Company Registration

Companies (Authorised to Register) Amendment Rules, 2023

calendar13 Feb, 2023
timeReading Time: 10 Minutes
Companies (Authorised to Register) Amendment Rules, 2023

The Ministry of Corporate Affairs or MCA notified the Companies (Authorised to Register) Amendment Rules of 2023 on 19 January 2023 to amend the Companies (Authorised to Register) Rules of 2014. The MCA[1] brought forth these amendments in the exercise of its powers flowing from the provisions of the Companies Act of 2013, namely, Section 164(1), Section 367, Section 374, Section 466 (1) and Section 469 (1) and (2). It came into effect on 23 January 2023.

The Companies (Authorised to Register) Rules of 2014 provide the requirements for entities like a company, limited liability partnership, trust, or a Section 8 company looking to obtain registration from the Registrar of Companies. It also provides for both pre-registration and post-registration obligations on such entities seeking registration which every company is required to adhere to.

The Companies (Authorised to Register) Amendment Rules of 2023 have amended various provisions of the Companies (Authorised to Register) Rules of 2014. It has amended Rule 3(2) (a), (b), (c) and (d) along with Form No. URC-1. This article attempts to delve into these recent amendments in depth.

Amendments to Companies (Authorised to Register) Rules, 2014

As mentioned above, the amendments mainly revolve around Rule 3 (2) of the Companies (Authorised to Register) Rules of 2014 and Form Number URC-1.

  • Rule 3(2) provides for the information and documents which an entity seeking registration shall be required to attach and provide along with Form URC-1 to the registrar of companies.

    i. Amendments to Rule 3(2) of the Companies (Authorised to Register) Rules of 2014

    a. Rule 3(2) (a) deals with the registration requirements of either a limited liability partnership affirm applies to be registered as a company that is limited by shares. It states that any of the entities mentioned above seeking registration shall provide a list of all the partners who are such partners six days prior to submitting the application to obtain registration. The information shall include details regarding their names, occupation, address, details of shares held by them, and also giving separate information about the shares which have been allotted for cash consideration and for consideration other than cash and the source of consideration. Where the shares are numbered, the shares are required to be listed by the numbers.
    A list of the proposed first directors of the company along with their director identification number or DIN, passport number, expiry date, presidential address, along with their interest in any other body corporate or firm. Consent from such proposed directors to act as directors of the company is also required to be submitted.
    If the entity seeking registration is a partnership firm, then the deed of partnership or any other instrument which regulates the firm and if the partnership deed was revised, then copies of the original and the subsequent deeds along with the latest version of the deed shall be submitted. Moreover, if the firm is registered with the registrar of firms, then the certificate of registration issued by such registrar shall also be submitted.
    A copy of the recent income tax return of the firm order limited liability partnership is also required to be submitted.
    Prior to the amendment, either a written consent or no objection certificate from everyone on the secured creditors of the applicant was also required to be submitted. Post the amendment, only a No Objection Certificate from the secured creditors along with the charge holder is only can be submitted and not a written consent. The amendment has also omitted Rule 3(2) (a) (v) and (vi). This essentially means that there is no longer the requirement to obtain and submit the written consent of the majority of members agreeing to such registration at a general meeting, whether attending in person or by proxy. There is also no requirement to submit an undertaking that all the proposed directors of the company shall duly comply with the applicable provisions of the Indian Stamp Act of 1899.

b. Rule 3 (2) (b) of the Companies (Authorised to Register) Rules of 2014 deals with requirements for registration for which the application is being made by either a partnership phone or a limited liability partnership for registering as an unlimited company or a company which is limited by guarantee.

The applicant is required to submit a list of all the partners who are such partners six days prior to submitting the application to obtain registration. The information shall include details regarding the names, occupations, and addresses of the partners of the firm or a limited liability partnership, along with proof of ownership.

The applicant is also required to submit a list of the proposed first directors of the company along with their director identification number or DIN, passport number along with its expiry date, presidential address, along with their interest in any other body corporate or firm. Consent from such proposed directors to act as directors of the company is also required to be submitted.

If the entity seeking registration is a partnership firm, then the deed of partnership or any other instrument which regulates the firm, and if the partnership deed was revised, then copies of the original and the subsequent deeds along with the latest version of the deed shall be submitted. Moreover, if the firm is registered with the registrar of firms, then the certificate of registration issued by such registrar shall also be submitted.

If the company is intending to be registered as a company which is limited by guarantee, a copy of the resolution which declares the amount of guarantee shall also be submitted.

The applicant is also required to submit a copy of the recent income tax return of the firm order limited liability partnership.

Before the 2023 amendment, either a written consent or no objection certificate from the secured creditors of the applicant was also required to be submitted. However, after the amendment, a written permission can longer be submitted. Only a No Objection Certificate from the secured creditors along with the charge holder is only required to be submitted along with Form number MR-1.

The 2023 amendment omitted Rule 3(2) (b) (vi) and (vii), which stated that the applicant was required to submit the written consent of the majority of members agreeing to such registration at a general meeting, whether attending in person or by proxy along with an undertaking that all the proposed directors of the company shall duly comply with the applicable requirements of the Indian Stamp Act of 1899. Both these requirements have been eliminated by the 2023 amendment to the rules.

c. Rule 3 (2) (c) of the Companies (Authorised to Register) Rules of 2014 provides for the requirements necessary to obtain registration when the application is being made by a society looking to be registered as a company which is limited by guarantee under Section 8 of the Companies Act of 2013.

While submitting Form number UR-1, the applicant shall also submit a list containing the particulars of all the partners, like the names, occupations, and addresses of the partners of the firm or a limited liability partnership, along with proof of ownership. These persons should have been partners as of 6 days prior to the date on which the application to obtain registration is being submitted.

The applicant shall also submit a list of all the proposed first directors of the company along with details regarding their residential address, director identification number or DIN, passport number along with the expiry date, and their interest in any other body corporate or firm. Consent from such proposed directors to act as directors of the company is also required to be submitted.

The applicant is also required to submit a list which shall contain particulars of the members of the society’s governing body along with details pertaining to the name and address of each of the members.

A certified copy of any certificate of the society’s registration shall also be submitted.

A copy of the most recent income tax return of the society shall also be submitted.

The Companies (Authorised to Register) Amendment Rules of 2023 brought about four amendments to Rule 3(2) (c) to the 2014 Rules. It omitted Rules 3(2) (c) (vi), (vii) and (viii). The erstwhile Rule 3(2) (c) (vi) stated that the applicant is to submit the written consent of the majority of members agreeing for such registration at a general meeting, whether attending in person or by proxy, along with the resolution which has been passed to declare the amount of guarantee. Rule 3(2) (c) (vii) stated that an undertaking that all the proposed directors of the company shall duly comply with the applicable requirements of the Indian Stamp Act of 1899 should also be submitted. Rule 3(2) (c ) (ix) stated that details with respect to the objects for which the company has been formed and a declaration taken from all the members that all the prohibitions and restrictions mentioned under Section 8 (1) (b) and (c) of the Companies Act of 2013 have been complied with. The Companies (Authorised to Register) Amendment Rules, 2023, has eliminated all these requirements.

The next significant amendment made is to Rule (3) (2) (c) (iv) which required either a written consent or no objection certificate from the secured creditors of the applicant was also required to be submitted. However, after the amendment, a written permission can longer be submitted. Only a No Objection Certificate from the secured creditors along with the charge holder is only required to be submitted along with Form number MR-1.

d. Rule 3(2) (d) deals with the registration requirements for a trust seeking to be registered as a company that is limited by guarantee under Section 8 of the Companies Act of 2013.

It states that any of the entities as mentioned above seeking registration shall provide a list of all the partners who are such partners six days prior to submitting the application to obtain registration. The information shall include details regarding their names, occupation, address, details of shares held by them, and also giving separate information about the shares which have been allotted for cash consideration and for consideration other than cash and the source of consideration. Where the shares are numbered, the shares are required to be listed by the numbers.

A list of the proposed first directors of the company along with their director identification number or DIN, passport number along with the expiry date, presidential address, along with their interest in any other body corporate or firm. Consent from such proposed directors to act as directors of the company is also required to be submitted.

A certified copy of any certificate of the trust’s registration along with the trust deed shall also be submitted.

The applicant is also required to submit details with respect to the objects for which the company has been formed and a declaration taken from all the members that all the prohibitions and restrictions mentioned under Section 8 (1) (b) and (c) of the Companies Act of 2013 have been complied with. Section 8 (1) (b) pertains to the requirement of Section 8 companies to prove to the satisfaction of the central government shall apply all of their profits or income to advance the objects of the Section 8 company. Section 8 (1) (c) mentions the prohibition imposed on Section 8 companies from providing dividends towards members from the profits obtained by the Section 8 company.

The Companies (Authorised to Register) Amendment Rules, 2023, brought about four amendments to Rule 3(2) (d) to the 2014 Rules. It amended Rule 3(2) (d) (iv) and omitted Rules 3(2) (d) (v), (vi) and (vii).

Erstwhile Rule 3(2) (d) (iv) stated that either a written consent or no objection certificate from all of the secured creditors of the applicant was required to be submitted, Post the amendment, the applicant is only required to provide a No Objection Certificate from the secured creditors, as mentioned above, not a written consent.

Rule 3(2) (d) (v) of the Companies (Authorised to Register) Rules of 2014 that the applicant is to submit the written consent of the majority of members agreeing to such registration at a general meeting, whether attending in person or by proxy along with the resolution which has been passed to declare the amount of guarantee. Rules 3(2) (d) (vi) stated that the applicant is required to submit an undertaking that all the proposed directors of the company shall duly comply with the applicable requirements of the Indian Stamp Act of 1899. Rules 3(2) (d) (vii) stated that a copy of the most recent income tax return of the society was also required to be submitted. The Companies (Authorised to Register) Amendment Rules, 2023, has eliminated all these requirements.

  • Amendments to Form Number UR-1 of the Companies (Authorised to Register) Rules of 2014

Form Number UR-1 is titled “Application by a company for registration under Section 366”. The law governing the form includes Section 366 of the Companies Act of 2013 and Rule 3(2) of the Companies (Authorised to Register) Rules of 2014. Form number UR-1 is filed to register either a limited liability partnership, partnership firm, society, cooperative society or any other business entity as an unlimited company or a company which is limited by guarantee or a company which is limited by shares.

Such form of application for registration must be filed along with the prescribed fees as provided under the Companies (Registration Officers and Fees) Rules of 2014. The form is required to be digitally signed by a person authorised by the board of directors and shall be certified either by a company secretary in practice or a cost accountant in practice, or a chartered accountant and practice.

Details required to be filled in amended Form number UR-1:

The below mentioned details are required to be duly filled in Form number UR-1:

  1. Further information pertaining to the company like the type of company, LLPIN registration number, type of the existing entity, name and address of the existing entity, Email ID of the existing entity, the number of members of the existing entity on the date on which the application is being made.
  2. Details regarding the particulars of the proposed company, like the name of the company, category of such proposed company, and whether the liability of the company’s members is limited by any other Act other than the Companies Act of 2013 enacted by the parliament.
  3. The date of the instrument which constituted the existing entity along with a description of such instrument.
  4. the date on which the resolution pause paused to declare the amount of guarantee along with details of the particulars of the guarantee which have been taken by each member
  5. The date on which the general meeting was held wherein the resolution approving registration along with limited liability passed
  6. details regarding the passing of a special resolution and the venue where the general meeting was held
  7. Total value or amount of the movable or immovable property, including actionable claims
  8. Whether any legal proceedings or suit is pending by or against the entity or a member of the company or a public officer, along with details of such pending proceeding or suit.
  9. Whether hey the entity has any outstanding secured debt as on the date on which the application is being made, along with the amount of the total outstanding debt
  10. The date on which the advertisement was published in the English language and the date on which the advertisement was published in the vernacular language in accordance with Companies (Registration Officers and Fees) Rules of 2014, Rule 4.
  11. Details regarding any objection which has been received till the date on which the application is filed  in response to the publication of the advertisement

Attachments are required to be submitted along with amended Form number UR-1

The below mentioned attachments must be submitted along with Form number UR-1:

  1. Particulars of the partners and members of the entity, along with information regarding the shares held by such partners or members.
  2. Affidavit from all the partners or members of the entity regarding the entity’s dissolution.
  3. Copy of instrument regulating constituting the entity.
  4. Copy of the registration certificate of the entity, if applicable.
  5. Copier any newspaper advertisement published in the English language or vernacular language.
  6. A resolution passed by unregistered companies in situations pertaining to Chapter XXI on the Companies Act of 2013.
  7. Any intimation from the appropriate registrar of firms or the registrar of companies.
  8. No objection certificate along with charge holder from the secured creditors, if applicable.
  9. Statement of the accounts of the entity which has been duly prepared not be more than 15 days preceding the date on which the application was made after being duly certified by an auditor.
  10. Copy of the resolution that clearly declares the amount of guarantee.
  11. Copy of the most recent income tax return of the entity.
  12. Copy of any objections that have been received from the company and also details of the resolutions that were passed in this record.
  13. Any other optional attachment.

Conclusion

The Ministry of Corporate Affairs notified the Companies (Authorised to Register) Amendment Rules of 2023 on 19 January 2023 to amend the Companies (Authorised to Register) Rules of 2014. The amendments shall come into effect from 23 January 2023. The Companies (Authorised to Register) Rules of 2014 provide the requirements and compliances for entities like a company, limited liability partnership, trust, or a Section 8 company looking to obtain registration from the Registrar of Companies. The Companies (Authorised to Register) Amendment Rules of 2023 have amended Rule 3(2) (a), (b), (c ) and (d) along with Form No. URC-1 of the Companies (Authorised to Register) Rules of 2014. The amendment has considerably reduced the number of both pre-registration and post-registration compliances, which entities like a limited liability partnership or a partnership firm or a trust or society shall be required to comply with while applying to be registered as a company with the Registrar of Companies.

Read Our Article: How To Avail A Company Registration Certificate?

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