KEY FEATURES - FILING OF CRL- 1
KEY FEATURES - FILING OF CRL- 1
Information to the Registrar by
company regarding the number of layers of subsidiaries
MCA has issue [1]Notification
on 20th September, 2017 in respect of “Numbers of Layers of
Investment in Subsidiaries” of Company. These rules called as Companies
(Restriction on number of layers) Rules, 2017
MCA has issued CRL -1 form w.e.f. 26th
February, 2018. Now this form is available on MCA website.
ü Enter the number of layers of subsidiaries as on the date of commencement of these rules i.e. 20th September, 2017. (The field value is restricted to 99).
ü Enter the number of subsidiaries in each layer.
ü The value entered should be greater than zero
ü System shall auto-calculate Sum of all no. of subsidiaries entered in the layers
ü Note - Disqualified director should not be able to sign the form
ü The form will be processed in auto approval mode.
ü Time limit (days) for filing 180 days from the date of publication in the Official Gazette
Note: Process for uploading of details of “Subsidiary” after filing of CRL-1
given at the end of the editorial.
Allowed Numbers
- Layers of Investment
No Company other than below mentioned 4 categories of company shall have more
than two layers of subsidiaries.
Companies
on which rules above not applicable Companies:
·
Banking
Company
·
Non-banking
Financial Company
·
Insurance
Company
·
Government
Company
Exemption to the Companies:
i.
Acquiring Company incorporated outside India: These provisions shall not affect a company from
acquiring a Company incorporated outside India with subsidiaries beyond two
layers as per the law of such Country.
Note: If a company incorporated outside India and
having more than 2 layers of subsidiaries according to their law. An Indian
company acquiring that foreign body corporate then these provisions shall not
affect such transaction. Indian Company can acquire foreign company which have
more than 2 layers of subsidiaries.
ii.
One Layer of Subsidiaries: For computing the numbers of layers, one layer
which consists of one
or more wholly owned subsidiary or subsidiaries
shall not be
taken into account.
Note: If a Company have more than 2 WOS or subsidiaries
on one layer, such companies shall not taken into account while calculating the
layers of subsidiaries. On one layer there may be more than 2 Subsidiaries or
WOS’s.
Question: If Company existing before 20th
September, 2017 (commencement of these rules) having more than 2 layers of
subsidiaries. In such situation what is the way out?
Answer:
i.
Such
Company shall file, with the Registrar a return in Form CRL-1 disclosing
the details specified therein, within a period of 150 [2]days
from the date of publication of these rules in the Official Gazette
Note: Companies have to file CRL -1 within 150 days. (As per e-form Instruction
Kit required to be file within 180 days from the date of publication of rules
in the official Gazette. (i.e. 19th March, 2018)
ii.
Such
Company shall not, after the date of commencement of these rules, have any
additional layer of subsidiaries over and above the layers existing on
such date; and
Note: Companies can continue with no. of layers as on
20.09.2017 without any restriction. Even there is no need to dis-investment in
such excess no. layers of subsidiaries.
iii.
Such
Company shall not, in case one or more layers are reduced by it subsequent to
the commencement of these rules, have the number of layers beyond the
number of layers it has after such reduction or maximum layers allowed in sub
rule (1), whichever is more.
Note: If any time after 20.09.2017 Company made dis-investment in any of its
subsidiary (which is on and above counting of 2 layers) in that situation
company can’t make new investment until unless its having less than 2 layers of
subsidiaries.
Example: Company “XYX” having 6 layers of subsidiaries as
on 20.09.2017. Company made disinvestment in one of its layers on 15.11.2017.
Therefore, as on 15.11.2017 Company XYZ having 5 layers of subsidiaries. In
such situation Company can’t make investment in one more company to reach its
limit of 6 Companies. Because as
per rules the limit is 2 layers.
NOTE:
In case Company having more than 2 layers of subsidiaries as on
20.09.2017 it’s has to ‘(i) file form CRL-1 with ROC within 150 days (ii) no
need to reduce the excess no. of layers by dis- investment in Companies
UPLOAD
DETAIL OF SUBSIDIARIES
§ After
uploaded the form CRL-1 and SRN is generated, it is required to upload the
details of the subsidiary companies within 15days from the payment date
otherwise SRN shall marked as NTBR .
§ Login to MCA portal with the same credentials as
was used to upload the CRL-1 form and then click the link under MCA Services
> Upload Subsidiary Details to upload the details of subsidiaries.
§ Once the provided details are validated, the
system is allowed to download the excel sheet. After validating the detail,
click the ‘Generate Excel’ button to generate the excel file and fill in all
the relevant information as per the instructions. The excel file shall be
generated based on the information filed by the user in the CRL-1 form.
§ Fills the subsidiary data in excel as per the
instructions and uploads the excel sheet by clicking the ‘Upload Excel’ button.
§ On click of ‘Submit’ button, system shall check
whether the CIN/FCRN/LLPIN entered is ‘valid’ and is ‘Active’ in status. In
case the CIN/FCRN/LLPIN is not Valid or ‘Active’, an error message shall be
displayed as ‘CIN/FCRN/LLPIN is not valid/Active. Please enter the correct
details’.
§ The system shall also perform the validation for
the number of layers and the number of subsidiaries in a particular layer.
System will notified for the error records in the excel sheet with appropriate
color code.
§ In case the CIN/FCRN/LLPIN is ‘valid’ and
‘Active’ in status, the corresponding names should be pre-filled.
§ No system checks shall be performed where ‘Other
registration number’ is selected as the type of registration. Enter the name of
subsidiary/holding in such case.
§ Once all the details are submitted and there is
no error w.r.t type of registration as ‘CIN/FCRN/LLPIN’, the data is saved in
the database.
Penalties:
If any company contravenes any provision of these
rules the company and every officer of the company who is in default shall
be punishable with fine which may extend to ten thousand rupees and where the
contravention is a continuing one, with a further fine which may extend to
one thousand rupees for every day after the first during which such
contravention continues.
(Author
– CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice
from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents
of this document have been prepared on the basis of relevant provisions and as
per the information existing at the time of the preparation. Although care has
been taken to ensure the accuracy, completeness and reliability of the information
provided, I assume no responsibility therefore. Users of this information are
expected to refer to the relevant existing provisions of applicable Laws. The
user of the information agrees that the information is not a professional
advice and is subject to change without notice. I assume no responsibility for
the consequences of use of such information. IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION
[2] (As per e-form Instruction Kit
required to be file within 180 days from the date of publication of rules in
the official Gazette. (i.e. 19th March, 2018)
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