FAQ's

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Frequently asked questions

Ques 1 Till what time is the name reservation of the proposed company valid?

Ans  The period for reservation of name is now valid for ‘twenty days from the date of approval or such other period as may be prescribed’.

Ques 2 What in case an existing company proposes to change its name? Is the provision same as for a new company name reservation?

Ans No, in case of an existing company, the Registrar may reserve the name for a period of sixty days from the date of approval.

Ques 3 Can a company have registered office right from its incorporation itself? Or By what time within incorporation, a company should have a registered office?

 Ans Yes, as per the recent amendment in Companies Act, a company is supposed to have a registered office within 30 days of its incorporation.

Ques 4 Is a company required to inform anyone in case it changes its registered office after incorporation?

Ans Yes, the notice of every change of the situation of the registered office is to be given to the Registrar within thirty days of the change.

Ques 5 If a company had a turnover of INR 1500 crore in year 2015-16, then does it require to constitute a Corporate Social Responsibility Committee in Year 2017-18?

Ans No, as per the amended provisions, a company falling within the threshold of the specified net worth or turnover or net profit during the immediately preceding financial year is required to constitute the CSR Committee. Therefore in the above case, if the company had turnover of INR 1500 core in year 2016-17, only then it would have been mandatory for the company to be in compliance with the CSR provisions.

Ques 6 In case a company is not required to appoint an independent director, then what would be the constitution of its CSR committee?

Ans In case of such companies, the CSR Committee may be formed with two or more Directors.

Ques 7 What to do in case where shareholders of a company decide not to ratify the auditor’s appointment?

Ans There is no more requirement for ratification of appointment of auditors by members.  Auditors shall be appointed for 5 years or 10 years as the case may be in accordance with the law.

Ques 8 What are the implications of number of members falling below minimum as prescribed under Companies Act 2013?

Ans If at any time the number of members of a company is reduced below the minimum prescribed and the company carries on business for more than six months while the number of members is so reduced, then every person who is a member of the company during that time, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued.

Ques 9 In the year 2017-18, can a company re-open and recast its financial statements for the year 2007-08?

Ans No, as per the amended provision, books of accounts cannot be re-opened beyond 8 preceding financial years unless a direction has been issued by the Central Government under the proviso to sub-section (5) of section 128 for keeping of books of account for a period longer than eight years.

Ques 10 Can a Chief Executive Officer who is not appointed as a director sign the financial statement?

Ans Yes, as per the new provisions, CEO can sign the financial statement irrespective of the fact whether he is a director in the company or not.

Ques 11 Is it mandatory for one of the two directors required to sign financial statement to be a Managing Director?

Ans It depends. If the company is mandatorily required to appoint a Managing Director, then one of the two directors has to be a MD. Else, sign by any two directors shall be the sufficient compliance.

Ques 12 While preparing consolidated financial statements, only subsidiaries are to be considered and associated companies to be ignored, right?

Ans No, the amended provisions have clarified that a company has to include its associate companies as well while preparing consolidated financial statements.

Ques 13 Are the financial statements and consolidated financial statements to be prepared in accordance with Applicable accounting standards?

Ans Yes, The consolidated financial statement of the company, its subsidiaries and associates should be in accordance with the applicable accounting standards.

Ques 14 What should be the minimum gap between between sending copies of financial statements to member or debentures and the general meeting in which those statements are to be laid?

 

Ans Normally there should be at least 21 days gap, however, in the following cases, it will be sufficient compliance even if it is less than 21 days.

  1. In case of company having share capital-Agreed by members who are majority in number and hold at least 95% of paid up share capital
  2. if the company has no share capital, agreed by members having at least 95% of the total voting power 

 

Ques 15 Can an EGM be held outside India as well?

 

Ans EGM has to take place in India only, except in case of wholly owned subsidiary of a company incorporated outside India where EGM may be held outside India as well.

 

Ques 16 What is to be done if there is a change in the number of shares held by promoters or in case of change of top ten shareholders of a company?

 

Ans Earlier listed company had to file a return in the prescribed form with the Registrar with respect to change in the number of shares held by promoters and top ten shareholders of such company, within fifteen days of such change.

But now that requirement is lifted. However, this information is required to be filed with Stock Exchanges/SEBI.

 

Ques 17 What is the compliance requirement to keep registers or copies of return at some other place in India?

 

Ans A company is allowed to keep registers or copies of return at any other place in India in which more than one-tenth of the total number of members entered in the register of members reside, if approved by a special resolution passed at a general meeting of the company.

 

Ques 18 Is it possible for a director to participate in a meeting requiring approval of the Board’s report from a place outside India?

 

Ans Yes, the directors are now allowed to participate on certain items which were restricted at Board meetings through video conferencing or other audio visual means if there is quorum through physical presence of directors.

 

 

 

 

 

 

 

Ques 19 Is it mandatory for an individual to apply for DIN in order to be a Director of a company?

Ans Normally yes, but the Central Government is now empowered to recognise any other identification number to be treated as Director Identification Number for the purposes of this Act

 

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