This article has been written by Mr. Aditya Jain, a student of Maharishi University of Information Technology

Ministry of Corporate Affairs is the Indian ministry of the government  principally focused on the management of the Limited Liability Partnership Act, 2008, the Companies Act 2013, the Insolvency and Bankruptcy Code, 2016 and the Companies Act 1956.

The Ministry is responsible for managing the Competition Act, 2002 to avoid practices having adversative consequence on competition, to encourage besides sustain competition in marketplaces, to shield the interests of customers by means of the commission established under the Act.

In addition, Ministry of Corporate Affairs exercises supervision on the 3 professional bodies, that is, the Institute of Chartered Accountants of India (ICAI), the Institute of Cost Accountants of India (ICAI) , and the Institute of Company Secretaries of India (ICSI) that are established under three distinct Acts of Parliament designed for proper and logical development of the concerned professions.

The Ministry of Corporate Affairs as well has the duty of implementation of the functions of Central Government concerning to administration of the Partnership Act 1932, Societies Registration Act, 1980 and the Companies (Donations to National Funds) Act, 1951.

Ministry of Corporate Affairs is in authority principally for the control of the Indian enterprises in the manufacturing and the services sector. The Ministry of Corporate Affairs is typically run by the civil servants of the Indian Corporate Law Service cadre and these officers get selected by the Union Public Service Commission through the conducting of the  Civil Services Exam .

Nirmala Sitharaman is an economist and a politician serving as Minister of Finance and Corporate Affairs of the country since 2019.

The ministry controls the following acts:

• The Companies Act, 2013
• Insolvency And Bankruptcy Code, 2016
• The Companies Act, 1956
• The Competition Act, 2002
• The Chartered Accountants Act, 1949 [As amended by the Chartered Accountants (Amendment) Act, 2006]
• The Monopolies and Restrictive Trade Practices Act, 1969
• The Company Secretaries Act, 1980 as revised by The Company Secretaries (Amendment) Act, 2006
• Companies (Donation to National) Fund Act, 1951
• The Cost and Works Accountants Act, 1959 [As Amended by The Cost and Works Accountants (Amendment) Act, 2006]
• The Indian Partnership Act, 1932
• The Companies Amendment Act, 2006
• Societies Registration Act, 1860
• The Limited liability Partnership Act, 2008

The Companies Act, 2013 has been passed in August 2013,  to control companies by expanding responsibilities of the corporate officials and is proposed to prevent the accounting humiliations for instance the Satyam scandal that have beleaguered India. The Companies Act, 2013  substitutes The Companies Act, 1956 that has proved to be outdated in terms of management of the 21st century difficulties.

The Ministry of Corporate Affairs has established a committee for the framing of the National Competition Policy (India) and associated matters (formulate revisions in the Act) under the guidance and chairmanship of Dhanendra Kumar, past chairman of the Competition Commission of India.

The numerous services that are provided by the Ministry of Corporate Affairs are

• The incorporation of company.
• Registration of the companies which are unregistered.
• Registration of a location of the business within India by the company that is  incorporated in India.
• Registration meant for changing the objectives of a company.

Notification by Ministry of Corporate Affairs

Companies (Incorporation) Amendment Rules 2022, were issued by Ministry of Corporate Affairs so as to further alter the Companies (Incorporation) Rules, 2014. By means of this notification, by Ministry of Corporate Affairs presents Form INC 20A (Declaration for the Commencement of the Business) and as well introduced rule 12 (associated to the Nidhi Company). A summary of Ministry of Corporate Affairs amendments to the Companies Act 2013, from the date of 1st April, 2022.

Modifications in Company Incorporation

1. New Proviso has been Added to Rule 12 for a Nidhi Company:

 The subsequent proviso was added to the Rule 12 (Application for company incorporation):

In case, a company has been incorporated as Nidhi Company, then it must have the declaration of the Central Government under section 406 of the Companies Act 2013 before the start of its operation, and a report in this respect has to be be filed by the firm during the time of  its incorporation.

The Old Form INC 20A has been Replaced with a new Form:

By means of this notification, the Ministry of Corporate Affairs also has replaced Form INC 20A (Declaration for Commencement of Business).

Form INC 20A – Declaration for the commencement of the Business

As stated by Section 10A (1)(a) of the Companies Act 2013 and the Rule 23A of Companies (Incorporation) Rules of 2014, the Form INC-20A should be filed.

Information on the Section 10A of Companies Act of 2013

• A director has to file the declaration to the Registrar in 180 days from the company’s incorporation day, stating that every subscriber to memorandum made payment of the cost of the shares decided to be taken by them on the day of such a declaration.
• The company ought to confirm its registered office through the Registrar.
• In case of any failings to obey the necessities of this section happens, the company will be charged Rs. 50,000, and each officer who is unsuccessful to obey will be charged Rs. 1000 for each day that the tragedy lasts, up to the maximum of Rs. 1 Lakh.
• The Registrar might take actions to having the name of the corporation detached from the register of the companies in case no declaration is submitted to Registrar in 180 days from the company’s date of incorporation.
• Moreover, the Registrar might take steps to eliminate the company’s name from register of the companies in case he has decent cause to be doubtful that it is not leading any businesses or actions.

Vital points in Form INC 20A

• The declaration that is made by a director as per Section 10A should be made on the Form INC-20A and also filed in compliance with Companies (Registration Offices and Fees) Rules, 2014. A Chartered Accountant, Cost Accountant or a Company Secretary in practice should certify the particulars in the Form.
• The registration or consent must as well be sought after and attached with the declaration in case the company has been pursuing objects which call for registration or consent from any of the sectoral regulators, for instance Securities and Exchange Board of India, the Reserve Bank of India, etc.
• In 180 days of the company’s incorporation, every single company should submit Form INC 20A. In case any business has been unsuccessful to comply, that company will be required to make payment of a fine for the failure to submit the form in the definite time period (180 days).

Companies which are not entitled for filing Form INC20A

• Companies that had been established before the day of November 2, 2018
• Businesses founded after November 2, 2018, lacking the share capital

Bottom Line

It is important for all the companies to go on to register Form INC 20A in addition to all other essential information with the Registrar of Companies in 180 days from the company’s incorporation, for the reason that if companies are unsuccessful to do so, the companies face severe penalty. By means of the revisions to the Companies Incorporation Amendments Rules, the 2022 Ministry of Corporate Affairs is trying to take a further comprehensive method to the company incorporation.

References:

1. https://en.wikipedia.org/wiki/Ministry_of_Corporate_Affairs
2. https://www.mca.gov.in/content/mca/global/en/about-us/aboutmca/roles-responsibilities.html#:~:text=The%20Ministry%20is%20primarily%20concerned,sector%20in%20accordance%20with%20law.
3. https://ebizfiling.com/blog/company-incorporation-amendments-rules-2022/

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