New development: MCA to release new form INC-29. In this one form we can provide DIN, Name availability and incorporation docs at once. This form is being brought under the ease of doing business initiative to shorten the time needed for incorporation of company.

Summary of MCA Webcast on Inegrated Form for Incorporation (INC 29)

COMBINED FORM FOR DIN+NAME AVAILABILITY+INCORPORATION

1. only is an option and not mandatory;

2. required to propose only 1 name;

3. simpler process;

4. separate Q for this form at RoC back office;

5. Template Memorandum of Association and Template Articles of Association;  Option is available for amending the M&AoA;

6. object to incorporate company within 24 hours of applying;

7. registration fee of Rs.2k.  + other fees depending upon capital of the company.

8. Will PAN be generated, automaticlly with Form No. INC-29 - Not available.

9.  All attachments/declaration/proof etc. will be required for Form No.29. However, duplication of attachment will be reduced.

10. In case Directors/Shareholders have DIN, then separate address proof/ID proof will not be asked for.

11. Re-submission requires onearous process (including change in M&AoA) and hence, one needs to be doubly sure before applying said form.

12. This form is not meant for Section 8.

13. Two re-submissions will be permitted.

14. In case the form is rejected, refund needs to be applied through Refund Form.

15. This form is not a STP Form and needs to be processed by respective RoC.

16. Certificate of Commencement of Business will continue.

ABATEMENTS UNDER SERVICE TAX

Dear Professional Colleagues

Please find list of abatements under service tax till 22.04.2015. Hope the information will assist you in your Professional endeavours. 

Sr. No.	Description of taxable service	Abatement %	Taxable %	Conditions
(1)	(2)		(4)	(5)
1a	Services in relation to financial leasing including hire purchase	90%	10%	Nil
1b	Services by a tour operation in relation to a tour, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour			(i) CENVAT credit on inputs, capital good and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) The invoice, bill or challan issued indicates that it is towards the charges for such accommodation. (iii) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.
2a	Services of goods transport agency in relation to transportation of goods.	75%	25%	CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
2b.	Services by a tour operator in relation to a package tour			(i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) The bill issued for this purpose indicates that it is inclusive of charges for such a tour.
2c.	Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority. (a) For a residential unit satisfying both the following conditions, namely: (i) The carpet area of unit is less than 2000 square feet, and (ii) The amount charged for unit is less than rupees one crore			(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) The value of land is included in the amount charged from the service receiver.
3a	b) For other than (2c) above	70%	30%	- do -
3b	Transport of goods by rail			NIL
3c	Transport of passengers, with or without accompanied belongings by rail
4	Transport of passengers with or without accompanied belongings by air.	60%	40%	CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
4b	Renting of any motor vehicle designed to carry passengers			CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
4c	Services by a tour operator in relation to: Any services other than specified in (2b) and  (1b) above			(i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour.
5	Transport of goods in a vessel.	50%	50%	CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
6	Renting of hotels, inns, guest houses, clubs, campsites or other commercial places mean for residential or lodging purposes.	40%	60%	CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
7	Bundled services by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any place specially arranged for organizing a function) together with renting of such premises.	30%	70%	(i) CENVAT credit on any goods classifiable under chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules 2004.
7b	Services provided in relation to chit			CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

Thanks

CS Nikhil Kalra 

Remuneration to managerial person appointed under Companies Act, 1956 after 01.04.2014

F. No. 1/5/2013-CL-V

Government of India

Ministry of Corporate Affairs

General Circular No. 07/2015

Dated: 10^th April, 2015

Subject: Remuneration to managerial person under Schedule XIII of the Companies Act, 1956 – Clarification with regard to payment for period.

Stakeholders have drawn attention to the Provisions of Schedule XIII (sixth proviso to Para (C) of Section ll of Part ll) of the Companies Act, 1956 (Earlier Act) and as clarified vide Circular number 14/11/2012-CL-VII dated 16th August, 2012, which allowed listed companies and their subsidiaries to pay remuneration, without approval of Central Government, in excess of limits specified in para II Para (C) of such Schedule if the managerial person met the conditions specified therein. Stakeholders have expressed that since similar provisions are not available in the Schedule V of the Companies Act, 2013, there is a need for a clarification that a managerial person appointed in accordance with such provision of Schedule XIII of Earlier Act may receive relevant remuneration for the period as approved by the company in accordance with such provisions of Earlier Act.

2. The matter has been examined in the light of earlier clarifications on transitional matters issued by the Ministry. It is clarified that a managerial person referred to in para 1 above may continue to receive remuneration for his remaining term in accordance with terms and conditions approved by company as per relevant provisions of Schedule XIII of earlier Act even if the part of his/her tenure falls after 1st April, 2014.

3. This issues with the approval of the competent authority.

Yours faithfully

(K. M S Narayanan)

Assistant Director (Policy)

Clarification Under section 186(7) of Companies Act, 2013

File No. 5/3/13-CL.V

Government of India 

Ministry of Corporate Affairs 

General Circular No. 06/2015 

Dated 9th April, 2015 

Subject: Clarification under sub-section (7) of section 186 of the Companies Act, 2013 

1. Attention of this Ministry has been drawn to General Circular No 06/2013 dated 14.03.2013 vide which it was clarified that in cases where the effective yield (effective rate of return) on tax free bonds is greater than the yield on prevailing bank rate, there was no violation of Section 372A(3) of Companies Act, 1956. Stakeholders have requested for similar clarification w.r.t. corresponding section 186(7) of the Companies Act, 2013. 

2. The matter has been examined in the Ministry and it is hereby clarified that in cases where the effective yield (effective rate of return) on tax free bonds is greater than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan, there is no violation of sub-section (7) of section 186 of the Companies Act,2013. 

3. This issues with the approval of competent authority.

Yours faithfully 
(K. M S Narayanan) 
Assistant Director (Policy)

Companies (Auditor’s Report) Order,2015 i.e. CARO 2015

The MCA has issued Companies (Auditor’s Report) Order,2015. It shall come into force on the date of its publication  in the Official Gazette.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

Order

New Delhi, the 10th April, 2015

S.O. __________ (E).- In exercise of the powers conferred by sub-section (11) of section 143 of the Companies Act, 2013 (18 of 2013 ) and in supersession of the Companies (Auditor’s Report) Order, 2003, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 480 (E), dated the 12(11 June, 2003, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the Institute of Chartered Accountants of India, constituted under the Chartered Accountants Act, 1949 (38 of 1949), hereby makes the following Order, namely:-

1. Short title, application and commencement. – (1) This order may be called the Companies (Auditor’s Report) Order, 2015.

(2) It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except -

(i)  a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii) an insurance company as defined under the Insurance Act,1938 (4 of 1938);

(iii) a company licensed to operate under section 8 of the Companies Act;

(iv) a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and

(v) a private limited company with a paid up capital and reserves not more than rupees fifty lakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year.

(3)     It shall come into force on the date of its publication in the Official Gazette.

2.   Auditor’s report to contain matters specified in paragraphs 3 and 4. Every report made by the auditor under section 143 of the Companies Act, on the accounts of every company examined by him to which this Order applies for the financial year commencing on or after 1St April, 2014, shall contain the matters specified in paragraphs 3 and 4.

3.  Matters to be included in the auditor’s report. – The auditor’s report on the account of a company to which this Order applies shall include a statement on the following matters, namely:-

(i)      (a) whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

(ii) (a) whether physical verification of inventory has been conducted at reasonable intervals by the management;

(b)    are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

(c)     whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

(iii) whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

(a)       whether receipt of the principal amount and interest arc also regular; and

(b)           if overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv)         is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

(v)           in case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with? I I not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

(vi)       where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained;

(vii) (a) is the company regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

(b)    in case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

(c)     whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

(ix)    whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported;

(x)    whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

(xi) whether term loans were applied for the purpose for which the loans were obtained;

(xii)    whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

4. Reasons to be stated for unfavourable or qualified answers.- (1) Where, in the auditor’s report, the answer to any of the questions referred to in paragraph 3 is unfavourable or qualified, the auditor’s report shall also state the reasons for such unfavourable or qualified answer, as the case may be.

(2) Where the auditor is unable to express any opinion in answer to a particular question, his report shall indicate such fact together with the reasons why it is not possible for him to give an answer to such question.

File No. 17/ 4 /2015-CL-V]

Amardeep Singh Bhatia

Joint Secretary to the Government of India