FAQ’s Company Law On the Basis of Query Received - Series - 421

Company Law
On the Basis of Query Received

In this Flash Editorial author begins by referring the queries / questions received from professionals, Students or corporate in relation to Companies Act, 2013 or latest amendments in that. Author will try to explain solutions of such questions with the provisions of law.

This is article no. 421 of the series of editorials written by the author on corporate laws {including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.
   A.  Do we need to attach CA certificate in DPT-3 for exempted deposit Filings also?

Statutory Provisions Contained Under the Act:
As per latest amendments in DPT-3 dated 22.01.2019; All the Companies (Whether, Small, Non Small, Private, Public, OPC, etc.) required to file DPT-3 after publication of these rules. Details of same has been published in our editorial No. 412 link given below:

As per draft of DPT-3, every company while filing e-form DPT-3 required to attach a “Certificate of Statutory Auditor”.

However, one can opine that CA Certificate is required to attach, whether deposits are exempted deposit or non-exempted deposit.

   B.  If Company doesn’t have any outstanding amount or having nil outstanding Loan and advance receipt. Therefore, in that case company need to file DPT-3 or not?

Statutory Provisions Contained Under the Act:
Outstanding receipt of Money and Loan from 1st April, 2014 to 22nd January, 2019 (i.e. date of publication of notice) is required to report in e-form DPT-3. Act states that company have to report “Outstanding Loan and outstanding receipt”.

However, one can opine if as on 22.01.2019 company doesn’t have any outstanding amount of loan or having NIL outstanding Loan and receipt of money. Then there is no need to file e-form DPT-3.
   C.  As per notification of Specified Companies Order, 2019; whether specified companies reporting will be done only for the MSME whose dues are not paid for more than 45 days? Or reporting will be of “total outstanding amount from MSME even if outstanding for 1 Day?

Statutory Provisions Contained Under the Act:
Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification

However, as per language of section states about “Outstanding Dues” and in case of MSME payment become due from 46th Day (after 45 days).

Therefore, one can state that, specified companies have to report in e-form MSME-1 about “all the outstanding dues” that means dues which are not paid within 45 days.

   D.  Can we transfer the shares before filing the declaration of commencement of business, if company incorporated after 02.11.2018?

Statutory Provisions Contained Under the Act:

As per 10A, a company incorporated after ordinance SHALL NOT COMMENCE its business or exercises any borrowing powers unless file a declaration with ROC in form 20A
As per language of Section 10A read with rule 23A, a Company can’t start any business activity before filing of declaration with ROC. 

However, transfer of shares doesn’t fall under business activity or borrowing of Company. Therefore, one can opine that shareholders can transfer their shares even before filing of declaration in e-form 20A.
   E.   Whether a Company can file any form for change in Directorship or allotment of shares, before filing e-form 20A commencement of Business. if company incorporated after 02.11.2018?

As per language of Section 10A read with rule 23A, a Company can’t start any business activity before filing of declaration with ROC.

Practically as per MCA website its doesn’t allow to file any e-forms like change in director of company before filing of declaration of commencement of business. MCA site showing following Error “no form filing is allowed before filing of declaration of commencement of business”

  F.   If the subscriber of MOA dies before depositing the subscriber money then how to comply with provisions of declaration of commencement of Business?

As per Companies act in case of death of share holder his/her legal heir shall be considered as share holder of Company and Company/legal heir have to comply with the provision of Section 56 transmission of shares.

Therefore, one can opine that in above situation Company will first transmit the shares to legal heir and then legal heir shall make payment of subscription money and after that company shall file e-form 20A “declaration of commencement of business”.

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


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