLP agreement.
Notice of change of director is to be given by company.	A partner who has resigned from LLP can himself file notice of his resignation to ROC.
Share, share certificate, register of members, transfer and transmission of shares etc. required.	No requirement of share and share certificate. Hence, no question of its issue, allotment, transfer, rectification of register etc.
Board meetings, general meetings are required.	No provision for regular meeting of Board and members. Partners can decide when and how to meet, delegation of powers etc. Provision is made that LLP should maintain minute book
Charges are required to be registered	No provision for registration of charges.
Elaborate records and registers are required to be maintained	No records and registers have been prescribed.
Restrictions on Board regarding some specified contracts, contracts in which directors interested, investments, loans and guarantees to other companies	Partners are free to enter into any contract.
Disclosures required of contracts where directors are interested	No requirement of disclosures required of contracts where partners are interested, unless specified in LLP Agreement.
Elaborate provision relating to redressal in case of oppression and mismanagement	No provision relating to redressal in case of oppression and mismanagement
Specific provisions relating to nidhis, NBFC	No specific provisions relating to nidhis, NBFC
Similarities
Limited liability and perpetual succession	Limited liability and perpetual succession
Must have common seal	Common seal is optional
Provision of approval of name, change of name are similar.	Provision of approval of name, change of name are similar.
ROC is the administrative authority	ROC is the administrative authority
Provisions of name, its approval and change are similar.	Provisions of name, its approval and change are similar.
No personal liability of individual director or member [except of director of private company in some cases like income tax and sales tax dues].	No personal liability of partner, except in case of fraud.
Complicated procedure for change of registered office, particularly when change is to other State	Simple procedure to change registered office of LLP anywhere in India just by informing ROC and following prescribed conditions.
Registrar of Companies (ROC) is the administrating authority.	Registrar of Companies (ROC) is the administrating authority.
Memorandum and Articles, details of directors, accounts, annual return, special resolutions etc. filed by LLP with ROC will be available for public inspection	Incorporation document, details of partners, accounts, statement of solvency and annual return filed by LLP with ROC will be available for public inspection [clause 36 of LLP Bill, 2008]
Powers to Central Government to inspect records of company and to order investigation	Powers to Central Government to inspect records of company and to order investigation
Provisions of compromise, arrangement or reconstruction of companies are similar	Provisions of compromise, arrangement or reconstruction of LLP [clauses 60 to 62 of LLP Bill, 2008]
Company can be would up voluntarily or by order of Court	LLP can be would up voluntarily or by order of Court
ROC can strike off name of defunct company.	ROC can strike off name of defunct LLP

Source: http://www.dateyvs.com/

Company Secretary Appointment Rules amended-5crores&above-Mandatory

More job opportunities for Company Secretaries in employment as it will be become mandatory & an enforceable provision (atleast now) OR more unemployment for Company Secretaries in employment & more opportunities for practice!!! These are all just views, the quality in Company Secretaries will always be banked upon, irrespective of any legislative amendments. We, Company Secretaries, lets keep rockin...

Amended & Applicable Provision from 15th March 2009:

Get Mandatory Compliance Certificate:

• if your share capital is between 10 lakhs & 2 crores;
• if your share capital is between 2 crores & 5 crores and you have not appointed whole time company secretary.

Mandatorily appoint a Whole Time Company Secretary:

• if your share capital is between 2 crores & 5 crores and you have not got the Compliance Certificate;
• if your share capital is above 5 crores.

And, NO special provisions for Companies having its registered office in a place with a population of less than one lakh as per 2001 census.

COMPANIES (APPOINTMENT AND QUALIFICATIONS OF SECRETARY) AMENDMENT RULES, 2009 - AMENDMENT IN RULE 3 NOTIFICATION NO. G.S.R. 11 (E), DATED 5-1-2009 In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 642 read with clause (45) of section 2 and section 383A of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualifications of Secretary) Rules, 1988, namely :— 1. (1) These rules may be called the Companies (Appointment and Qualifications of Secretary) Amendment Rules, 2009. (2) They shall come into force from the 15th day of March, 2009. 2. In the Companies (Appointment and Qualifications of Secretary) Rules, 1988, in rule 2, (i) in sub-rule (1) and in the proviso to sub-rule (4), for the words "rupees two crores" the following words shall be substituted, namely:— "five crore rupees"; (ii) in sub-rule (3), the second and third proviso shall be omitted; (iii) after sub-rule (3), the following sub-rule shall be inserted, namely:— "(3A) A company having a paid up share capital of two crore rupees or more but less than five crore rupees may appoint any individual who possesses the qualification of membership of the Institute of Company Secretaries of India constituted under the Company Secretaries Act, 1980 (56 of 1980), as a whole-time secretary to perform the duties of a secretary under the Companies Act, 1956: Provided that where a company has appointed under sub-rule (3) or this sub-rule, a whole-time company secretary, possessing the qualification of membership of the Institute of Company Secretaries of India, such a company is not required to obtain a certificate from a secretary in whole-time practice under rule 3 of the Companies (Compliance Certificate) Rules, 2001."

Source: http://www.taxmann.net/Datafolder/flash/flashbn0701_2.htm

Enjoy workin...Vj

FREE CS doubt clearance session for chennai CS students at Learn Labz

[CS free Intro Class]Time to win Prizes for CS exams & Understand CS course better

Yes,

Learn Labz celeberated its first batch of Company Secretary (ICSI) friends to face the exams in Chennai, this December 2008.

To cheer the other examinees at the exam centre, we conducted Learn Labz contests with a facility for CS students to enjoy classes @ Learn Labz with 10% discount and also a lucky draw with Gift worth up to Rs. 25,000/- and the SURPRISE is unlocked this 25th January 2009 at 4 PM with a free introductory sessions to new comers creating more awareness about CS course, CS training, TOP, et al. Do refer your friends.


Recession is for Markets, for Professionals its always to learn. The fun in learning starts when you experiment to excel.

Chennai CS students meet you right there at Learn Labz. Enjoy passin...Keep Studyin...

CS Contact Class for CS Foundation, Executive & Professional Students: At Learn Labz on 25th January 2009 at 4 PM
Learn Labz - 128, Veeraperumal Koil Street, Mylapore, Chennai. Catch Vijay on 93829 35598 for details.
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Just 120 days to get emails for e-filing mistakes from RoC-15th February 2009 onwards, Companies Regulation 2008 says so

Your document may render "invalid" or "defective" and fresh filing with additional fees is the only option, so care for e-mails!!!

Companies Regulations, 1957

readwith

Companies (Amendment) Regulations, 2008

Erstwhile Regulation 17 (1) The Registrar shall examine, or cause to be examined, every document received in his office which is required or authorised by or under the Act to be registered, recorded or filed by or with the Registrar.

17(2) If any such document is found to be defective or incomplete in any respect, the Registrar shall give notice in writing to the company to rectify the defect or complete the document or to file a revised document complete in all respects, within 15 days from the date of such notice.

17(3) In case of failure on the part of the company to rectify the defect or to complete the document within 15 days after giving notice to the company, the document shall be registered, recorded or filed as the case may be, by the Registrar and the company shall be informed accordingly.

Now, the new amendment to replace the above mentioned regulation 17 is as under,

• This regulation comes into force from 15^th February 2009.
• The things filed with MCA through www.mca.gov.in for approval or registration or record or rectification shall be examined by RoC.
• The e-forms filed with MCA through www.mca.gov.in for information and filed under Straight Through Processing (STP) may be examined by RoC.
• RoC to call for information or asks for rectification of defects or incompleteness or to re-submit the things, if it finds necessary, only within 120 days from filing [excluding approval time taken by other authorities like CLB, CG] and intimate the same through website and last known e-mail or if not available, then to last known address or registered office of the company.
• RoC to wait for 30 days (15 days for shifting registered office from state to state) and if not received or not satisfied with the provided explanation or rectification, it can treat the thing as "invalid" ["defective" in cases of forms filed for information through STP] and intimate accordingly.
• The Company then has only option to make fresh filing with additional filing fee, as applicable to rectify the 'invalid/defective thing'.
• This regulation comes into force from 15^th February 2009 and RoC is given a time of 60 days and not more than 150 days from 15^th February 2009 to re-examine all things of company pending at RoC for more than 30 days from 15^th February 2009, by giving intimation as aforesaid.

You can access the regulations in http://www.mca.gov.in/MinistryWebsite/dca/notification/pdf/GSR888(E)_2jan2009.pdf

Now you can Track only Company Law Updates from by clicking http://feeds.feedburner.com/companylaw

So, now the RoC season will begin from 15^th February yet again!!! Make replies to prevent a fresh filing…

r u doing CS Executive/Professional Program & Professionals can enjoy classified updates now

Click & Read from below of whatsoever applicable to you. Say for instance, you are a CS Inter/Executive Student doing Module-II, you may have to click "CS Executive Securities Law" link or such other links, on the right hand side of http://yehseeyes.blogspot.com/, its like ready-referencer to the blog.

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[ECB]corporates in service sector under automatic route&any all-in-cost ceiling, NBFCinfrastructure finance with approval

1. RBI has liberalized the ECB policy by dispensing with the requirement of all-in-cost ceilings on ECB until June 30, 2009. However eligible borrowers, proposing to avail of ECB beyond the permissible all-in-cost ceilings as mentioned below may approach the Reserve Bank under the Approval Route.

Ceilings under Automatic Route:

2. Development of integrated township [as in Press Note 3 (2002 Series) dated January 04, 2002] is now a permissible end-use of ECB unless reviewed in 30th June 2009. Integrated township includes housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems and manufacture of building materials. Development of land and providing allied infrastructure forms an integrated part of township's development.

The minimum area to be developed should be 100 acres for which norms and standards are to be followed as per local bye-laws / rules. In the absence of such bye-laws/rules, a minimum of two thousand dwelling units for about ten thousand population will need to be developed.

3. ECB by Non-Banking Financial Companies (NBFCs) exclusively involved in financing of the infrastructure sector, to avail of ECBs from multilateral / regional financial institutions and Government owned development financial institutions for on-lending to the borrowers in the infrastructure sector under the Approval route.

The direct lending portfolio of the above lenders vis-à-vis their total ECB lending to NBFCs, at any point of time should not be less than 3:1. AD Category - I banks should obtain a certificate from the eligible lenders to this effect. This facility will be reviewed in June 2009.

4. Corporates in the Hotels, Hospitals and Software sectors to avail of ECB up to USD 100 million per financial year, under the Automatic Route, for foreign currency and / or Rupee capital expenditure for permissible end-use. The proceeds of the ECBs should not be used for acquisition of land. ECB by other entities in Hotels, Hospitals and Software sector continue to remain under Approval Route as earlier.

5. Necessary amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 dated May 3, 2000 are being issued separately

Pl. find atached RBI/2008-09/343 A.P. (DIR Series) Circular No. 46 dated January 2, 2009 for details.

Click here for erstwhile ECB amendment.