FAQ's Small, Abridge - DIRECTOR’ REPORT - ONE PERSON COMPANY & SMALL COMPANY



Small, Abridge……..
DIRECTOR’ REPORT
ONE PERSON COMPANY & SMALL COMPANY

Short Summary:
MCA has further amended the Companies (Accounts) Rules, 2014, these rules called the Companies (Accounts) Amendment Rules, 2018.

As per Companies amendment Act, 2017 it was proposed that MCA shall issue abridge form of Directors Report for One Person Company and Small Company.

MCA has came with new rule 8A on 31st July, 2018 for “abridge form of Directors report disclosure” by prescribing separate bunch of disclosures for Small Company and One Person Company.
FAQ’S:
   A.   Whether these rules impact the Annual Filing of OPC and Small Company for the f.y. ended 31.03.2018?
As per notification rules shall be applicable from the date of publication in official Gazette. If these rules published in official gazette before holding of Board Meeting in which Directors Report shall be approved then these rule shall impact that Directors Report.

Note: In general it’s published in Official Gazette immediately or with in some days.
   
    B.    Whether Rule 8 i.e. “Matters to be Included in Board’s Report” shall be applicable on OPC and Small Company?
A new sub Rule 6 added after sub Rule 5 in Rule 8; I.e. “This Rule shall not apply to OPC and Small Company”.
Therefore, Rule 8 shall not apply on the OPC and Small Company

     C.    Whether OPC and Small Companies are required to prepare MGT-9 after notification of these rules?
Requirement of preparation of MGT-9 shall not be applicable on OPC and Small Companies. Because, only transaction mentioned in Rule 8A are applicable on these companies for the purpose of Directors’ Report.

    D.   Whether it is mandatory to mention the Dates of Board Meeting and presence of Directors in Board Report?
As per Rule 8A(b) Company have to mention the Numbers of Meeting, Neither Dates nor presence of Directors.

Therefore, one can opine that there is no need to mention the date of Meetings and presence of Directors in Board Report.

     E.    Whether these rules applicable on Financial Year 2017-18?
As per notification rules shall be applicable from the date of publication in official Gazette. If these rules published in official gazette before holding of Board Meeting in which Directors Report shall be approved then these rule shall impact that Directors Report.

Note: In general it’s published in Official Gazette immediately or with in some days.

    F.     Whether it is mandatory to mention the Dates of Board Meeting and presence of Directors in Board Report?
As per Rule 8A(b) Company have to mention the Numbers of Meeting, Neither Dates nor presence of Directors.

Therefore, one can opine that there is no need to mention the date of Meetings and presence of Directors in Board Report.

     G.    Which material changes Company have to mention in Directors’ Report?
·         Material changes from the date of closure of financial year.
·         Financial changes in the nature of Business and
·         Financial changes with impact on the financial position.

    H.   Whether it is mandatory to mention the Dates of Board Meeting and presence of Directors in Board Report?
As per Rule 8A (b) Company have to mention the Numbers of Meeting, Neither Dates nor presence of Directors.

      I.       Details of all related party transaction is required to be mention in AOC-2?
The report shall contain the particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 in the form AOC-2.

NOTE:

Related party transaction in relation to transaction mentioned in section 188(1) – there are 7 transactions (a to g) shall be mentioned in AOC-2.



 (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


Comments

Popular posts from this blog

Declaration of Commencement of Business - Series 487

Vacancy Updates (Through Google Form) | Dated: 20-August-2020

Process of Conversion of Loan into Equity