Final Companies Rules Book (8-3-2019) PDF

THE
COMPANIES
RULES
Updated till January, 2019
January 2019 [amended upto 22nd January, 2019]
Price : Rs. 300/-
© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
Disclaimer
Due care has been taken to avoid errors or omissions in this
publication. In spite of this, errors may still persist. Any mistake,
error or discrepancy if noted, may be brought to the notice of the
Institute, which shall be taken care of in next edition.
The Institute shall not be responsible for any loss or damage resulting
from any action taken on the basis of this publication. To avoid any
doubt, it is suggested that the reader should cross-check the contents
of this publication with original Government notifications.
Published by :
THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
ICSI House, 22, Institutional Area, Lodi Road, New Delhi - 110 003
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Printed at: Chandu Press/February 2019
(ii)
CONTENTS
Page No.
CHAPTER I
n Companies (Specification of Definitions Details) Rules, 2014 1

n Companies (Restriction on Number of Layers) Rules, 2017 6
CHAPTER II
n Companies (Incorporation) Rules, 2014 9
CHAPTER III
n Companies (Prospectus and Allotment of Securities) 69

Rules, 2014
n Companies (Issue of Global Depository Receipts) Rules, 2014 88
CHAPTER IV
n Companies (Share Capital and Debentures) Rules, 2014 92
CHAPTER V
n Companies (Acceptance of Deposits) Rules, 2014 141
CHAPTER VI
n Companies (Registration of Charges) Rules, 2014 168
CHAPTER VII
n Companies (Management and Administration) Rules, 2014 174

n Companies (Significant Beneficial Owners) Rules, 2018 212
(iii)
CONTENTS
Page No.
CHAPTER VIII
n Companies (Declaration and Payment of Dividend) 216

Rules, 2014
n Investor Education and Protection Fund Authority 218
(Appointment of Chairperson and Members, Holding
of Meetings and Provision for Offices and Officers)
Rules, 2016
n Investor Education and Protection Fund Authority 228
(Accounting, Audit, Transfer and Refund) Rules, 2016
CHAPTER IX
n Companies (Accounts) Rules, 2014 249

n Companies (Corporate Social Responsibility Policy) 262
Rules, 2014
n Companies (Indian Accounting Standards) Rules, 2015 271
n Companies (Accounting Standards) Rules, 2006 281
n National Financial Reporting Authority Rules, 2018 286
n National Financial Reporting Authority (Manner of 300
Appointment and Other Terms and Conditions of
Service of Chairperson and Members) Rules, 2018
CHAPTER X
n Companies (Audit and Auditors) Rules, 2014 310

n Companies (Cost Records and Audit) Rules, 2014 324
n Companies (Filing of Documents and Forms in Extensible
Business Reporting Language) Rules, 2015 342
CHAPTER XI
n Companies (Appointment and Qualification of Directors) 346

Rules, 2014
(iv)
CONTENTS
Page No.
CHAPTER XII
n Companies (Meetings of Board and its Powers) Rules, 2014 366
CHAPTER XIII
n Companies (Appointment and Remuneration of 388

Managerial Personnel) Rules, 2014
CHAPTER XIV
n Companies (Inspection, Investigation and Inquiry) 397

Rules, 2014
CHAPTER XV
n Companies (Compromises, Arrangements and 400

Amalgamations) Rules, 2016
n Companies (Mediation and Conciliation) Rules, 2016 421
CHAPTER XVII
n Companies (Registered Valuers and Valuation) Rules, 2017 435
CHAPTER XVIII
n Companies (Removal of Names of Companies from 475

the Register of Companies) Rules, 2016
CHAPTER XXI
n Companies (Authorised to Register) Rules, 2014 481
CHAPTER XXII
n Companies (Registration of Foreign Companies) Rules, 2014 495
(v)
CONTENTS
Page No.
CHAPTER XXIV
n Companies (Registration Offices and Fees) Rules, 2014 518
CHAPTER XXVI
n Nidhi Rules, 2014 547
CHAPTER XXVII
n National Company Law Tribunal Rules, 2016 566

n National Company Law Appellate Tribunal Rules, 2016 648
n National Company Law Tribunal (Procedure for 679
Reduction of Share Capital of Company) Rules, 2016
n Companies (Transfer of Pending Proceedings) Rules, 2016 684
CHAPTER XXIX – PART I
n Companies (Adjudication of Penalties) Rules, 2014 688
CHAPTER XXIX – PART II
n Companies (Miscellaneous) Rules, 2014 693

n Companies (Arrests in Connection with Investigation 698
by Serious Fraud Investigation Office) Rules, 2017
(vi)
1
CHAPTER I
COMPANIES (SPECIFICATION OF
DEFINITIONS DETAILS) RULES, 2014
[G.S.R. 238(E), Dated 31st March, 2014]
In exercise of the powers conferred under sub-clause (ix) of clause (76),
sub-clause (iii) of clause (77) of section 2, read with sub-sections (1)
and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the
Central Government hereby makes the following rules, namely:–
1. Short title and commencement.

(1) These rules may be called the Companies (Specification of
definitions details) Rules, 2014.
(2) They shall come into force on the 1st day of April, 2014.
2. Definitions.
(1) In these rules, unless the context otherwise requires,–
(a) “Act” means the Companies Act, 2013 (18 of 2013);
(b) “Certifying Authority” for the purpose of Digital Signature
Certificate means a person who has been granted a licence
to issue a Digital Signature Certificate under section 24 of
the Information Technology Act, 2000 (21 of 2000) and the
Certified Filing Center (CFC) under the Act;
(c) “digital signature” means the digital signature as defined
under clause (p) of sub-section (1) of section 2 of the
Information Technology Act, 2000 (21 of 2000);
(d) “Digital Signature Certificate” means a Digital Signature
Certificate as defined under clause (q) of subsection (1) of
section 2 of the Information Technology Act, 2000 (21 of
2000);
1
2 Companies (Specification of Definitions Details) Rules, 2014
(e) “Director Identification Number” (DIN) means an

identification number allotted by the Central Government
to any individual, intending to be appointed as director or
to any existing director of a company, for the purpose of his
identification as a director of a company;
Provided that the Director Identification Number (DIN)
obtained by the individuals prior to the notification of these
rules shall be the DIN for the purpose of the Companies Act,
2013:
Provided further that “Director Identification Number”
(DIN) includes the Designated Partnership Identification
Number (DPIN) issued under section 7 of the Limited
Liability Partnership Act, 2008 (6 of 2009) and the rules
made there under;
(f) “e-Form” means a form in the electronic form as prescribed
under the Act or the rules made there under and notified by
the Central Government under the Act;
(g) “electronic Mail” means the message sent, received or
forwarded in digital form using any electronic communication
mechanism that the message so sent, received or forwarded
is storable and retrievable;
(h) “electronic mode”, for the purposes of clause (42) of section 2
of the Act, means carrying out electronically based, whether
main server is installed in India or not, including, but not
limited to –
(i) business to business and business to consumer
transactions, data interchange and other digital supply
transactions;
(ii) offering to accept deposits or inviting deposits or
accepting deposits or subscriptions in securities, in
India or from citizens of India;
(iii) financial settlements, web based marketing, advisory
Companies (Specification of Definitions Details) Rules, 2014 3
and transactional services, database services and

products, supply chain management;
(iv) online services such as telemarketing, telecommuting,
telemedicine, education and information research;
and
(v) all related data communication services, whether
conducted by e-mail, mobile devices, social media,
cloud computing, document management, voice or
data transmission or otherwise;
(i) “electronic record” means the electronic record as defined
under clause (t) of sub-section (1) of section 2 of the
Information Technology Act, 2000;
(j) “electronic Registry” means an electronic repository or
storage system of the Central Government in which the
information or documents are received, stored, protected
and preserved in electronic form;
(k) “Executive Director” means a whole time director as defined
in clause (94) of section 2 of the Act;
(l) “Fees” means the fees as specified in the Companies
(Registration Offices and Fees) Rules, 2014;
(m) “Form” means a form set forth in the Act or the rules made
there under which shall be used for the matter to which it
relates;
(n) “Pre-fill” means the automated process of data input by the
computer system from the database maintained in electronic
registry of the Central Government;
(o) “Registrar’s Front Office” means an office maintained by
the Central Government or an agency authorised by it to
facilitate e-filing of documents into the electronic registry
and their inspection and viewing;
(p) “Regional Director” means the person appointed by the
4 Companies (Specification of Definitions Details) Rules, 2014
Central Government in the Ministry of Corporate Affairs as

a Regional Director;
(q) “section” means the section of the Act;
(r) 1
[omitted]
(s) For the purposes of clause (d) of sub-section (1) of Section
164 and clause (f) of sub-section (1) of section 167 of the Act,
“or otherwise” means any offence in respect of which he has
been convicted by a Court under this Act or the Companies
Act, 1956;
(2) The words and expressions used in these rules but not defined and
defined in the Act or in (i) the Securities Contracts (Regulation) Act,
1956 (42 of 1956) or (ii) the Securities and Exchange Board of India
Act, 1992 (15 of 1992) or (iii) the Depositories Act, 1996 (22 of 1996)
or (iv) the Information Technology Act, 2000 (21 of 2000) or rules and
regulations made there under shall have the meanings respectively
assigned to them under the Act or those Acts.
3. Related party.
For the purposes of sub-clause (ix) of clause (76) of section 2 of the
Act, a director 2[other than an independent director] or key managerial
personnel of the holding company or his relative with reference to a
company, shall be deemed to be a related party.
4. List of relatives in terms of clause (77) of section 2.

A person shall be deemed to be the relative of another, if he or she is
related to another in the following manner, namely:-
1. Omitted by the Companies (Specification of Definitions Details) Amendment

Rules, 2018 (w.e.f. 07-05-2018). Prior to its omission, clause (r) read as under:
“Total Share Capital”, for the purposes of clause (6) and clause (87) of section 2,
means the aggregate of the -(a) paid-up equity share capital; and (b) convertible
preference share capital;”
2. Inserted by the Companies (Specification of definitions details) Amendment
Rules, 2014 (w.e.f. 17-7-2014).
Companies (Specification of Definitions Details) Rules, 2014 5
(1) Father : Provided that the term “Father” includes step-father.

(2) Mother : Provided that the term “Mother” includes the step-
mother.
(3) Son : Provided that the term “Son” includes the step-son.
(4) Son’s wife.
(5) Daughter.
(6) Daughter’s husband.
(7) Brother : Provided that the term “Brother” includes the step-
brother;
(8) Sister : Provided that the term “Sister” includes the step-
sister.
6
COMPANIES (RESTRICTION ON
NUMBER OF LAYERS) RULES, 2017
[G.S.R. 1176(E), Dated 20th September, 2017]
In exercise of the powers conferred under proviso to clause (87) of

section 2, section 450 read with sub-sections (1) and (2) of section
469 of the Companies Act, 2013 (18 of 2013), the Central Government
hereby makes the following rules, namely:–
1. Short title and Commencement.

(1) These rules may be called the Companies (Restriction on number
of layers) Rules, 2017.
(2) They shall come into force on the date of their publication in the
Official Gazette.
2. Restriction on number of layers for certain classes of holding

companies.
(1) On and from the date of commencement of these rules, no company,
other than a company belonging to a class specified in sub-rule (2),
shall have more than two layers of subsidiaries:
Provided that the provisions of this sub-rule shall not affect a company
from acquiring a company incorporated outside India with subsidiaries
beyond two layers as per the laws of such country:
Provided further that for computing the number of layers under this
rule, one layer which consists of one or more wholly owned subsidiary
or subsidiaries shall not be taken into account.
(2) The provisions of this rule shall not apply to the following classes of
companies, namely:–
(a) a banking company as defined in clause (c) of section 5 of the
Banking Regulation Act, 1949 (10 of 1949);
6
Companies (Restriction on Number of Layers) Rules, 2017 7
(b) a non-banking financial company as defined in clause (f)

of Section 45-I of the Reserve Bank of India Act, 1934 (2
of 1934) which is registered with the Reserve Bank of India
and considered as systematically important non-banking
financial company by the Reserve Bank of India;
(c) an insurance company being a company which carries on
the business of insurance in accordance with provisions
of the Insurance Act, 1938 (4 of 1938) and the Insurance
Regulatory Development Authority Act, 1999 (41 of 1999);
(d) a Government company referred to in clause (45) of section
2 of the Act.
(3) The provisions of this rule shall not be in derogation of the proviso
to sub-section (1) of section 186 of the Act.
(4) Every company, other than a company referred to in sub-rule (2),
existing on or before the commencement of these rules, which has
number of layers of subsidiaries in excess of the layers specified in sub-
rule (1) –
(i) shall file, with the Registrar a return in Form CRL-1
disclosing the details specified therein, within a period of
one hundred and fifty days from the date of publication of
these rules in the Official Gazette;
(ii) 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
(iii) 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.
(5) 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
8 Companies (Restriction on Number of Layers) Rules, 2017
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.
9
CHAPTER II
COMPANIES (INCORPORATION)
RULES, 2014
In exercise of the powers conferred under section 3, section 4, sub-
sections (5) and (6) of section 5, section 6, sub-section (1) and (2) of
section 7, sub-section (1) and (2) of section 8, clauses (a) and (b) of
subsection (1) of section11, sub-sections (2), (3), (4) and (5) of section
12, sub-sections (3), (4) and proviso to sub-section (5) of section 13,
sub-section (2) of section 14, sub-section (1) of section 17, sub-section
(1) and (2) of section 20 read with sub-sections (1) and (2) of section
469 of the Companies Act, 2013 (18 of 2013) and in supersession of the
Companies (Central Government’s) General Rules and Forms, 1956 or
any other relevant rules prescribed under the Companies Act, 1956 (1
of 1956) on matters covered under these rules, except as respects things
done or omitted to be done before such supersession, the Central
Government hereby makes the following rules, namely: -
(1) These rules may be called the Companies (Incorporation) Rules,
2014.
2. Definitions.
(1) In these rules, unless the context otherwise requires,-
(a) ‘‘Act’’ means the Companies Act, 2013 (18 of 2013);
(b) ‘‘Annexure’’ means the Annexure to these rules;
(c) “Form” or “e-Form” means a form in the electronic form
or non-electronic form as specified under the Act or Rules
made there under and notified by the Central Government
under the Act;
9
10 Companies (Incorporation) Rules, 2014
(d) ‘‘Fees’’ means fees as specified in the Companies (Registration

offices and fees) Rules, 2014;
(e) ‘‘Regional Director’’ means the person appointed by the
(f) ‘‘Section’’ means the section of the Act;
(2) Words and expressions used in these rules but not defined and
defined in the Act or in Companies (Specification of definitions details)
Rules, 2014 shall have the meanings respectively assigned to them in
the Act and said rules.
3. One Person Company.
(1) Only a natural person who is an Indian citizen and resident in

India –
(a) shall be eligible to incorporate a One Person Company;
(b) shall be a nominee for the sole member of a One Person
Company.
1
[Explanation I - For the purposes of this rule, the term “resident in
India” means a person who has stayed in India for a period of not
less than one hundred and eighty two days during the immediately
preceding financial year.
Explanation II.- For the purposes of this rule, while counting the
number of days of stay of a director in India for the financial year 2018-
2019, any period of stay between 01.01.2018 till the date of notification
of this rule shall also be counted.]
1. Substituted by the Companies (Incorporation) Third Amendment Rules,

2018 (w.e.f 27-07-2018) for: “Explanation - For the purpose of this rule, the
term “resident in India” means a person who has stayed in India for a period
of not less than one hundred and eighty two days during the immediately
preceding one calendar year”.
Companies (Incorporation) Rules, 2014 11
[(2) A natural person shall not be member of more than a One Person
1
Company at any point of time and the said person shall not be a
nominee of more than a One Person Company.]
(3) Where a natural person, being member in One Person Company in
accordance with this rule becomes a member in another such Company
by virtue of his being a nominee in that One Person Company, such
person shall meet the eligibility criteria specified in sub rule (2) within
a period of one hundred and eighty days.
(4) No minor shall become member or nominee of the One Person
Company or can hold share with beneficial interest.
(5) Such Company cannot be incorporated or converted into a
company under section 8 of the Act.
(6) Such Company cannot carry out Non-Banking Financial Investment
activities including investment in securities of any body corporates.
(7) No such company can convert voluntarily into any kind of company
unless two years have expired from the date of incorporation of One
Person Company, except threshold limit (paid up share capital) is
increased beyond fifty lakh rupees or its average annual turnover
during the relevant period exceeds two crore rupees.
4. Nomination by the subscriber or member of One Person

Company.
For the purposes of first proviso to sub-section (1) of section 3 –
(1) The subscriber to the memorandum of a One Person Company
shall nominate a person, after obtaining prior written consent of such
person, who shall, in the event of the subscriber’s death or his incapacity
to contract, become the member of that One Person Company.
(2) The name of the person nominated under sub-rule (1) shall be

2016 (w.e.f 27-07-2016) for:
“(2) No person shall be eligible to incorporate more than a One Person
Company or become nominee in more than one such company.”
mentioned in the memorandum of One Person Company and 1[such

nomination in Form No. INC-32 (SPICe) along with consent of such
nominee obtained in Form No. INC-3] and fee as provided in the
Companies (Registration offices and fees) Rules, 2014 shall be filed
with the Registrar at the time of incorporation of the company along
with its memorandum and articles.
(3) The person nominated by the subscriber or member of a One Person
Company may, withdraw his consent by giving a notice in writing to
such sole member and to the One Person Company:
Provided that the sole member shall nominate another person as
nominee within fifteen days of the receipt of the notice of withdrawal
and shall send an intimation of such nomination in writing to the
Company, along with the written consent of such other person so
nominated in Form No. INC.3.
(4) The company shall within thirty days of receipt of the notice of
withdrawal of consent under sub-rule (3) file with the Registrar, a
notice of such withdrawal of consent and the intimation of the name
of another person nominated by the sole member in Form No INC.4
along with fee as provided in the Companies (Registration offices and
fees) Rules, 2014 and the written consent of such another person so
nominated in Form No. INC.3.
(5) The subscriber or member of a One Person Company may, by
intimation in writing to the company, change the name of the person
nominated by him at any time for any reason including in case of death
or incapacity to contract of nominee and nominate another person
after obtaining the prior consent of such another person in Form No
INC.3:
Provided that the company shall, on the receipt of such intimation, file
with the Registrar, a notice of such change in Form No INC.4 along
with fee as provided in the Companies (Registration offices and fees)
1. Substituted by the Companies (Incorporation) Fifth Amendment Rules, 2016

dated 29-12-2016 (w.e.f. 1-1-2017) for:
“such nomination in Form No INC.2 along with consent of such nominee
obtained in Form No INC.3”.
Rules, 2014 and with the written consent of the new nominee in Form
No.INC.3 within thirty days of receipt of intimation of the change.
(6) Where the sole member of One Person Company ceases to be the
member in the event of death or incapacity to contract and his nominee
becomes the member of such One Person Company, such new member
shall nominate within fifteen days of becoming member, a person who
shall in the event of his death or his incapacity to contract become the
member of such company, and the company shall file with the Registrar
an intimation of such cessation and nomination in Form No INC.4
along with the fee as provided in the Companies (Registration offices
and fees) Rules, 2014 within thirty days of the change in membership
and with the prior written consent of the person so nominated in Form
No.INC.3.
5. 1[Omitted]
6. One Person Company to convert itself into a public company or a

private company in certain cases.
(1) Where the paid up share capital of an One Person Company
2
[exceeds fifty lakh rupees and its average annual turnover during the
relevant period] exceeds two crore rupees, it shall cease to be entitled
to continue as a One Person Company.
(2) Such One Person Company shall be required to convert itself, within
1. Omitted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f

01-05-2015] for :
“5. Penalty
If One Person Company or any officer of such company contravenes the
provisions of the s rules, One Person Company or any officer of the One
Person Company shall be punishable with fine which may extend to ten
thousand rupees and with a further fine which may extend to one thousand
rupees for every day after the first during which such contravention
continues.”
2. Substituted by the Companies (Incorporation) Amendment Rules, 2015
(w.e.f 01-05-2015) for : “exceeds fifty lakh rupees or its average annual turnover
during the relevant period.”
six months of the date on which its paid up share capital is increased
beyond fifty lakh rupees or the last day of the relevant period during
which its average annual turnover exceeds two crore rupees as the case
may be, into either a private company with minimum of two members
and two directors or a public company with at least of seven members
and three directors in accordance with the provisions of section 18 of
the Act.
(3) The One Person Company shall alter its memorandum and articles
by passing a resolution in accordance with sub-section (3) of section
122 of the Act to give effect to the conversion and to make necessary
changes incidental thereto.
(4) The One Person Company shall within period of sixty days from
the date of applicability of sub-rule (1), give a notice to the Registrar
in Form No.INC.5 informing that it has ceased to be a One Person
Company and that it is now required to convert itself into a private
company or a public company by virtue of its paid up share capital
or average annual turnover, having exceeded the threshold limit laid
down in sub-rule (1).
Explanation. – For the purposes of this rule,- “relevant period” means
the period of immediately preceding three consecutive financial years;
(5) If One Person Company or any officer of the One Person Company
contravenes the provisions of these rules, One Person Company or any
officer of the One Person Company shall be punishable with fine which
may extend to ten thousand rupees and with a further fine which may
extend to one thousand rupees for every day after the first during
which such contravention continues.
(6) A One Person company can get itself converted into a Private
or Public company after increasing the minimum number of
members and directors to two or minimum of seven members and
two or three directors as the case may be, and by maintaining the
minimum paid-up capital as per requirements of the Act for such
class of company and by making due compliance of section 18 of the
Act for conversion.
7. Conversion of private company into One Person Company.

(1) A private company other than a company registered under section
8 of the Act 1[having paid up share capital of fifty lakhs rupees or less
and average annual turnover during the relevant period] is two crore
rupees or less may convert itself into one person company by passing a
special resolution in the general meeting.
(2) Before passing such resolution, the company shall obtain No
objection in writing from members and creditors.
(3) The one person company shall file copy of the special resolution
with the Registrar of Companies within thirty days from the date of
passing such resolution in Form No. MGT.14.
(4) The company shall file an application in Form No.INC.6 for its
conversion into One Person Company along with fees as provided in
the Companies (Registration offices and fees) Rules, 2014, by attaching
the following documents, namely:-
(i) The directors of the company shall give a declaration by
way of affidavit duly sworn in confirming that all members
and creditors of the company have given their consent for
conversion, the paid up share capital company is fifty lakhs
rupees or less or average annual turnover is less than two
crores rupees, as the case may be;
(ii) the list of members and list of creditors;
(iii) the latest Audited Balance Sheet and the Profit and Loss
Account; and
(iv) the copy of No Objection letter of secured creditors.
(5) On being satisfied and complied with requirements stated herein
the Registrar shall issue the Certificate.

(w.e.f. 01-05-2015) for : “having paid up share capital of fifty lakhs rupees or
less or average annual turnover during the relevant period”.
1
[7A. Penalty.-
If a One Person Company or any such company contravenes any of
the provisions of these rules, the One Person Company or any officer
of the such Company shall be punishable with fine which may extend
top five thousand rupees and with a further fine which may extend five
hundred rupees for every day after the first offence during which such
contravention continues.]
8. Undesirable names.
(1) In determining whether a proposed name is identical with another,
the differences on account of the following shall be disregarded-
(a) the words like Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP,
Limited Liability Partnership;
(b) words appearing at the end of the names – company, and
company, co., co, corporation, corp, corpn, corp.;
(c) plural version of any of the words appearing in the name;
(d) type and case of letters, spacing between letters and
punctuation marks;
(e) joining words together or separating the words does not
make a name distinguishable from a name that uses the
similar, separated or joined words;
(f) use of a different tense or number of the same word does not
distinguish one name from another;
(g) using different phonetic spellings or spelling variations
shall not be considered as distinguishing one name from
another. Illustration (For example, P.Q. Industries limited is
existing then P and Q Industries or Pee Que Industries or
P n Q Industries or P & Q Industries shall not be allowed
and similarly if a name contains numeric character like 3,
resemblance shall be checked with ‘Three’ also;)
1. Inserted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f.

01-05-2015)
(h) misspelled words, whether intentionally misspelled or not,

do not conflict with the similar, properly spelled words;
(i) the addition of an internet related designation, such as .com,
.net, .edu, .gov, .org, .in does not make a name distinguishable
from another, even where (.) is written as ‘dot’;
(j) the addition of words like New, Modern, Nav, Shri, Sri, Shree,
Sree, Om, Jai, Sai, The, etc. does not make a name distinguishable
from an existing name and similarly, if it is different from the
name of the existing company only to the extent of adding the
name of the place, the same shall not be allowed; such names
may be allowed only if no objection from the existing company
by way of Board resolution is submitted;
(k) different combination of the same words does not make a
name distinguishable from an existing name, e.g., if there
is a company in existence by the name of “Builders and
Contractors Limited”, the name “Contractors and Builders
Limited” shall not be allowed unless it is change of name of
existing company;
(l) if the proposed name is the Hindi or English translation or
transliteration of the name of an existing company or limited
liability partnership in English or Hindi, as the case may be.
(2)(a) The name shall be considered undesirable, if-
(i) it attracts the provisions of section 3 of the Emblems and
Names (Prevention and Improper Use) Act, 1950 (12 of
1950);
[(ii) it includes the name of a trade mark registered or a trade
1

2016 (w.e.f 27-07-2016) for:
“(ii) it includes the name of a registered trade mark or a trade mark which
is subject of an application for registration, unless the consent of the owner
or applicant for registration, of the trade mark, as the case may be, has been
obtained and produced by the promoters;”
mark which is subject of an application for registration under

the Trade Marks Act, 1999 and the rules framed thereunder
unless the consent of the owner or applicant for registration,
of the trade mark, as the case may be, has been obtained and
produced by the promoters;]
(iii) it includes any word or words which are offensive to any
section of the people;
(b) The name shall also be considered undesirable, if-
(i) the proposed name is identical with or too nearly resembles
the name of a limited liability partnership;
(ii) 1
[omitted]
(iii) the company’s main business is financing, leasing, chit fund,
investments, securities or combination thereof, such name
shall not be allowed unless the name is indicative of such
related financial activities, viz., Chit Fund or Investment or
Loan, etc.;
(iv) it resembles closely the popular or abbreviated description of
an existing company or limited liability partnership;
(v) the proposed name is identical with or too nearly resembles
the name of a company or limited liability partnership
incorporated outside India and reserved by such company or
limited liability partnership with the Registrar:
Provided that if a foreign company is incorporating its
subsidiary company in India, then the original name of the
holding company as it is may be allowed with the addition of
1. Omitted by the Companies (Incorporation) Amendment Rules, 2016 dated

22-1-2016 (w.e.f. 26-01-2016). Prior to its omission, sub clause (ii) read as under:
“it is not in consonance with the principal objects of the company as set out
in the memorandum of association; Provided that every name need not be
necessarily indicative of the objects of the company, but when there is some
indication of objects in the name, then it shall be in conformity with the
objects mentioned in the memorandum;”
word India or name of any Indian state or city, if otherwise

available;
(vi) any part of the proposed name includes the words indicative
of a separate type of business constitution or legal person
or any connotation thereof e.g. co-operative, sehkari, trust,
LLP, partnership, society, proprietor, HUF, firm, Inc., PLC,
GmbH, SA, PTE, Sdn, AG etc.;
Explanation.- For the purposes of this sub-clause, it is hereby

clarified that the name including phrase ‘Electoral Trust’ may
be allowed for Registration of companies to be formed under
section 8 of the Act, in accordance with the Electoral Trusts
Scheme, 2013 notified by the Central Board of Direct Taxes
(CBDT):
Provided that name application is accompanied with an
affidavit to the effect that the name to be obtained shall be
only for the purpose of registration of companies under
Electoral Trust Scheme as notified by the Central Board of
Direct Taxes;
(vii) the proposed name contains the words ‘British India’;
(viii) the proposed name implies association or connection with
embassy or consulate or a foreign government;
(ix) the proposed name includes or implies association or
connection with or patronage of a national hero or any person
held in high esteem or important personages who occupied
or are occupying important positions in Government;
(x) 1
[Omitted]

22-01-2016 (w.e.f. 26-01-2016). Prior to its omission, sub clause (x) read as under:
“(x) for the proposed name is vague or an abbreviated name such as ‘ABC
limited’ or ‘23K limited’ or ‘DJMO’ Ltd: abbreviated name based on the
name of the promoters will not be allowed. For example:- BMCD Limited
representing first alphabet of the name of the promoter like Bharat,
Mahesh, Chandan and David: Provided that existing company may use
its abbreviated name as part of the name for formation of a new company
as subsidiary or joint venture or associate company but such joint venture
(xi) the proposed name is identical to the name of a company

dissolved as a result of liquidation proceeding and a period of
two years have not elapsed from the date of such dissolution:
Provided that if the proposed name is identical with the
name of a company which is struck off in pursuance of
action under section 248 of the Act 1[or under section 560
of the Companies Act, 1956 (1 of 1956)], then the same
shall not be allowed before the expiry of twenty years
from the publication in the Official Gazette being so
struck off;
(xii) it is identical with or too nearly resembles the name of a
limited liability partnership in liquidation or the name of a
limited liability partnership which is struck off up to a period
of five years;
(xiii) the proposed name include words such as ‘Insurance’, ‘Bank’,
‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’,
‘Nidhi’, ‘Mutual fund’ etc., unless a declaration is submitted
by the applicant that the requirements mandated by the
respective regulator, such as IRDA, RBI, SEBI, MCA etc.
have been complied with by the applicant;
(xiv) the proposed name includes the word “State”, the same
shall be allowed only in case the company is a government
company;
(xv) the proposed name is containing only the name of a
continent, country, state, city such as Asia limited, Germany
Limited, Haryana Limited, Mysore Limited;
or associated company shall not have an abbreviated name only e.g. Delhi
Paper Mills Limited can get a joint venture or associated company as
DPM Papers Limited and not as DPM Limited: Provided further that the
companies well known in their respective field by abbreviated names are
allowed to change their names to abbreviation of their existing name after
following the requirements of the Act;”
1. Inserted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f.
01-05-2015]
(xvi) the name is only a general one, like Cotton Textile Mills
Ltd. or Silk Manufacturing Ltd., and not Lakshmi Silk
Manufacturing Co. Ltd;
(xvii) 1[omitted]
(xviii) the proposed name includes name of any foreign country or
any city in a foreign country, the same shall be allowed if
the applicant produces any proof of significance of business
relations with such foreign country like Memorandum of
Understanding with a company of such country:
Provided that the name combining the name of a foreign
country with the use of India like India Japan or Japan India
shall be allowed if, there is a government to government
participation or patronage and no company shall be
incorporated using the name of an enemy country.
Explanation.- For the purposes of this clause, enemy country

means so declared by the Central Government from time to
time.
(3) 2[Omitted]
(4) 3[Omitted]

22-01-2016 (w.e.f. 26-01-2016). Prior to its omission, sub clause (xvii) read as
under:
“(xvii) it is intended or likely to produce a misleading impression regarding
the scope or scale of its activities which would be beyond the resources at
its disposal:”
22-1-2016 (w.e.f. 26-01-2016). Prior to its omission, sub rule (3) read as under:
“(3) If any company has changed its activities which are not reflected in its
name, it shall change its name in line with its activities within a period of six
months from the change of activities after complying with all the provisions as
applicable to change of name.”
22-1-2016 (w.e.f. 26-01-2016). Prior to its omission, sub rule (4) read as under:
“(4) In case the key word used in the name proposed is the name of a person
(5) The applicant shall declare in affirmative or negative (to affirm or

deny) whether they are using or have been using in the last five years,
the name applied for incorporation of company or LLP in any other
business constitution like Sole proprietor or Partnership or any other
incorporated or unincorporated entity and if, yes details thereof and
No Objection Certificate from other partners and associates for use of
such name by the proposed Company or LLP, as the case may be, and
also a declaration as to whether such other business shall be taken over
by the proposed company or LLP or not .
(6) The following words and combinations thereof shall not be used in
the name of a company in English or any of the languages depicting the
same meaning unless the previous approval of the Central Government
has been obtained for the use of any such word or expression –
(a) Board;
(b) Commission;
(c) Authority;
(d) Undertaking;
(e) National;
(f) Union;
(g) Central;
(h) Federal;
(i) Republic;
(j) President;
(k) Rashtrapati;
(l) Small Scale Industries;
(m) Khadi and Village Industries Corporation;
other than the name(s) of the promoters or their close blood relatives, No objection
from such other person(s) shall be attached with the application for name. In case
the name includes the name of relatives, the proof of relation shall be attached and
it shall be mandatory to furnish the significance and proof thereof for use of coined
words made out of the name of the promoters or their relatives.”
(n) Financial 1[omitted] Corporation and the like;

(o) Municipal;
(p) Panchayat;
(q) Development Authority;
(r) Prime Minister or Chief Minister;
(s) Minister;
(t) Nation;
(u) Forest corporation;
(v) Development Scheme;
(w) Statute or Statutory;
(x) Court or Judiciary;
(y) Governor;
(z) the use of word Scheme with the name of Government(s),
State, India, Bharat or any government authority or in any
manner resembling with the schemes launched by Central,
state or local Governments and authorities; and
(za) Bureau.
(7) For the Companies under section 8 of the Act, the name shall include
the words foundation, Forum, Association, Federation, Chambers,
Confederation, council, Electoral trust and the like etc. Every company
incorporated as a “Nidhi” shall have the last word ‘Nidhi Limited’ as
part of its name.
(8) The names released on change of name by any company shall
remain in data base and shall not be allowed to be taken by any other
company including the group company of the company who has
changed the name for a period of three years from the date of change
subject to specific direction from the competent authority in the course
of compromise, arrangement and amalgamation.
1. Omitted by the Companies (Incorporation) Third Amendment Rules, 2016

(w.e.f. 27-07-2016) for “,”.
[9. Reservation of name.

1
An application for reservation of name shall be made through

the web service available at www.mca.gov.in by using form RUN
(Reserve Unique Name) along with fee as provided in the Companies
(Registration offices and fees) Rules, 2014, which may either be
approved or rejected, as the case may be, by the Registrar, Central
Registration Centre after allowing re-submission of such application
within fifteen days for rectification of the defects, if any.]
10. Where the articles contain the provisions for entrenchment, the
company shall give notice to the Registrar of such provisions in Form
No.INC. 2 or 2[omitted] or Form No. INC32 (SPICe)], as the case may
be, along with the fee as provided in the Companies (Registration
offices and fees) Rules, 2014 at the time of incorporation of the
1. Substituted by the Companies (Incorporation) Second Amendment Rules,

2018 (w.e.f. 23-03-2018) for:
*“9. Reservation of name.- An application for reservation of name
shall be made through the web service available at www.mca.gov.in by
using RUN (Reserve Unique Name) along with fee as provided in the
Companies (Registration offices and fees) Rules, 2014, which may either
be approved or rejected, as the case may be, by the Registrar, Central
Registration Centre.”
* Substituted by the the Companies (Incorporation) Amendment Rules, 2018
dated 20-01-2018 (w.e.f. 26-1-2018) for:
**“9. Reservation of name – An application for the reservation of a
name shall be made in Form No. INC.1 along with the fee as provided
in the Companies (Registration offices and fees) Rules, 2014 which may
be approved or rejected, as the case may be, by the Registrar, Central
Registration Centre.”
**Substituted by the Companies (Incorporation) Amendment Rules, 2016
dated 22-01-2016 (w.e.f. 26 -1-2016) for :
“9. Reservation of name.- An application for the reservation of a name
shall be made in Form No. INC.1 along with the fee as provided in the
Companies (Registration offices and fees) Rules, 2014.”
20-01-2018 (w.e.f. 26-01-2018) for : *“Form No. INC-7”.
*Substituted by the Companies (Incorporation) 5th Amendment Rules, 2016
Dated 29th December, 2016 for: “Form No.lNC-7 or Form No INC-32(SPlCe)”
company or in case of existing companies, the same shall be filed in

Form No.MGT.14 within thirty days from the date of entrenchment of
the articles, as the case may be, along with the fee as provided in the
Companies (Registration offices and fees) Rules, 2014.
11. The model articles as prescribed in Table F, G, H, I and J of Schedule
I may be adopted by a company as may be applicable to the case of the
company, either in totality or otherwise.
[12. Application for incorporation of companies.

1
An application for registration of a company shall be filed, with the

Registrar within whose jurisdiction the registered office of the company
is proposed to be situated, in Form No.INC-32 (SPICe) along with the
fee as provided under the Companies (Registration offices and fees)
Rules, 2014;
Provided that in case pursuing of any of the objects of a company
requires registration or approval from sectoral regulators such as the
Reserve Bank of India, the Securities and Exchange Board, registration

dated 20-01-2018 (w.e.f. 26-01-2018) for:
“12. Application for incorporation of companies.- An application shall be
filed, with the Registrar within whose jurisdiction the registered office of the
company is proposed to be situated, in *[Form No. INC-7 (Part I company and
company with more than seven subscribers) and Form No. INC-32 (SPICe)]
along with the fee as provided in the Companies (Registration offices and fees)
Rules, 2014 for registration of a company.
**[Provided that in case pursuing of any of the objects of a company requires
registration or approval from sectoral regulators such as the Reserve Bank of
India, the Securities and Exchange Board, registration or approval, as the case
may be, from such regulator shall be obtained by the company before pursuing
such objects and a declaration in this behalf shall be submitted at the stage of
incorporation of the company.]
*Substituted by the Companies (Incorporation) Fifth Amendment Rules, 2016
dated 29th December, 2016 (w.e.f. 01-01-2017) for “Form No.INC.2 (for One
Person Company) and Form no. INC.7 (other than One Person Company)”.
**Inserted by Companies (incorporation) Second Amendment Rules, 2015
(w.e.f. 29-05-2015).
or approval, as the case may be, from such regulator shall be obtained by
the proposed company before pursuing such objects and a declaration
in this behalf shall be submitted at the stage of incorporation of the
company.]
13. Signing of memorandum and articles.

The Memorandum and Articles of Association of the company shall be
signed in the following manner, namely:-
(1) The memorandum and articles of association of the company shall
be signed by each subscriber to the memorandum, who shall add his
name, address, description and occupation, if any, in the presence of
at least one witness who shall attest the signature and shall likewise
sign and add his name, address, description and occupation, if any
and the witness shall state that “I witness to subscriber/subscriber(s),
who has/have subscribed and signed in my presence (date and place to
be given); further I have verified his or their Identity Details (ID) for
their identification and satisfied myself of his/her/their identification
particulars as filled in”
(2) Where a subscriber to the memorandum is illiterate, he shall affix
his thumb impression or mark which shall be described as such by the
person, writing for him, who shall place the name of the subscriber
against or below the mark and authenticate it by his own signature and
he shall also write against the name of the subscriber, the number of
shares taken by him.
1
[Explanation.-For the purposes of sub-rule(1) and sub-rule (2), the
type written or printed particulars of the subscribers and witnesses shall
be allowed as if it is written by the subscriber and witness respectively
so long as the subscriber and the witness as the case may be appends his
or her signature or thumb impression, as the case may be.]
(3) Such person shall also read and explain the contents of the
memorandum and articles of association to the subscriber and make
1. Inserted by the Companies (Incorporation) Third Amendment Rules, 2016

(w.e.f. 27-07-2016).
an endorsement to that effect on the memorandum and articles of

association.
(4) Where the subscriber to the memorandum is a body corporate, the
memorandum and articles of association shall be signed by director,
officer or employee of the body corporate duly authorized in this
behalf by a resolution of the board of directors of the body corporate
and where the subscriber is a Limited Liability Partnership, it shall
be signed by a partner of the Limited Liability Partnership, duly
authorized by a resolution approved by all the partners of the Limited
Liability Partnership :
Provided that in either case, the person so authorized shall not, at
the same time, be a subscriber to the memorandum and articles of
Association.
(5) Where subscriber to the memorandum is a foreign national residing
outside India –
(a) in a country in any part of the Commonwealth, his signatures
and address on the memorandum and articles of association
and proof of identity shall be notarized by a Notary (Public)
in that part of the Commonwealth.
(b) in a country which is a party to the Hague Apostille
Convention, 1961, his signatures and address on the
memorandum and articles of association and proof of
identity shall be notarized before the Notary (Public) of the
country of his origin and be duly apostillised in accordance
with the said Hague Convention.
(c) in a country outside the Commonwealth and which is
not a party to the Hague Apostille Convention, 1961, his
signatures and address on the memorandum and articles of
association and proof of identity, shall be notarized before
the Notary (Public) of such country and the certificate of the
Notary (Public) shall be authenticated by a Diplomatic or
Consular Officer empowered in this behalf under section 3 of
the Diplomatic and Consular Officers (Oaths and Fees) Act,
1948 (40 of 1948) or, where there is no such officer by any of
the officials mentioned in section 6 of the Commissioners

of Oaths Act, 1889 (52 and 53 Vic.C.10), or in any Act
amending the same;
(d) visited in India and intended to incorporate a company, in
such case the incorporation shall be allowed if, he/she is
having a valid Business Visa.
Explanation. – For the purposes of this clause, it is hereby clarified
that, in case of Person is of Indian Origin or Overseas Citizen of India,
requirement of business Visa shall not be applicable.
14. Declaration by professionals.

For the purposes of clause (b) of sub-section (1) of section 7,
the declaration by an advocate, a Chartered Accountant, Cost
accountant or Company Secretary in practice shall be in Form No.
INC.8. Explanation (i) “chartered accountant” means a chartered
accountant as defined in clause (b) of sub section 1 of section 2
of the Chartered Accountants Act, 1949 (ii) “Cost Accountant”
means a cost accountant as defined in clause (b) of subsection (1)
of section 2 of the Cost and Works Accountants Act, 1959 and (iii)
“company secretary” means a “company secretary” or “secretary”
means as defined in clause (c) of sub-section (1) of section 2 of the
Company Secretaries Act, 1980.
1
[15. Declaration from Subscribers and First Directors
For the purposes of clause (c) of sub-section (1) of section 7, the
declaration shall be submitted by each of the subscribers to the
memorandum and each of the first directors named in the articles in
Form No.INC-9.]

2018 (w.e.f. 27-07-2018) for:
“15. Affidavit from subscribers and first directors.
For the purposes of clause 15(c) of sub-section (1) of section 7, the affidavit
shall be submitted by each of the subscribers to the memorandum and each
of the first directors named in the articles in Form No.INC.9”
16. Particulars of every subscriber to be filed with the Registrar at

the time of incorporation.
(1) The following particulars of every subscriber to the memorandum
shall be filed with the Registrar-
(a) Name (including surname or family name) and recent
Photograph affixed and scan with MOA and AOA:
(b) Father’s/Mother’s/ name:
(c) Nationality:
(d) Date of Birth:
(e) Place of Birth (District and State):
(f) Educational qualification:
(g) Occupation:
(h) Income-tax permanent account number:
(i) Permanent residential address and also Present address
(Time since residing at present address and address of
previous residence address (es) if stay of present address is
less than one year) similarly the office/business addresses :
(j) Email id of Subscriber:
(k) Phone No. of Subscriber:
(l) Fax no. of Subscriber (optional)
Explanation.- information related to (i) to (l) shall be of the

individual subscriber and not of the professional engaged in
the incorporation of the company;
(m) Proof of Identity:
• For Indian Nationals:
PAN Card ( mandatory) and any one of the following
Voter’s identity card
Passport copy
Driving License copy

Unique Identification Number (UIN)
• For Foreign nationals and Non Resident Indians
Passport

1
[Explanation.- In case the subscriber is already holding a
valid DIN, and the particulars provided therein have been
updated as on the date of application, and the declaration to
this effect is given in the application, the proof of identity and
residence need not be attached.]
(n) Residential proof such as Bank Statement, Electricity Bill,
Telephone / Mobile Bill :
Provided that Bank statement Electricity bill, Telephone or
Mobile bill shall not be more than two months old;
(o) Proof of nationality in case the subscriber is a foreign
national.
(p) If the subscriber is already a director or promoter of a
company(s), the particulars relating to-
(i) Name of the company;
(ii) Corporate Identity Number;
(iii) Whether interested as a director or promoter;
(q) [Omitted]
2

(w.e.f. 27-07-2016).
2. Omitted by the Companies (Incorporation) Third Amendment Rules, 2016
(w.e.f. 27-07-2016). Prior to its omission, read as under:
*“(q) the promoter or the first director shall itself attest his signature and latest
photograph in Form No. INC.10.”
* Substituted by the Companies (Incorporation) Amendment Rules, 2015
(w.e.f. 01-05-2015] for :
“(q) the specimen signature and latest photograph duly verified by the banker
or notary shall be in the prescribed Form No.INC.10.”
(2) Where the subscriber to the memorandum is a body corporate,

then the following particulars shall be filed with the Registrar –
(a) Corporate Identity Number of the Company or Registration
number of the body corporate, if any
(b) GLN, if any;
(c) the name of the body corporate
(d) the registered office address or principal place of business;
(e) E-mail Id;
(f) if the body corporate is a company, certified true copy of the
board resolution specifying inter alia the authorization
to subscribe to the memorandum of association of
the proposed company and to make investment in the
proposed company, the number of shares proposed to be
subscribed by the body corporate, and the name, address
and designation of the person authorized to subscribe to
the Memorandum;
(g) if the body corporate is a limited liability partnership
1[Omitted], certified true copy of the resolution agreed to
by all the partners specifying inter alia the authorization
to subscribe to the memorandum of association of the
proposed company and to make investment in the proposed
company, the number of shares proposed to be subscribed in
the body corporate, and the name of the partner authorized
to subscribe to the Memorandum;
(h) the particulars as specified above for subscribers in terms
of clause (e) of sub- section (1) of section 7 for the person
subscribing for body corporate;
(i) in case of foreign bodies corporate, the details relating to -
1. The words “or partnership firm” omitted by the Companies (Incorporation)
Third Amendment Rules, 2016 (w.e.f. 27-07-2016)
(i) the copy of certificate of incorporation of the foreign

body corporate; and
(ii) the registered office address.
17. Particulars of first directors of the company and their consent

to act as such.
The particulars of each person mentioned in the articles as first director
of the company and his interest in other firms or bodies corporate
along with his consent to act as director of the company shall be filed
in Form No.DIR.12 along with the fee as provided in the Companies
(Registration offices and fees) Rules, 2014.
1
[18. The Certificate of Incorporation shall be issued by the Registrar
in Form No.INC-11 and the Certificate of Incorporation shall mention
permanent account number of the company where it is issued by the
Income-tax Department.]
19. License under section 8 for new companies with charitable

objects etc.
(1)A person or an association of persons (hereinafter referred to in this rule
as “the proposed company”), desirous of incorporating a company with
limited liability under sub-section (1) of section 8 without the addition to
its name of the word “Limited”, or as the case may be, the words “Private
Limited”, shall make an application in Form No.INC.12 along with the fee
as provided in the Companies (Registration offices and fees) Rules, 2014 to
the Registrar for a license under sub-section (1) of section 8.
(2) The memorandum of association of the proposed company shall be
in Form No.INC.13.
(3) The application under sub-rule (1) shall be accompanied by the
following documents, namely :

dated 25.1.2017 (w.e.f.30-1-2017) for:
“18. Certificate of incorporation.- The Certificate of Incorporation shall be
issued by the Registrar in Form No.INC.11.”
(a) the draft memorandum and articles of association of the

proposed company;
(b) the declaration in Form No.INC.14 by an Advocate, a
Chartered Accountant, Cost Accountant or Company
Secretary in practice, that the draft memorandum and
articles of association have been drawn up in conformity
with the provisions of section 8 and rules made thereunder
and that all the requirements of the Act and the rules made
there under relating to registration of the company under
section 8 and matters incidental or supplemental thereto
have been complied with;
(c) an estimate of the future annual income and expenditure of
the company for next three years, specifying the sources of
the income and the objects of the expenditure;
(d) the declaration by each of the persons making the application
in Form No. INC.15.
20. License for existing companies.

(1) A limited company registered under this Act or under any
previous company law, with any of the objects specified in clause (a)
of sub-section (1) of section 8 and the restrictions and prohibitions
as mentioned respectively in clause (b) and (c) of that sub-section,
and which is desirous of being registered under section 8, without the
addition to its name of the word “Limited” or as the case may be, the
words “Private Limited”, shall make an application in Form No.INC.12
along with the fee as provided in the Companies (Registration offices
and fees) Rules, 2014 to the Registrar for a licence under sub-section
(5) of section 8.
(2) The application under sub-rule (1), shall be accompanied by the
following documents, namely:-
(a) the memorandum and articles of association of the company;
(b) the declaration as given in Form No.INC.14 by an Advocate,
a Chartered accountant, Cost Accountant or Company
Secretary in Practice, that the memorandum and articles

of association have been drawn up in conformity with the
provisions of section 8 and rules made there under and that
all the requirements of the Act and the rules made there
under relating to registration of the company under section
8 and matters incidental or supplemental thereto have been
complied with;
(c) For each of the two financial years immediately preceding
the date of the application, or when the company has
functioned only for one financial year, for such year (i) the
financial statements, (ii) the Board’s reports, and (iii) the
audit reports, relating to existing companies ;
(d) a statement showing in detail the assets (with the values
thereof), and the liabilities of the company, as on the date of
the application or within thirty days preceding that date;
(e) an estimate of the future annual income and expenditure of
the company for next three years, specifying the sources of
the income and the objects of the expenditure;
(f) the certified copy of the resolutions passed in general/ board
meetings approving registration of the company under
section 8; and
(g) a declaration by each of the persons making the application
in Form No.INC.15.
(3) The company shall, within a week from the date of making the
application to the Registrar, publish a notice at his own expense, and a
copy of the notice, as published, shall be sent forthwith to the Registrar
and the said notice shall be in Form No. INC.26 and shall be published –
(a) at least once in a vernacular newspaper in the principal
vernacular language of the district in which the registered office
of the proposed company is to be situated or is situated, and
circulating in that district, and at least once in English language
in an English newspaper circulating in that district; and
(b) on the websites as may be notified by the Central Government.
(4) The Registrar may require the applicant to furnish the approval or
concurrence of any appropriate authority, regulatory body, department
or Ministry of the Central Government or the State Government(s).
(5) The Registrar shall, after considering the objections, if any,
received by it within thirty days from the date of publication
of notice, and after consulting any authority, regulatory body,
Department or Ministry of the Central Government or the State
Government(s), as it may, in its discretion, decide whether the
license should or should not be granted.
(6) The license shall be in Form No.INC.16. or Form No.INC.17, as
the case may be, and the Registrar shall have power to include in the
license such other conditions as may be deemed necessary by him.
(7) The Registrar may direct the company to insert in its memorandum,
or in its articles, or partly in one and partly in the other, such conditions
of the license as may be specified by the Registrar in this behalf.
21. Conditions for conversion of a company registered under
Section 8 into a company of any other kind.
(1) A company registered under section 8 which intends to convert
itself into a company of any other kind shall pass a special resolution at
a general meeting for approving such conversion.
(2) The explanatory statement annexed to the notice convening the
general meeting shall set out in detail the reasons for opting for such
conversion including the following, namely:-
(a) the date of incorporation of the company;
(b) the principal objects of the company as set out in the
memorandum of association;
(c) the reasons as to why the activities for achieving the objects
of the company cannot be carried on in the current structure
i.e. as a section 8 company;
(d) if the principal or main objects of the company are proposed
to be altered, what would be the altered objects and the
reasons for the alteration;
(e) what are the privileges or concessions currently enjoyed by

the company, such as tax exemptions, approvals for receiving
donations or contributions including foreign contributions,
land and other immovable properties, if any, that were
acquired by the company at concessional rates or prices or
gratuitously and, if so, the market prices prevalent at the time
of acquisition and the price that was paid by the company,
details of any donations or bequests received by the company
with conditions attached to their utilization etc.
(f) details of impact of the proposed conversion on the members
of the company including details of any benefits that may
accrue to the members as a result of the conversion.
(3) A certified true copy of the special resolution along with a copy of
the Notice convening the meeting including the explanatory statement
shall be filed with the Registrar in Form No.MGT.14 along with the fee.
(4) The company shall file an application in Form No.INC.18 with
the Regional Director with the fee along with a certified true copy of
the special resolution and a copy of the Notice convening the meeting
including the explanatory statement for approval for converting itself
into a company of any other kind and the company shall also attach the
proof of serving of the notice served to all the authorities mentioned in
subrule (2) of rule 22.
(5) A copy of the application with annexures as filed with the Regional
Director shall also be filed with the Registrar.
22. Other conditions to be complied with by companies registered
under section 8 seeking conversion into any other kind.
(1) The company shall, within a week from the date of submitting
the application to the Regional Director, publish a notice at its own
expense, and a copy of the notice, as published, shall be sent forthwith
to the Regional Director and the said notice shall be in Form No.
INC.19 and shall be published-
(a) at least once in a vernacular newspaper in the principal
vernacular language of the district in which the registered
office of the company is situated, and having a wide
circulation in that district, and at least once in English
language in an English newspaper having a wide circulation

in that district; and
(b) on the website of the company, if any, and as may be notified
or directed by the Central Government.
(2) The company shall send a copy of the notice, simultaneously with its
publication, together with a copy of the application and all attachments
by registered post or hand delivery, to the Chief Commissioner of
Income Tax having jurisdiction over the company, Income Tax Officer
who has jurisdiction over the company, the Charity Commissioner,
the Chief Secretary of the State in which the registered office of the
company is situated, any organisation or Department of the Central
Government or State Government or other authority under whose
jurisdiction the company has been operating and if any of these
authorities wish to make any representation to Regional Director, it
shall do so within sixty days of the receipt of the notice, after giving an
opportunity to the Company.
(3) The copy of proof of serving such notice shall be attached to the
application.
(4) The Board of directors shall give a declaration to the effect that no
portion of the income or property of the company has been or shall be
paid or transferred directly or indirectly by way of dividend or bonus
or otherwise to persons who are or have been members of the company
or to any one or more of them or to any persons claiming through any
one or more of them.
(5) Where the company has obtained any special status, privilege,
exemption, benefit or grant(s) from any authority such as Income
Tax Department, Charity Commissioner or any organisation or
Department of Central Government, State Government, Municipal
Body or any recognized authority, a “No Objection Certificate” must
be obtained, if required under the terms of the said special status,
privilege, exemption, benefit or grant(s) from the concerned authority
and filed with the Regional Director, along with the application.
(6) The company should have filed all its financial statements and
Annual Returns upto the financial year preceding the submission of
the application to the Regional Director and all other returns required
to be filed under the Act up to the date of submitting the application
to the Regional Director and in the event the application is made after
the expiry of three months from the date of preceding financial year
to which the financial statement has been filed, a statement of the
financial position duly certified by chartered accountant made up to a
date not preceding thirty days of filing the application shall be attached.
(7) The company shall attach with the application a certificate from
practicing Chartered Accountant or Company Secretary in practice or
Cost Accountant in practice certifying that the conditions laid down in
the Act and these rules relating to conversion of a company registered
under section 8 into any other kind of company, have been complied
with.
(8) The Regional Director may require the applicant to furnish the
approval or concurrence of any particular authority for grant of his
approval for the conversion and he may also obtain the report from
the Registrar.
(9) On receipt of the application, and on being satisfied, the Regional
Director shall issue an order approving the conversion of the company
into a company of any other kind subject to such terms and conditions
as may be imposed in the facts and circumstances of each case including
the following conditions, namely;-
(a) the company shall give up and shall not claim, with effect
from the date its conversion takes effect, any special status,
exemptions or privileges that it enjoyed by virtue of having
been registered under the provisions of section 8;
(b) if the company had acquired any immovable property free
of cost or at a concessional cost from any government or
authority, it may be required to pay the difference between
the cost at which it acquired such property and the market
price of such property at the time of conversion either to the
government or to the authority that provided the immovable
property;
(c) any accumulated profit or unutilised income of the company
brought forward from previous years shall be first utilized
to settle all outstanding statutory dues, amounts due to
lenders claims of creditors, suppliers, service providers and
others including employees and lastly any loans advanced

by the promoters or members or any other amounts due
to them and the balance, if any, shall be transferred to the
Investor Education and Protection Fund within thirty days
of receiving the approval for conversion;
(10) Before imposing the conditions or rejecting the application, the
company shall be given a reasonable opportunity of being heard by the
Regional Director.
(11) On receipt of the approval of the Regional Director,
(i) the company shall convene a general meeting of its members
to pass a special resolution for amending its memorandum of
association and articles of association as required under the
Act consequent to the conversion of the section 8 company
into a company of any other kind;
(ii) the Company shall thereafter file with the Registrar.-
(a) a certified copy of the approval of the Regional
Director within thirty days from the date of receipt of
the order in Form No.INC.20 along with the fee;
(b) amended memorandum of association and articles of
association of the company.
(c) a declaration by the directors that the conditions, if
any imposed by the Regional Director have been fully
complied with.
(12) On receipt of the documents referred to in sub rule (10) above, the
Registrar shall register the documents and issue the fresh Certificate of
Incorporation.
23. Intimation to Registrar of revocation of license issued under
section 8.
Where the license granted to a company registered under section 8
has been revoked, the company shall apply to the Registrar in Form
No.INC.20 along with the fee to convert its status and change of name
accordingly.
1
[23A. Declaration at the time of commencement of business.
The declaration under section 10A by a director shall be in Form
No.INC-20A and shall be filed as provided in the Companies
(Registration Offices and Fees) Rules, 2014 and the contents of the
said form shall be verified by a Company Secretary or a Chartered
Accountant or a Cost Accountant, in practice:
Provided that in the case of a company pursuing objects requiring
registration or approval from any sectoral regulators such as the
Reserve Bank of India, Securities and Exchange Board of India, etc.,
the registration or approval, as the case may be from such regulator
shall also be obtained and attached with the declaration.]
24. 2[omitted]
25. Verification of registered office.

(1) The verification of the registered office shall be filed in Form
No.INC.22 along with the fee, and
(2) There shall be attached to said Form, any of the following
documents, namely :-
(a) the registered document of the title of the premises of the
registered office in the name of the company; or
(b) the notarized copy of lease or rent agreement in the name of
the company along with a copy of rent paid receipt not older
than one month;
1. Inserted by the Companies (Incorporation) Fourth Amendment Rules, 2018

(w.e.f. 18-12-2018).
2. Omitted by the Companies (Incorporation) Second Amendment Rules, 2015
(w.e.f. 29-5-2015). Prior to its omission, Rule 24 read as under:
“24. Declaration at the time of commencement of business –
The declaration filed by a director shall be in Form No.INC. 21 along with the
fee as and the contents of the form shall be verified by a Company Secretary in
practice or a Chartered Accountant or a Cost Accountant in practice:
Provided that in the case of a company requiring registration from sectoral
regulators such as Reserve Bank of India, Securities and Exchange Board of
India etc, the approval from such regulator shall be required.”
(c) the authorization from the owner or authorized occupant of

the premises along with proof of ownership or occupancy
authorization, to use the premises by the company as its
registered office; and
(d) the proof of evidence of any utility service like telephone,
gas, electricity, etc. depicting the address of the premises
in the name of the owner or document, as the case may be,
which is not older than two months.
1
[26. Publication of name by company.
(1) Every company which has a website for conducting online business
or otherwise, shall disclose/publish its name, address of its registered
office, the Corporate Identity Number, Telephone number, fax number
if any, email and the name of the person who may be contacted in case
of any queries or grievances on the landing/home page of the said
website.
(2) The Central Government may as and when required, notify the
other documents on which the name of the company shall be printed].
27. Notice and verification of change of situation of the registered

office.
The notice of change of the situation of the registered office and
verification thereof shall be filed in Form No.INC.22 along with the
fee and shall be attached to the said form, the similar documents and
manner of verification as are specified for verification of Registered
office on incorporation in terms of sub-section (2) of section 12.
2
[28. Shifting of registered office within the same State.

2016 (w.e.f. 27-07-2016) for: “26. Publication of name by company.- The
Central Government may as and when required, notify the other documents on
which the name of the company shall be printed”.
2017 (w.e.f. 27-07-2017) for:
(1) An application seeking confirmation from the Regional Director for

shifting the registered office within the same State from the jurisdiction
of one Registrar of Companies to the jurisdiction of another Registrar
of Companies, shall be filed by the company with the Regional Director
in Form No.INC.23 along with the fee and following documents, –
(a) Board Resolution for shifting of registered office;
(b) Special Resolution of the members of the company approving
the shifting of registered office;
(c) a declaration given by the Key Managerial Personnel or any
two directors authorised by the Board, that the company has
“28. Shifting of registered office within the same State.-

(1) An application seeking confirmation from the Regional Director for
shifting the registered office within the same State from the jurisdiction of one
Registrar of Companies to the jurisdiction of another Registrar of Companies,
shall be filed by the company with the Regional Director in Form no.INC.23
along with the fee.
(2) The company shall, not less than one month before filing any application
with the Regional Director for the change of registered office.-
(a) publish a notice, at least once in a daily newspaper published in English
and in the principal language of that district in which the registered office of
the company is situated and circulating in that district; and
(b) serve individual notice on each debenture holder, depositor and creditor of
the company, clearly indicating the matter of application and stating that any
person whose interest is likely to be affected by the proposed alteration of the
memorandum may intimate his nature of interest and grounds of opposition
to the Regional Director with a copy to the company within twenty one days
of the date of publication of that notice:
Provided that in case no objection is received by the Regional Director within
twenty one days from the date of service or publication of the notice, the
person concerned shall be deemed to have given his consent to the change of
registered office proposed in the application:
Provided further that the shifting of registered office shall not be allowed if any
inquiry, inspection or investigation has been initiated against the company or
any prosecution is pending against the company under the Act.
*[Provided also that on completion of such inquiry, inspection or investigation
as a consequence of which no prosecution is envisaged or no prosecution is
pending, shifting of registered office shall be allowed]”.
*Inserted by the Companies (Incorporation) Third Amendment Rules, 2016
(w.e.f. 27-07-2016).
not defaulted in payment of dues to its workmen and has

either the consent of its creditors for the proposed shifting or
has made necessary provision for the payment thereof;
(d) a declaration not to seek change in the jurisdiction of the
Court where cases for prosecution are pending;
(e) acknowledged copy of intimation to the Chief Secretary of the
State as to the proposed shifting and that the employees interest
is not adversely affected consequent to proposed shifting.]
29. Alteration of Memorandum by change of name.
1
[(1) The change of name shall not be allowed to a company which
has not filed annual returns or financial statements due for filing with
the Registrar or which has failed to pay or repay matured deposits or
debentures or interest thereon:
Provided that the change of name shall be allowed upon filing
necessary documents or payment or repayment of matured deposits or
debentures or interest thereon as the case may be].
(2) An application shall be filed in Form No.INC.24 along with the
fee for change in the name of the company and a new certificate of
incorporation in Form No.INC.25 shall be issued to the company
consequent upon change of name.
[ 30. Shifting of Registered Office from one State or Union Territory

2
1. Substituted by the Companies (Incorporation) Third Amendment Rules, 2016

(w.e.f. 27-07-2016) for: “(1) The change of name shall not be allowed to a company
which has defaulted in filing its annual returns or financial statements or any
document due for filing with the Registrar or which has defaulted in repayment of
matured deposits or debentures or interest on deposits or debentures”.
2017 (w.e.f. 27-7-2017) for :
“30. Shifting of registered office from one State or Union territory to
another State.-
(1) An application under sub-section (4) of section 13, for the purpose of
seeking approval for alteration of memorandum with regard to the change
of place of the registered office from one State Government or Union
territory to another, shall be filed with the Central Government in Form
No. INC.23 along with the fee and shall be accompanied by the following
documents, namely:-
(a) a copy of the memorandum and articles of association;
(b) a copy of the notice convening the general meeting along with relevant
Explanatory Statement;
(c) a copy of the special resolution sanctioning the alteration by the
members of the company;
(d) a copy of the minutes of the general meeting at which the resolution
authorizing such alteration was passed, giving details of the number of votes
cast in favor or against the resolution;
(e) an affidavit verifying the application;
(f) the list of creditors and debenture holders entitled to object to the
application;
(g) an affidavit verifying the list of creditors;
(h) the document relating to payment of application fee;
(i) a copy of board resolution or Power of Attorney or the executed
Vakalatnama, as the case may be.
*[(j) a copy of the No Objection Certificate from the Reserve Bank of India
where the applicant is a registered Non Banking Financial Company]
* Inserted by the Companies (Incorporation) Third Amendment Rules,
2016 (w.e.f. 27-07-2016).
(2) There shall be attached to the application, a list of creditors and
debenture holders, drawn up to the latest practicable date preceding the
date of filing of application by not more than one month, setting forth the
following details, namely:-
(a) the names and address of every creditor and debenture holder of the
company;
(b) the nature and respective amounts due to them in respect of debts, claims
or liabilities: Provided that the applicant company shall file an affidavit,
signed by the Company Secretary of the company, if any and not less than
two directors of the company, one of whom shall be a managing director,
where there is one, to the effect that they have made a full enquiry into the
affairs of the company and, having done so, have formed an opinion that the
list of creditors is correct, and that the estimated value as given in the list of
the debts or claims payable on a contingency or not ascertained are proper
estimates of the values of such debts and claims and that there are no other
debts of or claims against the company to their knowledge.
(3) There shall also be attached to the application an affidavit from the
directors of the company that no employee shall be retrenched as a

consequence of shifting of the registered office from one state to another
state and also there shall be an application filed by the company to the Chief
Secretary of the concerned State Government or the Union territory
(4) A duly authenticated copy of the list of creditors shall be kept at the
registered office of the company and any person desirous of inspecting the
same may, at any time during the ordinary hours of business, inspect and
take extracts from the same on payment of a sum not exceeding ten rupees
per page to the company.
(5) There shall also be attached to the application a copy of the
acknowledgment of service of a copy of the application with complete
annexures to the Registrar and Chief Secretary of the State Government or
Union territory where the registered office is situated at the time of filing
the application.
(6) The company shall at least fourteen days before the date of hearing-
(a) advertise the application in the Form No.INC.26 in a vernacular
newspaper in the principal vernacular language in the district in which the
registered office of the company is situated, and at least once in English
language in an English newspaper circulating in that district;
(b) serve, by registered post with acknowledgement due, individual
notice(s), to the effect set out in clause (a) on each debenture-holder and
creditor of the company; and
(c) serve, by registered post with acknowledgement due, a notice together
with the copy of the application to the Registrar **[omitted] and to the
regulatory body, if the company is regulated under any special Act or law
for the time being in force.
** Omitted by the Companies (Incorporation) Third Amendment Rules,
2016 (w.e.f. 27-07-2016) for “and to the Securities and Exchange Board of
India, in the case of listed companies”
(7) Where any objection of any person whose interest is likely to be affected
by the proposed application has been received by the applicant, it shall serve
a copy thereof to the Central Government on or before the date of hearing.
(8) Where no objection has been received from any of the parties, who have
been duly served, the application may be put up for orders without hearing.
(9) Before confirming the alteration, the Central Government shall ensure
that, with respect to every creditor and debenture holder who, in the
opinion of the Central government, is entitled to object to the alteration,
and who signifies his objection in the manner directed by the Central
government, either his consent to the alteration has been obtained or his
debt or claim has been discharged or has determined, or has been secured
to another State.
(1) An application under sub-section (4) of section 13, for the purpose
of seeking approval for alteration of memorandum with regard to the
change of place of the registered office from one State Government or
Union territory to another, shall be filed with the Central Government
in Form No. INC.23 along with the fee and shall be accompanied by the
following documents, namely: –
(a) a copy of Memorandum of Association, with proposed
alterations;
(b) a copy of the minutes of the general meeting at which the
resolution authorising such alteration was passed, giving
details of the number of votes cast in favour or against the
resolution;
(c) a copy of Board Resolution or Power of Attorney or the
executed Vakalatnama, as the case may be.
debenture holders, drawn up to the latest practicable date preceding
the date of filing of application by not more than one month, setting
forth the following details, namely:-
(a) the names and address of every creditor and debenture
holder of the company;
(b) the nature and respective amounts due to them in respect of
to the satisfaction of the Central Government.

(10) The Central Government may make an order confirming the alteration
on such terms and conditions, if any, as it thinks fit, and may make such
order as to costs as it thinks proper:
Provided that the shifting of registered office shall not be allowed if any
inquiry, inspection or investigation has been initiated against the company
or any prosecution is pending against the company under the Act.
***[Explanation.-On completion of such inquiry, inspection or investigation
as a consequence of which no prosecution is envisaged or no prosecution is
pending, shifting of registered office shall be allowed.]”
***Inserted by the Companies (Incorporation) Third Amendment Rules,
2016 (w.e.f. 27-07-2016).
debts, claims or liabilities:

Provided that the list of creditors and debenture holders, accompanied
by declaration signed by the Company Secretary of the company, if any,
and not less than two directors of the company, one of whom shall be a
managing director, where there is one, stating that –
(i) they have made a full enquiry into the affairs of the company
and, having done so, have concluded that the list of creditors
are correct, and that the estimated value as given in the
list of the debts or claims payable on a contingency or not
ascertained are proper estimates of the values of such debts
and claims and that there are no other debts of or claims
against the company to their knowledge, and
(ii) no employee shall be retrenched as a consequence of shifting
of the registered office from one state to another state and
also there shall be an application filed by the company to the
Chief Secretary of the concerned State Government or the
Union territory.
registered office of the company and any person desirous of inspecting
the same may, at any time during the ordinary hours of business,
inspect and take extracts from the same on payment of a sum not
exceeding ten rupees per page to the company.
(4) There shall also be attached to the application a copy of the
acknowledgment of service of a copy of the application with complete
annexures to the Registrar and Chief Secretary of the State Government
or Union territory where the registered office is situated at the time of
filing the application.
(5) The company shall, not more than thirty days before the date of
filing the application in Form No. INC.23 –
(a) advertise in the Form No. INC.26 in the vernacular newspaper
in the principal vernacular language in the district and in
English language in an English newspaper with the widest
circulation in the state in which the registered office of the
company is situated:
Provided that a copy of advertisement shall be served on the
Central Government immediately on its publication.
(b) serve, by registered post with acknowledgement due,
individual notice, to the effect set out in clause (a) on each
debenture-holder and creditor of the company; and
(c) serve, by registered post with acknowledgement due, a notice
together with the copy of the application to the Registrar and
to the Securities and Exchange Board of India, in the case of
listed companies and to the regulatory body, if the company
is regulated under any special Act or law for the time being
in force.
(6) There shall be attached to the application a duly authenticated copy
of the advertisement and notices issued under sub-rule (5), a copy
each of the objection received by the applicant, and tabulated details of
responses along with the counter-response from the company received
either in the electronic mode or in physical mode in response to the
advertisements and notices issued under sub-rule (5).
(7) Where no objection has been received from any person in response
to the advertisement or notice under sub-rule (5) or otherwise, the
application may be put up for orders without hearing and the order
either approving or rejecting the application shall be passed within
fifteen days of the receipt of the application.
(8) Where an objection has been received,
(i) the Central Government shall hold a hearing or hearings, as
required and direct the company to file an affidavit to record
the consensus reached at the hearing, upon executing which,
the Central Government shall pass an order approving the
shifting, within sixty days of filing the application.
(ii) where no consensus is reached at the hearings the company
shall file an affidavit specifying the manner in which objection
is to be resolved within a definite time frame, duly reserving
the original jurisdiction to the objector for pursuing its legal
remedies, even after the registered office is shifted, upon

execution of which the Central Government shall pass an
order confirming or rejecting the alteration within sixty days
of the filing of application.
(9) The order passed by the Central Government confirming the
alteration may be on such terms and conditions, if any, as it thinks fit,
and may include such order as to costs as it thinks proper:
Provided that the shifting of registered office shall not be allowed if any
inquiry, inspection or investigation has been initiated against the company
or any prosecution is pending against the company under the Act.
(10) On completion of such inquiry, inspection or investigation as a
consequence of which no prosecution is envisaged or no prosecution is
pending, shifting of registered office shall be allowed.]
31. Certified copy of Central Government’s Order

The certified copy of the order of the Central Government, approving
the alteration of the memorandum for transfer of registered office of the
company from one State to another, shall be filed in Form No.INC.28
along with the fee as with the Registrar of the State within thirty days
from the date of receipt of certified copy of the order.
32. Change of objects for which money is raised through prospectus.

(1) Where the company has raised money from public through
prospectus and has any unutilised amount out of the money so raised,
it shall not change the objects for which the money so raised is to be
applied unless a special resolution is passed through postal ballot and
the notice in respect of the resolution for altering the objects shall
contain the following particulars, namely:-
(a) the total money received;
(b) the total money utilized for the objects stated in the
prospectus;
(c) the unutilized amount out of the money so raised through
prospectus,
(d) the particulars of the proposed alteration or change in the

objects;
(e) the justification for the alteration or change in the objects;
(f) the amount proposed to be utilised for the new objects;
(g) the estimated financial impact of the proposed alteration on
the earnings and cash flow of the company;
(h) the other relevant information which is necessary for the
members to take an informed decision on the proposed
resolution;
(i) the place from where any interested person may obtain a
copy of the notice of resolution to be passed.
(2) The advertisement giving details of each resolution to be passed
for change in objects which shall be published simultaneously with the
dispatch of postal ballot notices to shareholders.
(3) The notice shall also be placed on the website of the company, if any.
33. Alteration of articles.

(1) For effecting the conversion of a private company into a public
company or vice versa, the application shall be filed in Form No.INC.27
with fee.
1
[(2) subject to the provision of sub-rule (1), for effecting the conversion
of a public company into a private company, a copy of order of the
Tribunal approving the alteration, shall be filed with the Registrar in
Form No.INC-27 with fee together with the printed copy of altered
articles within fifteen days from the date of receipt of the order from
1. Substituted by the Companies (Incorporation) fourth Amendment Rules,

2016 (w.e.f. 01-10-2016) for :
“(2) A copy of order of the competent authority approving the alteration,
shall be filed with the Registrar in Form No. INC.27 with fee together with
the printed copy of the altered articles within fifteen days of the receipt of
the order from the Central Government”.
Explanation. - For the purposes of this sub-rule, the term “competent authority”
means, the Central Government.
the Tribunal.]
34. Copies of memorandum and articles, etc. to be given to members

on request being made by them.
A company shall on payment of fee, send a copy of each of the following
documents to a member within seven days of the request being made
by him-
(1) the memorandum;
(2) the articles;
(3) every agreement and every resolution referred to in sub-section (1)
of section 117, if and so far as they have not been embodied in the
memorandum and articles.
35. Service of documents.-

(1) A document may be served on a company or an officer thereof
through electronic transmission.
(2) For the purposes of sub-rule (1), the term, “electronic transmission”
means a communication–
(a) delivered by –
(i) facsimile telecommunication or electronic mail when
directed to the facsimile number or electronic mail
address, respectively, which the company or the officer has
provided from time to time for sending communications
to the company or the officer respectively;
(ii) posting of an electronic message board or network
that the company or the officer has designated for
such communications, and which transmission shall
be validly delivered upon the posting; or
(iii) other means of electronic communication,
in respect of which the company or the officer has put in
place reasonable systems to verify that the sender is the
person purporting to send the transmission; and

(b) that creates a record that is capable of retention, retrieval and
review, and which may thereafter be rendered into clearly
legible tangible form.
(3) A document may be served on the Registrar or any member
through electronic transmission.
(4) For the purposes of sub-rule (3), the term, “electronic transmission”
means a communication –
(a) delivered by –
(i) facsimile telecommunication or electronic mail
when directed to the facsimile number or electronic
mail address, respectively, which the Registrar or the
member has provided from time to time for sending
communications to the Registrar or the member
respectively;
(ii) posting of an electronic message board or network
that the Registrar or the member has designated for
those communications, and which transmission shall
be validly delivered upon the posting; or
(iii) other means of electronic communication,
in respect of which the Registrar or the member has put
in place reasonable systems to verify that the sender is the
person purporting to send the transmission, and
(b) that creates a record that is capable of retention, retrieval and
review, and which may thereafter be rendered into clearly
legible tangible form.
(5) For the purposes of sub-section (1) and (2) of section 20, ‘‘courier’’
means a document sent through a courier which provides proof of
delivery.
(6) In case of delivery by post, such service shall be deemed to have
been effected- (i) in the case of a notice of a meeting, at the expiration
of forty eight hours after the letter containing the same is posted; and
(ii) in any other case, at the time at which the letter would be delivered
in the ordinary course of post.
36. 1[Omitted]
1. Omitted by the Companies (Incorporation) Fifth Amendment Rules, 2016

dated 29-12-2016 (w.e.f. 1-1-2017). Prior to its omission, Rule 36 read as under:
*“36. Integrated Process for Incorporation. –
(1) For the purpose of simplifying the filing of forms for incorporation of a
company, the integrated process shall apply with effect from 01/05/2015
(2) For the purposes of sub-rule (1), the application for allotment of
Director Identification Number upto three Directors, reservation of a name,
incorporation of company and appointment of Directors of the proposed
company shall be filed in Integrated Form No. INC – 29, for One Person
Company, private company, public company and Producer Company, with
the Registrar within whose jurisdiction the registered office of the company is
proposed to be situated, along with the fees of rupees two thousand in addition
to the registration fee as specified in companies (Registration of Offices and
Fees), Rules, 2014.
(3) For the purposes of filing Integrated Incorporation form, the particulars
of maximum of three directors shall be allowed to be filled in INC-29 and
allotment of Directors Identification Number of maximum of three proposed
directors shall be permitted in Form INC-29 in case of proposed directors not
having approved Director Identification Number.
(4) The promoter or applicant of the proposed company shall propose only one
name in e-form INC-29.
(5) The promoter or applicant of the proposed company may prepare
Memorandum of Association as per templates in Form INC-30 and may opt
for templates of Articles of Association in Form INC-31 in accordance with
the provisions of rule 13 for preparation of Memorandum of Association and
Articles of Association.
(6) The promoter or the Applicant shall sign and witness, the Memorandum
of Association and Articles of Association in the forms downloaded from the
portal of the Ministry of Corporate Affairs and scanned legibly and attach to
e-form INC-29 in accordance with the provisions of rule 13 for preparation of
Memorandum of Association and Articles of Association.
(7) The facility to file Integrated application for incorporation in Form INC-29
is available as an option to the process for separate applications for allotment
of Director Identification Number, reservation of name and Incorporation of a
company as provided in these rules.

(8) For an application filed using the Integrated process of incorporation as
provided in this rule, the provisions of sub-section(5) of section4 of the Act and
rule 9 of these rules shall not apply.
(9) A company using the provision of this rule may furnish verification of its
registered office under sub-section(2) of section 12 of the Act by filing e-form
INC-29 in which case the company shall attach along with such e-form INC-29,
any of the documents referred to in sub-rule(2) of rule 25.
(10) The requirement of filing e-form INC-22 may be dispensed with if, the
proposed company maintains its registered office at the given correspondence
address.
(11) The Registrar within whose jurisdiction the registered office of the company
is proposed to be situated shall process INC-29 including for allotment of
Director Identification Number.
(12) (a) Where the Registrar, on examining e-form INC-29, finds that it is
necessary to call for further information or finds such application or documents
to be defective or incomplete in any respect, he shall give intimation to the
applicant to remove the defects and re-submit the e-form within fifteen days
from the date of such intimation given by the Registrar.
(b) After the re-submission of the document, if the registrar still finds that the
document is defective or incomplete in any respect, he shall give one more
opportunity of fifteen days to remove such defects or deficiencies.
**{(ba) After the resubmission of the documents and on completion of
second opportunity, if the registrar still finds that the documents are defective
or incomplete, he shall give third opportunity to remove such defects or
deficiencies;
Provided that the total period for re-submission of documents shall not exceed
a total period of thirty days.}
(c) In case, the Registrar is of the opinion that the document is defective or
incomplete in any respect after giving such***(three opportunities), the e-form
INC-29 of the proposed company shall be rejected.
(13) The certificate of Incorporation shall be issued by the Registrar in Form
No. INC-11.”
*Inserted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f.
01-05-2015).
** Inserted by the Companies (Incorporation) Amendment Rules, 2016 (w.e.f.
22-1-2016).
*** Substituted by the Companies (Incorporation) Amendment Rules, 2016
(w.e.f. 22-1-2016).
1
[37. Conversion of unlimited liability company into a limited
liability company by shares or guarantee.
(1) Without prejudice to any other provision in the Companies Act,
for effecting the conversion of an unlimited liability company with
or without share capital into limited liability company by shares or
guarantee, such a company shall pass a special resolution in a general
meeting and thereafter, an application shall be filed in Form No. INC-
27 in the manner provided in sub-rules (2) and (3).
(2) The Company shall within seven days from the date of passing of
the special resolution in a general meeting, publish a notice, in Form
No. INC-27Aof such proposed conversion in two newspapers (one in
English and one in vernacular language) in the district in which the
registered office of the company is situate and shall also place the same
on the website of the Company, if any, indicating clearly the proposal
of conversion of the company into a company limited by shares or
guarantee, and seeking objections if any, from the persons interested
in its affairs to such conversion and cause a copy of such notice to be
dispatched to its creditors and debentures holders made as on the date
of notice of the general meeting by registered post or by speed post
or through courier with proof of dispatch. The notice shall also state
that the objections, if any, may be intimated to the Registrar and to
the company within twenty-one days of the date of publication of the
notice, duly indicating nature of interest and grounds of opposition.
(3) The Company shall within forty five days of passing of the special
resolution file an application as prescribed in sub rule (1) for its
conversion into a company limited by shares or guarantee along with
the fees as provided in the Companies (Registration offices and Fees)
Rules, 2014, by attaching the following documents, namely:-
a. notice of the general meeting along with explanatory statement;
b. copy of the resolution passed in the general meeting;

(w.e.f. 27-07-2016).
c. copy of the newspaper publication;

d. a copy of altered Memorandum of Association as well
as Articles of Association duly certified by any one of
the Directors duly authorised in this behalf or Company
Secretary of the Company, if any.
e. declaration signed by not less than two Directors of the
Company, including Managing Director, if any, that such
conversion shall not affect any debts, liabilities, obligations
or contracts incurred or entered into by or on behalf of the
Company before conversion (except to the extent that the
liability of the members shall become limited).
f. a complete list of creditors and debenture holders, to whom
individual notices have been sent under sub rule (2) setting
(i) the names and address of every creditor and debenture
holder of the Company;
(ii) the nature and respective amounts due to them in
respect of debts, claims or liabilities:
(iii) declaration by a Director of the Company that notice
as required under sub-rule (2) has been dispatched to
all the creditors and debenture holders with proof of
dispatch.
g. a declaration signed by not less than two Directors of the
Company, one of whom shall be a Managing Director
where there is one, to the effect that they have made a
full enquiry into the affairs of the Company and, having
done so, have formed an opinion that the list of creditors
is correct, and that the estimated value as given in the list
of the debts or claims payable on a contingency are proper
estimates of the values of such debts and claims and that
there are no other debts or claims against the company to
their knowledge.
h. a declaration of solvency signed by at least two Directors of

the Company, one of whom shall be the Managing Director,
where there is one to the effect that the Board of Directors
of the Company have made a full inquiry into the affairs
of the company, as a result of which they have formed an
opinion that it is capable of meeting its liabilities and will not
be rendered insolvent within a period of one year from the
date of declaration, through a resolution, passed in a duly
convened meeting or by circulation.
i. The company shall also obtain a certificate from the Auditors
that the company is solvent and that it is a going concern as
on the date of passing of resolution by the Board certifying
solvency as per clause (h) above.
j. No Objection Certificate from sectoral regulator, if applicable.
k. No Objection Certificate from all secured creditors, if any.
(4) Declaration signed by not less than two Directors including
Managing Director, where there is one, that no complaints are pending
against the company from the members or investors and no inquiry,
inspection or investigation is pending against the company or its
Directors or officers.
(5) The Registrar shall, after considering the application and objections
if any, received by the Registrar and after ensuring that the company
has satisfactorily addressed the objections received by the company,
suitably decide whether the approval for conversion should or should
not be granted.
(6) The certificate of incorporation consequent to conversion of
unlimited liability company to into a company limited by shares or
guarantee be in Form INC-11A issued to the company upon grant of
approval for conversion.
(7) Conditions to be complied with, subsequent to conversion. –
(1) Company shall not change its name for a period of one year
from the date of such conversion.
(2) The company shall not declare or distribute any dividend

without satisfying past debts, liabilities, obligations or
contracts incurred or entered into before conversion.
Explanation : For the purpose of this clause, past debts, liabilities,
obligations or contracts does not include secured debts due to banks
and financial institutions.
(8) An Unlimited Liability Company shall not be eligible for conversion
into a company limited by shares or guarantee in case-
(a) its net worth is negative, or
(b) an application is pending under the provisions of the
Companies Act1956 or the Companies Act, 2013 for striking
off its name, or
(c) the company is in default of any of its Annual Returns or
financial statements under the provisions of the Companies
Act, 1956 or the Companies Act, 2013, or
(d) a petition for winding up is pending against the company, or
(e) the company has not received amount due on calls in arrears,
from its directors, for a period of not less than six months
from the due date; or
(f) an inquiry, inspection or investigation is pending against the
company.
(9) The Registrar of Companies shall take a decision on the application
filed under these rules within thirty days from the date of receipt of
application complete in all respects.]
1
[38. Simplified Proforma for Incorporating Company Electronically
1. Substituted by the Companies (Incorporation) Fifth Amendment Rules, 2016

dated 29-12-2016 (w.e.f. 01-01-2017) for :
*[38. Simplified Proforma for Incorporating Company Electronically (SPICE)
(1) The simplified integrated process for incorporation of a company in
Form No. INC-32 alongwith e-Memorandum of Association in Form No.
INC-33 and e-Articles of Association in Form No. INC-34.
(2) The provisions of sub-rule (2) to sub-rule (13) of rule 36 shall apply
(SPICe).
(1) The application for incorporation of a company under this rule
shall be in Form No. INC-32 (SPICe) along with e-Memorandum
of Association (e-MOA) in Form No. INC-33 and e-Articles of
Association (e-AOA) in Form No. INC-34:
Provided that in case of incorporation of a company falling under
section 8 of the Act, Form No. INC-32 (SPICe) shall be filed along with
Form No. INC-13 (Memorandum of Association) and Form No. INC-
31 (Articles of Association) as attachments.
1
[Provided further that in case of incorporation of a company having
more than seven subscribers or where any of the subscriber to the
MOA/AOA is signing at a place outside India, MOA/AOA shall be filed
with INC-32 (SPICe) in the respective formats as specified in Table A
to J in Schedule I without filing Form INC-33 and INC-34]
(2) For the purposes of sub-rule (1), the application for allotment of
Director Identification Number upto three Directors, reservation
of a name, incorporation of company and appointment of Directors
of the proposed for One Person Company, private company, public
company and a company falling under section 8 of the Act, shall be
filed in FORM No. INC32 (SPICe), with the Registrar, within whose
jurisdiction the registered office of the company is proposed to be
situated along with the fee of rupees five hundred in addition to the
registration fee as specified in the Companies (Registration of Offices
and Fees) Rules, 2014:
Provided that where an applicant has applied for reservation of a name
mutatis mutandis for incorporation under this rule.

Provided that for the purposes of references to form numbers INC-29, INC-
30 and INC-31 in rule 36 with Form No. INC-32, Form no. INC-33 and
Form No. INC-34 shall be substituted respectively.]
* Inserted by the Companies (Incorporation) fourth Amendment Rules,
2016 dated 01-10-2016 (w.e.f. 02-10-2016).
1. Inserted by the Companies (Incorporation) Amendment Rules, 2018 dated
20.01.2018 (w.e.f. 26-01-2018).
under Rule 9 and which has been approved therein, he may fill the
reserved name as proposed name of the company.
1
[Provided further that in case of companies incorporated, with effect from
the 26th day of January, 2018, with a nominal capital of less than or equal
to rupees ten lakhs or in respect of companies not having a share capital
whose number of members as stated in the articles of association does not
exceed twenty, fee on INC-32 (SPICe) shall not be applicable.]
(3) For the purposes of filing SPICe Form, the particulars of maximum
of three directors shall be allowed to be filled in Form No. INC-32
(SPICe), and allotment of Director Identification Number of maximum
of three proposed directors shall be permitted in Form No. INC-32
(SPICe) in case of proposed directors not having approved Director
Identification Number.
(4) The promoter or applicant of the proposed company shall propose
only one name in Form No. INC-32 (SPICe).
(5) The promoter or applicant of the proposed company shall prepare
Memorandum of Association (e-MoA) in Form No. INC-33 and
Articles of Association (e-AoA) in Form No. INC-34, in accordance
with rule 13.
Provided that the subscribers and witness or witnesses shall affix their
digital signatures to the e-MoA and e-AoA.
(6) For incorporation using application as provided in this rule,
provisions of the sub-clause (i) of sub-section (5) of section 4 of the
Act, rule 9, and clause (a) of sub-rule (1) of rule 16 to the extent of
affixing recent photograph shall not apply.
(7) A company using the provisions of this rule may furnish verification
of its registered office under sub-section (2) of section 12 of the Act by
filing Form No. INC-32 (SPICe) in which case the company shall attach
along with such Form No. INC-32 (SPICe), any of the documents
referred to in sub-rule (2) of rule 25.
1. Inserted by the Companies (Incorporation) Amendment Rules, 2018 dated

20.01.2018 (w.e.f. 26-01-2018).
(8) Form No. INC-22 shall not be required to be filed in case the
proposed company maintains its registered office at the given
correspondence address.
(9) (a) Where the Registrar, on examining Form No. INC-32 (SPICe),
finds that it is necessary to call for further information or finds such
application or document to be defective or incomplete in any respect,
he shall give intimation to the applicant to remove the defects and re-
submit the e-form within fifteen days from the date of such intimation
given by the Registrar.
(b) After the resubmission of the document, if the registrar still finds
that the document is defective or incomplete in any respect, he shall
give one more opportunity of fifteen days to remove such defects or
deficiencies.
Provided that the total period for re-submission of documents shall not
exceed thirty days.
(10) The Certificate of Incorporation of company shall be issued by the
Registrar in Form No. INC-11.]
1
[39. Conversion of a company limited by guarantee into a company
limited by shares
(1) A company other than a company registered under section 25 of
the Companies Act, 1956 or section 8 of the Companies Act, 2013 may
convert itself into a company limited by shares.
(2) The company seeking conversion shall have a share capital
equivalent to the guarantee amount.
(3) A special resolution is passed by its members authorising such
a conversion omitting the guarantee clause in its Memorandum of
Association and altering the Articles of Association to provide for the
articles as are applicable for a company limited by shares.
(4) A copy of the special resolution shall be filed with the Registrar
1. Inserted by the Companies (Incorporation) fourth Amendment Rules, 2016

dated 01-10-2016 (w.e.f. 01-11-2016).
of Companies in Form no. MGT14 within thirty days from the date
of passing of the same along with fee as prescribed in the Companies
(Registration Offices and Fees) Rules, 2014.
(5) An application in Form No. INC-27 shall be filed with the Registrar
of Companies within thirty days from date of the passing of the
special resolution enclosing the altered Memorandum of Association
and altered Articles of Association and a list of members with the
number of shares held aggregating to a minimum paid up capital
which is equivalent to the amount of guarantee hither to provided by
its members.
(6) The Registrar of Companies shall take a decision on the application
filed under these rules within thirty days from the date of receipt of
application complete in all respects and upon approval of Form No.
INC-27, the company shall be issued with a certificate of incorporation
in Form No. INC-11B.]
1
[40.Application under sub-section (41) of section 2 for change
in financial year
(1) The application for approval of concerned Regional Director
under sub-section (41) of section 2 , shall be filed in e-Form No.RD-1
along with the fee as provided in the Companies (Registration Offices
and Fees) Rules, 2014 and shall be accompanied by the following
documents, namely:-
(a) grounds and reasons for the application;
(b) a copy of the minutes of the board meeting at which the
resolution authorising such change was passed, giving details
of the number of votes cast in favour and or against the
resolution;
(c) Power of Attorney or Memorandum of Appearance, as the
case may be;
1. . Inserted by the Companies (Incorporation) Fourth Amendment Rules, 2018

(w.e.f. 18-12-2018).
(d) details of any previous application made within last five years
for change in financial year and outcome thereof along with
copy of order.
(2) Where the Regional Director on examining the application, referred
to in sub-rule (1), finds it necessary to call for further information or
finds such application to be defective or incomplete in any respect,
he shall give intimation of such information called for or defects or
incompleteness, on the last intimated e-mail address of the person or
the company, which has filed such application, directing the person
or the company to furnish such information, or to rectify defects or
incompleteness and to re-submit such application within a period of
fifteen days, in e-Form No. RD-GNL-5.
Provided that a maximum of two re-submissions shall be allowed.
(3) (a) In case where such further information called for has not been
provided or the defects or incompleteness has not been rectified to the
satisfaction of the Regional Director within the period allowed under
sub-rule (2), the Regional Director shall reject the application with
reasons within thirty days from the date of filing application or within
thirty days from the date of last re-submission made as the case may be.
(b) In case where the application is found to be in order, Regional
Director shall allow and convey the order within thirty days from
the date of application or within thirty days from the date of last re-
submission, as the case may be.
(c) where no order for approval or re-submission or rejection has been
explicitly made by the Regional Director within the stipulated time of
thirty days, it shall be deemed that the application stands approved and
an approval order shall be automatically issued to the applicant.
(4) The order conveyed by the Regional Director shall be filed by the
company with the Registrar in Form No.INC-28 within thirty days
from the date of receipt of the order along with fee as provided in the
Companies (Registration Offices and Fees) Rules, 2014.]
1
[41. Application under section 14 for conversion of public company
into private company.
(1) An application under the second proviso to sub-section (1) of section
14 for the conversion of a public company into a private company,
shall, within sixty days from the date of passing of special resolution,
be filed with Regional Director in e-Form No. RD-1 along with the fee
as provided in the Companies (Registration Offices and Fees) Rules,
2014 and shall be accompanied by the following documents, namely:-
(a) a draft copy of Memorandum of Association and Articles
of Association , with proposed alterations including the
alterations pursuant to sub-section (68) of section 2;
(b) a copy of the minutes of the general meeting at which the
special resolution authorising such alteration was passed
together with details of votes cast in favour and or against
with names of dissenters;
(c) a copy of Board resolution or Power of Attorney dated not
earlier than thirty days, as the case may be, authorising to file
application for such conversion;
(d) declaration by a key managerial personnel that pursuant to
the provisions of sub-section (68) of section 2, the company
limits the number of its members to two hundred and also
stating that no deposit has been accepted by the company in
violation of the Act and rules made thereunder;
(e) declaration by a key managerial personnel that there has
been no non-compliance of sections 73 to 76A, 177, 178,
185,186 and 188 of the Act and rules made thereunder;
(f) declaration by a key managerial personnel that no resolution
is pending to be filed in terms of sub-section (3) of section
179 and also stating that the company was never listed in
any of the Regional Stock Exchanges and if was so listed, all
necessary procedures were complied with in full for complete
1. . Inserted by the Companies (Incorporation) Fourth Amendment Rules, 2018

(w.e.f. 18-12-2018).
delisting of the shares in accordance with the applicable rules

and regulations laid down by Securities Exchange Board of
India:
Provided that in case of such companies where no key managerial
personnel is required to be appointed, the aforesaid declarations shall
be filed any of the director.
(2) Every application filed under sub-rule (1) shall set out the following
particulars, namely:-
(a) the date of the Board meeting at which the proposal for
alteration of Memorandum and Articles was approved;
(b) the date of the general meeting at which the proposed
alteration was approved;
(c) reason for conversion into a private company, effect of such
conversion on shareholders, creditors, debenture holders,
deposit holders and other related parties;
(d) details of any conversion made within last five years and
outcome thereof along with copy of order;
(e) details as to whether the company is registered under section
8.
(3) There shall be attached to the application, a list of creditors,
the date of filing of application by not more than thirty days, setting
debts, claims or liabilities;
(c) in respect of any contingent or unascertained debt, the value,
so far as can be justly estimated of such debt:
Provided that the company shall file an affidavit, signed by the
Company Secretary of the company, if any, and not less than two
directors of the company, one of whom shall be managing director,

where there is one, to the effect that they have made a full enquiry into
affairs of the company and, having done so, have formed an opinion
that the list of creditors and debenture holders is correct, and that the
estimated value as given in the list of the debts or claims payable on
contingency or not ascertained are proper estimates of the values of
such debts and claims that there are no other debts, or claims against,
the company to their knowledge.
(4) A duly authenticated copy of the list of creditors and debenture
holders shall be kept at the registered office of the company and any
person desirous of inspecting the same may, at any time during the
ordinary hours of business, inspect, and take extracts from the same on
payment of ten rupees per page to the company.
(5) The company shall, atleast twenty-one days before the date of filing
of the application_
(a) advertise in the Form No.INC.25A, in a vernacular newspaper
in the principal vernacular language in the district and in
English language in an English newspaper, widely circulated
in the State in which the registered office of the company is
situated;
individual notice on each debenture holder and creditor of
the company; and
(c) serve, by registered post with acknowledgement due, a notice
to the Regional Director and Registrar and to the regulatory
body, if the company is regulated under any law for the time
being in force.
(6) (a) Where no objection has been received from any person in
response to the advertisement or notice referred to in sub-rule (5) and
the application is complete in all respects, the same may be put up for
orders without hearing and the concerned Regional Director shall pass
an order approving the application within thirty days from the date of
receipt of the application.
(b) Where the Regional Director on examining the application

finds it necessary to call for further information or finds
such application to be defective or incomplete in any respect,
he shall within thirty days from the date of receipt of the
application, give intimation of such information called for
or defects or incompleteness, on the last intimated e-mail
address of the person or the company, which has filed such
application, directing the person or the company to furnish
such information, to rectify defects or incompleteness and to
re-submit such application within a period of fifteen days in
e-Form No. RD-GNL-5:
Provided that maximum of two re-submissions shall be
allowed.
(c) In cases where such further information called for has not
been provided or the defects or incompleteness has not
been rectified to the satisfaction of the Regional Director
within the period allowed under sub- rule (6), the Regional
Director shall reject the application with reasons within
thirty days from the date of filing application or within
thirty days from the date of last re-submission made, as
the case may be.
(d) Where no order for approval or re-submission or rejection
has been explicitly made by the Regional Director within the
stipulated period of thirty days, it shall be deemed that the
application stands approved and an approval order shall be
automatically issued to the applicant.
(9) (i) Where an objection has been received or Regional Director on
examining the application has specific objection under the provisions
of Act, the same shall be recorded in writing and the Regional Director
shall hold a hearing or hearings within a period thirty days , as required
and direct the company to file an affidavit to record the consensus
reached at the hearing, upon executing which, the Regional Director
shall pass an order either approving or rejecting the application along
with reasons within thirty days from the date of hearing, failing which
it shall be deemed that application has been approved and approval

order shall be automatically issued to the applicant.
(ii) In case where no consensus is received for conversion within sixty
days of filing the application while hearing or otherwise, the Regional
Director shall reject the application within stipulated period of sixty
days:
Provided that the conversion shall not be allowed if any inquiry,
inspection or investigation has been initiated against the company or
any prosecution is pending against the company under the Act.
(10) On completion of such inquiry, inspection or investigation as a
consequence of which no prosecution is envisaged or no prosecution is
pending, conversion shall be allowed.
(11) The order conveyed by the Regional Director shall be filed by the
company with the Registrar in Form No.INC-28 within fifteen days
from the date of receipt of approval along with fee as provided in the
Companies (Registration Offices and Fees) Rules, 2014.]
69
CHAPTER III
COMPANIES (PROSPECTUS AND
ALLOTMENT OF SECURITIES) RULES, 2014
In exercise of the powers conferred under section 26, sub-section (1)
of section 27, section 28, section 29, sub-section (2) of section 31, sub-
sections (3) and (4) of section 39, sub-section (6) of section 40 and
section 42 read with section 469 of the Companies Act, 2013 and in
supersession of the Companies (Central Government’s) General Rules
and Forms, 1956 or any other rules prescribed under the Companies
Act, 1956 (1 of 1956) on matters covered under these rules except as
respects things done or omitted to be done before such supersession,
the Central Government hereby makes the following rules, namely : –

(1) These rules may be called the Companies (Prospectus and
Allotment of Securities) Rules, 2014.
2. Definitions.
(b) “Annexure” means the Annexure to these rules;
(c) “fees” means fees as specified in the Companies (Registration
Offices and Fees) Rules, 2014;
(d) “Form” or ‘e-Form” means a form set forth in Annexure to
these rules which shall be used for the matter to which it
relates;
(e) “Regional Director” means the person appointed by the
69
70 Companies (Prospectus and Allotment of Securities) Rules, 2014

(f) “section” means section of the Act;
defined in the Act or in the Companies (Specification of definitions
details) Rules, 2014, shall have the meanings respectively assigned to
them in the Act or in the said Rules.
1
3. [Omitted]
1. Omitted by the Companies (Prospectus and Allotment of Securities)

Amendment Rules, 2018 (w.e.f. 07-05-2018). Prior to omission, Rule 3 read as
under:
“3. Information to be stated in the prospectus.–
(1) The Prospectus to be issued shall contain–
(a) the names, addresses and contact details of the corporate office of
the issuer company, compliance officer of the issuer company, merchant
bankers and co-managers to the issue, registrar to the issue, bankers to the
issue, stock brokers to the issue, credit rating agency for the issue, arrangers,
if any, of the instrument, names and addresses of such other persons as may
be specified by the Securities and Exchange Board in its regulations;
(b) the dates relating to opening and closing of the issue;
(c) a declaration which shall be made by the Board or the Committee
authorised by the Board in the prospectus that the allotment letters shall
be issued or application money shall be refunded within fifteen days from
the closure of the issue or such lesser time as may be specified by Securities
and Exchange Board or else the application money shall be refunded to the
applicants forthwith, failing which interest shall be due to be paid to the
applicants at the rate of fifteen per cent. Per annum for the delayed period.
(d) a statement given by the Board that all monies received out of the issue
shall be transferred to a separate bank account maintained with a Scheduled
Bank;
(e) the details of all utilized and unutilised monies out of the monies
collected in the previous issue made by way of public offer shall be disclosed
and continued to be disclosed in the balance sheet till the time any part
of the proceeds of such previous issue remains unutilized indicating the
purpose for which such monies have been utilized, and the securities or
other forms of financial assets in which such unutilized monies have been
invested;
Companies (Prospectus and Allotment of Securities) Rules, 2014 71
(f) the names, addresses, telephone numbers, fax numbers and e-mail
addresses of the underwriters and the amount underwritten by them;
(g) the consent of trustees, solicitors or advocates, merchant bankers to the
issue, registrar to the issue, lenders and experts;
(2) The capital structure of the company shall be presented in the following
manner, namely:–
(i) (a) the authorised, issued, subscribed and paid up capital (number of
securities, description and aggregate nominal value);
(b) the size of the present issue;
(c) the paid up capital-
(A) after the issue;
(B) after conversion of convertible instruments (if applicable);
(d) the share premium account (before and after the issue);
(ii) the details of the existing share capital of the issuer company in a tabular
form, indicating therein with regard to each allotment, the date of allotment,
the number of shares allotted, the face value of the shares allotted, the price
and the form of consideration:
Provided that in the case of an initial public offer of an existing company,
the details regarding individual allotment shall be given from the date of
incorporation of the issuer and in the case of a listed issuer company, the
details shall be given for five years immediately preceding the date of filing
of the prospectus:
Provided that the issuer company shall also disclose the number and price
at which each of the allotments were made in the last two years preceding
the date of the prospectus separately indicating the allotments made for
considerations other than cash and the details of the consideration in each
case.
(3) The prospectus to be issued shall contain the following particulars,
namely:–
(a) the objects of the issue;
(b) the purpose for which there is a requirement of funds ;
(c) the funding plan (means of finance);
(d) the summary of the project appraisal report (if any);
(e) the schedule of implementation of the project;
(f) the interim use of funds, if any
(4) The prospectus to be issued shall contain the following details and
disclosures, namely:–
(i) the details of any litigation or legal action pending or taken by any
Ministry or Department of the Government or a statutory authority against
any promoter of the issuer company during the last five years immediately
preceding the year of the issue of the prospectus and any direction issued
by such Ministry or Department or statutory authority upon conclusion of
such litigation or legal action shall be disclosed;
(ii) the details of pending litigation involving the issuer, promoter, director,
subsidiaries, group companies or any other person, whose outcome could
have material adverse effect on the position of the issuer;
(iii) the details of pending proceedings initiated against the issuer company
for economic offences;
(iv) the details of default and non-payment of statutory dues etc.
(5) The details of directors including their appointment and remuneration,
and particulars of the nature and extent of their interests in the company
shall be disclosed in the following manner, namely:–
(i) the name, designation, Director Identification Number (DIN), age,
address, period of directorship, details of other directorships;
(ii) the remuneration payable or paid to the director by the issuer company,
its subsidiary and associate company; shareholding of the director in the
company including any stock options; shareholding in subsidiaries and
associate companies; appointment of any relatives to an office or place of
profit;
(iii) the full particulars of the nature and extent of interest, if any, of every
director:
(a) in the promotion of the issuer company; or
(b) in any immoveable property acquired by the issuer company in the two
years preceding the date of the Prospectus or any immoveable property
proposed to be acquired by it.
(iv) where the interest of such a director consists in being a member of
a firm or company, the nature and extent of his interest in the firm or
company, with a statement of all sums paid or agreed to be paid to him or to
the firm or company in cash or shares or otherwise by any person either to
induce him to become, or to help him qualify as a director, or otherwise for
services rendered by him or by the firm or company, in connection with the
promotion or formation of the issuer company shall be disclosed.
(6) The sources of promoters’ contribution, if any, shall be disclosed in the
following manner, namely:–
(i) the total shareholding of the promoters, clearly stating the name of the
promoter, nature of issue, date of allotment, number of shares, face value,
4. [Omitted]
1
issue price or consideration, source of funds contributed, date when the

shares were made fully paid up, percentage of the total pre and post issue
capital;
(ii) the proceeds out of the sale of shares of the company and shares of its
subsidiary companies previously held by each of the promoters;
(iii) the disclosure for sources of promoters contribution shall also include
the particulars of name, address and the amount so raised as loan, financial
assistance etc, if any, by promoters for making such contributions and in
case of own sources, complete details thereof.”
under:
“4. Reports to be set out in the Prospectus.-
The following reports shall be set out with the prospectus, namely:–
(1) The reports by the auditors with respect to profits and losses and assets
and liabilities.
Explanation.- For the purposes of this sub-rule, the report shall also include
the amounts or rates of dividends, if any, paid by the issuer company in
respect of each class of shares for each of the five financial years immediately
preceding the year of issue of the prospectus, giving particulars of each class
of shares on which such dividends have been paid and particulars of the
cases in which no dividends have been paid in respect of any class of shares
for any of those years:
Provided that if no accounts have been made up in respect of any part of
the period of five years ending on a date three months before the issue of
the prospectus, a statement of that fact accompanied by a statement of the
accounts of the issuer company in respect of that part of the said period up
to a date not earlier than six months of the date of issue of the prospectus
indicating the profit or loss for that period and assets and liabilities position
as at the end of that period together with a certificate from the auditors
that such accounts have been examined and found correct and the said
statement may indicate the nature of provision or adjustments made or
which are yet to be made.
(2) The reports relating to profits and losses for each of the five financial
years or where five financial years have not expired, for each of the financial
year immediately preceding the issue of the prospectus shall-
(a) if the company has no subsidiaries, deal with the profits or losses of
the company (distinguishing items of a non-recurring nature) for each of
5. [Omitted]
1
the five financial years immediately preceding the year of the issue of the
prospectus; and
(b) if the company has subsidiaries, deal separately with issuer company’s
profits or losses as provided in clause (a) and in addition, deal either -
(i) as a whole with the combined profits or losses of its subsidiaries, so far as
they concern members of the issuer company; or
(ii) individually with the profits or losses of each subsidiary, so far as they
concern members of the issuer company; or
(iii) as a whole with the profits or losses of the company, and, so far as they
concern members of the issuer company, with the combined profits or
losses of its subsidiaries.
(3) The reports made by the auditors in respect of the business of the
company shall be stated in the prospectus in the manner provided in sub-
rule (2).”
under:
“5. Other matters and reports to be stated in the prospectus.–
The prospectus shall include the following other matters and reports,
namely:–
(1) If the proceeds, or any part of the proceeds, of the issue of the shares or
debentures are or is to be applied directly or indirectly–
(a) in the purchase of any business; or
(b) in the purchase of an interest in any business and by reason of that
purchase, or anything to be done in consequence thereof, or in connection
therewith; the company shall become entitled to an interest in either the
capital or profits and losses or both, in such business exceeding fifty per
cent. thereof, a report made by a chartered accountant (who shall be named
in the prospectus) upon–
(i) the profits or losses of the business for each of the five financial years
immediately preceding the date of the issue of the prospectus ; and
(ii) the assets and liabilities of the business as on the last date to which the
accounts of the business were made up, being a date not more than one
hundred and twenty days before the date of the issue of the prospectus;
(c) in purchase or acquisition of any immoveable property including
indirect acquisition of immoveable property for which advances have been
paid to even third parties, disclosures regarding–
(i) the names, addresses, descriptions and occupations of the vendors;

(ii) the amount paid or payable in cash, to the vendor and, where there is
more than one vendor, or the company is a sub-purchaser, the amount so
paid or payable to each vendor, specifying separately the amount, if any,
paid or payable for goodwill;
(iii) the nature of the title or interest in such property proposed to be
acquired by the company; and
(iv) the particulars of every transaction relating to the property, completed
within the two preceding years, in which any vendor of the property or
any person who is, or was at the time of the transaction, a promoter, or
a director or proposed director of the company had any interest, direct
or indirect, specifying the date of the transaction and the name of such
promoter, director or proposed director and stating the amount payable by
or to such vendor, promoter, director or proposed director in respect of the
transaction. (2)(a) If -
(i) the proceeds, or any part of the proceeds, of the issue of the shares or
debentures are or are to be applied directly or indirectly and in any manner
resulting in the acquisition by the company of shares in any other body
corporate; and
(ii) by reason of that acquisition or anything to be done in consequence
thereof or in connection therewith, that body corporate shall become
a subsidiary of the company, a report shall be made by a Chartered
Accountant (who shall be named in the prospectus) upon -
(A) the profits or losses of the other body corporate for each of the five
financial years immediately preceding the issue of the prospectus; and
(B) the assets and liabilities of the other body corporate as on the last date to
which its accounts were made up.
(b) The said report shall -
(i) indicate how the profits or losses of the other body corporate dealt with
by the report would, in respect of the shares to be acquired, have concerned
members of the issuer company and what allowance would have been
required to be made, in relation to assets and liabilities so dealt with for the
holders of the balance shares, if the issuer company had at all material times
held the shares proposed to be acquired; and
(ii) where the other body corporate has subsidiaries, deal with the profits or
losses and the assets and liabilities of the body corporate and its subsidiaries
in the manner as provided in sub-clause (ii) of clause (a).
(3) The matters relating to terms and conditions of the term loans including
re-scheduling, prepayment, penalty, default.
(4) The aggregate number of securities of the issuer company and its
subsidiary companies purchased or sold by the promoter group and by the
directors of the company which is a promoter of the issuer company and
by the directors of the issuer company and their relatives within six months
immediately preceding the date of filing the prospectus with the Registrar
of Companies shall be disclosed.
(5) The matters relating to -
(A) Material contracts;
(B) Other material contracts;
(C) Time and place at which the contracts together with documents will be
available for inspection from the date of prospectus until the date of closing
of subscription list.
(6) The related party transactions entered during the last five financial years
immediately preceding the issue of prospectus as under -
(a) all transactions with related parties with respect to giving of loans
or, guarantees, providing securities in connection with loans made, or
investments made ;
(b) all other transactions which are material to the issuer company or
the related party, or any transactions that are unusual in their nature or
conditions, involving goods, services, or tangible or intangible assets, to
which the issuer company or any of its parent companies was a party:
Provided that the disclosures for related party transactions for the period
prior to notification of these rules shall be to the extent of disclosure
requirements as per the Companies Act, 1956 and the relevant accounting
standards prevailing at the said time.
(7) The summary of reservations or qualifications or adverse remarks of
auditors in the last five financial years immediately preceding the year of
issue of prospectus and of their impact on the financial statements and
financial position of the company and the corrective steps taken and
proposed to be taken by the company for each of the said reservations or
qualifications or adverse remarks.
(8) The details of any inquiry, inspections or investigations initiated or
conducted under the Companies Act or any previous companies law in the
last five years immediately preceding the year of issue of prospectus in the
case of company and all of its subsidiaries; and if there were any prosecutions
filed (whether pending or not); fines imposed or compounding of offences
done in the last five years immediately preceding the year of the prospectus
for the company and all of its subsidiaries.
(9) The details of acts of material frauds committed against the company in
6. [Omitted]
1
the last five years, if any, and if so, the action taken by the company.
(10) A fact sheet shall be included at the beginning of the prospectus which
shall contain -
(a) the type of offer document (“Red Herring Prospectus” or “Shelf
Prospectus” or “Prospectus”).
(b) the name of the issuer company, date and place of its incorporation,
its logo, address of its registered office, its telephone number, fax number,
details of contact person, website address, e-mail address;
(c) the names of the promoters of the issuer company;
(d) the nature, number, price and amount of securities offered and issue
size, as may be applicable;
(e) the aggregate amount proposed to be raised through all the stages of
offers of specified securities made through the shelf prospectus;
(f) the name, logo and address of the registrar to the issue, along with its
telephone number, fax number, website address and e-mail address;
(g) the issue schedule -
(i) date of opening of the issue;
(ii) date of closing of the issue;
(iii) date of earliest closing of the issue, if any.
(h) the credit rating, if applicable;
(i) all the grades obtained for the initial public offer;
(j) the name(s) of the recognised stock exchanges where the securities are
proposed to be listed;
(k) the details about eligible investors;
(l) coupon rate, coupon payment frequency, redemption date, redemption
amount and details of debenture trustee in case of debt securities.”
under:
“6. Period for which information to be provided in certain cases.–
For the matters specified in rules 3 to 5, which require a company to
provide certain particulars or information relating to the preceding five
financial years, it shall be sufficient compliance for a company which has
not completed five years, if such company provides such particulars or
information for all the previous years since its incorporation.”
7. Variation in terms of contracts referred to in the prospectus or

objects for which prospectus was issued.
(1) where the company has raised money from public through
prospectus and has any unutilized amount out of the money so raised,
it shall not vary the terms of contracts referred to in the prospectus or
objects for which the prospectus was issued except by passing a special
resolution through postal ballot and the notice of the proposed special
resolution shall contain the following particulars, namely:–
(a) the original purpose or object of the Issue;
(b) the total money raised;
(c) the money utilised for the objects of the company stated in
the prospectus;
(d) the extent of achievement of proposed objects(that is fifty
percent, sixty percent, etc);
(e) the unutilised amount out of the money so raised through
prospectus,
(f) the particulars of the proposed variation in the terms of
contracts referred to in the prospectus or objects for which
prospectus was issued;
(g) the reason and justification for seeking variation;
(h) the proposed time limit within which the proposed varied
objects would be achieved;
(i) the clause-wise details as specified in sub-rule (3) of rule 3 as
was required with respect to the originally proposed objects
of the issue;
(j) the risk factors pertaining to the new objects; and
(k) the other relevant information which is necessary for the
members to take an informed decision on the proposed
resolution.
(2) The advertisement of the notice for getting the resolution passed
for varying the terms of any contract referred to in the prospectus or

altering the objects for which the prospectus was issued, shall be in
Form PAS-1 and such advertisement shall be published simultaneously
with dispatch of Postal Ballot Notices to Shareholders.
(3) The notice shall also be placed on the web-site of the company, if
any.
8. Offer of Sale by Members.

(1) The provisions of Part I of Chapter III namely “Prospectus and
Allotment of Securities” and rules made there under shall be applicable
to an offer of sale referred to in section 28 except for the following,
namely:-
(a) the provisions relating to minimum subscription;
(b) the provisions for minimum application value;
(c) the provisions requiring any statement to be made by the
Board of directors in respect of the utilization of money; and
(d) any other provision or information which cannot be compiled
or gathered by the offer or, with detailed justifications for not
being able to comply with such provisions.
(2) The prospectus issued under section 28 shall disclose the name of
the person or persons or entity bearing the cost of making the offer of
sale along with reasons.
9. Dematerialisation of securities.
The promoters of every public company making a public offer of any
convertible securities may hold such securities only in dematerialised
form:
Provided that the entire holding of convertible securities of the
company by the promoters held in physical form up to the date of the
initial public offer shall be converted into dematerialised form before
such offer is made and thereafter such promoter shareholding shall be
held in dematerialized form only.
1
[9A. Issue of securities in dematerialised form by unlisted public
companies.
(1) Every unlisted public company shall –
(a) issue the securities only in dematerialised form; and
(b) facilitate dematerialisation of all its existing securities
in accordance with provisions of the Depositories Act, 1996 and
regulations made there under.
(2) Every unlisted public company making any offer for issue of any
securities or buyback of securities or issue of bonus shares or rights
offer shall ensure that before making such offer, entire holding of
securities of its promoters, directors, key managerial personnel has
been dematerialised in accordance with provisions of the Depositories
Act, 1996 and regulations made there under.
(3) Every holder of securities of an unlisted public company,-
(a) who intends to transfer such securities on or after 2nd
October, 2018, shall get such securities dematerialised before
the transfer; or
(b) who subscribes to any securities of an unlisted public
company (whether by way of private placement or bonus
shares or rights offer) on or after 2nd October, 2018
shall ensure that all his existing securities are held in
dematerialized form before such subscription.
(4) Every unlisted public company shall facilitate dematerialisation
of all its existing securities by making necessary application to a
depository as defined in clause (e) of sub-section (1) of section 2 of
the Depositories Act, 1996 and shall secure International Security
Identification Number (ISIN) for each type of security and shall inform
all its existing security holders about such facility.
(5) Every unlisted public company shall ensure that –
1. Inserted by the Companies (Prospectus and Allotment of Securities) Third

Amendment Rules, 2018 dated 10-09-2018 (w.e.f. 02-10-2018).
(a) it makes timely payment of fees (admission as well as annual)

to the depository and registrar to an issue and share transfer
agent in accordance with the agreement executed between
the parties;
(b) it maintains security deposit, at all times, of not less than two
years’ fees with the depository and registrar to an issue and
share transfer agent, in such form as may be agreed between
the parties; and
(c) it complies with the regulations or directions or guidelines
or circulars, if any, issued by the Securities and Exchange
Board or Depository from time to time with respect to
dematerialisation of shares of unlisted public companies and
matters incidental or related thereto.
(6) No unlisted public company which has defaulted in sub-rule (5)
shall make offer of any securities or buyback its securities or issue any
bonus or right shares till the payments to depositories or registrar to an
issue and share transfer agent are made.
(7) Except as provided in sub-rule (8), the provisions of the Depositories
Act, 1996, the Securities and Exchange Board of India (Depositories
and Participants) Regulations, 1996 and the Securities and Exchange
Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 shall apply mutatis mutandis to dematerialisation of
securities of unlisted public companies.
(8) The audit report provided under regulation 55A of the Securities
and Exchange Board of India (Depositories and Participants)
Regulations, 1996 shall be submitted by the unlisted public company
on a half-yearly basis to the Registrar under whose jurisdiction the
registered office of the company is situated.
(9) The grievances, if any, of security holders of unlisted public
companies under this rule shall be filed before the Investor Education
and Protection Fund Authority.
(10) The Investor Education and Protection Fund Authority shall
initiate any action against a depository or participant or registrar to
an issue and share transfer agent after prior consultation with the
Securities and Exchange Board of India.]
1
[(11) This rule shall not apply to an unlisted public company which is :
(a) a Nidhi;
(b) a Government company or
(c) a wholly owned subsidiary.]
10. Shelf prospectus and Information Memorandum.

The information memorandum shall be prepared in Form PAS2 and
filed with the Registrar along with the fee as provided in the Companies
(Registration Offices and Fees) Rules, 2014 within one month prior to
the issue of a second or subsequent offer of securities under the shelf
prospectus.
11. Refund of Application Money.

(1) If the stated minimum amount has not been subscribed and the
sum payable on application is not received within the period specified
therein, then the application money shall be repaid within a period
of fifteen days from the closure of the issue and if any such money is
not so repaid within such period, the directors of the company who
are officers in default shall jointly and severally be liable to repay that
money with interest at the rate of fifteen percent per annum.
(2) The application money to be refunded shall be credited only to the
bank account from which the subscription was remitted.
12. Return of Allotment.

(1) Whenever a company having a share capital makes any allotment of
its securities, the company shall, within thirty days thereafter, file with
the Registrar a return of allotment in Form PAS-3, along with the fee as
specified in the Companies (Registration Offices and Fees) Rules, 2014.
(2) There shall be attached to the Form PAS-3 a list of allottees stating
1. Inserted by the Companies (Prospectus and Allotment of Securities)

Amendment Rules, 2019 (w.e.f. 22-01-2019).
their names, address, occupation, if any, and number of securities

allotted to each of the allottees and the list shall be certified by the
signatory of the Form PAS-3 as being complete and correct as per the
records of the company.
(3) In the case of securities (not being bonus shares) allotted as fully or
partly paid up for consideration other than cash, there shall be attached
to the Form PAS-3 a copy of the contract, duly stamped, pursuant to
which the securities have been allotted together with any contract of
sale if relating to a property or an asset, or a contract for services or
other consideration.
(4) Where a contract referred to in sub-rule (3) is not reduced to
writing, the company shall furnish along with the Form PAS-3 complete
particulars of the contract stamped with the same stamp duty as would
have been payable if the contract had been reduced to writing and those
particulars shall be deemed to be an instrument within the meaning
of the Indian Stamp Act, 1899 (2 of 1899), and the Registrar may, as a
condition of filing the particulars, require that the stamp duty payable
thereon be adjudicated under section 31 of the Indian Stamp Act, 1899.
(5) A report of a registered valuer in respect of valuation of the
consideration shall also be attached along with the contract as
mentioned in sub-rule (3) and sub-rule (4).
(6) In the case of issue of bonus shares, a copy of the resolution passed
in the general meeting authorizing the issue of such shares shall be
attached to the Form PAS-3.
(7) In case the shares have been issued in pursuance of clause (c) of
sub-section (1) of section 62 by a company other than a listed company
whose equity shares or convertible preference shares are listed on any
recognised stock exchange, there shall be attached to Form PAS-3, the
valuation report of the registered valuer.
Explanation. – Pending notification of sub-section (1) of section 247
of the Act and finalisation of qualifications and experience of valuers,
valuation of stocks, shares, debentures, securities etc. shall be conducted
by an independent merchant banker who is registered with the Securities
and Exchange Board of India or an independent chartered accountant in
practice having a minimum experience of ten years.
13. Payment of commission.

A company may pay commission to any person in connection with the
subscription or procurement of subscription to its securities, whether
absolute or conditional, subject to the following conditions, namely: -
(a) the payment of such commission shall be authorized in the
company’s articles of association;
(b) the commission may be paid out of proceeds of the issue or
the profit of the company or both;
(c) the rate of commission paid or agreed to be paid shall not
exceed, in case of shares, five percent of the price at which the
shares are issued or a rate authorised by the articles, whichever
is less, and in case of debentures, shall not exceed two and a
half per cent of the price at which the debentures are issued, or
as specified in the company’s articles, whichever is less;
(d) the prospectus of the company shall disclose–
(i) the name of the underwriters;
(ii) the rate and amount of the commission payable to the
underwriter; and
(iii) the number of securities which is to be underwritten
or subscribed by the underwriter absolutely or
conditionally.
(e) there shall not be paid commission to any underwriter on
securities which are not offered to the public for subscription;
(f) a copy of the contract for the payment of commission is
delivered to the Registrar at the time of delivery of the
prospectus for registration.
1
[14. Private Placement.
(1) For the purposes of sub-section (2) and sub-section (3) of section
42, a company shall not make an offer or invitation to subscribe to
1. Substituted by the Companies (Prospectus and Allotment of Securities)

Second Amendment Rules, 2018 (w.e.f. 7-08-2018).
securities through private placement unless the proposal has been

previously approved by the shareholders of the company, by a special
resolution for each of the offers or invitations:
Provided that in the explanatory statement annexed to the notice for
shareholders’ approval, the following disclosure shall be made:-
(a) particulars of the offer including date of passing of Board
resolution;
(b) kinds of securities offered and the price at which security is
being offered:
(c) basis or justification for the price (including premium, if
any) at which the offer or invitation is being made;
(d) name and address of valuer who performed valuation;
(e) amount which the company intends to raise by way of such
securities;
(f) material terms of raising such securities, proposed time
schedule, purposes or objects of offer, contribution being
made by the promoters or directors either as part of the offer
or separately in furtherance of objects; principle terms of
assets charged as securities:
Provided further that this sub-rule shall not apply in case of offer or
invitation for non-convertible debentures, where the proposed amount
to be raised through such offer or invitation does not exceed the limit
as specified in clause (c) of subsection (1) of section 180 and in such
cases relevant Board resolution under clause (c) of sub section (3) of
section 179 would be adequate:
Provided also that in case of offer or invitation for non-convertible
debentures, where the proposed amount to be raised through such
offer or invitation exceeds the limit as specified in clause (c) of sub-
section (1) of section 180, it shall be sufficient if the company passes
a previous special resolution only once in a year for all the offers or
invitations for such debentures during the year.
(2) For the purpose of sub-section (2) of section 42, an offer or
invitation to subscribe securities under private placement shall not be
made to persons more than two hundred in the aggregate in a financial

year:
Provided that any offer or invitation made to qualified institutional
buyers, or to employees of the company under a scheme of employees
stock option as per provisions of clause (b) of sub-section (1) of section
62 shall not be considered while calculating the limit of two hundred
persons.
Explanation. – For the purposes of this sub-rule it is hereby clarified
that the restrictions aforesaid would be reckoned individually for each
kind of security that is equity share, preference share or debenture.
(3) A private placement offer cum application letter shall be in the
form of an application in Form PAS-4 serially numbered and addressed
specificallv to the person to whom the offer is made and shall be sent
to him, either in writing or in electronic mode, within thirty days of
recording the name of such person pursuant to sub-section (3) of
section 42:
Provided that no person other than the person so addressed in the
private placement offer cum application letter shall be allowed to apply
through such application form and any application not conforming to
this condition shall be treated as invalid.
(4) The company shall maintain a complete record of private placement
offers in Form PAS-5.
(5) The payment to be made for subscription to securities shall be made
from the bank account of the person subscribing to such securities and
the company shall keep the record of the bank account from where
such payment for subscription has been received:
Provided that monies payable on subscription to securities to be held
by joint holders shall be paid from the bank account of the person
whose name appears first in the application:
Provided further that the provisions of this sub-rule shall not apply in
case of issue of shares for consideration other than cash.
(6) A return of allotment of securities under section 42 shall be filed
with the Registrar within fifteen days of allotment in Form PAS-3
and with the fee as provided in the Companies (Registration offices

and Fees) Rules, 2014 along with a complete list of all the allottees
containing-
(i) the full name, address, Permanent Account Number and
E-mail ID of such security holder;
(ii) the class of security held;
(iii) the date of allotment of security ;
(iv) the number of securities held, nominal value and amount
paid on such securities; and particulars of consideration
received if the securities were issued for consideration other
than cash.
(7) The provisions of sub-rule (2) shall not be applicable to –
(a) non-banking financial companies which are registered with
the Reserve Bank of India under the Reserve Bank of India
Act,1934 (2 of 1934); and
(b) housing finance companies which are registered with the
National Housing Bank under the National Housing Bank
Act, 1987 (53 of 1987),
if they are complying with regulations made by the Reserve Bank of
India or the National Housing Bank in respect of offer or invitation to
be issued on private placement basis:
Provided that such companies shall comply with sub-rule (2) in case
the Reserve Bank of India or the National Housing Bank have not
specified similar regulations.
(8) A company shall issue private placement offer cum application
letter only after the relevant special resolution or Board resolution has
been filed in the Registry:
Provided that private companies shall file with the Registry copy of the
Board resolution or special resolution with respect to approval under
clause(c) of sub-section (3) of section 179.
88
COMPANIES (ISSUE OF GLOBAL

DEPOSITORY RECEIPTS) RULES, 2014
[GSR 252(E), dated 31st March 2014]
In exercise of the powers conferred by section 41 read with 469 of

the Companies Act, 2013, the Central Government hereby makes the
following rules, namely: –

(1) These Rules may be called Companies (Issue of Global Depository
Receipts) Rules, 2014.
2. Definitions.
(1) In these Rules, unless the context otherwise requires, –
(b) “Section” means section of the Act;
(c) “Scheme” means the Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism)
Scheme, 1993 or any modification or reenactment thereof;
(2) The Words and expressions used in these rules but not defined and
details) Rules, 2014 or in the Foreign Currency Convertible Bonds and
Ordinary Shares (Through Depository Receipt Mechanism) Scheme,
1993 shall have the meanings respectively assigned to them in the Act
or in the said rules or scheme.
3. Eligibility to issue depository receipts.

A company may issue depository receipts provided it is eligible to
do so in terms of the Scheme and relevant provisions of the Foreign
Exchange Management Rules and Regulations.
88
Companies (Issue of Global Depository Receipts) Rules, 2014 89
4. Conditions for issue of depository receipts.

(1) The Board of Directors of the company intending to issue depository
receipts shall pass a resolution authorising the company to do so.
(2) The company shall take prior approval of its shareholders by a
special resolution to be passed at a general meeting:
Provided that a special resolution passed under section 62 for issue
of shares underlying the depository receipts, shall be deemed to be a
special resolution for the purpose of section 41 as well.
(3) The depository receipts shall be issued by an overseas depository
bank appointed by the company and the underlying shares shall be
kept in the custody of a domestic custodian bank.
(4) The company shall ensure that all the applicable provisions of the
Scheme and the rules or regulations orguidelines issued by the Reserve
Bank of India are complied with before and after the issue of depository
receipts.
(5) The company shall appoint a merchant banker or a practicing
chartered accountant or a practicing cost accountant or a practicing
company secretary to oversee all the compliances relating to issue
of depository receipts and the compliance report taken from such
merchant banker or practicing chartered accountant or practicing cost
accountant or practicing company secretary, as the case may be, shall
be placed at the meeting of the Board of Directors of the company or
of the committee of the Board of directors authorized by the Board in
this regard to be held immediately after closure of all formalities of the
issue of depository receipts:
Provided that the committee of the Board of directors referred to above
shall have at least one independent director in case the company is
required to have independent directors.
5. Manner and form of depository receipts.

(1) The depository receipts can be issued by way of public offering or
private placement or in any other manner prevalent abroad and may be
listed or traded in an overseas listing or trading platform.
90 Companies (Issue of Global Depository Receipts) Rules, 2014
(2) The depository receipts may be issued against issue of new shares or
may be sponsored against shares held by shareholders of the company
in accordance with such conditions as the Central Government or
Reserve Bank of India may prescribe or specify from time to time.
(3) The underlying shares shall be allotted in the name of the overseas
depository bank and against such shares, the depository receipts shall
be issued by the overseas depository bank abroad.
6. Voting rights.
(1) A holder of depository receipts may become a member of the
company and shall be entitled to vote as such only on conversion of
the depository receipts into underlying shares after following the
procedure provided in the Scheme and the provisions of this Act.
(2) Until the conversion of depository receipts, the overseas depository
shall be entitled to vote on behalf of the holders of depository receipts in
accordance with the provisions of the agreement entered into between
the depository, holders of depository receipts and the company in this
regard.
7. Proceeds of issue.
The proceeds of issues of depository receipts shall either be remitted
to a bank account in India or deposited in an Indian bank operating
abroad or any foreign bank (which is a Scheduled Bank under the
Reserve Bank of India Act, 1934) having operations in India with
an agreement that the foreign bank having operations in India shall
take responsibility for furnishing all the information which may be
required and inthe event of a sponsored issue of Depository Receipts,
the proceeds of the sale shall be credited to the respective bank account
of the shareholders.
8. Depository receipts prior to commencement.

(1) A company which has issued depository receipts prior to
commencement of these rules shall comply with the requirements
under these rules within six months of such commencement.
Companies (Issue of Global Depository Receipts) Rules, 2014 91
(2) Any issue of depository receipts after six months of commencement

of these rules shall be in accordance with the requirements of these
rules.
9. Non-applicability of certain provisions of the Act.

(1) The provisions of the Act and any rules issued there under insofar
as they relate to public issue of shares or debentures shall not apply to
issue of depository receipts abroad.
(2) The offer document, by whatever name called and if prepared for
the issue of depository receipts, shall not be treated as a prospectus or
an offer document within the meaning of this Act and all the provisions
as applicable to a prospectus or an offer document shall not apply to a
depository receipts offer document.
(3) Notwithstanding anything contained under section 88 of the Act,
until the redemption of depository receipts, the name of the overseas
depository bank shall be entered in the Register of Members of the
company.
92
CHAPTER IV
COMPANIES (SHARE CAPITAL AND
DEBENTURES) RULES, 2014
[G.S.R 265(E), Dated 31st March, 2014]
In exercise of the powers conferred under clause (a) (ii) of section 43,
sub-clause (d) of subsection (1) of section 54, sub-section (2) of 55,
(1) of section 62, sub-section (2) of section 42, clause (f) of sub-section
(2) of section 63, sub-section (1) of section 64, clause (b) of sub-section
3 of section 67, sub-section (2) of section 68 sub-section (6) of section
68, sub-section (9) of section 68, sub-section (10) of section 68, sub-
section (3) of section 71, sub-section (6) of section 71, sub-section (13)
of section 71 and sub-sections (1) and (2) of section 72, read with sub-
section (1) and (2) of section 469 of the Companies Act, 2013 (18 of
2013) and in supersession of the Companies (Central Government’s)
General Rules and Forms, 1956 or any other relevant rules prescribed
under the Companies Act, 1956 (1 of 1956) on matters covered under
these rules, except as respects things done or omitted to be done
before such supersession, the Central Government hereby makes the
following rules, namely: -

(1) These rules may be called the Companies (Share Capital and
Debentures) Rules, 2014.
2. Definitions.
(1) In these rules, unless the context otherwise requires, –
92
Companies (Share Capital and Debentures) Rules, 2014 93
(c) ‘‘Fees’’ means the fees as specified in the Companies

(Registration offices and fees) Rules, 2014;
(d) ‘‘Form’’ or “e-form” means a form set forth in Annexure to
relates;
(f) ‘‘section’’ means the section of the Act.
3. 1[Application.
The provisions of these rules shall apply to –
(a) all unlisted public companies;
(b) all private companies; and
(c) listed companies,so far as they do not contradict or conflict
with any other regulation framed in this regard by the
Securities and Exchange Board of India.]
4. Equity shares with differential rights.

(1) No company limited by shares shall issue equity shares with
1. Substituted by the Companies (Share Capital and Debentures) Amendment

Rules, 2015 (w.e.f.18-03-2015). Prior to its substitution, rule 3 read as under :
“3. Application - The provisions of these rules shall apply to-
(a) all unlisted public companies;
(b) all private companies; and
(c) listed companies,
so far as they do not contradict or conflict with any other provision framed
in this regard by the Securities and Exchange Board of India.”
94 Companies (Share Capital and Debentures) Rules, 2014
differential rights as to dividend, voting or otherwise, unless it complies

with the following conditions, namely:-
(a) the articles of association of the company authorizes the
issue of shares with differential rights;
(b) the issue of shares is authorized by an ordinary resolution
passed at a general meeting of the shareholders:
Provided that where the equity shares of a company are listed
on a recognized stock exchange, the issue of such shares shall
be approved by the shareholders through postal ballot ;
(c) the shares with differential rights shall not exceed twenty-six
percent of the total post-issue paid up equity share capital
including equity shares with differential rights issued at any
point of time;
(d) the company having consistent track record of distributable
profits for the last three years;
(e) the company has not defaulted in filing financial statements
and annual returns for three financial years immediately
preceding the financial year in which it is decided to issue
such shares;
(f) the company has no subsisting default in the payment of
a declared dividend to its shareholders or repayment of its
matured deposits or redemption of its preference shares or
debentures that have become due for redemption or payment
of interest on such deposits or debentures or payment of
dividend;
(g) the company has not defaulted in payment of the dividend
on preference shares or repayment of any term loan from a
public financial institution or State level financial institution
or scheduled Bank that has become repayable or interest
payable thereon or dues with respect to statutory payments
relating to its employees to any authority or default in
crediting the amount in Investor Education and Protection
Fund to the Central Government;

1
[Provided that a company may issue equity shares with
differential rights upon expiry of five years from the end of
the financial year in which such default was made good].
(h) the company has not been penalized by Court or Tribunal
during the last three years of any offence under the Reserve
Bank of India Act, 1934, the Securities and Exchange Board
of India Act, 1992, the Securities Contracts Regulation
Act, 1956, the Foreign Exchange Management Act, 1999 or
any other special Act, under which such companies being
regulated by sectoral regulators.
(2) The explanatory statement to be annexed to the notice of the general
meeting in pursuance of section 102 or of a postal ballot in pursuance
of section 110 shall contain the following particulars, namely:-
(a) the total number of shares to be issued with differential
rights;
(b) the details of the differential rights ;
(c) the percentage of the shares with differential rights to the
total post issue paid up equity share capital including equity
shares with differential rights issued at any point of time;
(d) the reasons or justification for the issue;
(e) the price at which such shares are proposed to be issued
either at par or at premium;
(f) the basis on which the price has been arrived at;
(g) (i) in case of private placement or preferential issue-
(a) details of total number of shares proposed to be
allotted to promoters, directors and key managerial
personnel;
1. Inserted by the Companies (Share Capital and Debentures) Third

(b) details of total number of shares proposed to be

allotted to persons other than promoters, directors
and key managerial personnel and their relationship
if any with any promoter, director or key managerial
personnel;
(ii) in case of public issue - reservation, if any, for different
classes of applicants including promoters, directors or key
managerial personnel;
(h) the percentage of voting right which the equity share capital
with differential voting right shall carry to the total voting
right of the aggregate equity share capital;
(i) the scale or proportion in which the voting rights of such
class or type of shares shall vary;
(j) the change in control, if any, in the company that may occur
consequent to the issue of equity shares with differential
voting rights;
(k) the diluted Earning Per Share pursuant to the issue of
such shares, calculated in accordance with the applicable
accounting standards;
(l) the pre and post issue shareholding pattern along with voting
rights as per clause 35 of the listing agreement issued by
Security Exchange Board of India from time to time.
(3) The company shall not convert its existing equity share capital with
voting rights into equity share capital carrying differential voting rights
and vice-versa.
(4) The Board of Directors shall, inter alia, disclose in the Board’s
Report for the financial year in which the issue of equity shares with
differential rights was completed, the following details, namely:-
(a) the total number of shares allotted with differential rights;
(b) the details of the differential rights relating to voting rights
and dividends;
(c) the percentage of the shares with differential rights to the

total post issue equity share capital with differential rights
issued at any point of time and percentage of voting rights
which the equity share capital with differential voting right
shall carry to the total voting right of the aggregate equity
share capital;
(d) the price at which such shares have been issued;
(e) the particulars of promoters, directors or key managerial
personnel to whom such shares are issued;
(f) the change in control, if any, in the company consequent to
the issue of equity shares with differential voting rights;
(g) the diluted Earning Per Share pursuant to the issue of each
class of shares, calculated in accordance with the applicable
accounting standards;
(h) the pre and post issue shareholding pattern along with voting
rights in the format specified under sub-rule (2) of rule 4.
(5) The holders of the equity shares with differential rights shall enjoy
all other rights such as bonus shares, rights shares etc., which the
holders of equity shares are entitled to, subject to the differential rights
with which such shares have been issued.
(6) Where a company issues equity shares with differential rights, the
Register of Members maintained under section 88 shall contain all the
relevant particulars of the shares so issued along with details of the
shareholders.
1
[Explanation.- For the purposes of this rule it is hereby clarified that

Rules, 2014 (w.e.f. 18-06-2014). Prior to its substitution, Explanation read as
under :
“Explaination - For the purposes of this rule, it is hereby clarified that
differential rights attached to such shares issued by any company under
the provisions of Companies Act, 1956, shall continue till such rights are
converted with the differential rights in accordance with the provisions of
the Companies Act, 2013.”
equity shares with differential rights issued by any company under the
provisions of the Companies Act, 1956 (1 of 1956) and the rules made
there under, shall continue to be regulated under such provisions and
rules.]
5. Certificate of shares (where shares are not in demat form).

(1) Where a company issues any share capital, no certificate of any
share or shares held in the company shall be issued, except-
(a) in pursuance of a resolution passed by the Board; and
(b) on surrender to the company of the letter of allotment or
fractional coupons of requisite value, save in cases of issues
against letters of acceptance or of renunciation, or in cases of
issue of bonus shares:
Provided that if the letter of allotment is lost or destroyed, the
Board may impose such reasonable terms, if any, as to seek
supporting evidence and indemnity and the payment of out-
of-pocket expenses incurred by the company in investigating
evidence, as it may think fit.
(2) Every certificate of share or shares shall be in Form No. SH.1 or as
near thereto as possible and shall specify the name(s) of the person(s)
in whose favor the certificate is issued, the shares to which it relates and
the amount paid-up thereon.
(3) 1[Every certificate shall specify the shares to which it relates and

Rules, 2018 (w.e.f.10-04-2018). The original content of sub-rule (3) as published
in Companies (Share Capital and Debentures) Rules, 2014 (w.e.f.1-04-2014)
read as under :
“(3) Every share certificate shall be #[issued under the seal of the company],
which shall be affixed in the presence of, and signed by-
(a) two directors duly authorized by the Board of Directors of the company
for the purpose or the committee of the Board, if so authorized by the
Board; and
##{(b) the secretary or any person authorised by the Board for the purpose:
*[Provided that, in companies wherein a Company Secretary is appointed

under the provisions of the Act, he shall deemed to be authorised for the
purpose of this rule:]
**[Provided further that], if the composition of the Board permits of it,
at least one of the aforesaid two directors shall be a person other than the
managing or whole-time director:
**[Provided also that], in case of a One Person Company, every share
certificate shall be issued under the seal of the company, which shall be
affixed in the presence of and signed by one director or a person authorized
by the Board of Directors of the company for the purpose and the Company
Secretary, or any other person authorized by the Board for the purpose.
Explanation.- For the purposes of this sub-rule, a director shall be deemed
to have signed the share certificate if his signature is printed thereon
as a facsimile signature by means of any machine, equipment or other
mechanical means such as engraving in metal or lithography, or digitally
signed, but not by means of a rubber stamp, provided that the director shall
be personally responsible for permitting the affixation of his signature thus
and the safe custody of any machine, equipment or other material used for
the purpose.”}
*Omitted by the Companies (Share Capital and Debentures) Amendment
Rules, 2015 (w.e.f. 18-03-2015)
**Substituted by the Companies (Share Capital and Debentures)
Amendment Rules, 2015 (w.e.f. 18-03-2015) by the words “provided that”
and “provided further that” respectively.
#Substituted by the Companies (Share Capital and Debentures) Second
Amendment Rules, 2015 (w.e.f. 29-05-2015) by the words “issued under the
seal, if any, of the company”
##Substituted by the Companies (Share Capital and Debentures) Second
Amendment Rules, 2015 (w.e.f. 29-05-2015) by:
“(b) the secretary or any person authorised by the Board for the purpose:
Provided that in case a company does not have a common seal, the share
certificate shall be signed by two directors or by a director and the Company
Secretary, wherever the company has appointed a Company Secretary:
Provided further that, if the composition of the Board permits of it, at least
one of the aforesaid two directors shall be a person other than a managing
director or a whole-time director:
Provided also that, in case of a One Person Company, every share certificate
shall be issued under the seal, if any, of the company, which shall be affixed
in the presence of and signed by one director or a person authorised by
the amount paid-up thereon and shall be signed by two directors or

by a director and the company secretary, wherever the company has
appointed company secretary:
Provided that in case the company has a common seal it shall be affixed
in the presence of persons required to sign the certificate.
Explanation. – For the purposes of this sub-rule, it is hereby clarified
that,-
(a) in case of an One Person Company, it shall be sufficient if the
certificate is signed by a director and the company secretary
or any other person authorised by the Board for the purpose.
(b) a director shall be deemed to have signed the share certificate
if his signature is printed thereon as facsimile signature by
means of any machine, equipment or other mechanical
means such as engraving in metal or lithography or digitally
signed, but not by means of rubber stamp, provided that the
director shall be personally responsible for permitting the
affixation of his signature thus and the safe custody of any
machine, equipment or other material used for the purpose].
(4) The particulars of every share certificate issued in accordance with
sub-rule (1) shall be entered in the Register of Members maintained in
accordance with the provisions of section 88 along with the name(s)
of person(s) to whom it has been issued, indicating the date of issue.
6. Issue of renewed or duplicate share certificate.

(1) the certificate of any share or shares shall not be issued either
in exchange for those which are sub-divided or consolidated or
in replacement of those which are defaced, mutilated, torn or old,
decrepit, worn out, or where the pages on the reverse for recording
the Board of Directors of the company for the purpose and the Company
Secretary, or any other person authorised by the Board for the purpose, and
in case the One Person Company does not have a common seal, the share
certificate shall be signed by the persons in the presence of whom the seal is
required to be affixed in this proviso.”.
transfers have been duly utilised, unless the certificate in lieu of which
it is issued is surrendered to the company:
Provided that the company may charge such fee as the Board thinks
fit, not exceeding fifty rupees per certificate issued on splitting
or consolidation of share certificate(s) or in replacement of share
certificate(s) that are defaced, mutilated, torn or old, decrepit or worn
out:
(b) Where a certificate is issued in any of the circumstances specified in
this sub-rule, it shall be stated on the face of it and be recorded in the
Register maintained for the purpose, that it is “Issued in lieu of share
certificate No..... sub-divided/replaced/on consolidation” and also that
no fee shall be payable pursuant to scheme of arrangement sanctioned
by the High Court or Central Government:
(c) A company may replace all the existing certificates by new
certificates upon sub-division or consolidation of shares or merger or
demerger or any reconstitution without requiring old certificates to be
surrendered subject to compliance with clause (a) of sub-rule (1) rule
5, sub-rule (2) of rule 5 and sub-rule (3) of rule 5.
(2) (a) The duplicate share certificate shall be not issued in lieu of those
that are lost or destroyed, without the prior consent of the Board and
without payment of such fees as the Board thinks fit, not exceeding
rupees fifty per certificate and on such reasonable terms, such as
furnishing supporting evidence and indemnity and the payment of
out-of-pocket expenses incurred by the company in investigating the
evidence produced:
(b) Where a certificate is issued in any of the circumstances specified
in this sub-rule, it shall be stated prominently on the face of it and
be recorded in the Register maintained for the purpose, that it is
“duplicate issued in lieu of share certificate No......”. and the word
“duplicate” shall be stamped or printed prominently on the face of
the share certificate:
(c) In case unlisted companies, the duplicate share certificates shall be
issued within a period of three months and in case of listed companies
such certificate shall be issued 1[within forty-five days], from the date
of submission of complete documents with the company respectively.
(3)(a) The particulars of every share certificate issued in accordance
with sub-rules (1) and (2) shall be entered forthwith in a Register
of Renewed and Duplicate Share Certificates maintained in Form
No.SH.2 indicating against the name(s) of the person(s) to whom the
certificate is issued, the number and date of issue of the share certificate
in lieu of which the new certificate is issued, and the necessary changes
indicated in the Register of Members by suitable cross-references in the
“Remarks” column.
(b) The register shall be kept at the registered office of the company
or at such other place where the Register of Members is kept and it
shall be preserved permanently and shall be kept in the custody of the
company secretary of the company or any other person authorized by
the Board for the purpose.
(c) All entries made in the Register of Renewed and Duplicate Share
Certificates shall be authenticated by the company secretary or such
other person as may be authorised by the Board for the purposes of
sealing and signing the share certificate under the provisions of sub-
rule (3) of rule 5.
7. Maintenance of share certificate forms and related books and

documents.
(1) All blank forms to be used for issue of share certificates shall be
printed and the printing shall be done only on the authority of a
resolution of the Board and the blank form shall be consecutively
machine-numbered and the forms and the blocks, engravings,
facsimiles and hues relating to the printing of such forms shall be kept
in the custody of the secretary or such other person as the Board may
authorise for the purpose; and the company secretary or other person
aforesaid shall be responsible for rendering an account of these forms
to the Board.
1. Substituted for “within fifteen days” by the Companies (Share Capital and
Debentures) Amendment Rules, 2015 (w.e.f.18-03-2015)
(2) The following persons shall be responsible for the maintenance,

preservation and safe custody of all books and documents relating
to the issue of share certificates, including the blank forms of share
certificates referred to in sub-rule (1), namely:–
(a) the committee of the Board, if so authorized by the Board or
where the company has a company secretary, the company
secretary; or
(b) where the company has no company secretary, a Director
specifically authorised by the Board for such purpose.
(3) All books referred to in sub-rule (2) shall be preserved in good
order not less than thirty years and in case of disputed cases, shall be
preserved permanently, and all certificates surrendered to a company
shall immediately be defaced by stamping or printing the word
“cancelled” in bold letters and may be destroyed after the expiry of
three years from the date on which they are surrendered, under the
authority of a resolution of the Board and in the presence of a person
duly appointed by the Board in this behalf:
Provided that nothing in this sub-rule shall apply to cancellation of
the certificates of securities, under sub-section (2) of section 6 of
the Depositories Act, 1996 (22 of 1996), when such certificates are
cancelled in accordance with sub-regulation (5) of regulation 54 of the
Securities and Exchange Board of India (Depositories and Participants)
Regulations, 1996, made under section 30 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992) read with section 25 of
the Depositories Act, 1996 (22 of 1996).
8. Issue of sweat equity shares.

(1) A company other than a listed company, which is not required to
comply with the Securities and Exchange Board of India Regulations
on sweat equity, shall not issue sweat equity shares to its directors
or employees at a discount or for consideration other than cash, for
their providing knowhow or making available rights in the nature
of intellectual property rights or value additions, by whatever name
called, unless the issue is authorised by a special resolution passed by
the company in general meeting.
Explanation. – For the purposes of this rule –

(i) the expressions ‘‘Employee’’ means-
(a) a permanent employee of the company who has been
working in India or outside India 1[omitted]; or
(b) a director of the company, whether a whole time
director or not; or
(c) an employee or a director as defined in sub-clauses (a)
or (b) above of a subsidiary, in India or outside India,
or of a holding company of the company;
(ii) the expression ‘Value additions’ means actual or anticipated
economic benefits derived or to be derived by the company
from an expert or a professional for providing know-how or
making available rights in the nature of intellectual property
rights, by such person to whom sweat equity is being
issued for which the consideration is not paid or included
in the normal remuneration payable under the contract of
employment, in the case of an employee.
meeting pursuant to section 102 shall contain the following particulars,
namely:-
(a) the date of the Board meeting at which the proposal for issue
of sweat equity shares was approved;
(b) the reasons or justification for the issue;
(c) the class of shares under which sweat equity shares are
intended to be issued;
(d) the total number of shares to be issued as sweat equity;
(e) the class or classes of directors or employees to whom such
equity shares are to be issued;
1. The words “for at least last one year” omitted by the Companies (Share
Capital and Debentures) Second Amendment Rules, 2018 (w.e.f. 07-05-2018)
(f) the principal terms and conditions on which sweat equity

shares are to be issued, including basis of valuation ;
(g) the time period of association of such person with the
company;
(h) the names of the directors or employees to whom the sweat
equity shares will be issued and their relationship with the
promoter or/and Key Managerial Personnel;
(i) the price at which the sweat equity shares are proposed to be
issued;
(j) the consideration including consideration other than cash, if
any to be received for the sweat equity;
(k) the ceiling on managerial remuneration, if any, be breached
by issuance of such sweat equity and how it is proposed to be
dealt with;
(l) a statement to the effect that the company shall conform to
the applicable accounting standards; and
(m) diluted Earning Per Share pursuant to the issue of sweat
equity shares, calculated in accordance with the applicable
accounting standards.
(3) The special resolution authorising the issue of sweat equity shares
shall be valid for making the allotment within a period of not more
than twelve months from the date of passing of the special resolution.
(4) The company shall not issue sweat equity shares for more than
fifteen percent of the existing paid up equity share capital in a year or
shares of the issue value of rupees five crores, whichever is higher:
Provided that the issuance of sweat equity shares in the Company shall
not exceed twenty five percent, of the paid up equity capital of the
Company at any time.
1
[Provided further that a startup company, as defined in notification
number GSR 180(E) dated 17th February, 2016 issued by the
Department of Industrial Policy and Promotion, Ministry of Commerce
and Industry, Government of India, may issue sweat equity shares not
exceeding fifty per cent of its paid up capital upto five years from the
date of its incorporation or registration].
(5) The sweat equity shares issued to directors or employees shall be
locked in/non transferable for a period of three years from the date of
allotment and the fact that the share certificates are under lock-in and
the period of expiry of lock in shall be stamped in bold or mentioned
in any other prominent manner on the share certificate.
(6) The sweat equity shares to be issued shall be valued at a price
determined by a registered valuer as the fair price giving justification
for such valuation.
(7) The valuation of intellectual property rights or of know how or value
additions for which sweat equity shares are to be issued, shall be carried
out by a registered valuer, who shall provide a proper report addressed
to the Board of directors with justification for such valuation.
(8) A copy of gist along with critical elements of the valuation report
obtained under clause (6) and clause (7) shall be sent to the shareholders
with the notice of the general meeting.
(9) Where sweat equity shares are issued for a non-cash consideration
on the basis of a valuation report in respect thereof obtained from the
registered valuer, such non-cash consideration shall be treated in the
following manner in the books of account of the company-
(a) where the non-cash consideration takes the form of a
depreciable or amortizable asset, it shall be carried to
the balance sheet of the company in accordance with the
accounting standards; or
(b) where clause (a) is not applicable, it shall be expensed as
provided in the accounting standards.

(10) The amount of sweat equity shares issued shall be treated as part of
managerial remuneration for the purposes of sections 197 and 198 of
the Act, if the following conditions are fulfilled, namely.-
(a) the sweat equity shares are issued to any director or manager;
and
(b) they are issued for consideration other than cash, which
does not take the form of an asset which can be carried to
the balance sheet of the company in accordance with the
applicable accounting standards.
(11) In respect of sweat equity shares issued during an accounting
period, the accounting value of sweat equity shares shall be treated as a
form of compensation to the employee or the director in the financial
statements of the company, if the sweat equity shares are not issued
pursuant to acquisition of an asset.
(12) If the shares are issued pursuant to acquisition of an asset, the value
of the asset, as determined by the valuation report, shall be carried in
the balance sheet as per the Accounting Standards and such amount
of the accounting value of the sweat equity shares that is in excess of
the value of the asset acquired, as per the valuation report, shall be
treated as a form of compensation to the employee or the director in
the financial statements of the company.
Explanation. – For the purposes of this sub-rule, it is hereby clarified
that the Accounting value shall be the fair value of the sweat equity
shares as determined by a registered valuer under sub-rule (6).
(13) The Board of Directors shall, inter alia, disclose in the Directors’
Report for the year in which such shares are issued, the following
details of issue of sweat equity shares namely:-
(a) the class of director or employee to whom sweat equity
shares were issued;
(b) the class of shares issued as Sweat Equity Shares;
(c) the number of sweat equity shares issued to the directors,
key managerial personnel or other employees showing
separately the number of such shares issued to them, if any,

for consideration other than cash and the individual names
of allottees holding one percent or more of the issued share
capital;
(d) the reasons or justification for the issue;
(e) the principal terms and conditions for issue of sweat equity
shares, including pricing formula;
(f) the total number of shares arising as a result of issue of sweat
equity shares;
(g) the percentage of the sweat equity shares of the total post
issued and paid up share capital;
(h) the consideration (including consideration other than cash)
received or benefit accrued to the company from the issue of
sweat equity shares; (i) the diluted Earnings Per Share (EPS)
pursuant to issuance of sweat equity shares.
(14)(a) The company shall maintain a Register of Sweat Equity Shares
in Form No. SH.3 and shall forthwith enter therein the particulars of
Sweat Equity Shares issued under section 54.
(b) The Register of Sweat Equity Shares shall be maintained at the
registered office of the company or such other place as the Board may
decide.
(c) The entries in the register shall be authenticated by the Company
Secretary of the company or by any other person authorized by the
Board for the purpose.
9. Issue and redemption of preference shares.

(1) A company having a share capital may, if so authorised by its articles,
issue preference shares subject to the following conditions, namely:-
(a) the issue of such shares has been authorized by passing a
special resolution in the general meeting of the company
(b) the company, at the time of such issue of preference shares, has
no subsisting default in the redemption of preference shares

issued either before or after the commencement of this Act or
in payment of dividend due on any preference shares.
(2) A company issuing preference shares shall set out in the resolution,
particulars in respect of the following matters relating to such shares,
namely:-
(a) the priority with respect to payment of dividend or repayment
of capital vis-a-vis equity shares;
(b) the participation in surplus fund;
(c) the participation in surplus assets and profits, on winding-up
which may remain after the entire capital has been repaid;
(d) the payment of dividend on cumulative or non-cumulative
basis.
(e) the conversion of preference shares into equity shares.
(f) the voting rights;
(g) the redemption of preference shares.
meeting pursuant to section 102 shall, inter-alia, provide the complete
material facts concerned with and relevant to the issue of such shares,
including-
(a) the size of the issue and number of preference shares to be
issued and nominal value of each share;
(b) the nature of such shares i.e. cumulative or non - cumulative,
participating or non - participating, convertible or non -
convertible
(c) the objectives of the issue;
(d) the manner of issue of shares;
(e) the price at which such shares are proposed to be issued;
(f) the basis on which the price has been arrived at;
(g) the terms of issue, including terms and rate of dividend on

each share, etc.;
(h) the terms of redemption, including the tenure of redemption,
redemption of shares at premium and if the preference shares
are convertible, the terms of conversion;
(i) the manner and modes of redemption;
(j) the current shareholding pattern of the company;
(k) the expected dilution in equity share capital upon conversion
of preference shares.
(4) Where a company issues preference shares, the Register of Members
maintained under section 88 shall contain the particulars in respect of
such preference share holder(s).
(5) A company intending to list its preference shares on a recognized
stock exchange shall issue such shares in accordance with the
regulations made by the Securities and Exchange Board of India in this
behalf.
(6) A company may redeem its preference shares only on the terms on
which they were issued or as varied after due approval of preference
shareholders under section 48 of the Act and the preference shares may
be redeemed:-
(a) at a fixed time or on the happening of a particular event;
(b) any time at the company’s option; or
(c) any time at the shareholder’s option.
10. Issue and redemption of preference shares by company in

infrastructural projects.
A company engaged in the setting up and dealing with of infrastructural
projects may issue preference shares for a period exceeding twenty
years but not exceeding thirty years, subject to the redemption of a
minimum ten percent of such preference shares per year from the
twenty first year onwards or earlier, on proportionate basis, at the
option of the preference shareholders.
11. Instrument of transfer.

(1) An instrument of transfer of securities held in physical form shall
be in Form No.SH.4 and every instrument of transfer with the date
of its execution specified thereon shall be delivered to the company
within sixty days from the date of such execution.
(2) In the case of a company not having share capital, provisions of
sub-rule (1) shall apply as if the references therein to securities were
references instead to the interest of the member in the company.
(3) A company shall not register a transfer of partly paid shares, unless
the company has given a notice in Form No. SH.5 to the transferee and
the transferee has given no objection to the transfer within two weeks
from the date of receipt of notice.
12. Issue of employee stock options.

A company, other than a listed company, which is not required to
comply with Securities and Exchange Board of India Employee Stock
Option Scheme Guidelines shall not offer shares to its employees
under a scheme of employees’ stock option (hereinafter referred to
as “Employees Stock Option Scheme”), unless it complies with the
following requirements, namely:-
(1) the issue of Employees Stock Option Scheme has been approved by
the shareholders of the company by passing a special resolution.
Explanation : For the purposes of clause (b) of sub-section (1) of
section 62 and this rule ‘‘Employee’’ means-
(a) a permanent employee of the company who has been
working in India or outside India; or
(b) a director of the company, whether a whole time director or
not but excluding an independent director; or
(c) an employee as defined in clauses (a) or (b) of a subsidiary,
in India or outside India, or of a holding company of the
company 1[omitted] but does not include –

(i) an employee who is a promoter or a person belonging
to the promoter group; or
(ii) a director who either himself or through his relative
or through any body corporate, directly or indirectly,
holds more than ten percent of the outstanding equity
shares of the company.

2
[Provided that in case of a startup company, as defined in
notification number GSR 180(E) dated 17th February, 2016
issued by the Department of Industrial Policy and Promotion,
Ministry of Commerce and Industry Government of India,
Government of India, the conditions mentioned in sub-
clause (i) and (ii) shall not apply upto five years from the date
of its incorporation or registration].
(2) The company shall make the following disclosures in the
explanatory statement annexed to the notice for passing of the
resolution –
(a) the total number of stock options to be granted;
(b) identification of classes of employees entitled to participate
in the Employees Stock Option Scheme;
(c) the appraisal process for determining the eligibility of
employees to the Employees Stock Option Scheme;
(d) the requirements of vesting and period of vesting;
(e) the maximum period within which the options shall be
vested;
(f) the exercise price or the formula for arriving at the same;
1. Words “or of an associate company” omitted by the Companies (Share

Capital and Debentures) Amendment Rules, 2015 (w.e.f.18-03-2015)
Amendment Rules, 2016 (w.e.f. 19-07-2016)
(g) the exercise period and process of exercise;

(h) the Lock-in period, if any ;
(i) the maximum number of options to be granted per employee
and in aggregate;
(j) the method which the company shall use to value its options;
(k) the conditions under which option vested in employees
may lapse e.g. in case of termination of employment for
misconduct;
(l) the specified time period within which the employee shall
exercise the vested options in the event of a proposed
termination of employment or resignation of employee; and
(m) a statement to the effect that the company shall comply with
the applicable accounting standards .
(3) The companies granting option to its employees pursuant to
Employees Stock Option Scheme will have the freedom to determine
the exercise price in conformity with the applicable accounting policies,
if any.
(4) The approval of shareholders by way of separate resolution shall be
obtained by the company in case of-
(a) grant of option to employees of subsidiary or holding
company; or
(b) grant of option to identified employees, during any one
year, equal to or exceeding one percent of the issued capital
(excluding outstanding warrants and conversions) of the
company at the time of grant of option.
(5)(a) The company may by special resolution, vary the terms of
Employees Stock Option Scheme not yet exercised by the employees
provided such variation is not prejudicial to the interests of the option
holders.
(b) The notice for passing special resolution for variation of terms of
Employees Stock Option Scheme shall disclose full of the variation, the
rationale therefor, and the details of the employees who are beneficiaries
of such variation.
(6)(a) There shall be a minimum period of one year between the grant
of options and vesting of option:
Provided that in a case where options are granted by a company under
its Employees Stock Option Scheme in lieu of options held by the
same person under an Employees Stock Option Scheme in another
company, which has merged or amalgamated with the first mentioned
company, the period during which the options granted by the merging
or amalgamating company were held by him shall be adjusted against
the minimum vesting period required under this clause;
(b) The company shall have the freedom to specify the lock-in period
for the shares issued pursuant to exercise of option.
(c) The Employees shall not have right to receive any dividend or to
vote or in any manner enjoy the benefits of a shareholder in respect
of option granted to them, till shares are issued on exercise of option.
(7) The amount, if any, payable by the employees, at the time of grant
of option –
(a) may be forfeited by the company if the option is not exercised
by the employees within the exercise period; or (b) the amount may
be refunded to the employees if the options are not vested due to
non-fulfillment of conditions relating to vesting of option as per the
Employees Stock Option Scheme.
(8)(a) The option granted to employees shall not be transferable to any
other person.
(b) The option granted to the employees shall not be pledged,
hypothecated, mortgaged or otherwise encumbered or alienated in any
other manner.
(c) Subject to clause (d), no person other than the employees to whom
the option is granted shall be entitled to exercise the option.
(d) In the event of the death of employee while in employment, all
the options granted to him till such date shall vest in the legal heirs or
nominees of the deceased employee.
(e) In case the employee suffers a permanent incapacity while in
employment, all the options granted to him as on the date of permanent
incapacitation, shall vest in him on that day.
(f) In the event of resignation or termination of employment, all
options not vested in the employee as on that day shall expire. However,
the employee can exercise the options granted to him which are vested
within the period specified in this behalf, subject to the terms and
conditions under the scheme granting such options as approved by the
Board.
(9) The Board of directors, shall, inter alia, disclose in the Directors’
Report for the year, the following details of the Employees Stock
Option Scheme:
(a) options granted;
(b) options vested;
(c) options exercised;
(d) the total number of shares arising as a result of exercise of
option;
(e) options lapsed;
(f) the exercise price;
(g) variation of terms of options;
(h) money realized by exercise of options;
(i) total number of options in force;
(j) employee wise details of options granted to;-
(i) key managerial personnel;
(ii) any other employee who receives a grant of options in
any one year of option amounting to five percent or
more of options granted during that year.
(iii) identified employees who were granted option, during

any one year, equal to or exceeding one percent of the
issued capital (excluding outstanding warrants and
conversions) of the company at the time of grant;
(10)(a) The company shall maintain a Register of Employee Stock Options
in Form No. SH.6 and shall forthwith enter therein the particulars of
option granted under clause (b) of sub-section (1) of section 62.
(b) The Register of Employee Stock Options shall be maintained at the
registered office of the company or such other place as the Board may
decide.
(c) The entries in the register shall be authenticated by the company
secretary of the company or by any other person authorized by the
(11) Where the equity shares of the company are listed on a recognized
stock exchange, the Employees Stock Option Scheme shall be issued, in
accordance with the regulations made by the Securities and Exchange
Board of India in this behalf.
13. Issue of shares on preferential basis.

(1) For the purposes of clause (c) of sub-section (1) of section 62,
If authorized by a special resolution passed in a general meeting,
shares may be issued by any company in any manner whatsoever
including by way of a preferential offer, to any persons whether
or not those persons include the persons referred to in clause (a)
or clause (b) of sub-section (1) of section 62 and such issue on
preferential basis should also comply with conditions laid down in
section 42 of the Act:
1
[Provided that in case of any preferential offer made by the company
to one or more existing members only, the provisions of sub-rule(1)
and proviso to sub-rule (3) of rule 14 of the Companies (Prospectus &
Allotment of Securities) Rules, 2014 shall not apply].
1. Inserted by the Companies (Share Capital and Debentures) Amendment

Rules, 2015 (w.e.f. 18-03-2015)
1
[Provided further that] the price of shares to be issued on a preferential
basis by a listed company shall not be required to be determined by the
valuation report of a registered valuer.
Explanation. – For the purposes of this rule, (i) the expression ‘Preferential
Offer’ means an issue of shares or other securities, by a company to any
select person or group of persons on a preferential basis and does not
include shares or other securities offered through a public issue, rights
issue, employee stock option scheme, employee stock purchase scheme
or an issue of sweat equity shares or bonus shares or depository receipts
issued in a country outside India or foreign securities;
(ii) the expression, “shares or other securities” means equity shares,
fully convertible debentures, partly convertible debentures or any other
securities, which would be convertible into or exchanged with equity
shares at a later date.
(2) Where the preferential offer of shares or other securities is made by
a company whose share or other securities are listed on a recognized
stock exchange, such preferential offer shall be made in accordance with
the provisions of the Act and regulations made by the Securities and
Exchange Board, and if they are not listed, the preferential offer shall
be made in accordance with the provisions of the Act and rules made
hereunder and subject to compliance with the following requirements,
namely:-
(a) the issue is authorized by its articles of association;
(b) the issue has been authorized by a special resolution of the
members;
(c) 2
[omitted]

Rules, 2015 (w.e.f. 18-03-2015), for: “provided that”.
2. Omitted by the Companies (Share Capital and Debentures) Third
Amendment Rules, 2016 (w.e.f. 19-07-2016). Prior to its omission, clause (c)
read as under :
“(c) the securities allotted by way of preferential offer shall be made fully
paid up at the time of their allotment.”
(d) The company shall make the following disclosures in the

explanatory statement to be annexed to the notice of the
general meeting pursuant to section 102 of the Act:
(i) the objects of the issue;
(ii) the total number of shares or other securities to be
issued;
(iii) the price or price band at/within which the allotment
is proposed;
(iv) basis on which the price has been arrived at along
with report of the registered valuer;
(v) relevant date with reference to which the price has
been arrived at;
(vi) the class or classes of persons to whom the allotment
is proposed to be made;
(vii) intention of promoters, directors or key managerial
personnel to subscribe to the offer;
(viii) the proposed time within which the allotment shall be
completed;
(ix) the names of the proposed allottees and the percentage
of post preferential offer capital that may be held by
them;
(x) the change in control, if any, in the company that
would occur consequent to the preferential offer;
(xi) the number of persons to whom allotment on
preferential basis have already been made during the
year, in terms of number of securities as well as price;
(xii) the justification for the allotment proposed to be
made for consideration other than cash together with
valuation report of the registered valuer.
(xiii) The pre issue and post issue shareholding pattern of

the company in the following format –
S.No. Category Pre Issue Post Issue

No. of % of No. of % of
Shares share Shares share
held holding held holding
A Promoters’ holding :
1 Indian
Individual
Bodies Corporate
Sub Total
2 Foreign Promoters
Sub Total (A)
B Non-Promoters’
holding :
1 Institutional
Investors
2 Non-Institution :
Private Corporate
Bodies
Directors and
Relatives
Indian Public
Others (Including
NRIs)
Sub Total(B)
(e) the allotment of securities on a preferential basis made
pursuant to the special resolution passed pursuant to sub-
rule (2)(b) shall be completed within a period of twelve
months from the date of passing of the special resolution.
(f) if the allotment of securities is not completed within twelve

months from the date of passing of the special resolution,
another special resolution shall be passed for the company to
complete such allotment thereafter.
(g) the price of the shares or other securities to be issued on a
preferential basis, either for cash or for consideration other
than cash, shall be determined on the basis of valuation
report of a registered valuer;
1
[(h) where convertible securities are offered on a preferential basis
with an option to apply for and get equity shares allotted, the
price of the resultant shares pursuant to conversion shall be
determined-
(i) either upfront at the time when the offer of convertible
securities is made, on the basis of valuation report of
the registered valuer given at the stage of such offer, or
(ii) at the time, which shall not be earlier than thirty days
to the date when the holder of convertible security
becomes entitled to apply for shares, on the basis of
valuation report of the registered valuer given not
earlier than sixty days of the date when the holder
of convertible security becomes entitled to apply for
shares:
Provided that the company shall take a decision on sub-
clauses (i) or (ii) at the time of offer of convertible security
itself and make such disclosure under sub-clause (v) of clause
(d) of sub-rule (2) of this rule];
1. Substituted by the Companies (Share Capital and Debentures) Third

Amendment Rules, 2016 (w.e.f. 19-07-2016). Prior to its substitution, clause
(h) read as under :
“(h) where convertible securities are offered on a preferential basis with an
option to apply for and get equity shares allotted, the price of the resultant
shares shall be determined beforehand on the basis of a valuation report of
a registered valuer and also complied with the provisions of section 62 of
the Act.”
(i) where shares or other securities are to be allotted for

consideration other than cash, the valuation of such
consideration shall be done by a registered valuer who shall
submit a valuation report to the company giving justification
for the valuation;
(j) where the preferential offer of shares is made for a non-cash
consideration, such non-cash consideration shall be treated in
the following manner in the books of account of the company-
(i) where the non-cash consideration takes the form of a
depreciable or amortizable asset, it shall be carried to
the balance sheet of the company in accordance with
the accounting standards; or
(ii) where clause (i) is not applicable, it shall be expensed
as provided in the accounting standards.
1
[Explanation – For the purposes of these rules, it is hereby clarified that,
till a registered valuer is appointed in accordance with the provisions
of the Act, the valuation report shall be made by an independent
merchant banker who is registered with the Securities and Exchange
Board of India or an independent Chartered Accountant in practice
having a minimum experience of ten years]
2
[(3) The price of shares or other securities to be issued on preferential
basis shall not be less than the price determined on the basis of
valuation report of a registered valuer.]
14. Issue of Bonus Shares.

The company which has once announced the decision of its Board
recommending a bonus issue, shall not subsequently withdraw the
same.

Rules, 2014 (w.e.f. 18-06-2014).
Rules, 2014 (w.e.f. 18-06-2014).
15. Notice to Registrar for alteration of share capital.

Where a company alters its share capital in any manner specified in
sub-section (1) of section 61, or an order is passed by the Government
increasing the authorized capital of the company in pursuance of
sub-section (4) read with sub-section (6) of section 62 or a company
redeems any redeemable preference shares 1[or a company not having
share capital increases number of its members], the notice of such
alteration, increase or redemption shall be filed by the company with
the Registrar in Form No. SH. 7 along with the fee.
16. Provision of money by company for purchase of its own shares

by employees or by trustees for the benefit of employees.
(1) The company shall not make a provision of money for the purchase
of, or subscription for, shares in the company or its holding company, if
the purchase of, or the subscription for, the shares by trustees is for the
shares to be held by or for the benefit of the employees of the company,
unless it complies with the following conditions, namely:-
(a) the scheme of provision of money for purchase of or
subscription for the shares as aforesaid is approved by the
members by passing special resolution in a general meeting;
(b) such purchase of shares shall be made only through a
recognized stock exchange in case the shares of the company
are listed and not by way of private offers or arrangements;
(c) where shares of a company are not listed on a recognized
stock exchange, the valuation at which shares are to be
purchased shall be made by a registered valuer;
(d) the value of shares to be purchased or subscribed in the
aggregate together with the money provided by the company
shall not exceed five per cent. of the aggregate of paid up
capital and free reserves of the company;


meeting to be convened pursuant to section 102 shall, in addition to the
particulars mentioned in sub-rule (1) of rule 18, contain the following
(a) the class of employees for whose benefit the scheme is being
implemented and money is being provided for purchase of
or subscription to shares;
(b) the particulars of the trustee or employees in whose favor
such shares are to be registered;
(c) the particulars of trust and name, address, occupation
and nationality of trustees and their relationship with the
promoters, directors or key managerial personnel, if any;
(d) the any interest of key managerial personnel, directors or
promoters in such scheme or trust and effect thereof;
(e) the detailed particulars of benefits which will accrue to the
employees from the implementation of the scheme;
(f) the details about who would exercise and how the voting
rights in respect of the shares to be purchased or subscribed
under the scheme would be exercised;
(3) A person shall not be appointed as a trustee to hold such shares,
if he-
(a) is a director, key managerial personnel or promoter of the
company or its holding, subsidiary or associate company or
any relative of such director, key managerial personnel or
promoter; or
(b) beneficially holds ten percent or more of the paid-up share
capital of the company.
(4) Where the voting rights are not exercised directly by the employees
in respect of shares to which the scheme relates, the Board of Directors
shall, inter alia, disclose in the Board’s report for the relevant financial
year the following details, namely:-
(a) the names of the employees who have not exercised the
voting rights directly;
(b) the reasons for not voting directly;
(c) the name of the person who is exercising such voting rights;
(d) the number of shares held by or in favour of, such employees
and the percentage of such shares to the total paid up share
capital of the company;
(e) the date of the general meeting in which such voting power
was exercised;
(f) the resolutions on which votes have been cast by persons
holding such voting power;
(g) the percentage of such voting power to the total voting power
on each resolution;
(h) whether the votes were cast in favour of or against the
resolution.
17. Buy-back of shares or other securities.

Unless stated otherwise, the following norms shall be complied with by
the private companies and unlisted public companies for buy-back of
their securities-
(1) The explanatory statement to be annexed to the notice of the
general meeting pursuant to section 102 shall contain the following
disclosures, namely:-
(a) the date of the board meeting at which the proposal for buy-
back was approved by the board of directors of the company;
(b) the objective of the buy-back;
(c) the class of shares or other securities intended to be
purchased under the buy-back;
(d) the number of securities that the company proposes to buy-
back;
(e) the method to be adopted for the buy-back;

(f) the price at which the buy-back of shares or other securities
shall be made;
(g) the basis of arriving at the buy-back price;
(h) the maximum amount to be paid for the buy-back and the
sources of funds from which the buy-back would be financed;
(i) the time-limit for the completion of buy-back;
(j) (i) the aggregate shareholding of the promoters and of the
directors of the promoter, where the promoter is a company
and of the directors and key managerial personnel as on the
date of the notice convening the general meeting;
(ii) the aggregate number of equity shares purchased or sold
by persons mentioned in sub-clause (i) during a period of
twelve months preceding the date of the board meeting at
which the buy-back was approved and from that date till the
date of notice convening the general meeting;
(iii) the maximum and minimum price at which purchases
and sales referred to in sub-clause (ii) were made along with
the relevant date;
(k) if the persons mentioned in sub-clause (i) of clause (j) intend
to tender their shares for buy-back –
(i) the quantum of shares proposed to be tendered;
(iii) the details of their transactions and their holdings
for the last twelve months prior to the date of the
board meeting at which the buy-back was approved
including information of number of shares acquired,
the price and the date of acquisition;
(l) a confirmation that there are no defaults subsisting in
repayment of deposits, interest payment thereon, redemption
of debentures or payment of interest thereon or redemption
of preference shares or payment of dividend due to any
shareholder, or repayment of any term loans or interest

payable thereon to any financial institution or banking
company;
(m) a confirmation that the Board of directors have made a full
enquiry into the affairs and prospects of the company and
that they have formed the opinion-
(i) that immediately following the date on which the
general meeting is convened there shall be no grounds
on which the company could be found unable to pay
its debts;
(ii) as regards its prospects for the year immediately
following that date, that, having regard to their
intentions with respect to the management of the
company’s business during that year and to the
amount and character of the financial resources
which will in their view be available to the company
during that year, the company shall be able to meet its
liabilities as and when they fall due and shall not be
rendered insolvent within a period of one year from
that date; and
(iii) the directors have taken into account the
liabilities(including prospective and contingent
liabilities), as if the company were being wound up
under the provisions of the Companies Act, 2013
(n) a report addressed to the Board of directors by the company’s
auditors stating that –
(i) they have inquired into the company’s state of affairs;
(ii) the amount of the permissible capital payment for
the securities in question is in their view properly
determined;
(iii) that the audited accounts on the basis of which
calculation with reference to buy back is done is
not more than six months old from the date of offer
document;

1
[Provided that where the audited accounts are more
than six months old, the calculations with reference to
buy back shall be on the basis of un-audited accounts
not older than six months from the date of offer
document which are subjected to limited review by
the auditors of the company]; and
(iv) the Board of directors have formed the opinion as
specified in clause (m) on reasonable grounds and
that the company, having regard to its state of affairs,
shall not be rendered insolvent within a period of one
year from that date.
(2) The company which has been authorized by a special resolution
shall, before the buy-back of shares, file with the Registrar of Companies
a letter of offer in Form No. SH.8, along with the fee:
Provided that such letter of offer shall be dated and signed on behalf
of the Board of directors of the company by not less than two directors
of the company, one of whom shall be the managing director, where
there is one.
(3) The company shall file with the Registrar, along with the letter
of offer, and in case of a listed company with the Registrar and the
Securities and Exchange Board, a declaration of solvency in Form
No. SH.9 along with the fee and signed by at least two directors of
the company, one of whom shall be the managing director, if any, and
verified by an affidavit as specified in the said Form.
(4) The letter of offer shall be dispatched to the shareholders or
security holders immediately after filing the same with the Registrar
of Companies but not later than twenty days from its filing with the
Registrar of Companies.

Rules, 2016 (w.e.f. 10-03-2016).
(5) The offer for buy-back shall remain open for a period of not less than
fifteen days and not exceeding thirty days from the date of dispatch of
the letter of offer.
1
[Provided that where all members of a company agree, the offer for
buy-back may remain open for a period less than fifteen days].
(6) In case the number of shares or other specified securities offered by
the shareholders or security holders is more than the total number of
shares or securities to be bought back by the company, the acceptance
per shareholder shall be on proportionate basis out of the total shares
offered for being bought back.
(7) The company shall complete the verifications of the offers received
within fifteen days from the date of closure of the offer and the shares
or other securities lodged shall be deemed to be accepted unless a
communication of rejection is made within twenty one days from the
date of closure of the offer.
(8) The company shall immediately after the date of closure of the offer,
open a separate bank account and deposit therein, such sum, as would
make up the entire sum due and payable as consideration for the shares
tendered for buy-back in terms of these rules.
(9) The company shall within seven days of the time specified in sub-
rule (7)-
(a) make payment of consideration in cash to those shareholders
or security holders whose securities have been accepted; or
(b) return the share certificates to the shareholders or security
holders whose securities have not been accepted at all or the
balance of securities in case of part acceptance .
(10) The company shall ensure that –
(a) the letter of offer shall contain true, factual and material
information and shall not contain any misleading
1. Inserted by the Companies (Share Capital and Debentures) Second

information and must state that the directors of the company

accept the responsibility for the information contained in
such document;
(b) the company shall not issue any new shares including by way
of bonus shares from the date of passing of special resolution
authorizing the buy-back till the date of the closure of the
offer under these rules, except those arising out of any
outstanding convertible instruments;
(c) the company shall confirm in its offer the opening of a
separate bank account adequately funded for this purpose
and to pay the consideration only by way of cash;
(d) the company shall not withdraw the offer once it has
announced the offer to the shareholders;
(e) the company shall not utilize any money borrowed from
banks or financial institutions for the purpose of buying back
its shares; and
(f) the company shall not utilize the proceeds of an earlier issue
of the same kind of shares or same kind of other specified
securities for the buy-back.
(12)(a) The company, shall maintain a register of shares or other
securities which have been bought-back in Form No. SH. 10.
(b) The register of shares or securities bought-back shall be maintained
at the registered office of the company and shall be kept in the custody
of the secretary of the company or any other person authorized by the
board in this behalf.
(c) The entries in the register shall be authenticated by the secretary of
the company or by any other person authorized by the Board for the
purpose.
(13) The company, after the completion of the buy-back under these
rules, shall file with the Registrar, and in case of a listed company with
the Registrar and the Securities and Exchange Board of India, a return
in the Form No. SH. 11 along with the fee .
(14) There shall be annexed to the return filed with the Registrar
in Form No. SH.11, a certificate in Form No. SH.15 signed by two
directors of the company including the managing director, if any,
certifying that the buy-back of securities has been made in compliance
with the provisions of the Act and the rules made there under.
18. Debentures.
(1) The company shall not issue secured debentures, unless it complies
with the following conditions, namely:-
(a) An issue of secured debentures may be made, provided the
date of its redemption shall not exceed ten years from the
date of issue.

1
[Provided that the following classes of companies may issue
secured debentures for a period exceeding ten years but not
exceeding thirty years,
(i) Companies engaged in setting up of infrastructure
projects;
(ii) ‘Infrastructure Finance Companies’ as defined in
clause (viia) of sub-direction (1) of direction 2 of
Non-Banking Financial (Non-deposit accepting or
holding) Companies Prudential Norms (Reserve
Bank) Directions, 2007];
2
[(iii) Infrastructure Debt Fund Non-Banking Financial

Rules, 2014 (w.e.f. 18-06-2014). Prior to its substitution, proviso read as under :
“Provided that a company engaged in the setting up of infrastructure projects
may issue secured debentures for a period exceeding ten years but not exceeding
thirty years”
2. Sub-cluase (iii) and (iv) Substituted for sub-clause (iii) by the Companies
(Share Capital and Debentures) Third Amendment Rules, 2015 (w.e.f. 6-11-
2015). Prior to its substitution, sub-clause (iii) (inserted by the Companies
(Share Capital and Debentures) Amendment Rules, 2014 (w.e.f. 18-06-2014),
read as under :
‘(iii)“Infrastructure Debt Fund Non-Banking Financial companies’ as defined
Companies’ as defined in clause (b) of direction 3

of Infrastructure Debt Fund Non-Banking Financial
Companies (Reserve Bank) Directions, 2011;
(iv) Companies permitted by a Ministry or Department of
the Central Government or by Reserve Bank of India
or by the National Housing Bank or by any other
statutory authority to issue debentures for a period
exceeding ten years;]
[(b) such an issue of debentures shall be secured by the creation
1
of a charge on the properties or assets of the company

or its subsidiaries or its holding company or its associates
companies, having a value which is sufficient for the due
repayment of the amount of debentures and interest thereon;]
(c) the company shall appoint a debenture trustee before the
issue of prospectus or letter of offer for subscription of its
debentures and not later than sixty days after the allotment
of the debentures, execute a debenture trust deed to protect
the interest of the debenture holders ; and
(d) the security for the debentures by way of a charge or mortgage
shall be created in favour of the debenture trustee on-
in clause (b) of direction 3 of Infrastructure Debt Fund Non-Banking Financial

Companies (Reserve Bank) Directions, 2011”
Amendment Rules, 2016( w.e.f. 19-07-2016). Prior to its substitution, clause
(b) read as under :
“(b) such an issue of debentures shall be secured by the creation of a charge, on
the properties or assets of the company, having a value which is sufficient for
the due repayment of the amount of debentures and interest thereon;”
[ [(i) any specific movable property of the company or

1 2
subsidiaries or associate companies or otherwise;]

(ii) any specific immovable property wherever situate, or
any interest therein:
Provided that in case of a non-banking financial company,
the charge or the mortgage under sub- clause (i) may be
created on any movable property :]
3
[Provided further that in case of any issue of debentures by a
Government company which is fully secured by the guarantee given
by the Central Government or one or more State Government or by
both, the requirement for creation of charge under this sub-rule shall
not apply.”.
Provided also that in case of any loan taken by a subsidiary company
from any bank or financial institutional the charge or mortgage under
this sub-rule may also be created on the properties or assets of the
holding company;]
(2) The company shall appoint debenture trustees under sub-section
(5) of section 71, after complying with the following conditions,
namely:-
(a) the names of the debenture trustees shall be stated in letter
of offer inviting subscription for debentures and also in all

Rules, 2015 (w.e.f.18-03-2015). Prior to their substitution, sub-clause (i) and
(ii) read as under :
“(i) any specific movable property of the company (not being in the nature of
pledge); or
(ii) any specific immovable property wherever situate, or any interest therein.”
Amendment Rules, 2016 (w.e.f. 19-07-2016). Prior to its substitution, sub-
clause(i) read as under :
“(i) any specific movable property of the company ; or”
Rules, 2015 (w.e.f. 18-03-2015)
the subsequent notices or other communications sent to the

debenture holders;
(b) before the appointment of debenture trustee or trustees,
a written consent shall be obtained from such debenture
trustee or trustees proposed to be appointed and a statement
to that effect shall appear in the letter of offer issued for
inviting the subscription of the debentures;
(c) A person shall not be appointed as a debenture trustee, if he-
(i) beneficially holds shares in the company;
(ii) is a promoter, director or key managerial personnel or
any other officer or an employee of the company or its
holding, subsidiary or associate company;
(iii) is beneficially entitled to moneys which are to be
paid by the company otherwise than as remuneration
payable to the debenture trustee;
(iv) is indebted to the company, or its subsidiary or its
holding or associate company or a subsidiary of such
holding company;
(v) has furnished any guarantee in respect of the principal
debts secured by the debentures or interest thereon;
(vi) has any pecuniary relationship with the company
amounting to two per cent. or more of its gross
turnover or total income or fifty lakh rupees or such
higher amount as may be prescribed, whichever is
lower, during the two immediately preceding financial
years or during the current financial year;
(vii) is relative of any promoter or any person who is in
the employment of the company as a director or key
managerial personnel
(d) the Board may fill any casual vacancy in the office of the
trustee but while any such vacancy continues, the remaining
trustee or trustees, if any, may act:
Provided that where such vacancy is caused by the resignation

of the debenture trustee, the vacancy shall only be filled with
the written consent of the majority of the debenture holders.
(e) any debenture trustee may be removed from office before the
expiry of his term only if it is approved by the holders of not
less than three fourth in value of the debentures outstanding,
at their meeting.
(3) It shall be the duty of every debenture trustee to-
(a) satisfy himself that the letter of offer does not contain any
matter which is inconsistent with the terms of the issue of
debentures or with the trust deed;
(b) satisfy himself that the covenants in the trust deed are not
prejudicial to the interest of the debenture holders;
(c) call for periodical status or performance reports from the
company;
(d) communicate promptly to the debenture holders defaults,
if any, with regard to payment of interest or redemption of
debentures and action taken by the trustee therefor;
(e) appoint a nominee director on the Board of the company in
the event of-
(i) two consecutive defaults in payment of interest to the
debenture holders; or
(ii) default in creation of security for debentures; or
(iii) default in redemption of debentures.
(f) ensure that the company does not commit any breach of
the terms of issue of debentures or covenants of the trust
deed and take such reasonable steps as may be necessary to
remedy any such breach;
(g) inform the debenture holders immediately of any breach of the
terms of issue of debentures or covenants of the trust deed;
(h) ensure the implementation of the conditions regarding
creation of security for the debentures, if any, and debenture

redemption reserve;
(i) ensure that the assets of the company issuing debentures
and of the guarantors, if any, are sufficient to discharge the
interest and principal amount at all times and that such
assets are free from any other encumbrances except those
which are specifically agreed to by the debenture holders;
(j) do such acts as are necessary in the event the security
becomes enforceable;
(k) call for reports on the utilization of funds raised by the issue
of debentures-
(l) take steps to convene a meeting of the holders of debentures
as and when such meeting is required to be held;
(m) ensure that the debentures have been converted or redeemed
in accordance with the terms of the issue of debentures;
(n) perform such acts as are necessary for the protection of the
interest of the debenture holders and do all other acts as are
necessary in order to resolve the grievances of the debenture
holders.
(4) The meeting of all the debenture holders shall be convened by the
debenture trustee on-
(a) requisition in writing signed by debenture holders holding at
least one-tenth in value of the debentures for the time being
outstanding;
(b) the happening of any event, which constitutes a breach,
default or which in the opinion of the debenture trustees
affects the interest of the debenture holders.
(5) For the purposes of sub-section (13) of section 71 and sub-rule (1)
a trust deed in Form No. SH.12 or as near thereto as possible shall be
executed by the company issuing debentures in favour of the debenture
trustees 1[within three months of closure of the issue or offer].
1. Substituted for “within sixty days of allotment of debentures” by the Companies

(Share Capital and Debentures) Amendment Rules, 2015 (w.e.f.18-03-2015).
(6) The provisions of sub-rules (2) to (5) of rule 18 shall not be

applicable to the public offer of debentures.
(7) The company shall create a Debenture Redemption Reserve for
the purpose of redemption of debentures, in accordance with the
conditions given below-
(a) the Debenture Redemption Reserve shall be created out of
the profits of the company available for payment of dividend;
(b) the company shall create Debenture Redemption Reserve
(DRR) in accordance with following conditions:-
(i) No DRR is required for debentures issued by All
India Financial Institutions (AIFIs) regulated by
Reserve Bank of India and Banking Companies for
both public as well as privately placed debentures. For
other Financial Institutions (FIs) within the meaning
of clause (72) of section 2 of the Companies Act, 2013,
DRR will be as applicable to NBFCs registered with
RBI.
(ii) For NBFCs registered with the RBI under Section 45-IA
of the RBI (Amendment) Act, 1997, 1[and for Housing
Finance Companies registered with the National Housing
Bank], ‘the adequacy’ of DRR will be 25% 2[of the value
of outstanding debentures] issued through public issue
as per present SEBI (Issue and Listing of Debt Securities)
Regulations, 2008, and no DRR is required in the case of
privately placed debentures.
(iii) For other companies including manufacturing and
infrastructure companies, the adequacy of DRR will

Rules, 2014 (w.e.f. 18-06-2014).
2. Substituted for “of the value of debentures” by the Companies (Share Capital
and Debentures) Third Amendment Rules, 2016 (w.e.f. 19-07-2016).
be 25% 1[of the value of outstanding debentures]

issued through public issue as per present SEBI (Issue
and Listing of Debt Securities), Regulations 2008
and also 25% DRR is required in the case of privately
placed debentures by listed companies. For unlisted
companies issuing debentures on private placement
basis, the DRR will be 25% of the value of debentures.

2
[Provided that where a company intends to redeem its
debentures prematurely, it may provide for transfer of such
amount in Debenture Redemption Reserve as is necessary
for redemption of such debentures even if it exceeds the
limits specified in this sub-rule.]
(c) every company required to create Debenture Redemption
Reserve shall on or before the 30th day of April in each year,
invest or deposit, as the case may be, a sum which shall not
be less than fifteen percent, of the amount of its debentures
maturing during the year ending on the 31st day of March of
the next year, in any one or more of the following methods,
namely:-
(i) in deposits with any scheduled bank, free from any
charge or lien;
(ii) in unencumbered securities of the Central
Government or of any State Government;
(iii) in unencumbered securities mentioned in sub-clauses
(a) to (d) and (ee) of section 20 of the Indian Trusts
Act, 1882;
(iv) in unencumbered bonds issued by any other company
which is notified under sub-clause (f) of section 20 of
the Indian Trusts Act, 1882;
1. Substituted for “of the value of debentures” by the Companies (Share Capital
and Debentures) Third Amendment Rules, 2016 (w.e.f. 19-07-2016).
(v) the amount invested or deposited as above shall not

be used for any purpose other than for redemption of
debentures maturing during the year referred above:
Provided that the amount remaining invested or
deposited, as the case may be, shall not at any time fall
below fifteen per cent of the amount of the debentures
maturing during the year ending on the 31st day of
March of that year;
(d) in case of partly convertible debentures, Debenture Redemption
Reserve shall be created in respect of non-convertible portion
of debenture issue in accordance with this sub-rule.
(e) the amount credited to the Debenture Redemption Reserve
shall not be utilised by the company except for the purpose
of redemption of debentures.
(8) (a) A trust deed for securing any issue of debentures shall be open
for inspection to any member or debenture holder of the company, in
the same manner, to the same extent and on the payment of the same
fees, as if it were the register of members of the company; and
(b) A copy of the trust deed shall be forwarded to any member or
debenture holder of the company, at his request, within seven days of
the making thereof, on payment of fee.
1
[(9) Nothing contained in this rule shall apply to any amount received
by a company against issue of commercial paper or any other similar
instrument issued in accordance with the guidelines or regulations or
notification issued by the Reserve Bank of India.
(10) In case of any offer of foreign currency convertible bonds or
foreign currency bonds issued in accordance with the Foreign Currency
Convertible Bonds and Ordinary Shares (Through Depository Receipt
Mechanism) Scheme, 1993 or regulations or directions issued by the
Reserve Bank of India, the provisions of this rule shall not apply unless
otherwise provided in such Scheme or regulations or directions].

Rules, 2015 (w.e.f.18-03-2015).
[(11) Nothing contained in this rule shall apply to rupee denominated

1
bonds issued exclusively to overseas investors in terms of A.P. (DIR Series)

Circular No. 17 dated September 29, 2015 of the Reserve Bank of India].
19. Nomination by securities holders.

(1) Any holder of securities of a company may, at any time, nominate,
in Form No. SH.13, any person as his nominee in whom the securities
shall vest in the event of his death.
(2) On the receipt of the nomination form, a corresponding entry
shall forthwith be made in the relevant register of securities holders,
maintained under section 88.
(3) Where the nomination is made in respect of the securities held by
more than one person jointly, all joint holders shall together nominate
in Form No.SH.13 any person as nominee.
(4) The request for nomination should be recorded by the Company
within a period of two months from the date of receipt of the duly filled
and signed nomination form.
(5) In the event of death of the holder of securities or where the
securities are held by more than one person jointly, in the event of
death of all the joint holders, the person nominated as the nominee
may upon the production of such evidence as may be required by the
Board, elect, either-
(a) to register himself as holder of the securities ; or
(b) to transfer the securities, as the deceased holder could have
done.
(6) If the person being a nominee, so becoming entitled, elects to be
registered as holder of the securities himself, he shall deliver or send to
the company a notice in writing signed by him stating that he so elects
and such notice shall be accompanied with the death certificate of the
deceased share or debenture holder(s).
1. Inserted by the Companies (Share Capital and Debentures) Fourth

Amendment Rules, 2016 (w.e.f.12-8-2016).
(7) All the limitations, restrictions and provisions of the Act relating to
the right to transfer and the registration of transfers of securities shall
be applicable to any such notice or transfer as aforesaid as if the death
of the share or debenture holder had not occurred and the notice or
transfer were a transfer signed by that shareholder or debenture holder,
as the case may be.
(8) A person, being a nominee, becoming entitled to any securities
by reason of the death of the holder shall be entitled to the same
dividends or interests and other advantages to which he would have
been entitled to if he were the registered holder of the securities
except that he shall not, before being registered as a holder in
respect of such securities, be entitled in respect of these securities
to exercise any right conferred by the membership in relation to
meetings of the company:
Provided that the Board may, at any time, give notice requiring any such
person to elect either to be registered himself or to transfer the securities,
and if the notice is not complied with within ninety days, the Board may
thereafter withhold payment of all dividends or interests, bonuses or other
moneys payable in respect of the securities, as the case may be, until the
requirements of the notice have been complied with.
(9) A nomination may be cancelled, or varied by nominating any other
person in place of the present nominee, by the holder of securities who
has made the nomination, by giving a notice of such cancellation or
variation, to the company in Form No. SH.14.
(10) The cancellation or variation shall take effect from the date on
which the notice of such variation or cancellation is received by the
company.
(11) Where the nominee is a minor, the holder of the securities, making
the nomination, may appoint a person in 1[Form No. SH. 13] specified
under sub-rule (1), who shall become entitled to the securities of the
company, in the event of death of the nominee during his minority.

Rules, 2015 (w.e.f.18-03-2015), for: “Form No. SH. 14”
141
CHAPTER V
COMPANIES (ACCEPTANCE OF DEPOSITS)
RULES, 2014
[G.S.R 256 (E), Dated 31st March, 2014]
In exercise of the powers conferred by clause (31) of section 2, section
73 and section 76 read with sub-sections (I) and (2) of section 469
of the Companies Act, 2013 (18 of 2013), and in supersession of the
Companies (Acceptance of Deposits) Rules, 1975 or any other rules
prescribed under the Companies Act, 1956 (I of 1956) on matters
covered under these rules except as respects things done or omitted
to be done before such supersession, the Central Government, in
consultation with the Reserve Bank of India, hereby makes the
following rules, namely: -
1. Short title, commencement and application.

(1) These rules may be called the Companies (Acceptance of Deposits)
Rules, 2014.
(2) They shall come into force on the lst day of April, 2014
(3) These rules shall apply to a company other than-
(i) a banking company;
(ii) a non-banking financial company as defined in the Reserve
Bank of India Act, 1934 (2 of 1934) registered with the
Reserve Bank of India;
(iii) a housing finance company registered with the National
Housing Bank established under the National Housing Bank
Act, 1987 (53 of 1987); and
(iv) a company specified by the Central Government under the
proviso to sub-section ( I) of section 73 of the Act.
141
142 Companies (Acceptance of Deposits) Rules, 2014
2. Definitions.
(1) In these rules, unless the context otherwise requires,
(a) “Act” means the Companies Act, 2013 (l8 of 2013);
(b) “Annexure” means the Annexure attached to these rules;
(c) “deposit” includes any receipt of money by way of deposit
or loan or in any other form, by a company, but does not
include-
(i) any amount received from the Central Government or
a State Government, or any amount received from any
other source whose repayment is guaranteed by the
Central Government or a State Government, or any
amount received from a local authority, or any amount
received from a statutory authority constituted under
an Act of Parliament or a State Legislature;
(ii) any amount received from foreign Governments,
foreign or international banks, multilateral
financial institutions (including, but not limited
to, International Finance Corporation, Asian
Development Bank, Commonwealth Development
Corporation and International Bank for Industrial
and Financial Reconstruction), foreign Governments
owned development financial institutions, foreign
export credit agencies, foreign collaborators, foreign
bodies corporate and foreign citizens, foreign
authorities or persons resident outside India subject
to the provisions of Foreign Exchange Management
Act, 1999 (42 of1999) and rules and regulations made
there under;
(iii) any amount received as a loan or facility from any
banking company or from the State Bank of India
or any of its subsidiary banks or from a banking:
institution notified by the Central Government under
section 51 of the Banking Regulation .Act, 1949 (10
Companies (Acceptance of Deposits) Rules, 2014 143
of 1949), or a corresponding new bank as defined

in clause (d) of section 2 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act,
1910 (5 of 1910) or in clause (b) of section (2) of the
Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980 (40 of 1980) ,or from a co-
operative bank as defined in clause (b-ii) of section 2
of the Reserve Bank of India Act, 1934 (2 of 1934);
(iv) any amount received as a loan or financial assistance
from Public Financial Institutions notified by the
Central Government in this behalf in consultation
with the Reserve Bank of India or any regional
financial institutions or Insurance Companies or
Scheduled Banks as defined in the Reserve Bank of
India Act, 1934 (2 of 1934);
(v) any amount received against issue of commercial
paper or any other instruments issued in accordance
with the guidelines or notification issued by the
Reserve Bank of India;
(vi) any amount received by a company from any other
company;
(vii) any amount received and held pursuant to an offer
made in accordance with the provisions of the Act
towards subscription to any securities, including share
application money or advance towards allotment of
securities pending allotment, so long as such amount
is appropriated only against the amount due on
allotment of the securities applied for;
Explanation - For the purposes of this sub-clause, it is

hereby clarified that -
(a) Without prejudice to any other liability or
action, if the securities for which application
money or advance for such securities was
received cannot be allotted within sixty days

from the date of receipt of the application
.money or advance for such securities and
such application money or advance is not
refunded to the subscribers within fifteen
days from the date of completion of sixty
days, such amount shall be treated as a deposit
under these rules.

1
[Provided that unless otherwise required
under the Companies Act, 1956 (1 of 1956)
or the Securities and Exchange Board of India
Act, 1992 (15 of 1992) or rules or regulations
made thereunder to allot any share, stock,
bond, or debenture within a specified period,
if a company had received any amount by way
of subscriptions to any shares, stock, bonds
or debentures before the 1st April, 2014 and
disclosed it in the balance sheet for the financial
year ending on or before the 31st March, 2014
against which the allotment is pending on the
31st March, 2015, the company shall, by the 1st
June 2015, either return such amounts to the
persons from whom these were received or allot
shares, stock, bonds or debentures or comply
with these rules.]
(b) any adjustment of the amount for any other
purpose shall not be treated as refund.
(viii)
2
[any amount received from a person who, at the
1. Inserted by the Companies (Acceptance of Deposits) Amendment Rules,

2015 (w.e.f. 31-3-2015)
2. Substituted by the Companies (Acceptance of Deposits) Second Amendment
Rules, 2015 (w.e.f. 15-9-2015) for:
“(viii) any amount received from a person who, at the time of the receipt of the
amount, was a director of the company:
time of the receipt of the amount, was a director of

the company or a relative of the director of the private
company:
Provided that the director of the company or relative
of the director of the private company, as the case
may be, from whom money is received, furnishes
to the company at the time of giving the money, a
declaration in writing to the effect that the amount
is not being given out of funds acquired by him by
borrowing or accepting loans or deposits from others
and the company shall disclose the details of money
so accepted in the Board’s report;]
(ix) any amount raised by the issue of bonds or debentures
secured by a first charge or a charge ranking pari
passu with the first charge on any assets referred to
in Schedule III of the Act excluding intangible assets
of the company or bonds or debentures compulsorily
convertible into shares of the company within 1[ten
years]:
Provided that if such bonds or debentures are secured
by the charge of any assets referred to in Schedule III
of the Act, excluding intangible assets, the amount of
such bonds or debentures shall not exceed the market
value of such assets as assessed by a registered valuer;
2
(ixa) any amount raised by issue of non-convertible
Provided that the director from whom money is received, furnishes to the
company at the time of giving the money, a declaration in writing to the effect
that the amount is not being given out of funds acquired by him by borrowing
or accepting loans or deposits from others;”
1. Substituted by the Companies (Acceptance of Deposits) Amendment Rules,
2016 (w.e.f. 29-06-2016) for: “five years”
2016 (w.e.f. 29-06-2016).
debenture not constituting a charge on the assets of the

company and listed on a recognised stock exchange
as per applicable regulations made by Securities and
Exchange Board of India;
(x) any amount received from an employee of the
company not exceeding his annual salary under a
contract of employment .with the company in the
nature of non-interest bearing security deposit;
1
(xi) any non-interest bearing amount received and held in
trust;
(xii) any amount received in the course of, or for the
purposes of the business of the company –
(a) as an advance for the supply of goods or
provision of services accounted for in any
manner whatsoever provided that such
advance is appropriated against supply of
goods or provision of services within a period
of three hundred and sixty five days from the
date of acceptance of such advance:
Provided that in case of any advance which is
subject matter of any legal proceedings before
any court of law, the said time limit of three
hundred and sixty five days shall not apply:
(b) as advance, accounted for in any manner
whatsoever, received in connection with
2
[consideration for immovable property]
under an agreement or arrangement, provided

2016 (w.e.f. 29-06-2016) for: “(xi) any non-interest bearing amount received or
held in trust;
2015 (w.e.f. 31-3-2015) for: “consideration for property”
that such advance is adjusted 1[against such

property] in accordance with the terms of
agreement or arrangement;
(c) as security deposit for the performance of the
contract for supply of goods or provision of
services;
(d) as advance received under long term projects
for supply of capital goods except those
covered under item (b) above:
[(e) as an advance towards consideration for
2
providing future services in the form of a

warranty or maintenance contract as per
written agreement or arrangement, if the
period for providing such services does not
exceed the period prevalent as per common
business practice or five years, from the date
of acceptance of such service whichever is
less;
(f) as an advance received and as allowed by
any sectoral regulator or in accordance with
directions of Central or State Government;
(g) as an advance for subscription towards
publication, whether in print or in electronic
to be adjusted against receipt of such
publications;]
Provided that if the amount received under items
(a), (b) and (d) above becomes refundable (with or
without interest) due to the reasons that the company

2015 (w.e.f. 31-03-2015) for: “against the property”
2016 (w.e.f. 29-06-2016)
accepting the money does not have necessary

permission or approval, wherever required, to deal
in the goods or properties or services for which the
money is taken, then the amount received shall be
deemed to be a deposit under these rules:
Explanation- For the purposes of this sub-clause the

amount 1[omitted] shall be deemed to be deposits on
the expiry of fifteen days from the date they become
due for refund.
(xiii) any amount brought in by the promoters of the
company by way of unsecured loan in pursuance of
the stipulation of any lending financial institution or a
bank subject to fulfillment of the following conditions,
namely:-
(a) the loan is brought in pursuance of the
stipulation imposed by the lending institutions
on the promoters to contribute such finance;
(b) the loan is provided by the promoters
themselves or by their relatives by both; and
(c) the exemption under this sub-clause shall
be available only till the loan of financial
institution or bank are repaid and not
thereafter;
(xiv) any amount accepted by a Nidhi company in
accordance with the rules made under section 406 of
the Act.
Explanation - For the purposes of this clause, any

amount .-
1. The word *”referred to in the proviso” omitted by the Companies (Acceptance
of Deposits) Amendment Rules, 2016 (w.e.f. 29-06-2016).
*Substituted by the Companies (Acceptance of Deposits) Amendment Rules,
2015 (w.e.f. 31-03-2015) for: “referred to in the first proviso”
(a) received by the company, whether in the form

of installments or otherwise, from a person
with promise or offer to give returns, in
cash or in kind, on completion of the period
specified In the promise or offer, or earlier,
accounted for in any manner whatsoever, or
(b) any additional contributions, over and above
the amount under item (a) above, made by
the company as part of such promise or offer,

1
[shall be considered as deposits unless specifically
excluded under this clause];
2
[(xv) any amount received by way of subscription in respect
of a chit under the Chit Fund Act, 1982 (40 of 1982);
(xvi) any amount received by the company under any
collective investment scheme in compliance with
regulations framed by the Securities and Exchange
Board of India;
(xvii) an amount of twenty five lakh rupees or more received
by a start-up company, by way of a convertible note
(convertible into equity shares or repayable within a
period not exceeding five years from the date of issue)
in a single tranche, from a person.
Explanation. – For the purposes of this sub-clause, –

I. “start-up company” means a private company
incorporated under the Companies Act, 2013
or Companies Act, 1956 and recognised as
such in accordance with notification number
G.S.R. 180(E) dated 17th February, 2016

2016 (w.e.f. 29-06-2016) for: “shall be treated as a deposit”
2016 (w.e.f. 29-06-2016).
issued by the Department of Industrial Policy

and Promotion, Ministry of Commerce and
Industry;
II. “convertible note” means an instrument
evidencing receipt of money initially as a debt,
which is repayable at the option of the holder,
or which is convertible into such number of
equity shares of the start-up company upon
occurrence of specified events and as per the
other terms and conditions agreed to and
indicated in the instrument.
(xviii) any amount received by a company from Alternate
Investment Funds, Domestic Venture Capital Funds
1
[Infrastructure Investment Trusts], 2[Real Estate
Investment Trusts] and Mutual Funds registered
with the Securities and Exchange Board of India in
accordance with regulations made by it.]
(d) “depositor” means.-
(i) any member of the company who has made a deposit
with the company in accordance with the provisions
of sub-section (2) of section 73 of the Act; or
(ii) any person who has made a deposit with a public
company in accordance with the provisions of section
76 of the Act;
(e) “eligible company” means a public company as referred to in
sub-section (1) of section 76, having a net worth of not less
than one hundred crore ‘rupees or a turnover of not less than
five hundred crore rupees and which has obtained the prior
consent of the company in general meeting by means of a

2017 (w.e.f. 11-05-2017)
2019 (w.e.f. 22-01-2019)
special resolution and also filed the said resolution with the
Registrar of Companies before making any invitation to the
Public for acceptance of deposits:
Provided that an eligible company, which is accepting
deposits within the limits specified under clause (c) of sub-
section (1) of section 180, may accept deposits by means of
an ordinary resolution;
(f) “fees” means fees as specified in the Companies (Registration
Offices and Fees) Rules, 2014;
(g) “Form” or ‘e-Form” means a form set forth in Annexure to
relates.
(h) “section” means section of the Act;
(i) “trustee” means the trustee as defined in section 3 of the
Indian Trusts Act, 1882 (12 of 1882).
defined in the Act or in the Reserve Bank of India Act, 1934 (2 of 1934)
or in the Companies (Specification of definitions details) Rules, 2014
shall have the meanings respectively assigned to them in the said Acts
or in the said rules.
3. Terms and conditions of acceptance of deposits by companies.
(1) On and from the commencement of these rules,–
no company referred to in sub-section (2) of section 73 and no eligible
company shall accept or renew any deposit, whether secured or
unsecured, which is repayable on demand or upon receiving a notice
within a period of less than six months or more than thirty-six months
from the date of acceptance or renewal of such deposit:
Provided that a company may, for the purpose of meeting any of its
short-term requirements of funds, accept or renew such deposits for
repayment earlier than six months from the date of deposit or renewal,
as the case may be, subject to the condition that –
(a) such deposits shall not exceed ten per cent. of the aggregate
of the 1[paid-up share capital, free reserves and securities

premium account] of the company, and
(b) such deposits are repayable not earlier than three months
from the date of such deposits or renewal thereof.
(2) Where depositors so desire, deposits may be accepted in joint names
not exceeding three, with or without any of the clauses, namely, “Jointly”,
“Either or Survivor”, “First named or Survivor’, “Anyone or Survivor”.
(3) No company referred to in sub-section (2) of section 73 shall accept
or renew any deposit from its members, if the amount of such deposits
together with the amount of other deposits outstanding as on the date
of acceptance or renewal of such deposits exceeds 2[thirty five per
cent.] of the aggregate of the 1[paid-up share capital, free reserves and
securities premium account] of the company.
3
[Provided that a Specified IFSC Public company and a private company
may accept from its members monies not exceeding one hundred
per cent. of aggregate of the paid up share capital, free reserves and
securities premium account and such company shall file the details of
monies so accepted to the Registrar in Form DPT-3.
Explanation. – For the purpose of this rule, a Specified IFSC Public
company means an unlisted public company which is licensed to
operate by the Reserve Bank of India or the Securities and Exchange

Rules, 2015 (w.e.f. 15-09-2015) for: “paid up share capital and free reserves”
2016 (w.e.f. 29-06-2016) for: “twenty five per cent.”
Rules, 2017 (w.e.f.19-9-2017) for:
*“Provided that a private company may accept from its members monies not
exceeding one hundred per cent of aggregate of the paid up share capital, free
reserves and securities premium account and such company shall file the details
of monies so accepted to the Registrar in such manner as may be specified”
*Inserted by Companies (Acceptance of Deposits) Amendment Rules, 2016
(w.e.f. 29-06-2016)
Board of India or the Insurance Regulatory and Development Authority

of India from the International Financial Services Centre located in
an approved multi services Special Economic Zone set-up under the
Special Economic Zones Act, 2005 (28 of 2005) read with the Special
Economic Zones Rules, 2006:
Provided further that the maximum limit in respect of deposits to be
accepted from members shall not apply to following classes of private
companies, namely:–
(i) a private company which is a start-up, for five years from the
date of its incorporation;
(ii) a private company which fulfils all of the following
conditions, namely:–
(a) which is not an associate or a subsidiary company of
any other company;
(b) the borrowings of such a company from banks or
financial institutions or any body corporate is less
than twice of its paid up share capital or fifty crore
rupees, whichever is less ; and
(c) such a company has not defaulted in the repayment
of such borrowings subsisting at the time of accepting
deposits under section 73:
Provided also that all the companies accepting deposits shall
file the details of monies so accepted to the Registrar in Form
DPT-3.]
(4) No eligible company shall accept or renew:-
(a) any deposit from its members, if the amount of such deposit
together with the amount of deposits outstanding as on the
date of acceptance or renewal of such deposits from members
exceeds ten per cent of the aggregate of the 1[paid-up share

capital, free reserves and securities premium account] of the

company;
(b) any other deposit, if the amount of such deposit together
with the amount of such other deposits, other than the
deposit referred to in clause (a), outstanding on the date
of acceptance or renewal exceeds twenty-five per cent. of
aggregate of the 1[paid-up share capital, free reserves and
securities premium account] of the company.
(5) No Government company eligible to accept deposits under section
76 shall accept or renew any deposit, if the amount of such deposits
together with the amount of other deposits outstanding as on the date
of acceptance or renewal exceeds thirty five per cent of the aggregate
of its 1[paid-up share capital, free reserves and securities premium
account] of the company.
(6) No company referred to in sub-section (2) of section 73 or any
eligible company shall invite or accept or renew any deposit in any
form, carrying a rate of interest or pay brokerage thereon at a rate
exceeding the maximum rate of interest or brokerage prescribed by
the Reserve Bank of India for acceptance of deposits by non-banking
financial companies.
Explanation:- For the purposes of this sub-rule, it is hereby clarified
that the person who is authorised, in writing, by a company to solicit
deposits on its behalf and through whom deposits are actually procured
shall only be entitled to the brokerage and payment of brokerage to any
other person for procuring deposits shall be deemed to be in violation
of these rules.
(7) The company shall not reserve to itself either directly or indirectly
a right to alter, to the prejudice or disadvantage of the depositor, any
of the terms and conditions of the deposit, deposit trust deed and
deposit insurance contract after circular or circular in the form of
advertisement is issued and deposits are accepted.

1
[(8)(a) Every eligible company shall obtain, at least once in a year,
credit rating for deposits accepted by it and a copy of the rating shall
be sent to the Registrar of Companies alongwith the return of deposits
in Form DPT-3.
(b) The credit rating referred to in clause (a) shall not be below the
minimum investment grade rating or other specified credit rating for
fixed deposits, from any one of the approved credit rating agencies as
specified for Non-Banking Financial Companies in the Non-Banking
Financial Companies Acceptance of Public Deposits (Reserve Bank)
Directions, 1998, issued by the Reserve Bank of India, as amended
from time to time.]
4. Form and particulars of advertisements or circulars

(1) Every company referred to in sub-section (2) of section 73
intending to invite deposit from its members shall issue a circular to
all its members by registered post with acknowledgement due or speed
post or by electronic mode in Form DPT-l:

2016 (w.e.f. 29-06-2016) for:
*“Every eligible company shall obtain, at least once in a year, credit rating for
deposits accepted by it in the manner specified herein below and a copy of
the rating shall be sent to the Registrar of Companies alongwith the return of
deposits in Form DPT-3;
Name of the agency Minimum investment Grade Rating

(a) The Credit Rating Information FA- (FA Minus)
Services of India Ltd.
(b) ICRA Ltd. MA - (MA Minus)
(c) Credit Analysis and Research Ltd. CARE BBB(FD)
(d) Fitch Ratings India Private Ltd. tA-(ind)(FD)
(e) Brickwork Ratings India Pvt. Ltd. BWR F A
(f) SME Rating Agency of India Ltd. SMERA A”
*Inserted by the Companies (Acceptance of Deposits) Amendment Rules, 2015
(w.e.f. 31-03-2015).
Provided that in addition to issue of such circular to all members in

the manner specified above, the circular may be published in English
language in an English newspaper and in vernacular language in a
vernacular newspaper having wide circulation in the State in which the
registered office of the company is situated.
1
[Provided further that a certificate of the statutory auditor of the
company shall be attached in Form DPT-1, stating that the company
has not committed default in the repayment of deposits or in the
payment of interest on such deposits accepted either before or after
the commencement of the Act and in case a company had committed
a default in the repayment of deposits accepted either before or after
the commencement of the Act or in the payment of interest on such
deposits, a certificate of the statutory auditor of the company shall be
attached in Form DPT-1, stating that the company had made good the
default and a period of five years has lapsed since the date of making
good the default as the case may be.]
2
[(2) Every eligible company intending to invite deposits shall issue
a circular in the form of an advertisement in form DPT-1 for the
purpose in English language in an English newspaper having country
wide circulation and in vernacular language in a vernacular newspaper
having wide circulation in the State in which the registered office of the
company is situated, and shall also place such circular on the website
of the company, if any.]
(3) Every company inviting deposits from the public shall upload a
copy of the circular on its website, if any.

2018 dated 05-07-2018 (w.e.f. 15-08-2018).
2016 (w.e.f. 29-06-2016) for:
“(2) Every eligible company intending to invite deposits shall issue a circular
in the form of an advertisement in Form DPT-l for the purpose in English
language in an English newspaper and in vernacular language in one vernacular
newspaper having wide circulation in the State in which the registered office of
the company is situated.”
(4) No company shall issue or allow any other person to issue or cause
to be issued on its behalf, any circular or a circular in the form of
advertisement inviting deposits, unless such circular or circular in the
form of advertisement is issued on the authority and in the name of the
Board of directors of the company.
(5) No circular or a circular in the form of advertisement shall be issued
by or on behalf of a company unless, not less than thirty days before
the date of such issue, there has been delivered to the Registrar for
registration a copy thereof signed by a majority of the directors of the
company as constituted at the time the Board approved the circular or
circular in the form of advertisement, or their agents, duly authorised
by them in writing.
(6) A circular or circular in the form of advertisement issued shall be valid
until the expiry of six months from the date of closure of the financial year
in which it is issued or until the date on which the financial statement is
laid before the company in annual general meeting or, where the annual
general meeting for any year has not been held, the latest day on which
that meeting should have been held in accordance with the provisions of
the Act, whichever is earlier, and a fresh circular or circular in the form
of advertisement shall be issued, in each succeeding financial year, for
inviting deposits during that financial year.
Explanation : For the purpose of this rule, the date of the issue of the
newspaper in which the advertisement appears shall be taken as the
date of issue of the advertisement and the effective date of issue of
circular shall be the date of dispatch of the circular.
5. 1[Omitted]
1. Omitted by the Companies (Acceptance of Deposits) Amendment Rules,

2018 dated 05-07-2018 (w.e.f. 15-08-2018) .Prior to its omission, Rule 5 read as under:
5. Manner and Extent of Deposit Insurance.-
(1) Every company referred to in sub-section (2) of section 73 and every other
eligible company inviting deposits shall enter into a contract for providing de-
posit insurance at least thirty days before the issue of circular or advertisement
or at least thirty days before the date of renewal, as the case may be.
^[“Provided that the companies may accept deposits without deposit insurance
contract till the 31st March, 2018 or till the availability of a deposit insurance
product, whichever is earlier.”]
Explanation- For the purposes of this sub-rule, the amount as specified in the
deposit insurance contract shall be deemed to be the amount in respect of both
principal amount and interest due thereon
(2) The deposit insurance contract shall specifically provide that in case the
company defaults in repayment of principal amount and interest thereon, the
depositor shall be entitled to the repayment of principal amount of deposits
and the interest thereon by the insurer up to the aggregate monetary ceiling as
specified in the contract:
Provided that in the case of any deposit and interest not exceeding twenty thou-
sand rupees, the deposit insurance contract shall provide for payment of the full
amount of the deposit and interest and in the case of any deposit and the inter-
est thereon in excess of twenty thousand rupees, the deposit insurance contract
shall provide for payment of an amount not less than twenty thousand rupees
for each depositor.
(3) The amount of insurance premium paid on the insurance of such deposits
shall be borne by the company itself and shall not be recovered from the de-
positors by deducting the same from the principal amount or interest payable
thereon.
(4) If any default is made by the company in complying with the terms and con-
ditions of the deposit insurance contract which makes the insurance cover in-
effective, the company shall either rectify the default immediately or enter into
a fresh contract within thirty days and in case of non-compliance, the amount
of deposits covered under the deposit insurance contract and interest payable
thereon shall be repaid within the next fifteen days and if such a company does
not repay the amount of deposits within said fifteen days it shall pay fifteen per
cent. interest per annum for the period of delay and shall be treated as having
defaulted and shall be liable to be punished in accordance with the provisions
of the Act.
^ Substituted by the Companies (Acceptance of Deposits) Amendment Rules,
2017 (w.e.f. 11-05-2017) for:
*“Provided that the companies may accept deposits without deposit insur-
ance contract till the 31st March, 2017 or till the availability of a deposit
insurance product, whichever is earlier.”
*Substituted by the Companies (Acceptance of Deposits) Amendment Rules,
2016 (w.e.f. 29-06-2016) for:
**“Provided that the companies may accept deposits without deposit insur-
ance contract till the 31st March, 2016 or till the availability of a deposit
insurance product, whichever is earlier.”
6. Creation of security.
(1) For the purposes of providing security, every company referred to
in sub-section (2) of section 73 and every eligible company inviting
secured deposits shall provide for security by way of a charge on its
assets as referred to in Schedule III of the Act excluding intangible
assets of the company for the due repayment of the amount of deposit
and interest thereon for an amount which shall not be less than the
amount remaining unsecured by the deposit insurance:
Provided that in the case of deposits which are secured by the charge
on the assets referred to in Schedule III of the Act excluding intangible
assets, the amount of such deposits and the interest payable thereon
shall not exceed the market value of such assets as assessed by a
registered valuer.
Explanation. I – For the purposes of this sub-rule it is clarified that the
company shall ensure that the total value of the security either by way
of deposit insurance or by way of charge or by both on company’s assets
shall not be less than the amount of deposits accepted and the interest
payable thereon.
Explanation II – For the purposes of proviso to sub-clause (ix) of clause
(c) of sub-rule (1) of rule 2 and this sub-rule, it is hereby clarified
that pending notification of sub-section (1) of section 247 of the Act
and finalisation of qualifications and experience of valuers, valuation
of stocks, shares, debentures, securities etc. shall be conducted by an
independent merchant banker who is registered with the Securities and
Exchange Board of India or an independent chartered accountant in
practice having a minimum experience of ten years.
(2) The security (not being in the nature of a pledge) for deposits as
specified in sub-rule (1) shall be created in favour of a trustee for the
depositors on:
**Substituted by the Companies (Acceptance of Deposits) Amendment Rules,

2015 (w.e.f. 31-5-2015) for: #“Provided that the companies may accept the de-
posits without deposit insurance contract till the 31st March, 2015”
#Inserted by the Companies (Acceptance of Deposits) Amendment Rules, 2014
(w.e.f. 06-6-2014).
(a) specific movable property of the company, or

(b) specific immovable property of the company wherever
situated, or any interest therein.
7. Appointment of trustee for depositors.

(1) No company referred to in sub-section (2) of section 73 or any
eligible company shall issue a circular or advertisement inviting secured
deposits ‘unless the company has appointed one or more trustees for
depositors for creating security for the deposits:
Provided that a written, consent shall be obtained from the trustee for
depositors before their appointment and a statement shall appear in
the circular or circular in the form of advertisement with reasonable
prominence to the effect that the trustees for depositors have given
their consent to the company to be so appointed.
(2) The company shall execute a deposit trust deed in Form DPT-2 at
least seven days before issuing the circular or circular in the form of
advertisement.
(3) No person including a company that is in the business of providing
trusteeship services shall be appointed as a trustee for the depositors, if
the proposed trustee –
(a) is a director, key managerial personnel or any other officer or
an employee of the company or of its holding, subsidiary or
associate company or a depositor in the company;
(b) is indebted to the company, or its subsidiary or its holding or
associate company or a subsidiary of such holding company;
(c) has any material pecuniary relationship with the company;
(d) has entered into any guarantee arrangement in respect of
principal debts secured by the deposits or interest thereon;
(e) is related to any person specified in clause (a) above.
(4) No trustee for depositors shall be removed from office after the issue
of circular or advertisement and before the expiry of his term except with
the consent of all the directors present at a meeting of the board.
Provided that in case the company is required to have independent

directors, at least one independent director shall be present in such
meeting of the Board.
8. Duties of trustees.
It shall be the duty of every trustee for depositors to –
(a) ensure that the assets of the company on which charge is
created together with the amount of deposit insurance are
sufficient to cover the repayment of the principal amount of
secured deposits outstanding and interest accrued thereon;
(b) satisfy himself that the circular or advertisement inviting
deposits does not contain any information which is
inconsistent with the terms of the deposit scheme or with the
trust deed and is in compliance with the rules and provisions
of the Act;
(c) ensure that the company does not commit any breach of
covenants and provisions of the trust deed;
(d) take such reasonable steps as may be necessary to procure a
remedy for any breach of covenants of the trust deed or the
terms of invitation of deposits;
(e) take steps to call a meeting of the holders of depositors as and
when such meeting is required to be held;
(f) supervise the implementation of the conditions regarding
creation of security for deposits and the terms of deposit
insurance;
(g) do such acts as arc: necessary in the event the security
becomes enforceable;
(h) carry out such acts as are necessary for the protection of the
interest of depositors and to resolve their grievances.
9. Meeting of depositors.
The trustee for depositors shall call a meeting of all the depositors on-
(a) requisition in writing signed by at least one-tenth of the

depositors in value for the time being outstanding;
(b) the happening of any event, which constitutes a default or
which, in the opinion of the trustee for depositors, affects the
interest of the depositors.
10. Form of application for Deposits.

(1) On and from the commencement of these rules, no company shall
accept, or renew any deposit, whether secured or unsecured, unless an
application, in such form as specified by the company, is submitted by
the intending depositor for the acceptance of such deposit.
(2) The form of application referred to in sub-rule (1) shall contain a
declaration by the intending depositor to the effect that the deposit is not
being made out of any money borrowed by him from any other person.
11. Power to nominate.

Every depositor may, at any time, nominate any person to whom his
deposits shall vest in the event of his death and the provisions of section
72 shall, as far as may be, apply to the nomination made under this rule.
12. Furnishing of deposit receipts to depositors.

(1) Every company shall, on the acceptance or renewal of a deposit,
furnish to the depositor or his agent a receipt for the amount received
by the company, within a period of twenty one days from the date of
receipt of money or realisation of cheque or date of renewal.
(2) The receipt referred to in sub-rule (1) shall be signed. by an officer
of the company duly authorised by the Board in this behalf and shall
state the date of deposit, the name and address of the depositor, the
amount received by the company as deposit, the rate of interest payable
thereon and the date on which the deposit is repayable.
13. Maintenance of liquid assets and creation of deposit repayment

reserve account.
Every company referred to in sub-section(2) of section 73 and every
eligible company shall on or before the 30th day of April of each year
deposit the sum as specified in clause (c) of the said sub-section with
any scheduled bank and the amount so deposited shall not be utilized
for any purpose other than the repayment of deposits;
1
[Provided that the amount remaining deposited shall not at any time
fall below twenty per cent. of the amount of deposits maturing during
the financial year.]
14. Registers of deposits.

(1) Every company accepting deposits shall maintain at its registered
office one or more separate registers for deposits accepted or renewed,
in which there shall be entered separately in the case of each depositor
the following particulars, namely:-
(a) name, address and PAN of the depositor/s;
(b) particulars of guardian, in case of a minor;
(c) particulars of the nominee;
(d) deposit receipt number;
(e) date and the amount of each deposit;
(f) duration of the deposit and the date On which each deposit
is repayable;
(g) rate of interest or such deposits to be payable to the depositor;
(h) due date for payment of interest;
(i) mandate and instructions for payment of interest and for
non-deduction of tax at source, if any;
(j) date or dates on which the payment of interest shall be
made;

2018 dated 05-07-2018 (w.e.f. 15-08-2018) for:
Provided that the amount remaining deposited shall not at any time fall
below fifteen percent of the amounts of deposits maturing until till the end
of the current financial year and the next financial year.
1
[(k) Omitted]
(I) particulars of security or charge created for repayment of
deposits;
(m) any other relevant particulars;
(2) The entries specified in sub-rule (1) shall be made within seven
days from the date of issuance of the receipt duly authenticated by a
director or secretary of the company or by any other officer authorised
by the Board for this purpose.
(3) The register referred to in sub-rule (1) shall be preserved in good
order for a period of not less than eight years the financial year in
which the latest entry is made in the register.
15. General provisions regarding premature repayment of deposits.

Where a company makes a repayment of deposits, on the request of
the depositor, after the expiry of a period of six months from the date
of such deposit but before the expiry of the period for which such
deposit was accepted, the rate of interest payable on such deposit shall
be reduced by one per cent. from the rate which the company would.
have paid had the deposit been accepted for the period for which such
deposit had actually run and the company shall not pay interest at any
rate higher than the rate reduced :
Provided that nothing contained in this rule shall apply to the
repayment of any deposit before the expiry of the period for which
such deposit was accepted by the company, if such repayment is made
solely for the purpose of –
(a) complying with the provisions of rule 3; or
(b) providing war risk or other related benefits to the personnel
of the naval, military or air forces or to their families, on an
1. Omitted by the Companies (Acceptance of Deposits) Amendment Rules, 2018

dated 05-07-2018 (w.e.f 15-08-2018). Prior to its omission, Rule 14(1)(k) read
as under:
“Details of deposit insurance including extent of deposit insurance”
application made by the associations or societies formed by

such personnel, during the period of emergency declared
under article 352 of the Constitution:
Provided further that where a company referred to in under sub-
section (2) of section 73 or any eligible company permits a depositor
to renew his deposit, before the expiry of the period for which such
deposit was accepted by the company, for availing of a higher rate of
interest, the company shall pay interest to such depositor at a higher
rate if such deposit is renewed in accordance with the other provisions
of these rules and for a period longer than the unexpired period of the
deposit.
Explanation : For the purposes of this rule, where the period for which
the deposit had run contains any part of a year, then, if such part is less
than six months, it shall be excluded and if such part is six months or
more, it shall be reckoned as one year.
16. Return of deposits to be filed with the Registrar.·

Every company to which these rules apply, shall on or before the
30th day of June, of every year, file with the Registrar, a return in Form
DPT-3 along with the fee as provided in Companies (Registration
Offices and Fees) Rules, 2014 and furnish the information contained
therein as on the 31st day of March of that year duly audited by the
auditor of the company.
1
[Explanation : It is hereby clarified that Form DPT-3 shall be used for
filing return of deposit or particulars of transaction not considered as
deposit or both by every company other than Government company.]
[16A. Disclosures in the financial statement.

2
(1) Every company, other than a private company, shall disclose in its

2019 (w.e.f. 22-01-2019).
2016 (w.e.f. 29-06-2016).
financial statement, by way of notes, about the money received from

the director.
(2) Every private company shall disclose in its financial statement, by
way of notes, about the money received from the directors, or relatives
of directors.]
1
[(3) Every company other than Government company shall file a
onetime return of outstanding receipt of money or loan by a company
but not considered as deposits, in terms of clause (c ) of sub-rule 1
of rule 2 from the 01st April, 2014 to the date of publication of this
notification in the Official Gazette, as specified in Form DPT-3 within
ninety days from the date of said publication of this notification along
with fee as provided in the Companies (Registration Offices and Fees)
Rules, 2014.]
17. Penal rate of interest.

Every company shall pay a penal rate of interest of eighteen per cent
per annum for the overdue period in case of deposits, whether secured
or unsecured, matured and claimed but remaining unpaid.
18. Power of Central Government to decide certain questions.

If any question arises as to the applicability of these rules to a particular
company, such question shall be decided by the Central Government
in consultation with the Reserve Bank of India.
19. Applicability of sections 73 and 74 to eligible companies.

Pursuant to provisions of sub-section (2) of section 76 of the Act,
the provisions of sections 73 and 74 shall, mutatis mutandis, apply to
acceptance of deposits from public by eligible companies,
Explanation. – For the purposes of this rule, it is hereby clarified that
in case of a company which had accepted or invited public deposits
under the relevant provisions of the Companies Act, 1956 and rules

2019 (w.e.f. 22-01-2019).
made under that Act (hereinafter known as “Earlier Deposits”) and

has been repaying such deposits and interest thereon in accordance
with such provisions, the provisions of clause (b) of sub-section(1) of
section 74 of the Act shall deemed to have been complied with if the
company complies with requirements under the Act and these rules
and continues to repay such deposit and interest due thereon due dates
for remaining period of such deposit in accordance with the terms and
conditions and the period of such earlier deposits and in compliance
with the requirements under the Act and these rules.
Provided further that the fresh deposits by every eligible company shall
have to be in accordance with the provisions of Chapter V of the Act
and these rules.
20. Statement regarding deposits existing as on date of

commencement of Act.
For the purpose of clause (a) of sub-section (1) of section 74, the
statement shall be in Form DPT-4.
21. Punishment of contravention.

If any company referred to in sub-section (2) of section 73 or any
eligible company inviting deposits or any other person contravenes any
provision of these rules for which no punishment is provided in the
Act, the company and every officer of the company who is in default
shall be punishable with fine which may extend to five thousand rupees
and where the contravention is a continuing one, with a further fine
which may extend to five hundred rupees for every day after the first
day during which the contravention continues.
168
CHAPTER VI
COMPANIES (REGISTRATION OF CHARGES)
RULES, 2014
In exercise of the powers conferred under Sections 77, 78, 79, 81, 82,
83, 84, 85, 87 read with Section 469 of the Companies Act, 2013 (18 of
following rules, namely: –

(1) These rules may be called the Companies (Registration of Charges)
Rules, 2014.
2. Definitions.
(b) ‘‘Annexure’’ means the Annexure appended to these rules;
(d) ‘‘Form’’ or “e-forms” means form set forth in Annexure to these
rules which shall be used for the matter to which it relates;
a Regional ‘Director;
168
Companies (Registration of Charges) Rules, 2014 169
(f) ‘‘section’’ means the section of the Act.

3. Registration of creation or modification of charge.

(1) For registration of charge as provided in subsection (1) of
Section 77, Section 78 and Section 79, the particulars of the charge
together with a copy of the instrument, if any, creating or modifying
the charge in Form No.CHG-1 (for other than Debentures) or Form
No.CHG-9 (for debentures), as the case may be, duly signed by the
company and the charge holder 1[shall be filed] with the Registrar
within a period of thirty days of the date of creation or modification
of charge along with the fee.
(2) If the particulars of a charge are not filed within the aforesaid
period, but filed within a period of three hundred days of the date of
such creation or modification, the additional fee shall be levied.
(3) If the company fails to register the particulars of the charge
with the Registrar within the period of thirty days of its creation or
modification, the particulars of the charge together with a copy of the
instrument, if any, creating or modifying such charge may be filed by
the charge-holder, in Form No.CHG-1 or Form No.CHG-9, as the case
may be, duly signed along with fee.
(4) A copy of every instrument evidencing any creation or modification
of charge and required to be filed with the Registrar in pursuance of
Section 77, 78 or 79 shall be verified as follows-
(a) where the instrument or deed relates solely to the property
situated outside India, the copy shall be verified by a certificate
1. Substituted by the Companies (Registration of Charges) Amendment Rules,

2018 (w.e.f. 05-07-2018) for: “and filed”
170 Companies (Registration of Charges) Rules, 2014
issued either 1[under the seal, if any, of the company], or

under the hand of any director or company secretary of the
company or an authorised officer of the charge holder or
under the hand of some person other than the company who
is interested in the mortgage or charge;
(b) where the instrument or deed relates, whether wholly or
partly, to the property situated in India, the copy shall be
verified by a certificate issued under the hand of any director
or company secretary of the company or an authorised
officer of the charge holder.
4. Condonation of delay by Registrar.

(1) The Registrar may, on being satisfied that the company had
sufficient cause for not filing the particulars and instrument of charge,
if any, within a period of thirty days of the date of creation of the
charge, allow the registration of the same after thirty days but within a
period of three hundred days of the date of such creation of charge or
modification of charge on payment of additional fee.
(2) The application for delay shall be made in Form No.CHG-1 and
supported by a declaration from the company signed by its secretary or
director that such belated filing shall not adversely affect rights of any
other intervening creditors of the company.
5. Application of rules in certain matters.

The provisions of rule 4 shall apply, mutatis mutandis, to the
registration of charge on any property acquired subject to such charge
and modification of charge under Section 79 of the Act.
6. Certificate of registration.
(1) Where a charge is registered with the Registrar under sub-section
(1) of Section 77 or section 78, he shall issue a certificate of registration
of such charge in Form No.CHG-2

2015 (w.e.f. 29-05-2015) for: “under the seal of the company”
(2) Where the particulars of modification of charge is registered under

section 79, the Registrar shall issue a certificate of modification of
charge in Form No. CHG-3
(3) The certificate issued by the Registrar under sub-rule (1) and sub-
rule (2) shall be conclusive evidence that the requirements of Chapter
VI of the Act and the rules made there under as to registration of
creation or modification of charge, as the case may be, have been
complied with.
7. Register of charges to be kept by the Registrar.

(1) The particulars of charges maintained on the Ministry of Corporate
Affairs portal (www.mca.gov.in/MCA21)shall be deemed to be the
register of charges for the purposes of Section 81 of the Act.
(2) The register shall be open to inspection by any person on payment
of fee.
8. Satisfaction of charge.
1
[(1) A company or charge holder shall within a period of three
hundred days from the date of the payment or satisfaction in full of any
charge registered under Chapter VI, give intimation of the same to the
Registrar in 2[Form No. CHG-4] along with the fee.]
(2) Where the Registrar enters a memorandum of satisfaction of charge
in full in pursuance of Section 82 or 83, he shall issue a certificate of
registration of satisfaction of charge in Form No.CHG-5.
9. Intimation of appointment of Receiver or Manager.

The notice of appointment or cessation of a receiver of, or of a person

2018 (w.e.f. 05-07-2018) for: “A company shall within a period of thirty days
from the date of the payment or satisfaction in full of any charge registered un-
der Chapter VI, give intimation of the same to the Registrar in Form No.CHG-4
along with the fee”.
2. ‘Form CHG-4’ substituted by the Companies (Registration of Charges)
Second Amendment Rules, 2018 (w.e.f. 18-12-2018).
172 Companies (Registration of Charges) Rules, 2014
to manage, the property, subject to charge, of a company shall be filed

with the Registrar in Form No. CHG.6 along with fee.
10. Company’s register of charges.

(1) Every company shall keep at its registered office a register of
charges in Form No. CHG.7 and enter therein particulars of all the
charges registered with the Registrar on any of the property, assets
or undertaking of the company and the particulars of any property
acquired subject to a charge as well as particulars of any modification
of a charge and satisfaction of charge.
(2) The entries in the register of charges maintained by the company
shall be made forthwith after the creation, modification or satisfaction
of charge, as the case may be.
(3) Entries in the register shall be authenticated by a director or the
secretary of the company or any other person authorised by the Board
for the purpose.
(4) The register of charges shall be preserved permanently and the
instrument creating a charge or modification thereon shall be preserved
for a period of eight years from the date of satisfaction of charge by the
company.
11. Register open for inspection.

The register of charges and the instrument of charges kept by the
company shall be open for inspection-
(a) by any member or creditor of the company without fees;
(b) by any other person on payment of fee.
12. Condonation of delay and rectification of register of charges.

(1) Where the instrument creating or modifying a charge is not filed
within a period of three hundred days from the date of its creation
(including acquisition of a property subject to a charge) or modification
and where the satisfaction of the charge is not filed 1[within a period

2018 (w.e.f. 05-07-2018) for : “within thirty days”
of three hundred days]from the date on which such payment of

satisfaction, the Registrar shall not register the same unless the delay is
condoned by the Central Government.
(2) The application for condonation of delay and for such other matters
covered in sub-clause (a), (b) and (c) of clause (i) of sub-section (1)
of Section 87 of the Act shall be filed with the Central Government in
Form No.CHG-8 along with the fee.
(3) The order passed by the Central Government under sub-section (1)
of section 87 of the Act shall be required to be filed with the Registrar
in Form No.INC.28 along with the fee as per the conditions stipulated
in the said order.
174
CHAPTER VII
COMPANIES (MANAGEMENT AND
ADMINISTRATION) RULES, 2014
In exercise of the powers conferred under sub-section (1) of section 88,
(2) section 89, sub-section (6) of section 89, sub-section (1) of section
91, sub-section (2) of section 92, sub-section (3) of section 92, sub-
section (2) of section 92, section 93, sub-section (1) of section 94, sub-
section (4) of section 100, sub-section (2) of section 114, sections 102,
101, 105, 108, sub-section (5) of section 109, sections 112, 113, 110,
sub-section (3) of section 186, section 115, sub-section (1) of section
117, sub-section (1) of section 118, sub-section (2) of section 119,
section 120 and sub-section (1) of section 121, read with sub-sections
(1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013)
and in supersession of Companies (Central Government’s) General
Rules and Forms, 1956 or any other relevant rules prescribed under
the Companies Act, 1956 (1 of 1956) on matters covered under these
rules, except as respects things done or omitted to be done before such
supersession, the Central Government hereby makes the following
rules, namely: -

(1) These rules may be called the Companies (Management and
Administration) Rules, 2014. (2) They shall come into force on the 1st
day of April 2014.
2. Definitions.
(b) ‘‘Annexure’’ means the Annexure to these Rules;
174
Companies (Management and Administration) Rules, 2014 175

(d) ‘‘Form’’ or an e-form means an form set forth in Annexure
to these rules which shall be used for the matter to which it
relates;
(f) ‘‘section’’ means section of the Act;
the Act and of in the rules.
3. Register of Members.
(1) Every company limited by shares shall, from the date of its
registration, maintain a register of its members in Form No. MGT.1:
1
[Provided that in the case of a company existing on the commencement
of the Act, the particulars as available in the register of members
maintained under the Companies Act, 1956 shall be transferred to the
new register of members in Form No.MGT-1 and in case additional
information, required as per provisions of the Act and these rules, is
provided by the members, such information may also be added in the
register as and when provided.]
(2) In the case of a company not having share capital, the register of
members shall contain the following particulars, in respect of each
member, namely:-
(a) name of the member; address (registered office address in case
1. Substituted by the Companies (Management and Administration)

Amendment Rules, 2016 (w.e.f. 23-09-2016) for: “Provided that in the case of
existing companies, registered under the Companies Act, 1956, particulars shall
be compiled within six months from the date of commencement of these rules.”
176 Companies (Management and Administration) Rules, 2014
the member is a body corporate); e-mail address; Permanent

Account Number or CIN; Unique Identification Number, if
any; Father’s/Mother’s/Spouse’s name; Occupation; Status;
Nationality; in case member is a minor, name of the guardian
and the date of birth of the member; name and address of
nominee;
(b) date of becoming member;
(c) date of cessation;
(d) amount of guarantee, if any
(e) other interest if any; and
(f) instructions, if any, given by the member with regard to
sending of notices etc :

1
[Provided that in the case of a company existing on the date
of commencement of the Act, the particulars as available in
the register of members maintained under the Companies
Act, 1956 shall be transferred to the new register of members
in Form No.MGT-1 and in case additional information,
required as per provisions of the Act and these rules, is
provided by the members, such information may also be
added in the register as and when provided.]
4. Register of debenture holders or any other security holders.
Every company which issues or allots debentures or any other security
shall maintain a separate register of debenture holders or security
holders, as the case may be, for each type of debentures or other
securities in Form No.MGT.2.
5. Maintenance of the Register of members etc. under section 88.
Every company shall maintain the registers under clauses (a), (b) and
(c) of sub-section (1) of section 88 in the following manner namely:-

Amendment Rules, 2016 (w.e.f. 23-09-2016) for: “Provided that in the case of
existing companies, registered under the Companies Act, 1956, particulars shall
be compiled within six months from the date of commencement of these rules.”
(1) The entries in the registers maintained under section 88 shall

be made within seven days after the Board of Directors or its duly
constituted committee approves the allotment or transfer of shares,
debentures or any other securities, as the case may be.
(2) The registers shall be maintained at the registered office of the
company unless a special resolution is passed in a general meeting
authorising the keeping of the register at any other place within the
city, town or village in which the registered office is situated or any
other place in India in which more than one-tenth of the total members
entered in the register of members reside.
(3) Consequent upon any forfeiture, buy-back, reduction, sub-
division, consolidation or cancellation of shares, issue of sweat equity
shares, transmission of shares, shares issued under any scheme of
arrangements, mergers, reconstitution or employees stock option
scheme or any of such scheme provided under this Act or by issue of
duplicate or new share certificates or new debenture or other security
certificates, entry shall be made within seven days after approval by the
Board or committee, in the register of members or in the respective
registers, as the case may be.
(4) If any change occurs in the status of a member or debenture holder
or any other security holder whether due to death or insolvency or
change of name or due to transfer to Investor Education Protection
Fund or due to any other reason, entries thereof explaining the change
shall be made in the respective register.
(5) If any rectification is made in the register maintained under section
88 by the company pursuant to any order passed by the competent
authority under the Act, the necessary reference of such order shall be
indicated in the respective register.
(6) If any order is passed by any judicial or revenue authority or by
Security and Exchange Board of India (SEBI) or competent authority
attaching the shares, debentures or other securities and giving directions
for remittance of dividend or interest, the necessary reference of such
order shall be indicated in the respective register.
(7) In case of companies whose securities are listed on a stock exchange

in or outside India, the particulars of any pledge, charge, lien or
hypothecation created by the promoters in respect of any securities of
the company held by the promoter including the names of pledgee/
pawnee and any revocation therein shall be entered in the register
within fifteen days from such an event.
(8) If promoters of any listed company, which has formed a joint
venture company with another company have pledged or hypthoticated
or created charge or lien in respect of any security of the listed company
in connection with such joint venture company, the particulars of such
pledge, hypothecation, charge and lien shall be entered in the register
members of the listed company within fifteen days from such an event.
6. Index of names to be included in Register.

(1) Every register maintained under sub-section (1) of section 88 shall
include an index of the names entered in the respective registers and
the index shall, in respect of each folio, contain sufficient indication
to enable the entries relating to that folio in the register to be readily
found:
Provided that the maintenance of index is not necessary in case the
number of members is less than fifty.
(2) The company shall make the necessary entries in the index
simultaneously with the entry for allotment or transfer of any security
in such Register.
7. Foreign register of members, debenture holders, other security

holders or beneficial owners residing outside India
(1) A company which has share capital or which has issued debentures
or any other security may, if so authorised by its articles, keep in any
country outside India, a part of the register of members or as the case
may be, of debenture holders or of any other security holders or of
beneficial owners, resident in that country (hereafter in this rule
referred to as the “foreign register”).
(2) The company shall, within thirty days from the date of the opening
of any foreign register, file with the Registrar notice of the situation of
the office in Form No.MGT.3 along with the fee where such register is
kept; and in the event of any change in the situation of such office or
of its discontinuance, shall, within thirty days from the date of such
change or discontinuance, as the case may be, file notice in Form
No.MGT.3 with the Registrar of such change or discontinuance.
(3) A foreign register shall be deemed to be part of the company’s
register (hereafter in this rule referred to as the “principal register”) of
members or of debenture holders or of any other security holders or
beneficial owners, as the case may be.
(4) The foreign register shall be maintained in the same format as the
principal register.
(5) A foreign register shall be open to inspection and may be closed, and
extracts may be taken there from and copies thereof may be required,
in the same manner, mutatis mutandis, as is applicable to the principal
register, except that the advertisement before closing the register shall
be inserted in at least two newspapers circulating in the place where in
the foreign register is kept.
(6) If a foreign register is kept by a company in any country outside
India, the decision of the appropriate competent authority in regard to
the rectification of the register shall be binding.
(7) Entries in the foreign register maintained under sub-section (4) of
section 88 shall be made simultaneously after the Board of Directors
or its duly constituted committee approves the allotment or transfer of
shares, debentures or any other securities, as the case may be.
(8) The company shall –
(a) transmit to its registered office in India a copy of every entry
in any foreign register within fifteen days after the entry is
made; and
(b) keep at such office a duplicate register of every foreign
register duly entered up from time to time.
(9) Every such duplicate register shall, for all the purposes of this Act,
be deemed to be part of the principal register.
(10) Subject to the provisions of section 88 and the rules made there
under, with respect to duplicate registers, the shares or as the case may
be, debentures or any other security, registered in any foreign register
shall be distinguished from the shares or as the case may be, debentures
or any other security, registered in the principal register and in every
other foreign register; and no transaction with respect to any shares
or as the case may be, debentures or any other security, registered in
a foreign register shall, during the continuance of that registration, be
registered in any other register.
(11) The company may discontinue the keeping of any foreign register;
and thereupon all entries in that register shall be transferred to some
other foreign register kept by the company outside India or to the
principal register.
8. Authentication.
(1) The entries in the registers maintained under section 88 and index
included therein shall be authenticated by the company secretary of
the company or by any other person authorised by the Board for the
purpose, and the date of the board resolution authorising the same
shall be mentioned.
(2) The entries in the foreign register shall be authenticated by the
company secretary of the company or person authorised by the Board
by appending his signature to each entry.
9. Declaration in respect of beneficial interest in any shares.

(1) A person whose name is entered in the register of members of a
company as the holder of shares in that company but who does not
hold the beneficial interest in such shares (hereinafter referred to as
“the registered owner”), shall file with the company, a declaration to
that effect in Form No.MGT.4 1[omitted], within a period of thirty days
1. The words “in duplicate”, omitted by the Companies (Management and
Administration) Amendment Rules, 2016 (w.e.f. 23-09-2016)
from the date on which his name is entered in the register of members
of such company:
Provided that where any change occurs in the beneficial interest in
such shares, the registered owner shall, within a period of thirty days
from the date of such change, make a declaration of such change to the
company in Form No.MGT.4 1[omitted].
(2) Every person holding and exempted from furnishing declaration
or acquiring a beneficial interest in shares of a company not registered
in his name (hereinafter referred to as “the beneficial owner”) shall file
with the company, a declaration disclosing such interest in Form No.
MGT.5 1[omitted], within thirty days after acquiring such beneficial
interest in the shares of the company:
Provided that where any change occurs in the beneficial interest in
such shares, the beneficial owner shall, within a period of thirty days
from the date of such change, make a declaration of such change to the
company in Form No.MGT.5 1[omitted].
(3) Where any declaration under section 89 is received by the company,
the company shall make a note of such declaration in the register of
members and shall file, within a period of thirty days from the date
of receipt of declaration by it, a return in Form No.MGT.6 with the
Registrar in respect of such declaration with fee.
1
[Provided that nothing contained in this rule shall apply in relation
to a trust which is created, to set up a Mutual Fund or Venture Capital
Fund or such other fund as may be approved by the Securities and
Exchange Board of India.]
10. Closure of register of members or debenture holders or other

security holders.
(1) A company closing the register of members or the register of
debenture holders or the register of other security holders shall give
at least seven days previous notice and in such manner, as may be
1. Inserted by the Companies (Management and Administration) Second

specified by Securities and Exchange Board of India, if such company is

a listed company or intends to get its securities listed, by advertisement
at least once in a vernacular newspaper in the principal vernacular
language of the district and having a wide circulation in the place
where the registered office of the company is situated, and at least once
in English language in an English newspaper circulating in that district
and having wide circulation in the place where the registered office of
the company is situated and publish the notice on the website as may
be notified by the Central Government and on the website, if any, of
the Company.
(2) The provisions contained in sub-rule (1) shall not be applicable
to a private company provided that the notice has been served on
all members of the private company not less than seven days prior
to closure of the register of members or debenture holders or other
security holders.
11. Annual Return.

(1) Every company shall prepare its annual return in Form No. MGT.7.
(2) The annual return, filed by a listed company or a company having
paid-up share capital of ten crore rupees or more or turnover of fifty
crore rupees or more, shall be certified by a Company Secretary in
practice and the certificate shall be in Form No. MGT.8.
12. Extract of annual return.

(1) The extract of the annual return to be attached with the Board’s
Report shall be in Form No. MGT.9.
(2) A copy of the annual return shall be filed with the Registrar with
such fee as may be specified for the purpose.
13. 1[Omitted]
1. Omitted by the Companies (Management and Administration) Second

Amendment Rules, 2018 (w.e.f. 13-06-2018) for:
#[“13.Return of changes in shareholding position of promoters and top ten
shareholders.-
[Omitted]
1
14. Inspection of registers, returns etc.

(1) The registers and indices maintained pursuant to section 88 and
copies of returns prepared pursuant to section 92, shall be open for
inspection during business hours, at such reasonable time on every
working day as the board may decide, by any member, debenture
holder, other security holder or beneficial owner without payment of
fee and by any other person on payment of such fee as may be specified
in the articles of association of the company but not exceeding fifty
rupees for each inspection.
Explanation.- For the purposes of this sub-rule, reasonable time of not less
than two hours on every working day shall be considered by the company.
(2) Any such member, debenture holder, security holder or beneficial
owner or any other person may require a copy of any such register or
entries therein or return on payment of such fee as may be specified in
the articles of association of the company but not exceeding ten rupees
for each page. Such copy or entries or return shall be supplied within
seven days of deposit of such fee.
Every listed company shall file with the Registrar, a return in Form No. MGT.10,
with respect to changes in the shareholding position of promoters and top ten
shareholders of the company, in each case, representing increase or decrease by
two per cent or more of the paid-up share capital of the company, within fifteen
days of such change.”]
#Substituted by the Companies (Management and Administration) Amendment
Rules, 2016 (w.e.f. 23-09-2016) for: “Every listed company shall file with the
Registrar, a return in Form No.MGT.10 along with the fee with respect to changes
relating to either increase or decrease of two percent or more in the shareholding
position of promoters and top ten shareholders of the company in each case,
*[omitted], within fifteen days of such change.”
*Omitted by the Companies (Management and Administration) Second Amendment
Rules, 2014 (w.e.f. 24-07-2014) for: “ëither value or volume of the shares”
Amendment Rules, 2014 (w.e.f. 24-07-2014). Prior to its omission, explanation
read as under:
“Explanation: For the purpose of this sub-rule, the expression “change” means
increase or decrease by two percent or more in the shareholding of each of the
promoters and each of the top ten shareholders of the company.”
15. Preservation of register of members etc. and annual return.

(1) The register of members along with the index shall be preserved
permanently and shall be kept in the custody of the company secretary
of the company or any other person authorized by the Board for such
purpose; and
(2) The register of debenture holders or any other security holders along
with the index shall be preserved for a period of eight years from the
date of redemption of debentures or securities, as the case may be, and
shall be kept in the custody of the company secretary of the company
or any other person authorized by the Board for such purpose.
(3) Copies of all annual returns prepared under section 92 and copies
of all certificates and documents required to be annexed thereto shall
be preserved for a period of eight years from the date of filing with the
Registrar.
(4) The foreign register of members shall be preserved permanently,
unless it is discontinued and all the entries are transferred to any
other foreign register or to the principal register. Foreign register of
debenture holders or any other security holders shall be preserved for
a period of eight years from the date of redemption of such debentures
or securities.
(5) The foreign register shall be kept in the custody of the company
secretary or person authorised by the Board.
(6) 1[Omitted]
16. Copies of the registers and annual return.

Copies of the registers maintained under section 88 or entries therein
and annual return filed under section 92 shall be furnished to any

“A copy of the proposed special resolution in advance to be filed with the
registrar as required in accordance with first proviso of sub-section (1) of
section 94, shall be filed with the Registrar, at least one day before the date
of general meeting of the company in Form No.MGT.14.”
member, debenture-holder, other security holder or beneficial owner

of the company or any other person on payment of such fee as may
be specified in the Articles of Association of the company but not
exceeding rupees ten for each page and such copy shall be supplied by
the company within a period of seven days from the date of deposit of
fee to the company.
17. Calling of Extraordinary general meeting by requistionists.

(1) The members may requisition convening of an extraordinary
general meeting in accordance with sub-section (4) of section 100,
by providing such requisition in writing or through electronic mode
at least clear twenty-one days prior to the proposed date of such
extraordinary general meeting.
(2) The notice shall specify the place, date, day and hour of the meeting
and shall contain the business to be transacted at the meeting.-
Explanation.- For the purposes of this sub-rule, it is here by clarified
that requistionists should convene meeting at Registered office or in
the same city or town where Registered office is situated and such
meeting should be convened 1[on any day except national holiday].
(3) If the resolution is to be proposed as a special resolution, the notice
shall be given as required by sub-section (2) of section 114.
(4) The notice shall be signed by all the requistionists or by a
requistionists duly authorised in writing by all other requistionists on
their behalf or by sending an electronic request attaching therewith a
scanned copy of such duly signed requisition.
(5) No explanatory statement as required under section 102 need be
annexed to the notice of an extraordinary general meeting convened
by the requistionists and the requistionists may disclose the reasons for
the resolution(s) which they propose to move at the meeting.
(6) The notice of the meeting shall be given to those members whose
1.
Substituted by the Companies (Management and Administration)
Amendment Rules, 2016 (w.e.f. 23-09-2016) for: “on working day”
names appear in the Register of members of the company within three

days on which the requistionists deposit with the Company a valid
requisition for calling an extraordinary general meeting.
(7) Where the meeting is not convened, the requistionists shall have a
right to receive list of members together with their registered address
and number of shares held and the company concerned is bound to
give a list of members together with their registered address made as
on twenty first day from the date of receipt of valid requisition together
with such changes, if any, before the expiry of the forty-five days from
the date of receipt of a valid requisition.
(8) The notice of the meeting shall be given by speed post or registered
post or through electronic mode . Any accidental omission to give
notice to, or the non-receipt of such notice by, any member shall not
invalidate the proceedings of the meeting.
18. Notice of the meeting.

(1) A company may give notice through electronic mode.
Explanation : For the purpose of this rule, the expression ‘‘electronic
mode’’ shall mean any communication sent by a company through
its authorized and secured computer programme which is capable of
producing confirmation and keeping record of such communication
addressed to the person entitled to receive such communication at the
last electronic mail address provided by the member.
(2) A notice may be sent through e-mail as a text or as an attachment
to e-mail or as a notification providing electronic link or Uniform
Resource Locator for accessing such notice.
(3) (i) The e-mail shall be addressed to the person entitled to receive
such e-mail as per the records of the company or as provided by the
depository:
Provided that the company shall provide an advance opportunity atleast
once in a financial year, to the member to register his e-mail address and
changes therein and such request may be made by only those members
who have not got their email id recorded or to update a fresh email id and
not from the members whose e-mail ids are already registered.
(ii) The subject line in e-mail shall state the name of the company,
notice of the type of meeting, place and the date on which the meeting
is scheduled.
(iii) If notice is sent in the form of a non-editable attachment to e-mail,
such attachment shall be in the Portable Document Format or in a
non-editable format together with a ‘link or instructions’ for recipient
for downloading relevant version of the software.
(iv) When notice or notifications of availability of notice are sent
by e-mail, the company should ensure that it uses a system which
produces confirmation of the total number of recipients e-mailed and a
record of each recipient to whom the notice has been sent and copy of
such record and any notices of any failed transmissions and subsequent
re-sending shall be retained by or on behalf of the company as ‘‘proof
of sending’’.
(v) The company’s obligation shall be satisfied when it transmits the
e-mail and the company shall not be held responsible for a failure in
transmission beyond its control:
(vi) If a member entitled to receive notice fails to provide or update
relevant e-mail address to the company, or to the depository participant
as the case may be, the company shall not be in default for not delivering
notice via e-mail.
(vii) The company may send e-mail through in-house facility or
its registrar and transfer agent or authorise any third party agency
providing bulk e-mail facility.
(viii) The notice made available on the electronic link or Uniform
Resource Locator has to be readable, and the recipient should be able
to obtain and retain copies and the company shall give the complete
Uniform Resource Locator or address of the website and full details of
how to access the document or information.
(ix) The notice of the general meeting of the company shall be
simultaneously placed on the website of the company if any and on the
website as may be notified by the Central Government.
[Omitted]
1
19. Proxies.
(1) A member of a company registered under section 8 shall not be
entitled to appoint any other person as his proxy unless such other
person is also a member of such company.
(2) A person can act as proxy on behalf of members not exceeding fifty
and holding in the aggregate not more than ten percent of the total
share capital of the company carrying voting rights:
Provided that a member holding more than ten percent of the total
share capital of the Company carrying voting rights may appoint a
single person as proxy and such person shall not act as proxy for any
other person or shareholder.
(3) The appointment of proxy shall be in the Form No. MGT 11.
2
[20. Voting though electronic means.

“Explanation: For the purpose of this rule, it is hereby declared that the extra
ordinary general meeting shall be held at a place within India.”
2. Substituted by the Companies (Management and Administration) Amend-
ment Rules, 2015 (w.e.f. 19.3.2015) for:
“20. Voting through electronic means.
(1) Every listed company or a company having not less than one thousand
shareholders shall provide to its members facility to exercise their right to
vote at general meetings by electronic means.
*[Provided that the Company may provide the facility referred to in this
sub-rule on or before the 1stday of January 2015]
*Inserted vide Companies (Management and Administration) Amendment
Rules, 2014 (w.e.f. 23-6-2014)
(2) A member may exercise his right to vote at any general meeting by elec-
tronic means and company may pass any resolution by electronic voting
system in accordance with the provisions of this rule.
Explanation. – For the purposes of this rule. –
(i) the expressions ‘‘voting by electronic means’’ or ‘‘electronic voting
system’’ means a ‘secured system’ based process of display of
(l) The provisions of this rule shall apply in respect of the general
electronic ballots, recording of votes of the members and the number

of votes polled in favour or against, such that the entire voting
exercised by way of electronic means gets registered and counted
in an electronic registry in a centralized server with adequate ‘cyber
security’;
(ii) the expression ‘‘secured system’’ means computer hardware, software,
and procedure that – (a) are reasonably secure from unauthorized
access and misuse; (b) provide a reasonable level of reliability and
correct operation; (c) are reasonably suited to performing the
intended functions; and (d) adhere to generally accepted security
procedures.
(iii) the expression “Cyber security” means protecting information,
equipment, devices, computer, computer resource, communication
device and information stored therein from unauthorized access,
use, disclosures, disruption, modification or destruction.”
(3) A company **[which provides ] the facility to its members to exercise
their votes at any general meeting by electronic voting system shall follow
the following procedure, namely;
**Substituted vide Companies (Management and Administration) Amend-
ment Rules, 2014 (w.e.f. 23-6-2014) for “which opts to provide”
(i) the notices of the meeting shall be sent to all the members, auditors
of the company, or directors either-
(a) by registered post or speed post ; or
(b) through electronic means like registered e-mail id;
(c) through courier service;
(ii) the notice shall also be placed on the website of the company, if any
and of the agency forthwith after it is sent to the members;
(iii) the notice of the meeting shall clearly mention that the business may
be transacted through electronic voting system and the company is
providing facility for voting by electronic means;
(iv) the notice shall clearly indicate the process and manner for voting by
electronic means and the time schedule including the time period
during which the votes may be cast and shall also provide the login
ID and create a facility for generating password and for keeping
security and casting of vote in a secure manner;
(v) the company shall cause an advertisement to be published, not less
than five days before the date of beginning of the voting period, at
least once in a vernacular newspaper in the principal vernacular
language of the district in which the registered office of the company
is situated, and having a wide circulation in that district, and at

least once in English language in an English newspaper having a
wide circulation in that district, about having sent the notice of the
meeting and specifying therein, inter alia, the following matters,
namely:-
(a) statement that the business may be transacted by electronic
voting;
(b) the date of completion of sending of notices;
(c) the date and time of commencement of voting through
electronic means;
(d) the date and time of end of voting through electronic means;
(e) the statement that voting shall not be allowed beyond the
said date and time;
(f) website address of the company and agency, if any, where
notice of the meeting is displayed; and
(g) contact details of the person responsible to address the
grievances connected with the electronic voting;
(vi) the e-voting shall remain open for not less than one day and not
more than three days: Provided that in all such cases, such voting
period shall be completed three days prior to the date of the general
meeting;
(vii) during the e-voting period, shareholders of the company, holding
shares either in physical form or in dematerialized form, as on the
record date, may cast their vote electronically:
Provided that once the vote on a resolution is cast by the shareholder,
he shall not be allowed to change it subsequently.
(viii) at the end of the voting period, the portal where votes are cast shall
forthwith be blocked.
(ix) the Board of directors shall appoint one scrutinizer, who may be
chartered Accountant in practice, Cost Accountant in practice,
or Company Secretary in practice or an advocate, but not in
employment of the company and is a person of repute who, in the
opinion of the Board can scrutinize the e-voting process in a fair and
transparent manner:
Provided that the scrutinizer so appointed may take assistance of a
person who is not in employment of the company and who is well-
versed with the e-voting system;
(x) the scrutinizer shall be willing to be appointed and be available for
the purpose of ascertaining the requisite majority;
meetings for which notices are issued on or after the date of

commencement of this rule;
1
[(2) Every company which has listed its equity shares on a recognised
(xi) the scrutinizer shall, within a period of not exceeding three working
days from the date of conclusion of e-voting period, unblock the
votes in the presence of at least two witnesses not in the employment
of the company and make a scrutinizer’s report of the votes cast in
favour or against, if any, forthwith to the Chairman;
(xii) the scrutinizer shall maintain a register either manually or
electronically to record the assent or dissent, received, mentioning
the particulars of name, address, folio number or client ID of the
shareholders, number of shares held by them, nominal value of such
shares and whether the shares have differential voting rights;
(xiii) the register and all other papers relating to electronic voting shall
remain in the safe custody of the scrutinizer until the chairman
considers, approves and signs the minutes and thereafter, the
scrutinizer shall return the register and other related papers to the
company.
(xiv) the results declared along with the scrutinizer’s report shall be placed
on the website of the company and on the website of the agency
within two days of passing of the resolution at the relevant general
meeting of members;
(xv) subject to receipt of sufficient votes, the resolution shall be deemed
to be passed on the date of the relevant general meeting of members.”
1. Substituted by the Companies (Management and Administration) Amend-
ment Rules, 2016 (w.e.f. 23-09-2016) for:
“(2) Every company other than a company referred to in Chapter XB or
Chapter XC of the Securities & Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009 having its equity shares
listed on a recognized stock exchange or a company having not less than
one thousand members, shall provide to its members facility to exercise
their right to vote on resolutions proposed to be considered at general meet-
ings by electronic means.
Explanation - For the purposes of this rule, the expression –
(i) "agency'' means the National Securities Depository Limited, the
Central Depository Services" India Limited or any other entity
approved by the Ministry of corporate Affairs subject to the
condition that the National Securities Depository Limited, the
Central Depository Services (India) Limited or such other entity has
stock exchange and every company having not less than one thousand
members shall provide to its members facility to exercise their right to
vote on resolutions proposed to be considered at a general meeting by
electronic means:
Provided that a Nidhi, or an enterprise or institutional investor referred
to in Chapter XB or Chapter XC of the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations,
2009 is not required to provide the facility to vote by electronic means:
obtained a certificate from the Standardisation Testing and Quality

Certification Directorate, Department of Information Technology,
Ministry of Communications and Information Technology,
Government of India including with regard to compliance with
parameters specified under Explanation (vi);
(ii) "cut-off date" means a date not earlier than seven days before the
date of general meeting for determining the eligibility to vote by
electronic means or in the general meeting;
(iii) "cyber security" means protecting information, equipment,
device, computer, computer resource, communication device
and information stored therein from unauthorised access/ use'
disclosures, disruption, modification or destruction;
(iv) "electronic voting system" means a secured system based process of
display of electronic ballots, recording of votes of the member3 and
the number of votes Polled in favour or against' in such a manner
that the entire voting exercised by way of electronic means gets
registered and counted in an electronic registry in a centralised
server with adequate cyber security;
(v) ''remote e-voting'' means the facility of casting vote by a member
using an electronic voting system from a place other than venue of a
general meeting;
(vi) "secured system" means computer hardware, software, and
procedure that
(a) are reasonably secure from unauthorised access and misuse;
(b) provide a reasonable level of reliability and correct operation;
(c) are reasonably suited to performing the intended functions;
and
(d) adhere to generally accepted security procedures;
(vii) “voting by electronic means” included “remote e-voting” and voting
at the general meeting through an electronic voting system which
may be the same as used for remote e-voting.”
Explanation. – For the purpose of this sub-rule, “Nidhi” means a

company which has been incorporated as a Nidhi with the object
of cultivating the habit of thrift and savings amongst its members,
receiving deposits from and lending to, its members only, for their
mutual benefit, and which complies with such rules as are prescribed
by the Central Government for regulation of such class of companies.]
(3) A member may exercise his right to vote through voting by
electronic means in resolutions referred to in sub-rule (2) and the
company shall pass such resolutions in accordance with the provisions
of this rule.
(4) A company which provides the facility to its members to exercise
voting by electronic means shall comply with the following procedure,
namely:-
(i) the notice of the meeting shall be sent to all the members,
directors and auditors of the company either
(a) by registered post or speed post ; or
(b) through electronic means, namely, registered e-mail
ID of the recipient; or
(c) by courier service;
(ii) the notice shall also be placed on the website, if any, of the
company and of the agency forthwith after it is sent to the
members;
(iii) the notice of the meeting shall clearly state –
(A) that the company is providing facility for voting by
electronic means and the business may be transacted
through such voting;
(B) that the facility for voting, either through electronic
voting system or ballot or polling paper shall also be
made available at the meeting and members attending
the meeting who have not already cast their vote by
remote e-voting shall be able to exercise their right at
the meeting;
(C) that the members who have cast their vote by remote-
voting prior to the meeting may also attend the
meeting but shall not be entitled to cast their vote
again;
(iv) the notice shall –
(A) indicate the process and manner for voting by
electronic means;
(B) indicate the time schedule including the time period
during which the votes may be cast by remote e-voting;
(C) provide the details about the login lD;
(D) specify the process and manner for generating or
receiving the password and for casting of vote in a
secure manner.
(v) the company shall cause a public notice by way of an
advertisement to be published, immediately on completion
of despatch of notices for the meeting under clause (i) of
sub-rule (4) but at least twenty-one days before the date of
general meeting, at least once in a vernacular newspaper in
the principal vernacular language of the district in which
the registered office of the company is situated, and having a
wide circulation in that district, and at least once in English
language in an English newspaper having country-wide
circulation, and specifying in the said advertisement, inter
alia,. the following manners namely :-
(a) statement that the business maybe transacted through
voting by electronic means;
(b) the date and time of commencement of remote
e-voting;
(c) the date and time of end of remote e-voting;
(d) cut-off date;
(e) the manner in which persons who have acquired
shares and become members of the company after

the dispatch of notice may obtain the login ID and
password;
(f) the statement that –
(A) remote e-voting shall not be allowed beyond
the said date and time;
(B) the manner in which the company shall
provide for voting by members present at the
meeting; and
(C) a member may participate in the general
meeting even after exercising his right to
vote through remote e-voting but shall not be
allowed to vote again in the meeting; and
(D) a person whose name is recorded in the register
of members or in the register of beneficial
owners maintained by the depositories as on
the cut-off date only shall be entitled to avail
the facility of remote e-voting as well as voting
in the general meeting;
(g) website address of the company, if any, and of the
agency where notice of the meeting is displayed; and
(h) name, designation, address, email id and phone
number of the person responsible to address the
grievances connected with facility for voting by
electronic means:
Provided that the public notice shall be placed on the
website of the company, if any, and of the agency;
(vi) the facility for remote e-voting shall remain open for not
less than thee days and shall close at 5.00 p.m. on the date
Preceding the date of the general meeting;
(vii) during the period when facility for remote e-voting is
provided, the members of the company, holding shares

either in physical form or in dematerialised form, as on the
cut-off date, may opt for remote e-voting:
Provided that once the vote on a resolution is cast by the
member, he shall not be allowed to change it subsequently or
cast the vote again:
Provided further that a member may participate in the
general meeting even after exercising his right to vote
through remote e-voting but shall not be allowed to vote
again;
(viii) at the end of the remote e-voting period, the facility shall
forthwith be blocked:
Provided that if a company opts to provide the same
electronic voting system as used during remote e-voting
during the general meeting, the said facility shall be in
operation till all the resolutions are considered and voted
upon in the meeting and may be used for voting only by the
members attending the meeting and who have not exercised
their right to vote through remote e-voting.
(ix) the Board of Directors shall appoint one or more scrutiniser,
who may be Chartered Accountant in practice, Cost
Accountant in practice, or Company Secretary in practice or
an Advocate, or any other person who is not in employment
of the company and is a person of repute who, in the opinion
of the Board can scrutinise the voting and remote e-voting
process in a fair and transparent manner:
Provided that the scrutiniser so appointed may take assistance
of a person who is not in employment of the company and
who is well-versed with the electronic voting system;
(x) the scrutiniser shall be willing to be appointed and be
available for the purpose of ascertaining the requisite
majority;
(xi) the Chairman shall, at the general meeting, at the end of

discussion on the resolutions on which voting is to be held,
allow voting, as provided in clauses (a) to (h) of sub-rule (l)
of rule 21 as applicable, with the assistance of scrutiniser, by
use of ballot or polling paper or by using an electronic voting
system for all those members who are present at the general
meeting but have not cast their votes by availing the remote
e-voting facility.
(xii) the scrutiniser shall, immediately after the conclusion of
voting at the general meeting, first count the votes cast at the
meeting, thereafter unblock the votes cast through remote
e-voting in the presence of at least two witnesses not in the
employment of the company and make, not later than three
days of conclusion of the meeting, a consolidated scrutiniser’s
report of the total votes cast in favor or against, if any, to the
Chairman or a person authorised by him in writing who
shall countersign the same:
Provided that the Chairman or a person authorised by him
in writing shall declare the result of the voting forthwith;
Explanation. – lt is hereby clarified that the manner in which
members have cast their votes, that is affirming or negating
the resolution, shall remain secret and not available to the
Chairman, Scrutiniser or any other person till the votes are
cast in the meeting.
(xiii) For the purpose of ensuring that members who have cast
their votes through remote e-voting do not vote again at the
general meeting, the scrutiniser shall have access, after the
closure of period for remote e-voting and before the start
of general meeting, to details relating to members such as
their names, folios, number of shares held and such other
information that the scrutiniser may require, who have cast
votes through remote e-voting but not the manner in which
they have cast their votes:
(xiv) the scrutiniser shall maintain a register either manually

or electronically to record the assent or dissent received,
mentioning the particulars of name, address, folio number
or client ID of the members, number of shares held by them,
nominal value of such shares and whether the shares have
differential voting rights;
(xv) the register and all other papers relating to voting by
electronic means shall remain in the safe custody of the
scruitniser until the Chairman considers, approves and signs
the minutes and there after, the scrutiniser shall hand over
the register and other related papers to the company.
(xvi) the results declared along with the report of the scrutiniser
shall be placed on the website of the company, if any, and
on the website of the agency immediately after the result is
declared by the Chairman :
Provided that in case of companies whose equity shares are
listed on a recognised stock exchange, the company shall,
simultaneously, forward the results to the concerned stock
exchange or exchanges where its equity shares are listed and
such stock exchange or exchanges shall place the results on
its or their website.
(xvii) subject to receipt of requisite number of votes, the resolution
shall be deemed to be passed on the date of the relevant
general meeting.
Explanation. – For the purposes of this clause, the requisite

number of votes shall be the votes required to pass the
resolution as the ‘ordinary resolution’ or the ‘special
resolution’ as the case may be, under section 114 of the
Act.
(xviii) a resolution proposed to be considered through voting by
electronic means shall not be withdrawn.
21. Manner in which the Chairman of meeting shall get the poll
process scrutinised and report thereon.
(1) The Chairman of a meeting shall ensure that –
(a) The Scrutinizers are provided with the Register of Members,
specimen signatures of the members, Attendance Register
and Register of Proxies.
(b) The Scrutinizers are provided with all the documents
received by the Company pursuant to sections 105, 112 and
section 113.
(c) The Scrutinizers shall arrange for Polling papers and
distribute them to the members and proxies present at the
meeting; in case of joint shareholders, the polling paper
shall be given to the first named holder or in his absence to
the joint holder attending the meeting as appearing in the
chronological order in the folio and the Polling paper shall
be in Form No. MGT.12.
(d) The Scrutinizers shall keep a record of the polling papers
received in response to poll, by initialing it.
(e) The Scrutinizers shall lock and seal an empty polling box in
the presence of the members and proxies.
(f) The Scrutinizers shall open the Polling box in the presence of
two persons as witnesses after the voting process is over.
(g) In case of ambiguity about the validity of a proxy, the
Scrutinizers shall decide the validity in consultation with the
Chairman.
(h) The Scrutinizers shall ensure that if a member who has
appointed a proxy has voted in person, the proxy’s vote shall
be disregarded.
(i) The Scrutinizers shall count the votes cast on poll and
prepare a report thereon addressed to the Chairman.
(j) Where voting is conducted by electronic means under the
provisions of section 108 and rules made there under, the

company shall provide all the necessary support, technical
and otherwise, to the Scrutinizers in orderly conduct of the
voting and counting the result thereof.
(k) The Scrutinizers’ report shall state total votes cast, valid votes,
votes in favour and against the resolution including the details
of invalid polling papers and votes comprised therein.
(l) The Scrutinizers shall submit the Report to the Chairman
who shall counter-sign the same.
(m) The Chairman shall declare the result of Voting on poll.
The result may either be announced by him or a person
authorized by him in writing.
(2) The scrutinizers appointed for the poll, shall submit a report to the
Chairman of the meeting in Form No. MGT.13 and the report shall be
signed by the scrutinizer and, in case there is more than one scrutinizer
by all the scrutinizer, and the same shall be submitted by them to the
Chairman of the meeting within seven days from the date the poll is taken.
22. Procedure to be followed for conducting business through

postal ballot.
(1) Where a company is required or decides to pass any resolution
by way of postal ballot, it shall send a notice to all the shareholders,
along with a draft resolution explaining the reasons therefore and
requesting them to send their assent or dissent in writing on a
postal ballot because postal ballot means voting by post or through
electronic means within a period of thirty days from the date of
dispatch of the notice.
(2) The notice shall be sent either (a) by Registered Post or speed post,
or (b) through electronic means like registered e-mail id or (c) through
courier service for facilitating the communication of the assent or
dissent of the shareholder to the resolution within the said period of
thirty days.
(3) An advertisement shall be published at least once in a vernacular
newspaper in the principal vernacular language of the district in which

the registered office of the company is situated, and having a wide
circulation in that district, and at least once in English language in
an English newspaper having a wide circulation in that district, about
having dispatched the ballot papers and specifying therein, inter alia,
the following matters, namely:-
(a) a statement to the effect that the business is to be transacted
by postal ballot which includes voting by electronic means;
(b) the date of completion of dispatch of notices;
(c) the date of commencement of voting;
(d) the date of end of voting;
(e) the statement that any postal ballot received from the
member beyond the said date will not be valid and voting
whether by post or by electronic means shall not be allowed
beyond the said date;
(f) a statement to the effect that members, who have not received
postal ballot forms may apply to the company and obtain a
duplicate thereof; and
(g) contact details of the person responsible to address the
grievances connected with the voting by postal ballot
including voting by electronic means.
(4) The notice of the postal ballot shall also be placed on the website of
the company forthwith after the notice is sent to the members and such
notice shall remain on such website till the last date for receipt of the
postal ballots from the members.
(5) The Board of directors shall appoint one scrutinizer, who is not
in employment of the company and who, in the opinion of the Board
can conduct the postal ballot voting process in a fair and transparent
manner.
(6) The scrutinizer shall be willing to be appointed and be available for
the purpose of ascertaining the requisite majority.
(7) 1[Omitted]
(8) Postal ballot received back from the shareholders shall be kept in the
safe custody of the scrutinizer and after the receipt of assent or dissent
of the shareholder in writing on a postal ballot, no person shall deface
or destroy the ballot paper or declare the identity of the shareholder.
(9) The scrutinizer shall submit his report as soon as possible after the
last date of receipt of postal ballots but not later than seven days thereof;
(10) The scrutinizer shall maintain a register either manually or
electronically to record their assent or dissent received, mentioning
the particulars of name, address, folio number or client ID of the
shareholder, number of shares held by them, nominal value of such
shares, whether the shares have differential voting rights, if any, details
of postal ballots which are received in defaced or mutilated form and
postal ballot forms which are invalid.
(11) The postal ballot and all other papers relating to postal ballot
including voting by electronic means, shall be under the safe custody
of the scrutinizer till the chairman considers, approves and signs the
minutes and thereafter, the scrutinizer shall return the ballot papers
and other related papers or register to the company who shall preserve
such ballot papers and other related papers or register safely.
(12) The assent or dissent received after thirty days from the date of
issue of notice shall be treated as if reply from the member has not
been received.
(13) The results shall be declared by placing it, along with the
scrutinizer’s report, on the website of the company.
(14) 2[Omitted]
1. Omitted by the Companies (Management and Administration) Amendment

Rules, 2016 (w.e.f. 23-09-2016) for:
“(7)If a resolution is assented to by the requisite majority of the shareholders by
means of postal ballot including voting by electronic means, it shall be deemed
to have been duly passed at a general meeting convened in that behalf.”
Rules, 2016 (w.e.f. 23-09-2016) for: “The resolution shall be deemed to be
passed on the date of at a meeting convened in that behalf”
(15) The provisions of rule 20 regarding voting by electronic means

shall apply, as far as applicable, mutatis mutandis to this rule in respect
of the voting by electronic means.
(16) pursuant to clause (a) of sub-section (1) of section 110, the
following items of business shall be transacted only by means of voting
through a postal ballot-
(a) alteration of the objects clause of the memorandum and in
the case of the company in existence immediately before the
commencement of the Act, alteration of the main objects of
the memorandum;
(b) alteration of articles of association in relation to insertion
or removal of provisions which, under sub-section (68) of
section 2, are required to be included in the articles of a
company in order to constitute it a private company;
(c) change in place of registered office outside the local limits
of any city, town or village as specified in sub-section (5) of
section 12;
(d) change in objects for which a company has raised money
from public through prospectus and still has any unutilized
amount out of the money so raised under sub-section (8) of
section 13;
(e) issue of shares with differential rights as to voting or dividend
or otherwise under subclause (ii) of clause (a) of section 43;
(f) variation in the rights attached to a class of shares or
debentures or other securities as specified under section 48;
(g) buy-back of shares by a company under sub-section (1) of
section 68;
(h) election of a director under section 151 of the Act;
(i) sale of the whole or substantially the whole of an undertaking
of a company as specified under sub-clause (a) of sub-section
(1) of section 180;
(j) giving loans or extending guarantee or providing security in

excess of the limit specified under sub-section (3) of section
186:

1
[Provided that any aforesaid items of business under this
sub-rule, required to be transacted by means of postal ballot,
may be transacted at a general meeting by a company which
is required to provide the facility to members to vote by
electronic means under section 108, in the manner provided
in that section:
Provided further that One Person Companies and other
companies having member’s upto two hundred are not
required to transact any business through postal ballot.]
23. Special Notice.

(1) A special notice required to be given to the company shall be signed,
either individually or collectively by such number of members holding
not less than one percent of total voting power or holding shares on
which an aggregate sum of 2[not less than five lakh rupees] has been
paid up on the date of the notice.
(2) The notice referred to in sub-rule (1) shall be sent by members to the
company not earlier than three months but at least fourteen days before
the date of the meeting at which the resolution is to be moved, exclusive of
the day on which the notice is given and the day of the meeting.
(3) The company shall immediately after receipt of the notice, give its
1. Substituted by the Companies (Management and Administration) Second

“Provided that One Person Company and other companies having members
upto two hundred are not required to transact any business through postal
ballot.”
2. Substituted by the Companies (Management and Administration) Amendment
Rules, 2015 (w.e.f. 28-08-2015) for: *“not more than five lakh rupees”
*Substituted by the Companies (Management and Administration)
Amendment Rules, 2014 (w.e.f. 24-07-2014) for: “not less than five lakh rupees”
members notice of the resolution at least seven days before the meeting,
exclusive of the day of dispatch of notice and day of the meeting , in the
same manner as it gives notice of any general meetings.
(4) Where it is not practicable to give the notice in the same manner as
it gives notice of any general meetings, the notice shall be published in
English language in English newspaper and in vernacular language in a
vernacular newspaper, both having wide circulation in the State where
the registered office of the Company is situated and such notice shall
also be posted on the website, if any, of the Company.
(5) The notice shall be published at least seven days before the meeting,
exclusive of the day of publication of the notice and day of the meeting.
24. Resolutions and agreements to be filed.

A copy of every resolution or any agreement required to be filed,
together with the explanatory statement under section 102, if any, shall
be filed with the Registrar in Form No. MGT 14 along with the fee.
25. Minutes of proceedings of general meeting, meeting of Board

of Directors and other meetings and resolutions passed by postal
ballot.
(1) (a) A distinct minute book shall be maintained for each type of
meeting namely:-
(i) general meetings of the members;
(ii) meetings of the creditors
(iii) meetings of the Board; and
(iv) meetings of each of the committees of the Board.
Explanation. – For the proposes of this sub-rule, resolutions passed by
postal ballot shall be recorded in the minute book of general meetings
as if it has been deemed to be passed in the general meeting.
(b) (i) The minutes of proceedings of each meeting shall be entered
in the books maintained for that purpose along with the date of such
entry within thirty days of the conclusion of the meeting.
(ii) In case of every resolution passed by postal ballot, a brief report on

the postal ballot conducted including the resolution proposed, the result
of the voting thereon and the summary of the scrutinizer’s report shall
be entered in the minutes book of general meetings along with the date
of such entry within thirty days from the date of passing of resolution.
1
(d) Each page of every such book shall be initialed or signed and the
last page of the record of proceedings of each meeting or each report in
such books shall be dated and signed –
(i) in the case of minutes of proceedings of a meeting of the
Board or of a committee thereof, by the chairman of the said
meeting or the chairman of the next succeeding meeting;
(ii) in the case of minutes of proceedings of a general meeting,
by the chairman of the same meeting within the aforesaid
period of thirty days or in the event of the death or inability
of that chairman within that period, by a director duly
authorised by the Board for the purpose;
(iii) In case of every resolution passed by postal ballot, by the
chairman of the Board within the aforesaid period of thirty
days or in the event of there being no chairman of the Board
or the death or inability of that chairman within that period,
by a director duly authorized by the Board for the purpose.
(e) The minute books of general meetings, shall be kept at the registered
office of the company and shall be preserved permanently and kept in
the custody of the company secretary or any director duly authorised
by the board 2[omitted].
(f) The minutes books of the Board and committee meetings shall
be preserved permanently and kept in the custody of the company
secretary of the company or any director duly authorized by the Board
1. In principal rules 25(1)(d) is coming after 25(1)(b).

Rules, 2016 (w.e.f. 23-09-2016) for: “or at such other place as may be approved
by the Board”
for the purpose and shall be kept in the registered office or such place
as Board may decide.
26. Copy of minute book of general meeting.
Any member shall be entitled to be furnished, within seven working
days after he has made a request in that behalf to the company, with a
copy of any minutes of any general meeting, on payment of such sum
as may be specified in the articles of association of the company, but
not exceeding a sum of ten rupees for each page or part of any page:
Provided that a member who has made a request for provision of
soft copy in respect of minutes of any previous general meetings held
during a period immediately preceding three financial years shall be
entitled to be furnished, with the same free of cost.
27. Maintenance and inspection of document in electronic form.
(1) Every listed company or a company having not less than one
thousand shareholders, debenture holders and other security holders,
1
[may] maintain its records, as required to be maintained under the Act
or rules made there under, in electronic form.
Explanation.- For the purposes of this sub-rule, it is hereby clarified
that in case of existing companies, data 1[may] be converted from
physical mode to electronic mode within six months from the date of
notification of provisions of section 120 of the Act.
(2) The records in electronic form shall be maintained in such manner
as the Board of directors of the company may think fit,
Provided that –
(a) the records are maintained in the same formats and in
accordance with all other requirements as provided in the
Act or the rules made there under;
(b) the information as required under the provisions of the Act
or the rules made there under should be adequately recorded
for future reference;

Amendment Rules, 2014 (w.e.f. 24-07-2014) for: “shall”
(c) the records must be capable of being readable, retrievable

and reproducible in printed form;
(d) the records are capable of being dated and signed digitally
wherever it is required under the provisions of the Act or the
rules made thereunder;
(e) the records, once dated and signed digitally, shall not be
capable of being edited or altered;
(f) the records shall be capable of being updated, according to
the provisions of the Act or the rules made there under, and
the date of updating shall be capable of being recorded on
every updating.
Explanation – For the purpose of this rule, the term “records” means
any register, index, agreement, memorandum, minutes or any other
document required by the Act or the rules made there under to be kept
by a company.
28. Security of records maintained in electronic form.-

(1) The Managing Director, Company Secretary or any other director
or officer of the company as the Board may decide shall be responsible
for the maintenance and security of electronic records.
(2) The person who is responsible for the maintenance and security of
electronic records shall-
(a) provide adequate protection against unauthorized access,
alteration or tampering of records;
(b) ensure against loss of the records as a result of damage to, or
failure of the media on which the records are maintained;
(c) ensure that the signatory of electronic records does not
repudiate the signed record as not genuine;
(d) ensure that computer systems, software and hardware are
adequately secured and validated to ensure their accuracy,
reliability and consistent intended performance;
(e) ensure that the computer systems can discern invalid and
altered records;
(f) ensure that records are accurate, accessible, and capable of
being reproduced for reference later;
(g) ensure that the records are at all times capable of being
retrieved to a readable and printable form;
(h) ensure that records are kept in a non-rewriteable and non-
erasable format like pdf. version or some other version which
cannot be altered or tampered;
(i) ensure that at least one backup, taken at a periodicity of not
exceeding one day, are kept of the updated records kept in
electronic form, every backup is authenticated and dated and
such backups shall be securely kept at such places as may be
decided by the Board;
(j) limit the access to the records to the managing director,
company secretary or any other director or officer or persons
performing work of the company as may be authorized by
the Board in this behalf;
(k) ensure that any reproduction of non-electronic original
records in electronic form is complete, authentic, true and
legible when retrieved;
(l) arrange and index the records in a way that permits easy
location, access and retrieval of any particular record; and
(m) take necessary steps to ensure security, integrity and
confidentiality of records.
29. Inspection and copies of records maintained in electronic

form.
Where a company maintains its records in electronic form, any duty
imposed by the Act or rules made there under to make those records
available for inspection or to provide copies of the whole or a part of
those records, shall be construed as a duty to make the records available
for inspection in electronic form or to provide copies of those records
containing a clear reproduction of the whole or part thereof, as the case

may be on payment of not exceeding ten rupees per page.
30. Penalty
If any default is made in compliance with any of the provisions of this
rule, the company and every officers or such other person who is in
default shall be punishable with fine which may extend to five thousand
rupees and where the contravention is a continuing one, with a further
fine which may extend to five hundred rupees for every day after the
first during which such contravention continues.
31. Report on Annual General Meeting.

(1) The report in pursuance of the provisions of sub-section (1) of
section 121 shall be prepared in the following manner, namely:-
(a) the report under this section shall be prepared in addition to
the minutes of the general meeting;
(b) the report shall be signed and dated by the Chairman of the
meeting or in case of his inability to sign, by any two directors
of the company, one of whom shall be the Managing director,
if there is one and company secretary of the company;
(c) the report shall contain the details in respect of the following,
namely:-
(i) the day, date, hour and venue of the annual general
meeting;
(ii) confirmation with respect to appointment of
Chairman of the meeting;
(iii) number of members attending the meeting;
(iv) confirmation of quorum;
(v) confirmation with respect to compliance of the Act
and the Rules, secretarial standards made there under
with respect to calling, convening and conducting the
meeting;
(vi) business transacted at the meeting and result thereof;

(vii) particulars with respect to any adjournment,
postponement of meeting, change in venue; and
(viii) any other points relevant for inclusion in the report.
(d) the Report shall contain fair and correct summary of the
proceedings of the meeting.
(2) The copy of the report prepared in pursuance of sub-section (1) of
section 121 and sub-rule (1), shall be filed with the Registrar in 1[Form
No. MGT.15] within thirty days of the conclusion of the annual general
meeting along with the fee.
1. ‘Form No. MGT-15’ substituted by the Companies (Management and

Administration) Amendment Rules, 2018 (w.e.f. 16-02-2018).
212
COMPANIES (SIGNIFICANT BENEFICIAL

OWNERS) RULES, 2018
[G.S.R. 561(e), New Delhi, 13th June, 2018]
In exercise of the powers conferred by Section 90 read with sub-section
(l) of section 469 of the Companies Act,2013 (18 of 2013), the Central
Government hereby makes the following rules, namely :-

(1) These rules may be called the Companies (Significant Beneficial
Owners) Rules, 2018.
Official Gazette.
2. Definitions.
(b) “form” means the form specified in Annexure to these rules;
(c) “registered owner” means a person whose name is entered in
the register of members of a company as the holder of shares
in that company but who does not hold beneficial interest in
such shares;
(d) “section” means a section of the Act
(e) “significant beneficial owner” means an individual referred
to in sub-section (1) of section 90 (holding ultimate
beneficial interest of not less than ten per cent.) read with
sub-section (10) of section 89, but whose name is not entered
in the register of members of a company as the holder of such
shares, and the term ‘significant beneficial ownership’ shall
be construed accordingly;
212
Companies (Significant Beneficial Owners) Rules, 2018 213
Explanation l. – For the purpose of this clause, the significant

beneficial ownership, in case of persons other than
individuals or natural persons, shall be determined as under-
(i) where the member is a company, the significant
beneficial owner is the natural person, who, whether
acting alone or together with other natural persons,
or through one or more other persons or trusts, holds
not less than ten per cent. share capital of the company
or who exercises significant influence or control in the
company through other means;
(ii) where the member is a partnership firm, the significant
beneficial owner is the natural person, who, whether
acting alone or together with other natural persons, or
through one or more other persons or trusts, holds not
less than ten per cent. of capital or has entitlement of
not less than ten per cent. of profits of the partnership;
(iii) where no natural person is identified under (i) or (ii),
the significant beneficial owner is the relevant natural
person who holds the position of senior managing
official;
(iv) where the member is a trust (through trustee), the
identification of beneficial owner(s) shall include
identification of the author of the trust, the trustee, the
beneficiaries with not less than ten per cent. interest
in the trust and any other natural person exercising
ultimate effective control over the trust through a
chain of control or ownership;
Explanation II – It is hereby clarified that instruments in the

form of global depository receipts, compulsorily convertible
preference shares or compulsorily convertible debentures
shall be treated as ‘shares’ the purpose of this clause;
defined in the Act or in Companies (Specification of Definitions
214 Companies (Significant Beneficial Owners) Rules, 2018
Details) Rules, 2014 shall have the meanings respectively assigned to

them in the Act and the said Rules.
3. Declaration of significant beneficial ownership in shares under

section 90.
(1) Every significant beneficial owner shall file a declaration in Form
No. BEN-I to the company in which he holds the significant beneficial
ownership on the date of commencement of these rules within ninety
days from such commencement and within thirty days in case of any
change in his significant beneficial ownership.
(2) Every individual, who, after the commencement of these rules,
acquires significant beneficial ownership in a company shall file a
declaration in Form No. BEN-1 to the company, within thirty days
of acquiring such significant beneficial ownership or in case of any
change in such ownership.
4. Return of significant beneficial owners in shares.

Where any declaration under rule 3 is received by the company, it shall
file a return in Form No. BEN-2 with the Registrar in respect of such
declaration, within a period of thirty days from the date of receipt
of declaration by it, along with the fees as prescribed in companies
(Registration offices and fees) Rules, 2014.
5. Register of significant beneficial owners.

(1) The company shall maintain a register of significant beneficial
owners in Form No. BEN - 3.
(2) The register shall be open for inspection during business hours, at
such reasonable time of not less than two hours, on every working day
as the board may decide, by any member of the company on payment
of such fee as may be specified by the company but not exceeding fifty
rupees for each inspection.
6. Notice seeking information about significant beneficial owners.

A company shall give notice seeking information in accordance with
Companies (Significant Beneficial Owners) Rules, 2018 215
under sub-section (5) of section 90, in Form No. BEN - 4.
7. Application to the Tribunal.

The company may apply to the Tribunal in accordance with sub-
section (7) of section 90, for order directing that the shares in question
be subject to restrictions, including
(a) restrictions on the transfer of interest attached to the shares
in question;
(b) suspension of the right to receive dividend in relation to the
shares in question;
(c) suspension of voting rights in relation to the shares in
question;
(d) any other restriction on all or any of the rights attached with
the shares in question.
8. Non-Applicability.
These rules are not made applicable to the holding of shares of
companies/body corporates, in case of pooled investment vehicles/
investment funds such as Mutual Funds, Alternative Investment Funds
(AIFs), Real Estate Investment Trusts (REITs) and Infrastructure
Investment Trusts (lnvITs) regulated under SEBI Act.
216
CHAPTER VIII
COMPANIES (DECLARATION AND PAYMENT
OF DIVIDEND) RULES, 2014
[G.S.R.241(E), Dated 31st March, 2014]
In exercise of the powers conferred under sub-section (1) of section 123
read with section 469 of the Companies Act, 2013 (18 of 2013) and in
and Forms, 1956 and other Rules prescribed under the Companies
Act, 1956 on matters covered under these rules, except as respects
things done or omitted to be done before such suppression, the Central
Government hereby makes the following rules, namely : –

(1) These rules may be called the Companies (Declaration and Payment
of Dividend) Rules, 2014.
2. Definitions.
(a) “Act” means the Companies Act, 2013;
(b) “section” means section of the Act.
defined in the Act or in the Companies (Specification of Definitions
Details) Rules, 2014, shall have the same meanings respectively
assigned to them in the Act or in the said Rules.
3. Declaration of dividend out of reserves.

In the event of inadequacy or absence of profits in any year, a company
may declare dividend out of free reserves subject to the fulfillment of
the following conditions, namely:–
216
Companies (Declaration and Payment of Dividend) Rules, 2014 217
(1) The rate of dividend declared shall not exceed the average of the
rates at which dividend was declared by it in the three years immediately
preceding that year:
Provided that this sub-rule shall not apply to a company, which has
not declared any dividend in each of the three preceding financial year.
(2) The total amount to be drawn from such accumulated profits shall
not exceed one-tenth of the sum of its paid-up share capital and free
reserves as appearing in the latest audited financial statement.
(3) The amount so drawn shall first be utilised to set off the losses
incurred in the financial year in which dividend is declared before any
dividend in respect of equity shares is declared.
(4) The balance of reserves after such withdrawal shall not fall below
fifteen per cent of its paid up share capital as appearing in the latest
audited financial statement.
(5) [Omitted]
1
1. Omitted by the Companies (Declaration and Payment of Dividend) Second

Amendment Rules, 2015 (w.e.f. 29-05-2015). Prior to its omission, sub rule (5)
read as under:
*[“No company shall declare dividend unless carried over previous losses and
depreciation not provided in previous year or years are set off against profit of
the company of the current year”]
*Substituted by the Companies (Declaration and Payment of Dividend)
“No company shall declare dividend unless carried over previous losses and
depreciation not provided in previous year are set off against profit of the
company of the current year the loss or depreciation, whichever is less, in
previous years is set off against the profit of the company for the year for which
dividend is declared or paid.”
218
INVESTOR EDUCATION AND PROTECTION

FUND AUTHORITY (APPOINTMENT OF
CHAIRPERSON AND MEMBERS, HOLDING
OF MEETINGS AND PROVISION FOR
OFFICES AND OFFICERS) RULES, 2016
[G.S.R. 26(E), Dated 13th January 2016]
In exercise of the powers conferred by sub-sections (5), (6) and (7)
of section 125 read with section 469 of the Companies Act, 2013 (18
of 2013), the Central Government hereby makes the following rules,
namely:-
1. Short title, extent and commencement.

(1) These rules may be called the Investor Education and Protection
Fund Authority (Appointment of Chairperson and Members, holding
of meetings and provision for offices and officers) Rules, 2016.
Official Gazette.
2. Definitions.
(a) “Act” means the Companies Act. 2013;
(b) “Authority” means the Investor Education and Protection
Fund Authority constituted under subsection (5) of section
125 of the Act;
(c) “Chairperson” means the chairperson of the authority
appointed under rule (5) of these rules;
(d) “Company” means company as defined in sub-section (20) of
section 2 of the Act and includes ‘corresponding new bank’
as defined in sub-section (d) of section 2 of the Banking
218
IEPF Authority (App. of Chairperson and Members) Rules, 2016 219
Companies (Acquisition and Transfer of Undertakings) Act,

1970 (5 of 1970) and clause (b) of section 2 of the Banking
1980 (40 of 1980);
(e) “Fund” means the Investor Education and Protection Fund
(IEPF) established under section 125 of the Act;
(f) “Investor” means any person, who has committed money in
shares, or debentures, bond or deposits under a scheme or
plan of a company registered under the Act;
(g) “Member” means members of the Authority appointed
under sub-section (6) of section 125 of the Act; and
(h) “Section” means the section of the Act.
(2) Words and expressions used in these rules and not defined herein
but defined in the Act or in the Companies (Specification of Definitions
assigned to them in the Act or in the said rules.
3. Establishment of the Authority.

The Authority shall be established on such date as may be notified by
the Central Government.
3A. 1[The Authority shall be a body corporate by the name aforesaid
having perpetual succession and a common seal with power to acquire,
hold and dispose of property, both movable and immovable, and to
contract and shall, by the said name, sue or be sued].
4. Composition of the Authority.

(1) The Authority shall consist of the following, namely:-
(a) Chairperson
1. Inserted by the Investor Education and Protection Fund Authority

(Appointment of Chairperson and Members, holding of meetings and
provision for offices and officers) Amendment Rules, 2016 (w.e.f. 05-09-2016)
220 IEPF Authority (App. of Chairperson and Members) Rules, 2016
(b) six members

(c) Chief Executive Officer
(2) The Chief Executive Officer shall be the convenor of the Authority.
5. Chairperson of the Authority.

The Secretary, Ministry of Corporate Affairs shall be the ex-officio
Chairperson of the Authority.
6. Chief Executive Officer of the Authority.

The Central Government shall appoint a person to be the Chief
Executive Officer of the Authority.
7. Members of the Authority.

The Central Government may appoint the following as the members of
the Authority, namely: –
(i) a person not below the rank of Executive Director to be
nominated by the Reserve Bank of India as ex-officio
member;
(ii) a person not below the rank of Executive Director to be
nominated by the Securities and Exchange Board of India as
ex-officio member;
(iii) four persons having special knowledge and experience of not
less than fifteen years, in finance, management, accountancy
or law with one person from each discipline and such person
shall have special knowledge, or professional experience,
which shall in the opinion of the Central Government shall
be useful to the Authority.
8. The term of office of members of the Authority.

(1) The members of the Authority appointed under clause (iii) of rule
7 shall hold office for a period of three years and shall be eligible for
reappointment;
Provided that no member shall hold office for more than three terms.
Provided further that a member shall be eligible for reappointment
after expiration of cooling off period of three years after his term.
(2) Notwithstanding anything contained in sub-rule (1), the Central
Government shall have the right to terminate the services of a member
appointed under clause (iii) of rule 7, at any time before the expiry of
the period specified under sub-rule (1), by giving him notice of not less
than three months in writing for reasons mentioned in sub-rule (4),
and a member shall also have the right to relinquish his office, at any
time before the expiry of the period specified under sub-rule (1), by
giving to the Central Government notice of not less than three months
in writing.
(3) The members appointed under clause (iii) of rule 7 shall hold office
for a period of three years or till attaining the age of 65 years whichever
is earlier.
(4) The Central Government shall remove a member from office if he –
(a) is, or at any time has been, adjudicated as insolvent;
(b) is of unsound mind and stands so declared by a competent
court;
(c) has been convicted of an offence which, in the opinion of the
Central Government, involves a moral turpitude;
(d) has, in the opinion of the Central Government, so abused his
position as to render his continuation in office detrimental to
the public interest.
Provided that no member shall be removed under this sub-rule unless
he has been given a reasonable opportunity of being heard in the matter.
9. The number of officers and employees of the Authority.

The Authority shall have such number of officers and other employees
for rendering secretarial assistance and for its day to day functions as
are set out in Schedule I to these rules.
10. Functions of the Authority.

(1) Subject to the provision of the Act, the Authority shall have the duty
to administer the Fund for Investor Education and Protection.
(2) The general management of the affairs of the Authority shall vest in
the Chief Executive Officer, who may exercise powers, which may be
authorised by the Authority.
(3) The Chief Executive Officer shall function under superintendence
and direction of the Chairperson.
(4) Without prejudice to the generality of the provisions, the functions
of the Authority shall include the following, namely:-
(a) The Authority may constitute permanent Committees for
overseeing its functions;
(b) Each Committee shall comprise two members, Chief
Executive Officer and concerned functional head, who shall
be the secretary of the Committee. The Committee shall be
headed by an ex-officio member;
(c) The Committee may invite experts with special knowledge
and expertise, as and when required to assist it on any
specific issue;
(d) The Authority may outsource, if required, work related to
Funds and Shares Management.
(e) The broad functional divisions of the Authority shall be as
per Schedule II to these rules.
11. Meetings.
(1) The Authority and its Committees shall meet at such times and
places as it may consider necessary.
(2) The Authority and its Committees shall determine its own
procedure for holding of meetings.
(3) If the Authority or its Committees has to hold a meeting elsewhere
than in New Delhi, the approval of the Chairperson of the Authority
shall be obtained indicating the reasons thereof.
(4) The Authority and the Committees shall meet at least once in a
quarter and at least four such meetings shall be held in a financial
year: Provided that not more than one hundred and twenty days shall
intervene between two consecutive meetings.
(5) The meeting of the Authority shall be presided over by the
Chairperson.
(6) If for any reason, the Chairperson is unable to attend a meeting,
any other Member chosen by the Members present from amongst
themselves at the meeting shall preside over the meeting.
(7) In case of difference in opinion on any question before the Authority,
or any of its Committees, the views of the majority shall be taken as the
final decision.
(8) More than fifty percent appointed Members of the Authority shall
constitute the quorum for the transaction of business at a meeting of
the Authority.
(9) Two members of a Committee shall constitute the quorum for the
transaction of business at a meeting of the Committee.
(10) For journeys performed by a non-official member of the Authority
or Committee or a special invitee in connection with the work of the
Authority or Committee, the actual expenditure for attending the
meeting shall be reimbursed, subject to maximum of such expenditure
limit applicable to a Senior Administrative Grade officer of Government
of India.
12. Member not to participate in meetings in certain cases.

A member, who has any pecuniary interest, direct or indirect in
any matter that is brought up for consideration at a meeting of the
Authority and its Committees, shall, as soon as possible after relevant
circumstances have come to his knowledge, disclose the nature of his
interest at such meeting and such disclosure shall be recorded in the
proceedings of the Authority and its Committees, and the member
shall not take any part in any deliberation or decision of the Authority
and its Committees with respect to that matter.
13. Vacancies, etc., not to invalidate proceedings of Authority.

No act or proceeding of the Authority and its Committees shall be
invalid merely by reason of-
(a) any vacancy in, or any defect in the constitution of the
Authority and its Committees;
(b) any defect in the appointment of a person acting as a member
of the Authority and its Committees;
(c) any laches in the procedure of the Authority and its
Committees not affecting the merits of the case.
14. Protection of action taken in good faith.

No suit, prosecution or other legal proceedings shall lie against
the Central Government or Authority or any officer of the Central
Government or any member, officer or other employee of the Authority
for anything, which is in good faith done or intended to be done under
these rules.
Schedule I
S. No. Designation Pay Scale Number

of posts
1 General Manager PB-4 + GP Rs. 01
8700
2 Assistant General Manager PB-3 + GP Rs. 01
5400
3 Senior Accounts Officer PB-3 + GP Rs. 01
5400
4 Assistant Accounts Officer PB-2 + GP Rs. 02
4800
Schedule II
Functional Divisions of the Authority
(1) Administration:
(i) Establishing, equipping, maintaining and operating
administrative functions as may be necessary or deemed
expedient for fulfilling the objects of the Fund.
(ii) Authority and committees of Authority related matters.
(2) Investment/ Funds Management:

(i) Maintaining funds standing to the credit of Fund, investing
the same in interest bearing account of any nationalised
bank.
(ii) Opening of depository account of authority and transferring
into the account securities of investor and transferring to
investors account securities upon settlement of the claim.
(3) Claims and Settlement:

(i) Making refunds to eligible investors after following due
procedure in respect of claims lodged by investors in
accordance with clause (a) of sub-section (3) of section 125
of the Act and rules made there under.
(ii) Distribution of disgorged amount as per the order of the
court or the Authority.
(iii) Distribution of disgorged amount in consultation with Legal
and Enforcement Division, to eligible and identified security
holders who have suffered losses due to any wrong actions
of any person in accordance with the order of Tribunal or
order of the Authority, as the case may be. The amount to be
distributed shall be limited to amount disgorged in respect
of any particular order and no other funds can be used for
distribution.
(4) Legal and Enforcement:

(i) Initiation of legal cases against non-compliant companies or
persons.
(ii) Handling disputes and legal cases arising out of claims or
settlement or any other dispute.
(iii) Reimbursement of funds from Fund for meeting legal
expenses incurred in pursuing class action suits under
section 37 and 245 of the Act by members, debenture holders
or depositors as sanctioned by Tribunal in accordance with
the procedure prescribed in this regard.
(5) Investor Education and Protection:

(i) Registering associations or institutions or professional
bodies or chambers of commerce and industry or other
organisations engaged in investor education and protection
activities.
(ii) Sanctioning grants to the registered entities for seminars,
programmes, projects or activities in the field of corporate
governance, Investors’ Education and Protection including
research activities.
(iii) Monitoring of the utilisation of the grants to ensure the
achievements of the objectives of the sanctioning of the
grants.
(iv) Cooperating and collaborating with institutions engaged in
Investor Education, corporate governance, awareness, and
protection activities.
(v) Conducting on its own or in collaboration with entities
engaged in Investor education and protection or academic
institutions or other regulated entities like Stock Exchanges,
Depositories, Banks and Mutual funds nationwide investors’
education and awareness programmes including seminars
and symposia.
(vi) Setting up of institutional arrangements or infrastructure for

taking up programmes; projects and action plans keeping
in view the objectives and expenditure relating thereto,
including research and training activities.
(vii) Publishing and disseminating information for investors’
benefit and objects and achievements of the Fund.
(viii) Advising Central Government on the issues related to
Investors’ interest.
(ix) Sponsor specific studies or research or analysis for the
development of capital market.
(6) Finance, Accounts and Audit:

(i) Maintenance of accounts of inflow and outflow of funds.
(ii) Reconciliation of accounts of investors.
(iii) Preparation of all accounting reports, audit work and annual
report.
(iv) Returns to Central Government.
(v) Preparation of budget of authority and its monitoring.
(vi) Accounting for all claims of investor in respective accounts.
(vii) Procedure for accounting of investors’ funds and securities.
(7) The Chairperson may re-allocate functions, merge or sub-divide
divisions as per administrative requirement.
228
INVESTOR EDUCATION AND PROTECTION

FUND AUTHORITY (ACCOUNTING, AUDIT,
TRANSFER AND REFUND) RULES, 2016
[G.S.R. 854(E), Dated 5th September 2016]
In exercise of the powers conferred by sub-sections (1), (2), (3), (4), (8),
(9), (10) and (11) of section 125 and sub-section (6) of section 124 read
with section 469 of the Companies Act, 2013 (18 of 2013), the Central
Government hereby makes the following rules, namely:-
1. Short title, extent and commencement.

(1) These rules may be called the Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
(2) They shall come into force with effect from the 7th September 2016.
2. Definitions.
(1) In these rules, unless the context otherwise requires,—
(a) “Act” means the Companies Act 2013;
(b) “Authority” means the Investor Education and Protection
Fund Authority constituted under subsection (5) of section
125 of the Act;
(c) “Chairperson” means the chairperson of the authority
appointed under sub-section (6) of section 125 of the Act;
(d) 1
[“Company” means a company defined in sub-section (20)
1.
Substituted by the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (w.e.f. 28-
02-2017) for:
“(d) “Company” means company as defined in sub-section (20) of section 2 of
the Act and includes ‘corresponding new bank’ as defined in sub-section (d) of
section 2 of the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970 (5 of 1970) and clause (b) of section 2 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980).”
228
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 229
of section 2 of the Act and includes ‘corresponding new bank’

as defined in sub-section (d) of section 2 of the Banking
1970 (5 of 1970) and clause (b) of section 2 of the Banking
1980 (40 of 1980) and ‘subsidiary bank’ as defined in clause
(k) of section 2 of State Bank of India (Subsidiary Bank) Act,
1959 (38 of 1959);
(da) “Corporate action” means any action taken by the company
relating to transfer of shares and all the benefits accruing
on such shares namely, bonus shares, split, consolidation,
fraction shares etc., except right issue to the Authority];
(e) “Existing IEPF” means the Investor Education and
Protection Fund (IEPF) constituted under section 205C of
the Companies Act, 1956 (1 of 1956);
(f) “Fund” means the Investor Education and Protection Fund
(IEPF) constituted under section 125 of the Act;
(g) “Investor” means any person, who has committed money in
shares, or debentures, bond or deposits under a scheme or
plan of a company registered under the Act;
(h) “Member” means member of the Authority appointed under
sub-section (6) of section 125 of the Act; and
(i) “Section” means the section of the Act.
(2) Words and expressions used in these rules and not defined herein
but defined in the Act or in the Companies (Specification of Definitions
3. Fund.
(1) The Authority shall administer the Fund.
(2) There shall be credited to the Fund, the following amounts, namely:-
(a) all amounts payable as mentioned in clause (a) to (n) of sub-
section (2) of section 125 of the Act;
230 IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
(b) all shares in accordance with sub-section (6) of section 124

of the Act;
(c) all the resultant benefits arising out of shares held by the
Authority under clause (b);
(d) all grants, fees and charges received by the Authority under
these rules;
(e) all sums received by the Authority from such other sources
as may be decided upon by the Central Government;
(f) all income earned by the Authority in any year;
(g) 1
[all amounts payable as mentioned in sub-section (3)
of section 10B of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970, section 10B
of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980 and section 40A of the State Bank
of India (Subsidiary Bank) Act, 1959]; and
(h) all other sums of money collected by the Authority as
envisaged in the Act.
(3) In case of term deposits and debentures of companies, due unpaid
or unclaimed interest shall be transferred to the Fund along with the
transfer of the matured amount of such term deposits and debentures.
(4) (a) All the money, which accrue under sub section (2) [except clause
(g)] of section 125 of the Act shall be deposited in the Consolidated
Fund of India under the Major Head ‘0075- Miscellaneous General
Services – 104 - Unclaimed and Unpaid dividends, deposits and
debentures etc.’. Such sums along with amount deposited under section
205C of the Companies Act, 1956 shall be transferred to the Fund in
1. Substituted by the Investor Education and Protection Fund Authority

02-2017) for:
“all amounts payable as mentioned in sub-section (3) of section 10B of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and
section 10B of Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1980”.
the non-interest bearing Public Account after taking due approval of

Parliament through Appropriation Act. This non-interest bearing
Public Account shall be termed as IEPF Fund and shall be utilised for
the purposes provided under sub-section (3) of section 125 of the Act.
(b)(i) All amounts remitted by the companies shall initially be
accounted for under the following heads of Accounts:-
Major Head 0075 – Miscellaneous General Services
Minor Head 104 - Unpaid dividend of Companies.
(ii) Grants and donations given to the Fund by the State Governments,
Companies or any other institutions for the purpose of the Fund as also
the interest or other income received out of the Investments made from
the Fund shall be credited to a separate sub-head under “800 – Other
Receipts” below the MH 0075 – Misc. General Services.
(iii) Amount booked under the above receipt head shall be transferred
to the Fund account under Major Head ‘8235 – General and other
Reserve Fund – 116 – IE & PF’ by the PAO, Ministry of Corporate
Affairs after making suitable budget provision under Major Head ‘3451
– Secretariat Economic Services 797 – Transfer to Reserve Fund Deposit
Account – Transfer to Investor’s Education and Protection Fund’. In
case the amounts of receipts in a year is more than the budget provision
made under Major Head 3451 transfer to the Fund, the difference shall
be transferred to the Fund in subsequent year, after obtaining approval
of the Budget Division of Department of Economic Affairs and after
making adequate budget provision in the relevant year.
(iv) Budget provision in connection with the activities to be financed
from the Fund shall be made under Major Head 3451 – Secretariat
Economic Services 090 Secretariat – Investor’s Education and
Protection Fund. Actual expenditure under the head shall be recouped
from the Fund and the amount so recouped shall be accounted for
under the Major Head ‘3451’ as Deduct entry below Minor Head ‘902 –
Deduct – amount met from Investor’s Education and Protection Fund’
with contra debit to Major Head – ‘8235 – General and Other Reserve
Funds -116 – Investor’s Education and Protection Fund’.
4. Accounts and audit.

(1) The Authority shall maintain proper accounts and other relevant
records as given in Schedule to these rules and prepare an annual
statement of accounts in such form as may be specified by the Central
Government in consultation with the Comptroller and Auditor-
General of India.
(2) The accounts of the Authority shall be audited annually by the
Internal Audit Party of the office of Chief Controller of Accounts and
Comptroller and Auditor-General of India at such intervals and any
expenditure incurred in connection with such audit shall be payable by
the Authority to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India or any other person
appointed by him in connection with the audit of the accounts of the
Authority shall have the same rights and privileges and authority in
connection with such audit as the Comptroller and Auditor-General
generally has in connection with the audit of the Government accounts
and, in particular, shall have the right to demand the production of
books, accounts, connected vouchers and other documents and papers
and to inspect any of the offices of the Authority.
(4) The accounts of the Authority as certified by the Comptroller and
Auditor-General of India or any other person appointed by him in
this behalf together with the audit report thereon shall be forwarded
annually to the Central Government and that Government shall cause
the same to be laid before each House of Parliament.
5. Statement to be furnished to the Fund.

(1) Any amount required to be credited by the companies to the Fund
as provided under clause (a) to (n) of sub-section (2) of section 125 of
the Act shall be remitted into the specified branches of Punjab National
Bank, which is the accredited Bank of the Pay and Accounts Office,
Ministry of Corporate Affairs and other authorised banks engaged by
the MCA-21 system, within a period of thirty days of such amounts
becoming due to be credited to the Fund.
(2) The amount shall be tendered by the companies along with challan
(in triplicate) to the specified Bank Branches of Punjab National Bank
and other authorised banks under MCA-21 system who will return
two copies of the challan, duly stamped in token of having received
the amount, to the Company. The third copy of the challan will be
forwarded along with the daily credit scroll by the receiving branch to
its Focal Point Branch of the Bank for onward transmission to the Pay
and Accounts Office, Ministry of Corporate Affairs.
(3) Every company shall file with the concerned Authority one copy
of the challan referred to in sub-rule (2) indicating the deposit of the
amount to the Fund and shall fill in the full particulars of the amount
tendered, including the head of account to which it has been credited.
(4) The company shall, along with the copy of the challan as required
under sub-rule (3), furnish a Statement in Form No. IEPF 1 containing
details of such transfer to the Authority within thirty days of submission
of challan.
(5) The amount may also be remitted by Electronic Fund Transfer in
such manner, as may be specified by the Central Government.
(6) (a) On receipt of the statement, the Authority shall enter the details
of such receipt in a Register maintained physically or electronically by
it in respect of each company every year, and reconcile the amount
so remitted and collected, with the concerned designated bank on
monthly basis.
(b) Each designated bank shall furnish an abstract of such receipts
during the month to the Authority within seven days after the close
of every month.
(c) The company shall maintain record consisting of name, last
known address, amount, folio number or client ID, certificate number,
beneficiary details etc. of the persons in respect of whom unpaid or
unclaimed amount has remained unpaid or unclaimed for a period of
seven years and has been transferred to the Fund and the Authority
shall have the powers to inspect such records.
(7) The provisions of this rule shall be applicable mutatis mutandis
in respect of the amounts to be credited to the Fund in pursuance of

clauses (h) to (m) of sub-section (2) of section 125.
(8) Every company shall within a period of ninety days after the
holding of Annual General Meeting or the date on which it should
have been held as per the provisions of section 96 of the Act and every
year thereafter till completion of the seven years period, identify the
unclaimed amounts, as referred in sub-section 2 of section 125 of the
Act, as on the date of holding of Annual General Meeting or the date
on which it should have been held as per the provisions of section 96
of the Act, separately furnish and upload on its own website and also
on website of Authority or any other website as may be specified by
the Government, a statement or information through Form No. IEPF
2, separately for each year, containing following information, namely:-
(a) the names and last known addresses of the persons entitled
to receive the sum;
(b) the nature of amount;
(c) the amount to which each person is entitled;
(d) the due date for transfer into the Investor Education and
Protection Fund; and
(e) such other information as may be considered relevant for the
purposes.
6. 1[Manner of transfer of shares under sub-section (6) of section

02-2017) for :
Manner of transfer of shares under sub-section (6) of section 124 to the Fund.-
(1) The shares shall be credited to an IEPF suspense account (on the name of
the company) with one of the depository participants as may be identified by
the Authority within a period of thirty days of such shares becoming due to be
transferred to the Fund:
Provided that, in case the beneficial owner has encashed any dividend warrant
during the last seven years, such shares shall not be required to be transferred
to the Fund even though some dividend warrants may not have been encashed.
(2) For the purposes of effecting transfer of such shares, the Board shall authorise
the Company Secretary or any other person to sign the necessary documents.
(3) The company shall follow the following procedure, namely:-
(a) The company shall inform at the latest available address, the shareholder
concerned regarding transfer of shares three months before the due date
of transfer of shares and also simultaneously publish a notice in the leading
newspaper in English and regional language having wide circulation, and on
their website giving details of such shareholders and shares due for transfer:
Provided that in cases, where the seven years as provided under sub-section (5)
of section 124 have been completed or are being completed within three months
from the date of coming into force of these rules, the company shall initiate the
aforesaid procedure immediately and transfer the shares on completion of three
months;
(b) In case, where there is a specific order of Court or Tribunal or statutory
Authority restraining any transfer of such shares and payment of dividend, the
company shall not transfer such shares to the Fund:
Provided that the company shall furnish details of such shares and unpaid
dividend to the Authority in Form No. IEPF 3 within thirty days from the end
of financial year;
(c) For the purposes of effecting the transfer where the shares are dealt with in
a depository,-
(i) the Company Secretary or the person authorised by the Board shall sign
on behalf of such shareholders, the delivery instruction slips of the depository
participants where the shareholders had their accounts for transfer in favour of
IEPF suspense account (name of the company);
(ii) on receipt of the delivery instruction slips, the depository shall effect the
transfer of shares in favour of the Fund in its records.
(d) For the purposes of effecting the transfer where the shares are held in
physical form,-
(i) the Company Secretary or the person authorised by the Board shall make an
application, on behalf of the concerned shareholders, to the company, for issue
of duplicate share certificates;
(ii) on receipt of the application under clause (a), a duplicate certificate for
each such shareholder shall be issued and it shall be stated on the face of it
and be recorded in the register maintained for the purpose, that the duplicate
certificate is “Issued in lieu of share certificate No..... for purpose of transfer to
IEPF” and the word “duplicate” shall be stamped or punched in bold letters
across the face of the share certificate;
(iii) particulars of every share certificate issued as above shall be entered
forthwith in a register of renewed and duplicate share certificates maintained in

Form No. SH 2 as specified in the Companies (Share Capital and Debentures)
Rules, 2014;
(iv) after issue of duplicate share certificates, the Company Secretary or the
person authorised by the Board, shall sign the necessary Form No. SH 4 i.e.,
securities transfer Form as specified in the Companies (Share Capital and
Debentures) Rules, 2014, for transferring the shares in favour of the Fund;
(v) on receipt of the duly filled transfer forms along with the duplicate share
certificates, the Board or its Committee shall approve the transfer and thereafter
the transfer of shares shall be effected in favour of the Fund in the records of
the company.
(4) The company or depository, as the case may be, shall preserve copies of
the depository instruction slips, transfer deeds and duplicate certificates for its
records.
(5) While effecting such transfer, the company shall send a statement to the
Fund in Form No. IEPF 4 containing details of such transfer.
(6) The voting rights on shares transferred to the Fund shall remain frozen until
the rightful owner claims the shares:
Provided that for the purpose of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the shares
which have been transferred to the Authority shall not be excluded while
calculating the total voting rights.
(7) Once the physical shares are transferred in the name of the Authority, the
Authority shall dematerialise these shares and it shall keep only those shares in
physical form, where dematerialisation of shares is not possible.
(8) The Authority shall maintain IEPF suspense account (name of the company)
with depository participant on behalf of the shareholders who are entitled for
the shares and all benefits accruing on such shares e.g. bonus shares, split,
consolidation, fraction shares etc. except right issue shall also be credited to
such IEPF suspense account (name of the company).
(9) The shares held in such IEPF suspense account shall not be transferred or
dealt with in any manner whatsoever except for the purposes of transferring
the shares back to the claimant as and when he approaches the Authority or in
accordance with sub-rule (10) and (11).
(10) If the company is getting delisted, the Authority shall surrender shares
on behalf of the shareholders in accordance with the Securities and Exchange
Board of India (Delisting of Equity Shares) Regulations, 2009 and the proceeds
realised shall be credited to the Fund and a separate ledger account shall be
maintained for such proceeds.
124 to the Fund.

(1) The shares shall be credited to DEMAT Account of the Authority
to be opened by the Authority for the said purpose, within a period of
thirty days of such shares becoming due to be transferred to the Fund:
Provided that, in case the beneficial owner has encashed any dividend
warrant during the last seven years, such shares shall not be required to
be transferred to the Fund even though some dividend warrants may
not have been encashed:
1
[Provided further that in cases where the period of seven years
provided under sub-section (5) of section 124 has been completed or
being completed during the period from 7th September, 2016 to 31st
October, 2017, the due date of transfer of such shares shall be deemed
to be 31st October, 2017.]
2
[Provided further that transfer of shares by the companies to the Fund
shall be deemed to be transmission of shares and the procedure to be
followed for transmission of shares shall be followed by the companies
while transferring the shares to the fund.]
(2) For the purposes of effecting transfer of such shares, the Board
(11) In case the company whose shares or securities are held by the Authority
is being wound up, the Authority may surrender the securities to receive the
amount entitled on behalf of the security holder and credit the amount to the
Fund and a separate ledger account shall be maintained for such proceeds.
(12) Any further dividend received on such shares shall be credited to the Fund
and a separate ledger account shall be maintained for such proceeds.”
(Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017
(w.e.f. 13.10.2017) for:
“Provided further that in cases where the period of seven years provided under
sub-section (5) of section 124 has been completed or being completed during
the period from 7th September, 2016 to 31st May, 2017, the due date of transfer
of such shares shall be deemed to be 31st May, 2017.”
(w.e.f. 13.10.2017)
shall authorise the Company Secretary or any other person to sign the
necessary documents.
(3) The company shall follow the following procedure while transferring
the shares, namely:-
(a) The company shall inform, at the latest available address,
the shareholder concerned regarding transfer of shares three
months before the due date of transfer of shares and also
simultaneously publish a notice in the leading newspaper
in English and regional language having wide circulation
informing the concerned that the names of such shareholders
and their folio number or DP ID Client ID are available on
their website duly mentioning the website address.
(b) In case, where there is a specific order of Court or Tribunal
or statutory Authority restraining any transfer of such shares
and payment of dividend or where such shares are pledged
or hypothecated under the provisions of the Depositories
Act, 1996 or shares already been transferred under sub-rule
(1) above, the company shall not transfer such shares to the
Fund:
Provided that the company shall furnish details of such
shares and unpaid dividend to the Authority in Form No.
IEPF 3 within thirty days from the end of financial year.
(c) For the purposes of effecting the transfer, where the shares
are dealt with in a depository-
(i) the Company shall inform the depository by way of
corporate action, where the shareholders have their
accounts for transfer in favour of the Authority.
(ii) on receipt of such intimation, the depository shall
effect the transfer of shares in favour of DEMAT
account of the Authority.

[(d) For the purposes of effecting the transfer shares held in
1
physical form –
(i) the Company Secretary or the person authorised by
the Board shall make an application, on behalf of the
concerned shareholder, to the company, for issue of a
new share certificate;
(ii) on receipt of the application under clause (a), a new
share certificate for each such shareholder shall
be issued and it shall be stated on the face of the
certificate that “Issued in lieu of share certificate
No..... for the purpose of transfer to IEPF” and the
same be recorded in the register maintained for the
purpose;
(iii) particulars of every share certificate shall be in Form
No. SH-1 as specified in the Companies (Share Capital
and Debentures) Rules, 2014;

(w.e.f. 13.10.2017) for:
“(d) For the purposes of effecting the transfer where the shares are held in
physical form –
(i) the Company Secretary or the person authorised by the Board shall make an
application, on behalf of the concerned shareholders, to the company, for issue
of duplicate share certificates;
(ii) on receipt of the application under clause (a), a duplicate certificate for
each such shareholder shall be issued and it shall be stated on the face of it
and be recorded in the register maintained for the purpose, that the duplicate
certificate is “Issued in lieu of share certificate No..... for purpose of transfer to
IEPF” and the word “duplicate” shall be stamped or punched in bold letters on
the first page of the share certificate;
(iii) particulars of every share certificate issued as above shall be entered
forthwith in a register of renewed and duplicate share certificates maintained in
Form No. SH-2 as specified in the Companies (Share Capital and Debentures)
Rules, 2014;
(iv) after issue of duplicate share certificates, the company shall inform the
depository by way of corporate action to convert the duplicate share certificates
into DEMAT form and transfer in favour of the Authority.”
(iv) after issue of a new share certificate, the company shall

inform the depository by way of corporate action to
convert the share certificates into DEMAT form and
transfer in favour of the Authority.]
(4) The company shall make such transfers through corporate action
and shall preserve copies for its records.
(5) While effecting such transfer, the company shall send a statement
to the Authority in Form No. IEPF 4 containing details of such transfer.
(6) The voting rights on shares transferred to the Fund shall remain
frozen until the rightful owner claims the shares:
Provided that for the purpose of the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011, the shares which have been transferred to the Authority shall not
be excluded while calculating the total voting rights.
(7) The company shall maintain the details of shareholding of each
individual shareholders whose shares have been credited to the
DEMAT account of the Authority.
(8) All benefits accruing on such shares e.g., bonus shares, split,
consolidation, fraction shares etc., except right issue shall also be
credited to such DEMAT account.
(9) The shares held in such DEMAT account shall not be transferred
or dealt with in any manner whatsoever except for the purposes of
transferring the shares back to the claimant as and when he approaches
the Authority or in accordance with sub-rule (10) and (11).
(10) If the company is getting delisted, the Authority shall surrender
shares on behalf of the shareholders in accordance with the Securities
and Exchange Board of India (Delisting of Equity Shares) Regulations,
2009 and the proceeds realised shall be credited to the Fund and a
separate ledger account shall be maintained for such proceeds.
(11) In case the company whose shares or securities are held by the
Authority is being wound up, the Authority may surrender the
securities to receive the amount entitled on behalf of the security
holder and credit the amount to the Fund and a separate ledger account
shall be maintained for such proceeds.
(12) Any further dividend received on such shares shall be credited to
the Fund and a separate ledger account shall be maintained for such
proceeds].
1
[(13) Any amount required to be credited by the companies to the
Fund as provided under sub-rules (10), (11) and sub-rule (12) shall be
remitted into the specified account of the IEPF Authority maintained
in the Punjab National Bank 2[and the details thereof shall be furnished
to the Authority in Form No. IEPF 7 within thirty days from the date of
remittance or within thirty days from the date of enforcement of these
Rules, as the case may be.]
(14) Authority shall furnish its report to the Central Government
as and when noncompliance of the rules by companies came to its
knowledge.]
7. 3[ Refunds to claimants from Fund.
1. Inserted by the Investor Education and Protection Fund Authority (Accounting,

Audit, Transfer and Refund) Second Amendment Rules, 2017 (w.e.f. 13.10.2017)
(Accounting, Audit, Transfer and Refund) Third Amendment Rules, 2017(w.e.f.
22.05.2018)
02-2017) for :
“Refunds to claimants from Fund. –
(1) Any person, whose shares, unclaimed dividend, matured deposits, matured
debentures, application money due for refund, or interest thereon, sale proceeds
of fractional shares, redemption proceeds of preference shares, etc. has been
transferred to the Fund, may claim the shares under provision to sub-section
(6) of section 124 or apply for refund, under clause (a) of sub-section (3) of
section 125 or under proviso to sub-section (3) of section 125, as the case may
be, to the Authority by making an application in Form IEPF 5 online available
on website www.iepf.gov.in along with fee, as decided by the Authority from
time to time in consultation with the Central Government, under his own
signature.
(1) Any person whose shares, unclaimed dividend, matured deposits,

matured debentures, application money due for refund, or interest
(2) The claimant shall after making an application online in Form IEPF-5 under
rule (1), send the same duly signed by him along with, requisite documents as
enumerated in Form IEPF-5 to the concerned company at its registered office
for verification of his claim.
(3) The company shall, within fifteen days of receipt of claim form, send a
verification report to the Authority in the format specified by the Authority
along with all documents submitted by the claimant.
(4) After verification of the entitlement of the claimant-
(a) to the amount claimed, the Authority and then Drawing and Disbursement
Officer of the Authority shall present a bill to the Pay and Accounts Office for
e- payment as per the guidelines.
(b) to the shares claimed, the Authority shall issue a refund sanction order
with the approval of the Competent Authority and shall either credit the shares
which are lying with depository participant in IEPF suspense account (name
of the company) to the demat account of the claimant to the extent of the
claimant’s entitlement or in case of the physical certificates, if any, cancel the
duplicate certificate and transfer the shares in favour of the claimant.
(5) The Authority shall, in its records, cause a note to be made of all the
payments made under sub rule (4).
(6) An application received for refund of any claim under this rule duly verified
by the concerned company shall be disposed of by the Authority within sixty
days from the date of receipt of the verification report from the company,
complete in all respects and any delay beyond sixty days shall be recorded in
writing specifying the reasons for the delay and the same shall be communicated
to the claimant in writing or by electronic means.
(7) In cases, where the application is incomplete, a communication shall be sent
to the claimant by the Authority detailing deficiencies of the application.
(8) In case, claimant is a legal heir or successor or administrator or nominee of
the registered security holder, he has to ensure that the transmission process is
completed by the company before filing any claim with the Authority.
(9) The claimant shall file only one consolidated claim in respect of a company
in a financial year.
(10) The company shall be solely liable under all circumstances whatsoever to
indemnity the IEPF Authority in case of any dispute or lawsuit that may be
initiated due to any incongruity or inconsistency or disparity in the verification
report or otherwise. The IEPF Authority shall not be liable to indemnity the
security holder or Company for any liability arising out of any discrepancy in
verification report submitted etc leading to any litigation or complaint arising
thereof.”
thereon, sale proceeds of fractional shares, redemption proceeds of

preference shares etc., has been transferred to the Fund, may claim the
shares under proviso to sub-section (6) of section 124 or apply for refund
under clause (a) of sub-section (3) of section 125 or under proviso to
sub-section (3) of section 125, as the case may be, to the Authority
by submitting an online application in Form IEPF-5 available on the
website www.iepf.gov.in along with fee specified by the Authority from
time to time in consultation with the Central Government.
(2) The claimant shall after making an application in Form IEPF-5
under rule (1), send the same duly signed by him along with, requisite
documents as enumerated in Form IEPF-5 to the concerned company
at its registered office for verification of his claim.
1
[(2A) Every company which has deposited the amount to the Fund
shall nominate a Nodal Officer for the purpose of coordination with
IEPF Authority and communicate the contact details of the Nodal
Officer duly indicating his or her designation, postal address, telephone
and mobile number and company authorized e-mail ID to the IEPF
Authority, within fifteen days from the date of publication of these
rules and the company shall display the name of Nodal Officer and his
e-mail ID on its website.]
(3) The company shall, within fifteen days from the date of receipt
of claim, send a verification report to the Authority in the format
specified by the Authority along with all the documents submitted by
the claimant.
2
[Provided that in case of non receipt of documents by the Authority
after the expiry of ninety days from the date of filing of Form IEPF-5,
the Authority may reject Form IEPF-5, after giving an opportunity to
the claimant to furnish response within a period of thirty days.]

(w.e.f. 13.10.2017)
(w.e.f. 13.10.2017)
(4) After verification of the entitlement of the claimant- (a) to the

amount claimed, the Authority and then Drawing and Disbursement
Officer of the Authority shall present a bill to the Pay and Accounts
Office for e- payment as per the guidelines, (b) to the shares claimed,
the Authority shall issue a refund sanction order with the approval of
the Competent Authority and shall credit the shares to the DEMAT
account of the claimant to the extent of the claimant’s entitlement.
(5) The Authority shall, in its records, cause a note to be made of all the
payments made under sub-rule (4).
(6) An application received for refund of any claim under this rule
duly verified by the concerned company shall be disposed off by the
Authority within sixty days from the date of receipt of the verification
report from the company, complete in all respects and any delay
beyond sixty days shall be recorded in writing specifying the reasons
for the delay and the same shall be communicated to the claimant in
writing or by electronic means.
(7) In cases, where the application is incomplete or not approved, a
communication shall be sent to the claimant and the concerned
company by the Authority detailing deficiencies of the application.
1
[Provided that in case of non receipt of rectified documents by
the Authority after the expiry of ninety days from the date of such
communication, the Authority may reject Form IEPF-5, after giving
an opportunity to the claimant to furnish response within a period of
thirty days.]
(8) In case, claimant is a legal heir or successor or administrator or
nominee of the registered share holder, he has to ensure that the
transmission process is completed by the company before filing any
claim with the Authority.
(9) In case, claimant is a legal heir or successor or administrator or
nominee of any other registered security or in cases where request of

(w.e.f. 13.10.2017)
transfer or transmission of shares is received after the transfer of shares

by company to the Authority, the company shall verify all requisite
documents required for registering transfer or transmission and
shall issue letter to the claimant indicating his entitlement to the said
security and furnish a copy of the same to the Authority while verifying
the claim of such claimant.
(10) The claimant shall file only one consolidated claim in respect of a
company in a financial year.
(11) The company shall be liable under all circumstances whatsoever
to indemnify the Authority in case of any dispute or lawsuit that may
be initiated due to any incongruity or inconsistency or disparity in the
verification report or otherwise and the Authority shall not be liable to
indemnify the security holder or Company for any liability arising out
of any discrepancy in verification report submitted etc., leading to any
litigation or complaint arising thereof.]
8. Power to direct payment of amount due to the Fund.

(1) The company shall furnish a statement to the Authority in Form
No. IEPF 6 within thirty days of end of financial year stating therein
the amounts due to be transferred to the Fund in next financial year.
(2) The company shall also furnish a statement to the authority within
thirty days of the closure of its accounts for the financial year stating
therein the reasons of deviation, if any, of amounts detailed in sub-rule
(1) above and actual amounts transferred to the Fund.
(3) Authority shall furnish a report to the Central Government within
sixty days of end of financial year giving details of companies who have
failed to transfer the due amount to the Fund.
(4) Authority shall also furnish a report to the Central Government by
end of next financial year giving details of companies who have failed
to file information referred to in sub-rule (8) of rule 5.
9. Transfer of assets, liabilities, etc., of the existing IEPF to the

Authority.
On and from the date of establishment of the Authority, –
(a) any reference to the existing IEPF in any law other than these
rules or in any contract or other instrument shall be deemed
as a reference to the Authority;
(b) all properties and assets, movable and immovable, of, or
belonging to, the existing IEPF, shall vest in the Authority;
(c) all rights and liabilities of the existing IEPF shall be transferred
to, and be the rights and liabilities of the Authority;
(d) without prejudice to the provisions of clause (c), all debts,
obligations and liabilities incurred, all contracts entered into
and all matters and things engaged to be done by, with or
for the existing IEPF immediately before that date, for or in
connection with the purpose of the said existing IEPF shall
be deemed to have been incurred, entered into, or engaged to
be done by, with or for, the Authority;
(e) all sums of money due to the existing IEPF immediately
before that date shall be deemed to be due to the Authority;
and
(f) all suits and other legal proceedings instituted or which
could have been instituted by or against the existing IEPF,
immediately before that date may be continued or may be
instituted by or against the Authority.
10. Returns and reports.

(1) The Authority shall furnish to the Central Government at such
time and in such form and manner as may be specified or as the
Central Government may direct, such returns and statements and such
particulars with regard to its activity.
(2) Without prejudice to the provisions of sub-rule (1), the Authority
shall, within one hundred and eighty days after the end of each financial
year, submit to the Central Government a report in such form, as may
be specified, giving a true and full account of its activities during the
previous financial year.

No suit, prosecution or other legal proceedings shall lie against
the Central Government or Authority or any officer of the Central
Government or any member, officer or other employee of the Authority
for anything which is in good faith done or intended to be done under
these rules.
12. Repeal and savings.

(1) The Investor Education and Protection Fund (Awareness and
Protection of Investors) Rules, 2001 and Investor Education and
Protection Fund (Uploading of information regarding unpaid and
unclaimed amounts lying with companies) Rules, 2012 are hereby
repealed.
(2) Notwithstanding such repeal, anything done or any action taken
or purported to have been done or taken under the rules repealed by
sub-rule (1) shall, in so far as it is not inconsistent with the provisions
of these rules, be deemed to have been done or taken under the
corresponding provisions of these rules.
SCHEDULE
REGISTERS AND BOOKS OF ACCOUNT TO BE
MAINTAINED BY THE AUTHORITY
(i) Register of Shares transferred under sub-section (6) of
section 124
(ii) Central Cash Book
(iii) Company wise Ledger
(iv) General Ledger
(v) Cashier’s Cash Book
(vi) Bank Ledger
(vii) Register of Assets
(viii) Investment Register
(ix) Claim Register

(x) Refund Register
(xi) Suspense Register
(xii) Documents Register
(xiii) Any other register or Book as decided by Authority
249
CHAPTER IX
COMPANIES (ACCOUNTS) RULES, 2014
[G.S.R.239 (E), Dated 31st March, 2014]
In exercise of the powers conferred under sub-sections (1) and (3) of
section 128, sub-section (3) of section 129, section 133, section 134, sub-
section (4) of section 135, sub-section (1) of section 136, section 137 and
section 138 read with section 469 of the Companies Act, 2013, and in
and Forms, 1956 or any other rules prescribed under the Companies Act,
1956 (1 of 1956) on matters covered under these rules, except as respects
things done or omitted to be done before such supersession, the Central

(1) These rules may be called the Companies (Accounts) Rules, 2014.
2. Definitions.
(c) “Fees” means the fees as specified in the Companies
relates;
1[(da) “Indian Accounting Standards” means the Indian
1. Inserted by the Companies (Accounts) Second Amendment Rules, 2015

(w.e.f. 04-09-2015).
249
250 Companies (Accounts) Rules, 2014
Accounting Standards referred to in rule 3 and Annexure to

the Companies (Indian Accounting Standards) Rules, 2015.]
(e) “Schedule” means the Schedule to the Act;
(f) “section” means the section of the Act;
details) Rules, 2014, shall have the meanings respectively assigned to
[2A. Notice of address at which books of account are to be

1
maintained.
For the purposes of the first proviso to sub-section (1) of Section 128,
the notice regarding address at which books of account may be kept
shall be in Form AOC-5.]
3. Manner of books of account to be kept in electronic mode.

(1) The books of account and other relevant books and papers
maintained in electronic mode shall remain accessible in India so as to
be usable for subsequent reference.
(2) The books of account and other relevant books and papers referred
to in sub-rule (1) shall be retained completely in the format in which
they were originally generated, sent or received, or in a format which
shall present accurately the information generated, sent or received
and the information contained in the electronic records shall remain
complete and unaltered.
(3) The information received from branch offices shall not be altered
and shall be kept in a manner where it shall depict what was originally
received from the branches.
(4) The information in the electronic record of the document shall be
capable of being displayed in a legible form.
1. Inserted by the Companies (Accounts) Amendment Rules, 2015 (w.e.f.

16-01-2015).
Companies (Accounts) Rules, 2014 251
(5) There shall be a proper system for storage, retrieval, display or

printout of the electronic records as the Audit Committee, if any, or the
Board may deem appropriate and such records shall not be disposed of
or rendered unusable, unless permitted by law:
Provided that the back-up of the books of account and other books and
papers of the company maintained in electronic mode, including at a
place outside India, if any, shall be kept in servers physically located in
India on a periodic basis.
(6) The company shall intimate to the Registrar on an annual basis at
the time of filing of financial statement-
(a) the name of the service provider;
(b) the internet protocol address of service provider;
(c) the location of the service provider (wherever applicable);
(d) where the books of account and other books and papers are
maintained on cloud, such address as provided by the service
provider.
Explanation. – For the purposes of this rule, the expression “electronic
mode” includes “electronic form” as defined in clause (r) of sub-section
(1) of section 2 of Information Technology Act, 2000 (21 of 2000) and
also includes an electronic record as defined in clause (t) of sub-section
(1) of section 2 of the Information Technology Act, 2000 (21 of 2000)
and “books of account ” shall have the meaning assigned to it under
the Act.
4. Conditions regarding maintenance and inspection of certain

financial information by directors.
(1) The summarised returns of the books of account of the company
kept and maintained outside India shall be sent to the registered
office at quarterly intervals, which shall be kept and maintained at
the registered office of the company and kept open to directors for
inspection.
(2) Where any other financial information maintained outside the
country is required by a director, the director shall furnish a request

to the company setting out the full details of the financial information
sought, the period for which such information is sought.
(3) The company shall produce such financial information to the
director within fifteen days of the date of receipt of the written request.
(4) The financial information required under sub-rules (2) and (3) shall
be sought for by the director himself and not by or through his power
of attorney holder or agent or representative.
[4A. Forms and items contained in financial statements.

1
The financial statements shall be in the form specified in Schedule III to

the Act and comply with Accounting Standards or Indian Accounting
Standards as applicable:
Provided that the items contained in the financial statements shall be
prepared in accordance with the definitions and other requirements
specified in the Accounting Standards or the Indian Accounting
Standards, as the case may be.]
5. Form of Statement containing salient features of financial

statements of subsidiaries.
The statement containing the salient feature of the financial statement
of a company’s subsidiary or subsidiaries, associate company or
companies and joint venture or ventures under the first proviso to sub-
section (3) of section 129 shall be in Form AOC-1.
6. Manner of consolidation of accounts.

The consolidation of financial statements of the company shall be made
in accordance with the provisions of Schedule III of the Act and the
applicable accounting standards:
Provided that in case of a company covered under sub-section (3) of
section 129 which is not required to prepare consolidated financial

(w.e.f. 04-09-2015).
statements under the Accounting Standards, it shall be sufficient

if the company complies with provisions on consolidated financial
statements provided in Schedule III of the Act.
[Provided further that nothing in this rule shall apply in respect of
1
preparation of consolidated financial statements by a company if it

meets the following conditions:-
(i) it is a wholly-owned subsidiary, or is a partially-owned subsidiary
of another company and all its other members, including those not
otherwise entitled to vote, having been intimated in writing and for
Which the proof of delivery of such intimation is available with the
company, do not object to the Company not presenting consolidated
financial statements;
(ii) it is a company whose securities are not listed or are not in the
process of listing on any stock exchange, whether in India or outside
India; and
(iii) its ultimate or any intermediate holding company files consolidated
financial statements with the Registrar which are in compliance with
the applicable Accounting Standards.]
2
[Provided also that nothing contained in this rule shall, subject to any
other law or regulation, apply for the financial year commencing from
the 1st day of April, 2014 and ending on the 31st March, 2015, in case
of a company which does not have a subsidiary or subsidiaries but has
one or more associate companies or joint ventures or both, for the
1. Substituted by the Companies (Accounts) Amendment Rules, 2016 (w.e.f.

27-07-2016) for:
*“Provided further that nothing in this rule shall apply in respect of preparation
of consolidated financial statement by an intermediate wholly-owned
subsidiary, other than a wholly-owned subsidiary whose immediate parent is a
company incorporated outside India”
*Inserted by the Companies (Accounts) Amendment Rules, 2014 (w.e.f.
14-10-2014)
14-10-2014)
consolidation of financial statement in respect of associate companies

or joint ventures or both, as the case may be.]
1
[Provided also that nothing in this rule shall apply in respect of
consolidation of financial statement by a company having subsidiary
or subsidiaries incorporated outside India only for the financial year
commencing on or after 1st April, 2014.]
7. Transitional provisions with respect to Accounting Standards.

(1) The standards of accounting as specified under the Companies Act,
1956 (1 of 1956) shall be deemed to be the accounting standards until
accounting standards are specified by the Central Government under
section 133.
(2) Till the National Financial Reporting Authority is constituted under
section 132 of the Act, the Central Government may prescribe the
standards of accounting or any addendum thereto, as recommended
by the Institute of Chartered Accountants of India in consultation with
and after examination of the recommendations made by the National
Advisory Committee on Accounting Standards constituted under
section 210A of the Companies Act, 1956 (1 of 1956).
8. Matters to be included in Board’s report.

(1) The Board’s Report shall be prepared based on the stand alone
financial statements of the company 2[and shall report on the highlights
of performance of subsidiaries, associates and joint venture companies
and their contribution to the overall performance of the company
during the period under report.]
1. Inserted by the Companies (Accounts) Amendment Rules, 2015 (w.e.f. 16-

01-2015).
2. Substituted by the Companies (Accounts) Amendment Rules, 2016 (w.e.f. 27-
07-2016) for:
“and the report shall contain a separate section wherein a report on the
performance and financial position of each of the subsidiaries, associates and
joint venture companies included in the consolidated financial statement is
presented.”
(2) The Report of the Board 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.
(3) The report of the Board shall contain the following information and
details, namely:-
(A) Conservation of energy –
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken by the company for utilising alternate
sources of energy;
(iii) the capital investment on energy conservation
equipments;
(B) Technology absorption-
(i) the efforts made towards technology absorption;
(ii) the benefits derived like product improvement,
cost reduction, product development or import
substitution;
(iii) in case of imported technology (imported during the
last three years reckoned from the beginning of the
financial year) –
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed, areas where absorption
has not taken place, and the reasons thereof;
and
(iv) the expenditure incurred on Research and
Development.
(C) Foreign exchange earnings and Outgo –
The Foreign Exchange earned in terms of actual inflows
during the year and the Foreign Exchange outgo during the
year in terms of actual outflows.

1
[Provided that the requirement of furnishing information
and details under this sub-rule shall not apply to a
Government company engaged in producing defence
equipment.]
(4) Every listed company and every other public company having a
paid up share capital of twenty five crore rupees or more calculated at
the end of the preceding financial year shall include, in the report by its
Board of directors, a statement indicating the manner in which formal
annual evaluation has been made by the Board of its own performance
and that of its committees and individual directors.
(5) In addition to the information and details specified in sub-rule (4),
the report of the Board shall also contain -
(i) the financial summary or highlights;
(ii) the change in the nature of business, if any;
(iii) the details of directors or key managerial personnel who
were appointed or have resigned during the year;
(iv) the names of companies which have become or ceased to be
its Subsidiaries, joint ventures or associate companies during
the year;
(v) the details relating to deposits, covered under Chapter V of
the Act,- (a) accepted during the year; (b) remained unpaid
or unclaimed as at the end of the year; (c) whether there has
been any default in repayment of deposits or payment of
interest thereon during the year and if so, number of such
cases and the total amount involved- (i) at the beginning of
the year; (ii) maximum during the year; (iii) at the end of the
year; (vi) the details of deposits which are not in compliance
with the requirements of Chapter V of the Act;

(w.e.f. 04-09-2015).
(vii) the details of significant and material orders passed by the

regulators or courts or tribunals impacting the going concern
status and company’s operations in future;
(viii) the details in respect of adequacy of internal financial
controls with reference to the Financial Statements.

[(ix) a disclosure, as to whether maintenance of cost records as
1
specified by the Central Government under sub-section (1)

of section 148 of the Companies Act, 2013, is required by
the Company and accordingly such accounts and records are
made and maintained,
(x) a statement that the company has complied with provisions
relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013 .]
[(6) This rule shall not apply to One Person Company or Small
1
Company.]
[8A. Matters to be included in Board’s Report for One Person

1
Company and Small Company.

(1) The Board’s Report of One Person Company and Small Company
shall be prepared based on the stand alone financial statement of the
company, which shall be in abridged form and contain the following:-
(a) the web address, if any, where annual return referred to in
sub-section (3) of section 92 has been placed;
(b) number of meetings of the Board;
(c) Directors’ Responsibility Statement as referred to in sub-
section (5) of section 134;
(d) details in respect of frauds reported by auditors under

31.07.2018).
sub-section (12) of section 143 other than those which are

reportable to the Central Government;
(e) explanations or comments by the Board on every
qualification, reservation or adverse remark or disclaimer
made by the auditor in his report;
(f) the state of the company’s affairs;
(g) the financial summary or highlights;
(h) material changes from the date of closure of the financial
year in the nature of business and their effect on the financial
position of the company;
(i) the details of directors who were appointed or have resigned
during the year;
(j) the details or significant and material orders passed by the
regulators or courts or tribunals impacting the going concern
status and company’s operations in future.
(2) The Report of the Board 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.]
9. Disclosures about CSR Policy.

The disclosure of contents of Corporate Social Responsibility Policy in
the Board’s report and on the company’s website, if any, shall be as per
annexure attached to the Companies (Corporate Social Responsibility
Policy) Rules, 2014.
10. Statement containing salient features of financial statements.

The statement containing features of documents referred to in first
proviso to sub-section (1) of section 136 shall be in Form AOC-3.
1
[Provided that the Companies which are required to comply with
1. Inserted by the Companies (Accounts) Amendment Rules, 2018 (w.e.f. 27-
02-2018).
Companies (Indian Accounting Standards) Rules, 2015 shall forward

their statement in Form AOC-3A.]
11. Manner of circulation of financial statements in certain cases.

In case of all listed companies and such public companies which have
a net worth of more than one crore rupees and turnover of more than
ten crore rupees, the financial statements may be sent-
(a) by electronic mode to such members whose shareholding is
in dematerialised format and whose email Ids are registered
with Depository for communication purposes;
(b) where Shareholding is held otherwise than by dematerialised
format, to such members who have positively consented in
writing for receiving by electronic mode; and
(c) by despatch of physical copies through any recognised mode
of delivery as specified under section 20 of the Act, in all
other cases.
12. Filing of financial statements and fees to be paid thereon.

1
[(1) Every company shall file the financial statements with Registrar
together with Form AOC-4 and the consolidated financial statement, if
any, with Form AOC-4 CFS.]
(2) The class of companies as may be notified by the Central
Government from time to time, shall mandatorily file their financial
statement in Extensible Business Reporting Language (XBRL) format
and the Central Government may specify the manner of such filing
under such notification for such class of companies.
Explanation. – For the purposes of this sub-rule, the term “Extensible
Business Reporting Language” means a standardised language for
1. Substituted by the Companies (Accounts) Second Amendment Rules, 2015

(w.e.f. 04-09-2015) for :
“(1) Every company shall file the financial statements with Registrar together
with Form AOC-4.”
communication in electronic form to express, report or file financial

information by companies under this rule.
(3) The fees or additional fees referred to in sub-section (1) of section
137 and in the second proviso to the said subsection and in sub-
section (2) of the said section shall be as specified in the Companies
13. Companies required to appoint internal auditor.

(1) The following class of companies shall be required to appoint an
internal auditor 1[which may be either an individual or a partnership
firm or a body corporate], namely:-
(a) every listed company;
(b) every unlisted public company having-
(i) paid up share capital of fifty crore rupees or more
during the preceding financial year; or
(ii) turnover of two hundred crore rupees or more during
the preceding financial year; or
(iii) outstanding loans or borrowings from banks or
public financial institutions exceeding one hundred
crore rupees or more at any point of time during the
preceding financial year; or
(iv) outstanding deposits of twenty five crore rupees
or more at any point of time during the preceding
financial year; and
(c) every private company having –
(i) turnover of two hundred crore rupees or more during
the preceding financial year; or
(ii) outstanding loans or borrowings from banks or
public financial institutions exceeding one hundred
1. Substituted by the Companies (Accounts) Amendment Rules, 2016 (w.e.f.

27-07-2016) for “ or a firm of internal auditors.”
crore rupees or more at any point of time during the

preceding financial year:
Provided that an existing company covered under any of the above
criteria shall comply with the requirements of section 138 and this rule
within six months of commencement of such section.
Explanation. – For the purposes of this rule –
(i) the internal auditor may or may not be an employee of the
company;
[(ii) the term “Chartered Accountant” or “Cost Accountant” shall
1
mean a “Chartered Accountant” or a “Cost Accountant”, as

the case may be, whether engaged in practice or not.]
(2) The Audit Committee of the company or the Board shall,
in consultation with the Internal Auditor, formulate the scope,
functioning, periodicity and methodology for conducting the internal
audit.
1. Substituted by the Companies (Accounts) Amendment Rules, 2016 (w.e.f. 27-

07-2016) for :
“(ii) the term “Chartered Accountant” shall mean a Chartered Accountant
whether engaged in practice or not.”
262
COMPANIES (CORPORATE SOCIAL

RESPONSIBILITY POLICY) RULES, 2014
[G.S.R. 129(E), Dated 27th February, 2014]
In exercise of the powers conferred under section 135 and sub-sections

(1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the
Central Government hereby makes the following rules, namely: -

(1) These rules may be called the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
2. Definitions.
(1) In these rules, unless the context otherwise requires, -
(b) “Annexure” means the Annexure appended to these rules;
(c) “Corporate Social Responsibility (CSR)” means and includes
but is not limited to :-
(i) Projects or programs relating to activities 1[areas or
subjects] specified in Schedule VII to the Act; or
(ii) Projects or programs relating to activities undertaken
by the board of directors of a company (Board)
in pursuance of recommendations of the CSR
Committee of the Board as per declared CSR Policy of
the company subject to the condition that such policy
1. Inserted by the Companies (Corporate Social Responsibility Policy)

262
Companies (Corporate Social Responsibility Policy) Rules, 2014 263
will 1[include activities, areas or subjects specified] in

Schedule VII of the Act.
(d) “CSR Committee” means the Corporate Social Responsibility
Committee of the Board referred to in section 135 of the Act.
(e) “CSR Policy” relates to the activities to be undertaken by the
2
[company in areas or subjects] as specified in Schedule VII
to the Act and the expenditure thereon, excluding activities
undertaken in pursuance of normal course of business of a
company;
(f) “Net profit” means the net profit of a company as per
its financial statement prepared in accordance with the
applicable provisions of the Act, but shall not include the
following, namely:-
(i) any profit arising from any overseas branch or
branches of the company, whether operated as a
separate company or otherwise; and
(ii) any dividend received from other companies in India,
which are covered under and complying with the
provisions of section 135 of the Act:
Provided that net profit in respect of a financial year for
which the relevant financial statements were prepared in
accordance with the provisions of the Companies Act,
1956, (1 of 1956) shall not be required to be re-calculated in
accordance with the provisions of the Act:
Provided further that in case of a foreign company covered
under these rules, net profit means the net profit of such
company as per profit and loss account prepared in terms of
clause (a) of sub-section (1) of section 381 read with section
198 of the Act.
1. Substituted by the Companies (Corporate Social Responsibility Policy)

Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “cover subjects enumerated”
Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “company as”
264 Companies (Corporate Social Responsibility Policy) Rules, 2014
(2) Words and expressions used and not defined in these rules but
defined in the Act shall have the same meanings respectively assigned
to them in the Act.
3. Corporate Social Responsibility.

(1) Every company including its holding or subsidiary, and a foreign
company defined under clause (42) of section 2 of the Act having
its branch office or project office in India, which fulfills the criteria
specified in sub-section (1) of section 135 of the Act shall comply with
the provisions of section 135 of the Act and these rules:
Provided that net worth, turnover or net profit of a foreign company of
the Act shall be computed in accordance with balance sheet and profit
and loss account of such company prepared in accordance with the
provisions of clause (a) of sub-section (1) of section 381 and section
198 of the Act.
(2) Every company which ceases to be a company covered under sub-
section (1) of section 135 of the Act for three consecutive financial
years shall not be required to -
(a) constitute a CSR Committee; and
(b) comply with the provisions contained in sub-section (2) to
(5) of the said section,
till such time it meets the criteria specified in sub-section (1) of section
135.
4. CSR Activities.
(1) The CSR activities shall be undertaken by the company, as per its
stated CSR Policy, as projects or programs or activities (either new or
ongoing), excluding activities undertaken in pursuance of its normal
course of business.
1
[(2) The Board of a company may decide to undertake its CSR activities

Amendments Rules, 2016 (w.e.f. 23-05-2016). The sub rule 2 of principal Rule
4 originally read as under:
“(2) The Board of a company may decide to undertake its CSR activities
approved by the CSR Committee, through –

(a) a company established under section 8 of the Act or a
registered trust or a registered society, established by the
company, either singly or alongwith any other company, or
(b) a company established under section 8 of the Act or a
registered trust or a registered society, established by the
Central Government or State Government or any entity
established under an Act of Parliament or a State legislature:
Provided that if, the Board of a company decides to undertake its CSR
activities through a company established under section 8 of the Act or a
registered trust or a registered society, other than those specified in this
sub-rule, such company or trust or society shall have an established
track record of three years in undertaking similar programs or
projects; and the company has specified the projects or programs to be
undertaken, the modalities of utilisation of funds of such projects and
programs and the monitoring and reporting mechanism.]
approved by the CSR Committee, through a registered trust or a registered

society or a company *[established by the company or its holding or subsidiary
or associate company under section 8 of the Act or otherwise]:
Provided that-
(i) if such trust, society or company is **[not established by the company or its
holding or subsidiary or associate company, it] shall have an established track
record of three years in undertaking similar programs or projects;
(ii) the company has specified the project or programs to be undertaken
through these entities, the modalities of utilization of funds on such projects
and programs and the monitoring and reporting mechanism.”
*Substituted by the word “established under section 8 of the Act by the company,
either singly or alongwith its holding or subsidiary or associate company, or
alongwith any other company or holding or subsidiary or associate company
of such other company, or otherwise” by the Companies (Corporate Social
Responsibility Policy) Amendments Rules, 2015, (w.e.f 19-01-2015)
**Substituted by the words “not established by the company, either singly
or alongwith its holding or subsidiary or associate company, or alongwith
any other company or holding or subsidiary or associate company of such
other company” by the Companies (Corporate Social Responsibility Policy)
Amendments Rules, 2015, (w.e.f 19-01-2015)
(3) A company may also collaborate with other companies for

undertaking projects or programs or CSR activities in such a manner
that the CSR Committees of respective companies are in a position
to report separately on such projects or programs in accordance with
these rules.
(4) Subject to provisions of sub-section (5) of section 135 of the Act,
the CSR projects or programs or activities undertaken in India only
shall amount to CSR Expenditure.
(5) The CSR projects or programs or activities that benefit only the
employees of the company and their families shall not be considered as
CSR activities in accordance with section 135 of the Act.
(6) Companies may build CSR capacities of their own personnel as
well as those of their Implementing agencies through Institutions
with established track records of at least three financial years but such
expenditure 1[including expenditure on administrative overheads,]
shall not exceed five percent of total CSR expenditure of the company
in one financial year.
(7) Contribution of any amount directly or indirectly to any political party
under section 182 of the Act, shall not be considered as CSR activity.
5. CSR Committees.
(1) The companies mentioned in the rule 3 shall constitute CSR
Committee as under.-
(i)
2
[a company] covered under sub-section (1) of section 135
which is not required to appoint an independent director
pursuant to sub-section (4) of section 149 of the Act, shall
have its CSR Committee without such director ;
1. Inserted by the Companies (Corporate Social Responsibility Policy)

Amendment Rules, 2014, (w.e.f. 12-09-2014)
Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “an unlisted public company
or a private company”
(ii) a private company having only two directors on its Board

shall constitute its CSR Committee with two such directors;
(iii) with respect to a foreign company covered under these rules,
the CSR Committee shall comprise of at least two persons
of which one person shall be as specified under clause (d) of
sub-section (1) of section 380 of the Act and another person
shall be nominated by the foreign company.
(2) The CSR Committee shall institute a transparent monitoring
mechanism for implementation of the CSR projects or programs or
activities undertaken by the company.
6. CSR Policy.
(1) The CSR Policy of the company shall, inter-alia, include the
following, namely :-
(a) a list of CSR projects or programs which a company plans to
undertake 1[areas or subjects specified in] the Schedule VII of
the Act, specifying modalities of execution of such project or
programs and implementation schedules for the same; and
(b) monitoring process of such projects or programs:
Provided that the CSR activities does not include the activities
undertaken in pursuance of normal course of business of a
company.
Provided further that the Board of Directors shall ensure
that activities included by a company in its Corporate Social
Responsibility Policy are related to the 2[areas or subjects specified
in Schedule VII] of the Act.
(2) The CSR Policy of the company shall specify that the surplus arising

Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “falling within the purview of”
Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “activities included in
Schedule VII”
out of the CSR projects or programs or activities shall not form part of
the business profit of a company.
7. CSR Expenditure.
CSR expenditure shall include all expenditure including contribution
to corpus, for projects or programs relating to CSR activities approved
by the Board on the recommendation of its CSR Committee, but does
not include any expenditure on an item not in conformity or not in line
with activities which fall within the 1[areas or subjects, specified in]
Schedule VII of the Act.
8. CSR Reporting.
(1) The Board’s Report of a company covered under these rules
pertaining to a financial year commencing on or after the 1st day
of April, 2014 shall include an annual report on CSR containing
particulars specified in Annexure.
(2) In case of a foreign company, the balance sheet filed under sub-
clause (b) of sub-section (1) of section 381 shall contain an Annexure
regarding report on CSR.
9. Display of CSR activities on its website.

The Board of Directors of the company shall, after taking into account
the recommendations of CSR Committee, approve the CSR Policy for
the company and disclose contents of such policy in its report and the
same shall be displayed on the company’s website, if any, as per the
particulars specified in the Annexure.

Amendment Rules, 2018 (w.e.f. 19-09-2018) for: “purview of”
ANNEXURE
Format for the Annual Report on CSR Activities
(to be included in Board’s Report)
1. A brief outline of the company’s CSR Policy, including overview of
projects or programs proposed to be undertaken and a reference to the
web-link to the CSR policy and projects or programs.
2. The Composition of CSR Committee.
3. Average net profit of the company for last three financial years.
4. Prescribed CSR Expenditure (two per cent of the amount as in item
3 above).
5. Details of CSR spent during the financial year:
(a) total amount to be spent for the financial year;
(b) amount unspent, if any;
(c) manner in which the amount spent during the financial year
is detailed below:
(1) (2) (3) (4) (5) (6) (7) (8)
Amount spent on the projects
Sector in which the project is
Cumulative expenditure up
*Amount spent Direct or

Programs was undertaken
district where projects or
(1)Direct expenditure on
project or programs wise
to the reporting period

Amount outlay (budget)
(2) Specify the State and
through implementing
or programs Sub-heads:
CSR Project or activity
(1) Local area or other

Projects or programs
projects or programs
(2)Overheads:
identified
covered
agency
S. No.
1.
2.
3.
Total
*Give details of implementing agency:

6. In case the company has failed to spend the two per cent of the
average net profit of the last three financial years or any part thereof.
the company shall provide the reasons for not spending the amount
in its Board report.
7. A responsibility statement of the CSR Committee that the
implementation and monitoring of CSR Policy, is in compliance with
CSR objectives and Policy of thecompany.
Sd/- Sd/- Sd/-

(Chief Executive (Chairman CSR (Person specified under
Officer or Committee) clause (d) of sub-
Managing Director section (1) of section
or Director 380 of the Act
(wherever applicable)
271
COMPANIES (INDIAN ACCOUNTING

STANDARDS) RULES, 2015
[G.S.R. 111(E), Dated 16th February 2015]
In exercise of the powers conferred by Section 133 read with section

469 of the Companies Act, 2013 (18 of 2013) and sub-section (1) of
Section 210A of the Companies Act, 1956 (1 of 1956), the Central
Government, in consultation with the National Advisory Committee
on Accounting Standards, hereby makes the following rules, namely :
(1) These rules may be called the Companies (Indian Accounting
Standards) Rules, 2015.
(2) They shall come into force on the 1st day of April, 2015
2. Definitions.
(a) “Accounting Standards” means the standards of accounting,
or any addendum thereto for companies or class of companies
as specified in rule 3;
(b) “Act” means the Companies Act, 2013 (18 of 2013);
(c) “Annexure” in relation to these rules means the Annexure
containing the Indian Accounting Standards (Ind AS)
appended to these rules;
(d) “entity” means a company as defined in clause (20) of Section
2 of the Act;
(e) “financial statements” means financial statements as defined
in clause (40) of Section 2 of the Act;
(f) “net worth” shall have the meaning assigned to it in clause
(57) of Section 2 of the Act;
271
272 Companies (Indian Accounting Standards) Rules, 2015
1
[(g) “Non-Banking Financial Company” means a Non-
Banking Financial Company as defined in clause (f) of
section 45-I of the Reserve Bank of India Act, 1934 and
includes Housing Finance Companies, Merchant Banking
companies, Micro Finance Companies, Mutual Benefit
Companies, Venture Capital Fund Companies, Stock
Broker or Sub-Broker Companies, Nidhi Companies,
Chit Companies, Securitisation and Reconstruction
Companies, Mortgage Guarantee Companies, Pension
Fund Companies, Asset Management Companies and
Core Investment Companies.]
(2) Words and expressions used herein and not defined in these
rules but defined in the Act shall have the same meaning respectively
assigned to them in the Act.
3. Applicability of Accounting Standards.
(1) The accounting standards as specified in the Annexure to these
rules to be called the Indian Accounting Standards (Ind AS) shall be
the accounting standards applicable to classes of companies specified
in rule 4.
(2) The Accounting standards as specified in Annexure to the
Companies (Accounting Standards) Rules, 2006 shall be the
Accounting Standards applicable to the companies other than the
classes of companies specified in rule 4.
(3) A company which follows the Indian Accounting Standards (Ind
AS) specified in Annexure to these rules in accordance with the
provisions of rule 4 shall follow such standards only.
(4) A company which follows the accounting standards specified in
Annexure to the Companies (Accounting Standards) Rules, 2006 shall
comply with such standards only and not the Standards specified in
Annexure to these rules.
1. Inserted by the Companies (Indian Accounting Standards) (Amendment)

Rules, 2016 (w.e.f. 30-03-2016).
Companies (Indian Accounting Standards) Rules, 2015 273
4. Obligation to comply with Indian Accounting Standards (Ind AS).

(1) The Companies and their auditors shall comply with the Indian
Accounting Standards (Ind AS) specified in Annexure to these rules in
preparation of their financial statements and audit respectively, in the
following manner, namely:-
(i) 1[any company and its holding, subsidiary, joint venture or
associate company] may comply with the Indian Accounting
Standards (Ind AS) for financial statements for accounting
periods beginning on or after 1stApril, 2015, with the
comparatives for the periods ending on 31st March, 2015, or
thereafter;
(ii) the following companies shall comply with the Indian
Accounting Standards (Ind AS) for the accounting periods
beginning on or after 1st April, 2016, with the comparatives
for the periods ending on 31st March, 2016, or thereafter,
namely:-
(a) companies whose equity or debt securities are listed
or are in the process of being listed on any stock
exchange in India or outside India and having net
worth of rupees five hundred crore or more;
(b) companies other than those covered by sub-clause (a)
of clause (ii) of sub- rule (1) and having net worth of
rupees five hundred crore or more;
(c) holding, subsidiary, joint venture or associate
companies of companies covered by sub-clause (a) of
clause (ii) of sub- rule (1) and sub-clause (b) of clause
(ii) of sub- rule (1) as the case may be; and
(iii) the following companies shall comply with the Indian
Accounting Standards (Ind AS) for the accounting periods
beginning on or after 1st April, 2017, with the comparatives
1. Substituted by the Companies (Indian Accounting Standards) (Amendment)

Rules, 2016 (w.e.f. 30-03-2016) for : “any company”.
for the periods ending on 31st March, 2017, or thereafter,

namely:-
(a) companies whose equity or debt securities are listed
or are in the process of being listed on any stock
exchange in India or outside India and having net
worth of less than rupees five hundred crore;
(b) companies other than those covered in clause (ii) of
sub- rule (1) and sub-clause (a) of clause (iii) of sub-
rule (1), that is, unlisted companies having net worth
of rupees two hundred and fifty crore or more but less
than rupees five hundred crore.
(c) holding, subsidiary, joint venture or associate
companies of companies covered under sub-clause
(a) of clause (iii) of sub- rule (1) and sub-clause (b) of
clause (iii) of sub- rule (1), as the case may be:
[(iv) Notwithstanding the requirement of clauses (i) to (iii), Non-
1
Banking Financial Companies (NBFCs) shall comply with

the Indian Accounting Standards (Ind ASs) in preparation
of their financial statements and audit respectively, in the
(a) The following NBFCs shall comply with the Indian
Accounting Standards (Ind AS) for accounting
periods beginning on or after the 1st April, 2018, with
comparatives for the periods ending on 31st March,
2018, or thereafter—
(A) NBFCs having net worth of rupees five
hundred crore or more;
(B) holding, subsidiary, joint venture or associate
companies of companies covered under item
(A), other than those already covered under

Rules, 2016 (w.e.f. 30-03-2016).
clauses (i), (ii) and (iii) of sub-rule (1) of

rule 4.
(b) The following NBFCs shall comply with the Indian
Accounting Standards (Ind AS) for accounting
periods beginning on or after the 1st April, 2019, with
comparatives for the periods ending on 31stMarch,
2019, or thereafter—
(A) NBFCs whose equity or debt securities are
listed or in the process of listing on any stock
exchange in India or outside India and having
net worth less than rupees five hundred crore;
(B) NBFCs, that are unlisted companies, having
net worth of rupees two-hundred and fifty
crore or more but less than rupees five
hundred crore; and
(C) holding, subsidiary, joint venture or associate
companies of companies covered under item
(A) or item (B) of sub-clause (b), other than
those already covered in clauses (i), (ii) and
(iii) of sub-rule (1) or item (B) of sub-clause
(a) of clause (iv).
Explanation.- For the purposes of clause (iv), if in a group
of Companies, some entities apply Accounting Standards
specified in the Annexure to the Companies (Accounting
Standards) Rules, 2006 and others apply accounting
standards as specified in the Annexure to these rules, in such
cases, for the purpose of individual financial statements,
the entities should apply respective standards applicable to
them. For preparation of consolidated financial statements,
the following conditions are to be followed, namely:-
(i) where an NBFC is a parent (at ultimate level or
at intermediate level), and prepares consolidated
financial statements as per Accounting Standards
specified in the Annexure to the Companies
(Accounting Standards) Rules, 2006, and its

subsidiaries, associates and joint ventures, if covered
by clause (i), (ii) and (iii) of sub-rule (1) has to provide
the relevant financial statement data in accordance
with the accounting policies followed by the parent
company for consolidation purposes (until the NBFC
is covered under clause (iv) of sub-rule (1);
(ii) where a parent is a company covered under clause
(i), (ii) and (iii) of sub-rule (1) and has an NBFC
subsidiary, associate or a joint venture, the parent has
to prepare Ind AS-compliant consolidated financial
statements and the NBFC subsidiary, associate and
a joint venture has to provide the relevant financial
statement data in accordance with the accounting
policies followed by the parent company for
consolidation purposes (until the NBFC is covered
under clause (iv) of sub-rule (1).
(v) Notwithstanding clauses (i) to (iv), the holding, subsidiary,
joint venture or associate companies of Scheduled
commercial banks (excluding RRBs) would be required to
prepare Ind AS based financial statements for accounting
periods beginning from 1st April, 2018 onwards, with
comparatives for the periods ending 31st March, 2018 or
thereafter:”; (II) in sub-rule (2), for the words brackets and
figure “sub-rule (1)’’ the words, brackets and figures “clause
(i), (ii) and (iii) of sub-rule (1)’’, shall be substituted, wherever
they occur;]
Provided that nothing in this sub-rule, except clause (i), shall apply to
companies whose securities are listed or are in the process of being listed
on SME exchange as referred to in Chapter XB or on the Institutional
Trading Platform without initial public offering in accordance with the
provisions of Chapter XC of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009.
Explanation 1. - SME Exchange shall have the same meaning as assigned
to it in Chapter XB of the Securities and Exchange Board of India (Issue
of Capital and Disclosure Requirements) Regulations, 2009.
Explanation 2. - “Comparatives” shall mean comparative figures for the

preceding accounting period.
(2) For the purposes of calculation of net worth of companies under
1
[clause (i), (ii) and (iii) of sub-rule (1)], the following principles shall
apply, namely:-
(a) the net worth shall be calculated in accordance with the
stand-alone financial statements of the company as on 31st
March, 2014 or the first audited financial statements for
accounting period which ends after that date;
(b) for companies which are not in existence on 31st March, 2014
or an existing company falling under any of thresholds specified
in 1[clause (i), (ii) and (iii) of sub-rule (1)] for the first time after
31st March, 2014, the net worth shall be calculated on the basis
of the first audited financial statements ending after that date in
respect of which it meets the thresholds specified in 1[clause (i),
(ii) and (iii) of sub-rule (1)].
Explanation.- For the purposes of sub-clause (b), the companies
meeting the specified thresholds given in 1[clause (i), (ii) and (iii) of
sub-rule (1)] for the first time at the end of an accounting year shall
apply Indian Accounting Standards (Ind AS) from the immediate next
accounting year in the manner specified in 1[clause (i), (ii) and (iii) of
sub-rule (1)].
Illustration .- (i) The companies meeting threshold for the first time as on
31st March, 2017 shall apply Ind AS for the financial year 2017-18 onwards.
(ii) The companies meeting threshold for the first time as on 31st
March, 2018 shall apply Ind AS for the financial year 2018-19 onwards
and so on.
2
[(2A) For the purposes of calculation of net worth of Non-Banking
Financial Companies covered under clause (iv) of sub-rule (1), the
following principles shall apply, namely:-

Rules, 2016 (w.e.f. 30-03-2016)for : “sub-rule (1)”
Rules, 2016 (w.e.f. 30-03-2016).
(a) the net worth shall be calculated in accordance with the

stand-alone financial statements of the NBFCs as on 31st
March, 2016 or the first audited financial statements for
accounting period which ends after that date;
(b) for NBFCs which are not in existence on 31st March, 2016
or an existing NBFC falling first time, after 31st March, 2016,
the net worth shall be calculated on the basis of the first
audited stand-alone financial statements ending after that
date, in respect of which it meets the thresholds.
Explanation.-
For the purposes of sub-clause (b), the NBFCs meeting the specified
thresholds given in sub clause (b) of clause (iv) of sub-rule (1) for the
first time at the end of an accounting year shall apply Indian Accounting
Standards (Ind ASs) from the immediate next accounting year in the
manner specified in sub clause (b) of clause (iv) of sub-rule (1).
Illustration - (i) The NBFCs meeting threshold for the first time as on 31st
March, 2019 shall apply Ind AS for the financial year 2019-20 onwards.
(ii) The NBFCs meeting threshold for the first time as on 31st March, 2020
shall apply Ind AS for the financial year 2020-21 onwards and so on.]
(3) Standards in Annexure to these rules once required to be complied
with in accordance with these rules, shall apply to both stand-alone
financial statements and consolidated financial statements.
(4) Companies to which Indian Accounting Standards (Ind AS)
are applicable as specified in these rules shall prepare their first set
of financial statements in accordance with the Indian Accounting
Standards (Ind AS) effective at the end of its first Indian Accounting
Standards (Ind AS) reporting period.
Explanation.- For the removal of doubts, it is hereby clarified that
the companies preparing financial statements applying the Indian
Accounting Standards (Ind AS) for the accounting period beginning
on 1stApril, 2016 1[or 1stApril, 2018, as the case may be] shall apply the

Rules, 2016 (w.e.f. 30-03-2016).
Indian Accounting Standards (Ind AS) effective for the financial year
ending on 31st March, 2017 1[or 31st March, 2019, as the case may be].
(5) Overseas subsidiary, associate, joint venture and other similar
entities of an Indian company may prepare its standalone financial
statements in accordance with the requirements of the specific
jurisdiction:
Provided that such Indian company shall prepare its consolidated
financial statements in accordance with the Indian Accounting
Standards (Ind AS) 2[Omitted] if it meets the criteria as specified in
sub-rule (1).
(6) Indian company which is a subsidiary, associate, joint venture and
other similar entities of a foreign company shall prepare its financial
statements in accordance with the Indian Accounting Standards (Ind
AS) 2[Omitted] if it meets the criteria as specified in sub-rule (1).
(7) Any company opting to apply the Indian Accounting Standards (Ind
AS) voluntarily as specified in sub-rule (1) for its financial statements
shall prepare its financial statements as per the Indian Accounting
Standards (Ind AS) consistently.
(8) Once the Indian Accounting Standards (Ind AS) are applied
voluntarily, it shall be irrevocable and such companies shall not be
required to prepare another set of financial statements in accordance
with Accounting Standards specified in Annexure to Companies
(Accounting Standards) Rules, 2006.
(9) Once a company starts following the Indian Accounting Standards
(Ind AS) 2[Omitted] on the basis of criteria specified in sub-rule (1), it
shall be required to follow the Indian Accounting Standards (Ind AS)
for all the subsequent financial statement even if any of the criteria
specified in this rule does not subsequently apply to it.

Rules, 2016 (w.e.f. 30-03-2016).
2. Omitted by the Companies (Indian Accounting Standards) (Amendment)
Rules, 2016 (w.e.f. 30-03-2016) for : “either voluntarily or mandatorily”
5.Exemptions
1
[The Banking Companies and Insurance Companies shall apply the
Ind ASs as notified by the Reserve Bank of India (RBI) and Insurance
Regulatory Development Authority (IRDA) respectively. An insurer or
insurance company shall however, provide Ind AS compliant financial
statement data for the purposes of preparation of consolidated financial
statements by its parent or investor or venturer, as required by the parent
or investor or venturer to comply with the requirements of these rules.]
ANNEXURE
[See rule 3]
A. General Instruction.
(1) Indian Accounting Standards, which are specified, are intended to
be in conformity with the provisions of applicable laws. However, if due
to subsequent amendments in the law, a particular Indian Accounting
Standard is found to be not in conformity with such law, the provisions
of the said law shall prevail and the financial statements shall be
prepared in conformity with such law.
(2) Indian Accounting Standards are intended to apply only to items
which are material.
(3) The Indian Accounting Standards include paragraphs set in bold
italic type and plain type, which have equal authority. Paragraphs in
bold italic type indicate the main principles. An individual Indian
Accounting Standard shall be read in the context of the objective, if
stated, in that Indian Accounting Standard and in accordance with
these General Instructions.
B. Indian Accounting Standards (Ind As)
[refer Ministry of Corporate Affairs Notification dated 16.02.2015 –
G.S.R. 111(E)]

Rules, 2016 Dated 30-03-2016 for: “The insurance companies, banking compa-
nies and non-banking finance companies shall not be required to apply Indian
Accounting Standards (Ind AS) for preparation of their financial statements
either voluntarily or mandatorily as specified in sub-rule (1) of rule 4.”
281
COMPANIES (ACCOUNTING STANDARDS)

RULES, 2006
[G.S.R. 739 (E), Dated 7th December 2006]
In exercise of the powers conferred by clause (a) of sub-section (1) of
section 642 of the Companies Act, 1956 (1 of 1956), read with sub-
section (3C) of section 211 and sub-section (1) of section 210A of
the said Act, the Central Government, in consultation with National
Advisory Committee on Accounting Standards, hereby makes the
following rules, namely:-

(1) These rules may be called the Companies (Accounting Standards)
Rules, 2006.
Official Gazette.
2. Definitions.
In these rules, unless the context otherwise requires,–

[(a) “Accounting Standards” means the standards of accounting
1
or any addendum thereto as specified in rule 3 of these rules;

(b) “Act” means the Companies Act, 1956 (1 of 1956) or the
Companies Act, 2013 (18 of 2013), as the case may be;]
(c) “Annexure” means an Annexure to these rules;
1. Substituted by the Companies (Accounting Standards) Amendment Rules,

2016 (w.e.f. 30-03-2016) for :
“(a) “Accounting Standards” means the Accounting Standards as specified in
rule 3 of these rules;
(b) “Act” means the Companies Act, 1956 (1 of 1956);”
281
282 Companies (Accounting Standards) Rules, 2006
1
[(d) “Financial Statements” means financial statements as defined
in sub-section (40) of section 2 of the Companies Act, 2013;
(e) “Enterprise” means a ‘company’ as defined in sub-section
(20) of section 2 of the Companies Act, 2013 or as defined in
section 3 of the Companies Act, 196, as the case may be;]
(f) “Small and Medium Sized Company” (SMC) means, a
company –
(i) whose equity or debt securities are not listed or are
not in the process of listing on any stock exchange,
whether in India or outside India;
(ii) which is not a bank, financial institution or an
insurance company;
(iii) whose turnover (excluding other income) does not
exceed rupees fifty crore in the immediately preceding
accounting year;
(iv) which does not have borrowings (including public
deposits) in excess of rupees ten crore at any time
during the immediately preceding accounting year;
and
(v) which is not a holding or subsidiary company of a
company which is not a small and medium-sized
company.
Explanation: For the purposes of clause (f), a company shall qualify
as a Small and Medium Sized Company, if the conditions mentioned
therein are satisfied as at the end of the relevant accounting period.
1. Substituted by the Companies (Accounting Standards) Amendment Rules,

2016 (w.e.f. 30-03-2016) for :
“(d) “General Purpose Financial Statements” include balance sheet, statement of
profit and loss, cash flow statement (wherever applicable), and other statements
and explanatory notes which form part thereof.
(e) “Enterprise” means a company as defined in section 3 of the Companies
Act, 1956.”
Companies (Accounting Standards) Rules, 2006 283
(2) Words and expressions used herein and not defined in these
rules but defined in the Act shall have the same meaning respectively
assigned to them in the Act.
3. Accounting Standards.
(1) The Central Government hereby prescribes Accounting Standards
1 to 7 and 9 to 29 as recommended by the Institute of Chartered
Accountants of India, which are specified in the Annexure to these
rules.
(2) The Accounting Standards shall come into effect in respect of
accounting periods commencing on or after the publication of these
Accounting Standards.
4. Obligation to comply with the Accounting Standards.

(1) Every company and its auditor(s) shall comply with the Accounting
Standards in the manner specified in Annexure to these rules.
(2) The Accounting Standards shall be applied in the preparation of
1
[omitted] Financial Statements.
5. An existing company, which was previously not a Small and Medium
Sized Company (SMC) and subsequently becomes an SMC, shall not
be qualified for exemption or relaxation in respect of Accounting
Standards available to an SMC until the company remains an SMC for
two consecutive accounting periods.
1. Omitted by the Companies (Accounting Standards) Amendment Rules, 2016

(w.e.f. 30-03-2016) for : “General Purpose”.
284 Companies (Accounting Standards) Rules, 2006
ANNEXURE
(See rule 3)
ACCOUNTING STANDARDS
A. General Instructions
1. SMCs shall follow the following instructions while complying with
Accounting Standards under these rules:-
1.1 the SMC which does not disclose certain information pursuant to
the exemptions or relaxations given to it shall disclose (by way of a note
to its financial statements) the fact that it is an SMC and has complied
with the Accounting Standards insofar as they are applicable to an
SMC on the following lines: “The Company is a Small and Medium
Sized Company (SMC) as defined in the General Instructions in
respect of Accounting Standards notified under the Companies Act,
1956. Accordingly, the Company has complied with the Accounting
Standards as applicable to a Small and Medium Sized Company.”
1.2 Where a company, being a SMC, has qualified for any exemption or
relaxation previously but no longer qualifies for the relevant exemption
or relaxation in the current accounting period, the relevant standards
or requirements become applicable from the current period and the
figures for the corresponding period of the previous accounting period
need not be revised merely by reason of its having ceased to be an SMC.
The fact that the company was an SMC in the previous period and it
had availed of the exemptions or relaxations available to SMCs shall be
disclosed in the notes to the financial statements.
1.3 If an SMC opts not to avail of the exemptions or relaxations available
to an SMC in respect of any but not all of the Accounting Standards,
it shall disclose the standard(s) in respect of which it has availed the
exemption or relaxation.
1.4 If an SMC desires to disclose the information not required to be
disclosed pursuant to the exemptions or relaxations available to the
SMCs, it shall disclose that information in compliance with the relevant
accounting standard.
Companies (Accounting Standards) Rules, 2006 285
1.5 The SMC may opt for availing certain exemptions or relaxations
from compliance with the requirements prescribed in an Accounting
Standard: Provided that such a partial exemption or relaxation and
disclosure shall not be permitted to mislead any person or public.
2. Accounting Standards, which are prescribed, are intended to be in
conformity with the provisions of applicable laws. However, if due to
subsequent amendments in the law, a particular accounting standard
is found to be not in conformity with such law, the provisions of the
said law will prevail and the financial statements shall be prepared in
conformity with such law.
3. Accounting Standards are intended to apply only to items which are
material.
4. The accounting standards include paragraphs set in bold italic type
and plain type, which have equal authority. Paragraphs in bold italic
type indicate the main principles. An individual accounting standard
shall be read in the context of the objective, if stated, in that accounting
standard and in accordance with these General Instructions.
B. Accounting Standards
[refer: http://www.mca.gov.in/MinistryV2/accountingstandards1.html]
286
NATIONAL FINANCIAL REPORTING

AUTHORITY RULES, 2018
[G.S.R. 1111(E), Dated 13th November, 2018]
In exercise of the powers conferred under sub-sections (2) and (4)

of section 132, sub-section (1) of section 139 and sub-section (1) of
section 469 of the Companies Act, 2013 (18 of 2013), the Central
Government hereby makes the following rules, namely :-
1. Short Title and Commencement.

(1) These rules may be called the National Financial Reporting
Authority Rules, 2018.
Official Gazette.
2. Definitions.
(a) “accounting standards” means the ‘accounting standards’ as
defined in clause (2) of section 2 of the Act;
(c) “auditing standards” means the ‘auditing standards’ as
defined in clause (7) of section 2 of the Act;
(d) “auditor” means an individual or a firm including a limited
liability partnership incorporated under the Limited Liability
Partnership Act, 2008 (6 of 2009) or any other Act for the
time being in force, who has been appointed as an auditor of
a company or a body corporate under section 139 of the Act
or under any other Act for the time being in force;
(e) “Authority” means the National Financial Reporting
Authority constituted under sub-section (1) of section 132 of
the Act;
286
National Financial Reporting Authority Rules, 2018 287
(f) “chairperson” means the chairperson of the Authority;
(g) “Division” means a division established by the Authority for

the purpose of organising and carrying out its functions and
duties;
(h) “Form” means the Form annexed to these Rules;
(i) “full-time member” means a member who has been

appointed as such under sub-section (3) of section 132 of the
Act;
(j) “part-time member” means a member of the Authority other

than a full-time member.
(2) Words and expressions used and not defined in these rules but
defined in the Act shall have the same meanings respectively assigned
to them in the Act.
3. Classes of companies and bodies corporate governed by the

Authority.
(1) The Authority shall have power to monitor and enforce compliance
with accounting standards and auditing standards, oversee the
quality of service under sub-section (2) of section 132 or undertake
investigation under sub-section (4) of such section of the auditors of
the following class of companies and bodies corporate, namely:-
(a) companies whose securities are listed on any stock exchange

in India or outside India;
(b) unlisted public companies having paid-up capital of not less

than rupees five hundred crores or having annual turnover
of not less than rupees one thousand crores or having, in
aggregate, outstanding loans, debentures and deposits of not
less than rupees five hundred crores as on the 31st March of
immediately preceding financial year;
(c) insurance companies, banking companies, companies

288 National Financial Reporting Authority Rules, 2018
engaged in the generation or supply of electricity, companies

governed by any special Act for the time being in force or
bodies corporate incorporated by an Act in accordance with
clauses (b), (c), (d), (e) and (f) of sub-section (4) of section 1
of the Act;
(d) any body corporate or company or person, or any class of
bodies corporate or companies or persons, on a reference
made to the Authority by the Central Government in public
interest; and
(e) a body corporate incorporated or registered outside India,
which is a subsidiary or associate company of any company
or body corporate incorporated or registered in India as
referred to in clauses (a) to (d), if the income or networth
of such subsidiary or associate company exceeds twenty per
cent. of the consolidated income or consolidated networth
of such company or the body corporate, as the case may be,
referred to in clauses (a) to (d).
(2) Every existing body corporate other than a company governed
by these rules, shall inform the Authority within thirty days of the
commencement of these rules, in Form NFRA-1, the particulars of the
auditor as on the date of commencement of these rules.
(3) Every body corporate, other than a company as defined in clause
(20) of section 2, formed in India and governed under this rule shall,
within fifteen days of appointment of an auditor under sub-section (1)
of section 139, inform the Authority in Form NFRA-1, the particulars
of the auditor appointed by such body corporate:
Provided that a body corporate governed under clause (e) of sub-rule
(1) shall provide details of appointment of its auditor in Form NFRA-1.
(4) A company or a body corporate other than a company governed
under this rule shall continue to be governed by the Authority for a
period of three years after it ceases to be listed or its paid-up capital or
turnover or aggregate of loans, debentures and deposits falls below the
limit stated therein.
4. Functions and duties of the Authority.

(1) The Authority shall protect the public interest and the interests
of investors, creditors and others associated with the companies or
bodies corporate governed under rule 3 by establishing high quality
standards of accounting and auditing and exercising effective oversight
of accounting functions performed by the companies and bodies
corporate and auditing functions performed by auditors.
(2) In particular, and without prejudice to the generality of the
foregoing, the Authority shall:
(a) maintain details of particulars of auditors appointed in the
companies and bodies corporate specified in rule 3;
(b) recommend accounting standards and auditing standards
for approval by the Central Government;
(c) monitor and enforce compliance with accounting standards
and auditing standards;
(d) oversee the quality of service of the professions associated
with ensuring compliance with such standards and suggest
measures for improvement in the quality of service;
(e) promote awareness in relation to the compliance of
accounting standards and auditing standards;
(f) co-operate with national and international organisations of
independent audit regulators in establishing and overseeing
adherence to accounting standards and auditing standards;
and
(g) perform such other functions and duties as may be necessary
or incidental to the aforesaid functions and duties.
(3) The Central Government may, by notification, and subject to such
conditions, limitations and restrictions as may be specified therein
delegate any of its powers or functions under the Act, other than the
power to make rules, to the Authority.
5. Annual return.
Every auditor referred to in rule 3 shall file a return with the Authority
on or before 30th April every year in such form as may be specified by
the Central Government.
6. Recommending accounting standards and auditing standards.

(1) For the purpose of recommending accounting standards or auditing
standards for approval by the Central Government, the Authority
(a) shall receive recommendations from the Institute of
Chartered Accountants of India on proposals for new
accounting standards or auditing standards or for
amendments to existing accounting standards or auditing
standards;
(b) may seek additional information from the Institute of
Chartered Accountants of India on the recommendations
received under clause (a), if required.
(2) The Authority shall consider the recommendations and
additional information in such manner as it deems fit before making
recommendations to the Central Government.
7. Monitoring and enforcing compliance with accounting standards.

(1) For the purpose of monitoring and enforcing compliance with
accounting standards under the Act by a company or a body corporate
governed under rule 3, the Authority may review the financial
statements of such company or body corporate, as the case may be, and
if so required, direct such company or body corporate or its auditor
by a written notice, to provide further information or explanation or
any relevant documents relating to such company or body corporate,
within such reasonable time as may be specified in the notice.
(2) The Authority may require the personal presence of the officers of
the company or body corporate and its auditor for seeking additional
information or explanation in connection with the review of the
financial statements of such company or body corporate.
(3) The Authority shall publish its findings relating to non-compliances

on its website and in such other manner as it considers fit, unless it has
reasons not to do so in the public interest and it records the reasons in
writing.
(4) Where the Authority finds or has reason to believe that any
accounting standard has or may have been violated, it may decide on
the further course of investigation or enforcement action through its
concerned Division.
8. Monitoring and enforcing compliance with auditing standards.

(1) For the purpose of monitoring and enforcing compliance with
auditing standards under the Act by a company or a body corporate
governed under rule 3, the Authority may: –
(a) review working papers (including audit plan and other audit
documents) and communications related to the audit;
(b) evaluate the sufficiency of the quality control system of the
auditor and the manner of documentation of the system by
the auditor; and
(c) perform such other testing of the audit, supervisory,
and quality control procedures of the auditor as may be
considered necessary or appropriate.
(2) The Authority may require an auditor to report on its governance
practices and internal processes designed to promote audit quality,
protect its reputation and reduce risks including risk of failure of the
auditor and may take such action on the report as may be necessary.
(3) The Authority may seek additional information or may require the
personal presence of the auditor for seeking additional information or
explanation in connection with the conduct of an audit.
(4) The Authority shall perform its monitoring and enforcement
activities through its officers or experts with sufficient experience in
audit of the relevant industry.
(5) The Authority shall publish its findings relating to non-compliances
on its website and in such other manner as it considers fit, unless it has
reasons not to do so in the public interest and it records the reasons in
writing.
(6) The Authority shall not publish proprietary or confidential
information, unless it has reasons to do so in the public interest and it
records the reasons in writing.
(7) The Authority may send a separate report containing proprietary
or confidential information to the Central Government for its
information.
(8) Where the Authority finds or has reason to believe that any law
or professional or other standard has or may have been violated by
an auditor, it may decide on the further course of investigation or
enforcement action through its concerned Division.
9. Overseeing the quality of service and suggesting measures for

improvement.
(1) On the basis of its review, the Authority may direct an auditor to
take measures for improvement of audit quality including changes in
their audit processes, quality control, and audit reports and specify a
detailed plan with time-limits.
(2) It shall be the duty of the auditor to make the required improvements
and send a report to the Authority explaining how it has complied with
the directions made by the Authority.
(3) The Authority shall monitor the improvements made by the auditor
and take such action as it deems fit depending on the progress made
by the auditor.
(4) The Authority may refer cases with regard to overseeing the quality
of service of auditors of companies or bodies corporate referred to in
rule 3 to the Quality Review Board constituted under the Chartered
Accountants Act, 1949 (38 of 1949) or call for any report or information
in respect of such auditors or companies or bodies corporate from such
Board as it may deem appropriate.
(5) The Authority may take the assistance of experts for its oversight
and monitoring activities.
10. Power to investigate.

(1) Where the Authority has-
(a) received any reference from the Central Government
for investigation into any matter of professional or other
misconduct under sub-section (4) of section 132 of the Act;
(b) decided to undertake investigation into any matter on the
basis of its compliance or oversight activities; or
(c) decided to undertake suo motu investigation into any matter
of professional or other misconduct, after recording reasons
in writing for this purpose,
it shall forward the matter to its Division dealing with enforcement for
carrying out investigation and other action.
(2) If, during the investigation, the Authority has evidence to believe
that any company or body corporate has not complied with the
requirements under the Act or rules which involves or may involve
fraud amounting to rupees one crore or more, it shall report its findings
to the Central Government.
(3) On the commencement of these rules-
(a) the action in respect of cases of professional or other
misconduct against auditors of companies referred to in
rule 3 shall be initiated by Authority and no other institute
or body shall initiate any such proceedings against such
auditors:
Provided that no other institute or body shall initiate or
continue any proceedings in such matters of misconduct
where the Authority has initiated an investigation under this
rule;
(b) the action in respect of cases of professional or other
misconduct against auditors of companies or bodies
corporate other than those referred to in rule 3 shall

continue to be proceeded with by the Institute of Chartered
Accountants of India as per provisions of the Chartered
Accountants Act, 1949 and the regulations made thereunder.
11. Disciplinary proceedings.

(1) Based on the reference received from the Central Government or
findings of its monitoring or enforcement or oversight activities, or on
the basis of material otherwise available on record, if the Authority
believes that sufficient cause exists to take actions permissible under
sub-section (4) of section 132, it shall refer the matter to the concerned
division, which shall cause a show-cause notice to be issued to the
auditor.
(2) The show-cause notice shall be in writing, and shall, inter alia, state-
(a) the provisions of the Act or rules under which it has been
issued;
(b) the details of the alleged facts;
(c) the details of the evidence in support of the alleged facts;
(d) the provisions of the Act, rules or the accounting standards
or auditing standards thereunder allegedly violated, or the
manner in which the public interest is allegedly affected;
(e) the actions that the Authority proposes to take or the
directions it proposes to issue if the allegations are
established;
(f) the time limit and the manner in which the auditor is
required to respond to the show-cause notice;
(g) the consequences of failure to respond to the show-cause
notice; and
(h) the procedure to be followed for disposal of the show-cause
notice.
(3) The show-cause notice shall enclose copies of documents relied
upon and extracts of relevant portions from the report of investigation

or other records.
(4) The show-cause notice shall be served on the auditor in the
following manner, namely -
(a) by sending it to the auditor at the address provided by him
or provided by the Institute of Chartered Accountants of
India (if required by the Authority) by registered post with
acknowledgement due; or
(b) by an appropriate electronic means to the email address of
the auditor provided by him or it or provided by the the
Institute of Chartered Accountants of India (if required by
the Authority):
Provided that where the auditor is a firm -
(a) a notice to a firm shall be deemed to be a notice to all the
partners or employees of that firm as on the date of service of
notice;
(b) the notice shall call upon the firm to disclose the name or
names of the partner or partners concerned who shall be
responsible for answering the allegations;
(c) the partner whose name is disclosed by the firm shall be
responsible for answering the notice against the firm, and if
no partner, whether erstwhile or present, of the firm owns
responsibility for the allegations made against the firm, then
the firm as a whole shall be responsible for answering the
allegations, and all the partners and employees of that firm
as on the date of occurrence of alleged misconduct, shall be
responsible for answering the allegations.
(5) The Division shall dispose of the show-cause notice within a period
of ninety days of the assignment through a summary procedure as may
be specified by the Authority, by a reasoned order in adherence to the
principles of natural justice including where necessary or appropriate
an opportunity of being heard in person, and after considering
the submissions, if any, made by the auditor, the relevant facts and
circumstances, and the material on record.
(6) The order disposing of a show-cause notice may provide for-
(a) no action;
(b) caution;
(c) action for imposing penalty against auditor under sub-
clause (A) of clause (c) of sub-section (4) of section 132 or
for debarring the auditor from engaging as such under sub-
clause (B) of clause (c) of sub-section (4) of section 132 or
both.
(7) The order passed under sub-rule (6) shall not become effective until
thirty days have elapsed from the date of issue of the order unless the
Division states otherwise in the order along with the reason for the
same.
(8) The order passed under sub-rule (6) shall be served on the auditor
in the manner specified in sub-rule (3) and a copy of the same shall
be sent
(i) in all cases to - (a) the Central Government; and (b) the
Institute of Chartered Accountants of India;
(ii) in the case of a company referred to in sub-section (5) of
section 139 to the Comptroller and Auditor General of India;
(iii) in the case of a listed company to the Securities and Exchange
Board of India; (iv) in the case of a bank or a non-banking
finance company to the Reserve Bank of India;
(iv) in the case of a bank or a non-banking finance company to
the Reserve Bank of India;
(v) in the case of an insurance company to the Insurance
Regulatory and Development Authority of India;
(vi) in case the auditor is resident outside India to concerned
regulator of such country;
and the same shall be published on the website of the Authority.
12. Manner of enforcement of orders passed in disciplinary

proceedings.
(1) Where the order passed under rule 11 relates to imposition of a
monetary penalty on any auditor, the auditor shall deposit the amount
of penalty with the Authority within thirty days of the order:
Provided that where the auditor prefers an appeal against the order
of the Authority, it shall deposit ten per cent. of the amount of the
monetary penalty with the Appellate Tribunal.
(2) If, within thirty days of the order passed under rule 11, the auditor
neither pays the penalty nor appeals against the order, the Authority
shall, without prejudice to any other action, inform about such non-
compliance to every company or body corporate (including those not
covered by rule 3) in which the auditor is functioning as auditor and
every such company or body corporate shall appoint a new auditor in
accordance with the provisions of the Act.
(3) Where the order passed under rule 11 imposes a penalty on the
auditor or debars the auditor from practice, the order shall be sent to
every company or body corporate in which the auditor is functioning
as auditor.
(4) Where the order passed under rule 11 debars the auditor from
practice or the order under sub-rule (2) is passed, the order shall be
sent to every company or body corporate (including those not covered
by rule 3) in which the auditor is functioning as auditor and every such
company or body corporate shall appoint a new auditor in accordance
with the provisions of the Act.
13. Punishment in case of non-compliance.

If a company or any officer of a company or an auditor or any other
person contravenes any of the provisions of these rules, the company
and every officer of the company who is in default or the auditor or
such other person shall be punishable as per the provisions of section
450 of the Act.
14. Role of chairperson and full-time members.

All matters related to, investigation, monitoring, enforcement and
disciplinary proceedings shall be examined and decided by the
chairperson or any one or more of the full-time members, acting
through one of the Divisions.
15. Advisory committees, study groups and task forces.

For the effective performance of its functions under the Act, the Authority
may constitute advisory committees, study groups and task forces.
16. Financial reporting advocacy and education.

The Authority shall take suitable measures for the promotion of
awareness and significance of accounting standards, auditing standards,
auditors’ responsibilities, audit quality and such other matters through
education, training, seminars, workshops, conferences and publicity.
17. Confidentiality and security of information.

(1) The Authority and all persons and organisations associated with it
shall maintain complete confidentiality and security of the information
provided to them for the purpose of the work of the Authority.
(2) The Authority may enter into such contractual arrangements as
may be necessary in order to maintain complete confidentiality and
security of the information.
18. Avoidance of conflict of interest.

(1) The Authority shall not enter into any contract, arrangement or
relationship or participate in any event that may, or is likely to be
perceived to, interfere with its ability to perform its functions and
duties in an effective, fair and reasonable manner.
(2) In particular the Authority or any person associated with it shall not
receive any funds, assets, donations, favours, gifts or sponsorships from
any source other than the Central Government and shall not enter into
any liabilities, obligations or commitments except as permitted by the
Central Government.
19. International associations and international assistance.

(1) The Authority may become a member of regional or international
associations of independent audit regulators and standard-setters on
such terms as it deems fit.
(2) The Authority may provide assistance to, or receive assistance from,
foreign independent audit regulators in investigation of an auditor in
accordance with Indian laws on such terms as it deems fit.
300
NATIONAL FINANCIAL REPORTING

AUTHORITY (MANNER OF APPOINTMENT
AND OTHER TERMS AND CONDITIONS OF
SERVICE OF CHAIRPERSON AND MEMBERS)
RULES, 2018
In exercise of the powers conferred by sub-section (3) of section 132 of

the Companies Act, 2013 (18 of 2013), the Central Government hereby
makes the following rules, namely :-

(1) These rules may be called The National Financial Reporting
Authority (Manner of Appointment and other Terms and Conditions
of Service of Chairperson and Members) Rules, 2018.
Official Gazette.
2. Definitions.
(b) “Authority” means the National Financial Reporting
Authority constituted under sub-section (1) of section 132 of
the Act.
(2) Words and expressions used in these rules and not defined, but
defined in the Act shall have the meanings respectively assigned to
them in the Act.
3. Composition of Authority.
(1) The Authority shall consist of the following persons to be appointed
by the Central Government, namely:-
300
NFRA (Manner of Appointment of Chairperson and Members) Rules, 2018 301
(a) a chairperson;
(b) three full time members; and
(c) nine part time members.
(2) The chairperson shall be a person of eminence, ability, integrity and
standing and having expertise and experience of not less than twenty-
five years in the field of accountancy, auditing, finance or law.
(3) A full-time member shall be a person of ability, integrity and
standing and having expertise and experience of not less than twenty
years in the field of accountancy, auditing, finance or law.
(4) The chairperson and all members, before being appointed,
shall submit a declaration to the Central Government confirming
that they have no conflict of interest or lack of independence in
respect of such appointment as chairperson or members in Form
I annexed to these rules, failing which their appointment shall not
be considered.
(5) The chairperson and full-time members, shall not be associated
with any audit firm including related consultancy firms during the
course of their appointment and two years after ceasing to hold such
appointment.
(6) A part-time member shall be a person who shall not, have any such
financial or other interest as is likely to affect prejudicially his functions
as a part-time member.
4. Manner of appointment.
(1) The Central Government shall appoint the chairperson and a full
time member referred to in rule 3 on the recommendation of a search-
cum-selection committee consisting of –
(a) Cabinet Secretary - Chairperson;
(b) Additional Principal Secretary to the Prime Minister –
Member;
(c) Secretary – Ministry of Corporate Affairs– Member;
302 NFRA (Manner of Appointment of Chairperson and Members) Rules, 2018
(d) Chairperson, National Financial Reporting Authority (for

selection of full-time members) – Member;
(e) three experts of repute from a panel of experts in the field of
accountancy, auditing, finance, law (to be nominated by the
Central Government) - Members
(2) The Secretary, Ministry of Corporate Affairs shall be the convener
of the search-cum-selection committee.
(3) The search-cum-selection committee shall determine its procedure
for making its recommendation.
(4) No appointment of chairperson or a full time member shall be
invalid merely by reason of any vacancy or absence in the search-cum-
selection committee.
(5) The search-cum-selection committee shall make its recommendations
in regard to appointment of chairperson or the members, as the case
may be, to the Central Government within a period not exceeding one
hundred and twenty days from the date of reference made to it by the
Central Government.
(6) The following persons shall be appointed as part time members of
the Authority namely:-
(i) one member to represent the Ministry of Corporate Affairs,
who shall be an officer not below the rank of Joint Secretary,
ex-officio;
(ii) one member to represent the Comptroller and Auditor
General of India, who shall be an officer not below the rank
of Accountant General or Principal Director, ex-officio;
(iii) one member to represent the Reserve Bank of India, who
shall be an officer not below the rank of Executive Director,
ex-officio;
(iv) one member to represent the Securities and Exchange
Board of India, who shall be an officer not below the rank of
Executive Director, ex-officio;
(v) President, Institute of Chartered Accountants of India, ex-

officio;
(vi) Chairperson, Accounting Standards Board, Institute of
Chartered Accountants of India, ex-officio;
(vii) Chairperson, Auditing and Assurance Standards Board,
Institute of Chartered Accountants of India, ex-officio; and
(viii) two experts from the field of accountancy, auditing, finance
or law.
5. Medical fitness.
No person shall be appointed as the chairperson or full time member
unless he is declared medically fit by an authority specified by the
Central Government in this behalf.
6. Resignation.
The chairperson or a member may, by writing under his hand addressed
to the Central Government, resign from his office at any time:
Provided that the chairperson or member shall, unless he is permitted
by the Central Government to relinquish office sooner, continue to
hold office until the expiry of three months from the date of receipt
of such notice or until a person duly appointed as a successor enters
upon his office or until the expiry of his term of office, whichever is
the earliest.
7. Removal from office.

(1) The Central Government may, on the recommendation of a
Committee referred to in sub-rule (1) of rule 4, remove from office the
chairperson or a member, who –
(a) has been adjudged as an insolvent; or
(b) has been convicted of an offence which, in the opinion of the
Central Government, involves moral turpitude; or
(c) has become physically or mentally incapable of acting as the
chairperson or member; or
(d) has acquired such financial or other interest as is likely to

affect prejudicially his functions as the chairperson or
member; or
(e) has so abused his position as to render his continuance in
office prejudicial to the public interest:
Provided that the chairperson or the interested member shall not be
the member of such Committee, where the subject matter of the cause
is against him.
(2) No member shall be removed under clauses (b) to (e) of sub-rule
(1) unless he has been given a reasonable opportunity of being heard
in the matter.
8. Procedure for inquiry of misbehavior or incapacity of the

chairperson or a member.
(1) If a written complaint is received by the Central Government,
alleging any definite charge of misbehavior or incapacity to perform
the functions of the office in respect of the chairperson or a full time
member, the Ministry of Corporate Affairs shall make a preliminary
scrutiny of such complaint.
(2) If on preliminary scrutiny, the Ministry of Corporate Affairs, is of
the opinion that there are reasonable grounds for making an inquiry
into the truth of any such misbehavior or incapacity of the chairperson
or full time member, it shall make a reference to the Committee
constituted under sub-rule (1) of rule 4 to conduct the inquiry:
Provided that the chairperson or the interested member shall not be
the member of such committee, where the subject matter of the cause
is against him.
(3) The Committee shall complete the inquiry within one hundred
and twenty days time or such further time as may be extended by the
Central Government on the request of the committee in this behalf.
(4) After the conclusion of the inquiry, the Committee shall submit
its report to the Central Government stating therein its findings
and the reasons thereof on each of the charges separately with such
observations on the whole case as it may think fit.
(5) The Committee shall not be bound by the procedure laid down
by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided
by the principles of natural justice and shall have power to regulate
its own procedure, including the fixing of date, place and time of
its inquiry.
9. Term of Office.
(1) The term of office of the chairperson and a full time member shall
be three years from the date on which he enters upon his office or till
he attains the age of sixty-five years, whichever is earlier, and he shall
be eligible for re-appointment for one more term.
(2) A part -time member shall hold office for a period, not exceeding
three years, as may be specified in the order of his appointment or the
period for which he holds the substantive post by virtue of which he
has been appointed as the part-time member, whichever is earlier, but
shall be eligible for re-appointment.
10. Vacancy.
In case of a vacancy in the office of the chairperson or a full-time
member, the Central Government shall have the power to appoint the
senior most full-time member or in his absence any other full time
member to officiate as chairperson.
11. Salary and allowances.

(1) The chairperson shall be paid a salary of two lakhs fifty thousand
rupees (fixed) and other allowances and benefits as are admissible to a
Central Government officer holding posts carrying the same pay.
(2) A full time member shall be paid a salary of two lakhs twenty-five
thousand rupees and other allowances and benefits as are admissible
to a Central Government Officer holding a Group ‘A’ post carrying the
same pay.
(3) In case the person appointed as the chairperson or full time member
is in receipt of any pension, the pay of such person shall be reduced by
the gross amount of pension drawn by him.
12. Pension, Gratuity and Provident Fund.

(1) The chairperson or a full time member shall be governed by the
provisions of the Contributory Provident Fund (India) Rules, 1962 and
the Contribution Pension System.
(2) Additional pension and gratuity shall not be admissible for service
rendered in the Authority.
13. Leave.
(1) The chairperson and a full time member shall be entitled to
following leave, namely :
(a) earned leave at the rate of thirty days for every completed
calendar year of service;
(b) casual leave, not exceeding eight days in a calendar year.
(2) The payment of leave salary during leave shall be governed by rule
40 of the Central Civil Services (Leave) Rules, 1972.
(3) The chairperson or a full time member shall be entitled to
encashment of leave in respect of the earned Leave standing to his
credit, subject to the condition that maximum leave encashment,
including the amount received at the time of retirement from previous
service shall not in any case exceed the prescribed limit under the
Central Civil Service (Leave) Rules,1972.
14. Leave and Foreign Travel Sanctioning Authority.

(1) The leave sanctioning authority, –
(a) for a full-time member, shall be the chairperson and in case
of absence of chairperson, the Central Government; and
(b) for the chairperson, shall be the Central Government.
(2) The Central Government shall be the sanctioning authority for

foreign travel of the chairperson or a fulltime member.
15. House rent allowance.

The chairperson or a full time Member shall be entitled to the house rent
allowance at the same rate as are admissible to a Central Government
officer holding a Group À’ post carrying the same pay:
Provided that the chairperson or a full-time member shall not be
eligible for house rent allowance in case he is declared eligible for
general pool residential accommodation and occupies Government
accommodation allotted to him.
16. Transport allowance.

The chairperson or a full time member shall be entitled to the facility
of staff car for journeys for official and private purposes in accordance
with the facilities as are admissible to a Central Government officer
holding a Group À’ post carrying the same pay as per the provisions of
applicable staff car rules.
17. Declaration of Financial and other Interests.

The chairperson or a full time member shall, before entering upon his
office, declare his assets, liabilities and financial and other interests.
18. Other conditions of service.

(1) The terms and conditions of service of a chairperson or a full time
member with respect to which no express provision has been made in
these rules, shall be such as are admissible to a Central Government
officer holding a Group À’ post carrying the same pay.
(2) The chairperson or a full time member shall not practise before the
Authority after retirement or resignation or removal from the service
of the Authority.
(3) The chairperson or a full time member shall not undertake any
arbitration work while functioning in the Authority.
(4) The chairperson or a full time member shall not, for a period of
two years from the date on which he ceases to hold office, accept any
employment in, or connected with the management or administration
of, any person who has been a party to a proceeding before the
Authority:
Provided that nothing contained in this rule shall apply to any
employment under the Central Government or a State Government
or a local authority or in any statutory authority or any corporation
established by or under any Central, State or Provincial Act or a
Government company as defined in clause (45) of section 2 of the
Companies Act, 2013 (18 of 2013).
19. Oath of office and secrecy.

Every person appointed to be the chairperson or a full time member
shall, before entering upon his office, make and subscribe an oath of
office and secrecy in Form II and Form III annexed to these rules.
20. Sitting fee and allowances of Part-time Members.

(1) A part-time member other than those holding the position on
ex-officio basis, shall be entitled to receive remuneration by way of a
sitting fee of rupees six thousand only for each meeting of the Authority
attended by him.
(2) A part-time member while on tour (including the journey
undertaken to attend a meeting of the Authority) shall also be entitled
to travelling allowance and daily allowances at the same rates and scale
as are applicable to a Group A officer in Senior Administrative Grade
in the Central Government.
21. Power to Relax.

Where the Central Government is of the opinion that it is necessary
or expedient so to do, it may, by order for reasons to be recorded in
writing relax any of the provisions of these rules with respect to any
class or category of persons.
22. Interpretation.
If any question arises relating to the interpretation of these rules, the
decision of the Central Government thereon shall be final.
310
CHAPTER X
COMPANIES (AUDIT AND AUDITORS)
RULES, 2014
In exercise of powers conferred by sub-sections (1), (2) and (4) of
section 139, sub-sections (1) and (2) of section 140, sub-section (3)
of section 141, sub-sections (2), (3), (8) and (12) of section 143, sub-
section (3) of section 148 read with sub-sections (1) and (2) of section
469 of the Companies Act, 2013 (18 of 2013) and in supersession of the
Companies (Central Government’s) General Rules and Forms, 1956
in so far as they relate to matters covered under these rules, except as
respects things done or omitted to be done before such supersession,
the Central Government hereby makes the following rules, namely:-

(1) These rules may be called as the Companies (Audit and Auditors)
Rules, 2014.
2. Definitions.
(b) “Annexure” means the Annexure enclosed to these rules;
(c) “fees” means fees specified in the Companies (Registration
Offices and Fees) Rules, 2014.
(d) “Form” or “e-Form” means a form set forth under these rules
which shall be used for the matter to which it relates;
(e) “section” means section of the Act.
310
Companies (Audit and Auditors) Rules, 2014 311

details) Rules, 2014 shall have the meanings respectively assigned to
them in the Act or in the said rules.
3. Manner and procedure of selection and appointment of auditors.

(1) In case of a company that is required to constitute an Audit
Committee under section 177, the committee, and, in cases where such
a committee is not required to be constituted, the Board, shall take
into consideration the qualifications and experience of the individual
or the firm proposed to be considered for appointment as auditor and
whether such qualifications and experience are commensurate with the
size and requirements of the company:
Provided that while considering the appointment, the Audit Committee
or the Board, as the case may be, shall have regard to any order or
pending proceeding relating to professional matters of conduct against
the proposed auditor before the Institute of Chartered Accountants of
India or any competent authority or any Court.
(2) The Audit Committee or the Board, as the case may be, may call for
such other information from the proposed auditor as it may deem fit.
(3) Subject to the provisions of sub-rule (1), where a company is
required to constitute the Audit Committee, the committee shall
recommend the name of an individual or a firm as auditor to the Board
for consideration and in other cases, the Board shall consider and
recommend an individual or a firm as auditor to the members in the
annual general meeting for appointment.
(4) If the Board agrees with the recommendation of the Audit
Committee, it shall further recommend the appointment of an
individual or a firm as auditor to the members in the annual general
meeting.
(5) If the Board disagrees with the recommendation of the Audit
Committee, it shall refer back the recommendation to the committee
for reconsideration citing reasons for such disagreement.
(6) If the Audit Committee, after considering the reasons given by the
312 Companies (Audit and Auditors) Rules, 2014
Board, decides not to reconsider its original recommendation, the

Board shall record reasons for its disagreement with the committee
and send its own recommendation for consideration of the members
in the annual general meeting; and if the Board agrees with the
recommendations of the Audit Committee, it shall place the matter for
consideration by members in the annual general meeting.
(7) The auditor appointed in the annual general meeting shall hold
office from the conclusion of that meeting till the conclusion of the sixth
annual general meeting, with the meeting wherein such appointment
has been made being counted as the first meeting:
1
[Omitted]
2
[Explanation – Omitted]
4. Conditions for appointment and notice to Registrar.

(1) The auditor appointed under rule 3 shall submit a certificate that -
(a) the individual or the firm, as the case may be, is eligible for
appointment and is not disqualified for appointment under
the Act, the Chartered Accountants Act, 1949 and the rules
or regulations made there under;
(b) the proposed appointment is as per the term provided under
the Act;
1. The words “Provided that such appointment shall be subject to ratification in
every annual general meeting till the sixth such meeting by way of passing of an
ordinary resolution” omitted by the Companies (Audit and Auditors) *Second
2. Omitted by the Companies (Audit and Auditors) *Second Amendment Rules,
2018 (w.e.f. 07-05-2018). Prior to its omission, explanation read as under:
“Explanation.- For the purposes of this rule, it is hereby clarified that, if the
appointment is not ratified by the members of the company, the Board of
Directors shall appoint another individual or firm as its auditor or auditors after
following the procedure laid down in this behalf under the Act”.
*The corrigendum notification as published in the Gazette of India,
Extraordinary, Part II, Section 3, sub-section (i) dated 07-05-2018 in page 2, in
line 7, for “Amendment” read “Second Amendment” (w.e.f. 17-05-2018)
(c) the proposed appointment is within the limits laid down by

or under the authority of the Act;
(d) the list of proceedings against the auditor or audit firm or any
partner of the audit firm pending with respect to professional
matters of conduct, as disclosed in the certificate, is true and
correct.
(2) The notice to Registrar about appointment of auditor under fourth
proviso to sub-section (1) of section 139 shall be in Form ADT-1.
5. Class of Companies.
For the purposes of sub-section (2) of section 139, the class of
companies shall mean the following classes of companies excluding
one person companies and small companies:-
(a) all unlisted public companies having paid up share capital of
rupees ten crore or more;
(b) all private limited companies having paid up share capital of
rupees 1[fifty] crore or more;
(c) all companies having paid up share capital of below threshold
limit mentioned in (a) and (b) above, but having public
borrowings from financial institutions, banks or public
deposits of rupees fifty crores or more.
6. Manner of rotation of auditors by the companies on expiry of

their term.
(1) The Audit Committee shall recommend to the Board, the name
of an individual auditor or of an audit firm who may replace the
incumbent auditor on expiry of the term of such incumbent.
(2) Where a company is required to constitute an Audit Committee,
the Board shall consider the recommendation of such committee, and
in other cases, the Board shall itself consider the matter of rotation of
1. Substituted by the Companies (Audit and Auditors) Second Amendment

Rules, 2017 (w.e.f. 22-06-2017) for: “twenty”
auditors and make its recommendation for appointment of the next

auditor by the members in annual general meeting.
(3) For the purpose of the rotation of auditors –
(i) in case of an auditor (whether an individual or audit firm),
the period for which the individual or the firm has held
office as auditor prior to the commencement of the Act
shall be taken into account for calculating the period of five
consecutive years or ten consecutive years, as the case may
be;
(ii) the incoming auditor or audit firm shall not be eligible if
such auditor or audit firm is associated with the outgoing
auditor or audit firm under the same network of audit firms.
Explanation. I – For the purposes of these rules the term “same
network” includes the firms operating or functioning, hitherto or in
future, under the same brand name, trade name or common control.
Explanation. II – For the purpose of rotation of auditors,-
(a) a break in the term for a continuous period of five years shall
be considered as fulfilling the requirement of rotation;
(b) if a partner, who is in charge of an audit firm and also certifies
the financial statements of the company, retires from the said
firm and joins another firm of chartered accountants, such
other firm shall also be ineligible to be appointed for a period
of five years.
Illustration explaining rotation in case of individual auditor

Illustration 1:-
Number of Maximum number Aggregate period

consecutive years for of consecutive which the auditor
which an individual years for which he would complete in
auditor has been may be appointed the same company
functioning as in the same in view of column I
auditor in the same company (including and II
company [in the first transitional period)
AGM held after the
commencement of
provisions of section
139(2)]
I II III
5 years (or more than 3 years 8 years or more
5 years)
4 years 3 years 7 years
1 year 4 years 5 years
Note: 1. Individual auditor shall include other individuals or firms
whose name or trade mark or brand is used by such individual, if any.
2. Consecutive years shall mean all the preceding financial years for
which the individual auditor has been the auditor until there has been
a break by five years or more.
Illustration explaining rotation in case of audit firm

Illustration 2:-
Number of Maximum number Aggregate period

consecutive years for of consecutive years which the firm would
which an audit firm for which the firm complete in the same
has been functioning may be appointed company in view of
as auditor in the same in the same column I and II
company [in the first company (including
AGM held after the transitional period)
commencement of
provisions of section
139(2)]
I II III
10 years (or more 3 years 13 years or more
than 10 years)
1 year 9 years 10 years
Note : 1. Audit Firm shall include other firms whose name or trade
mark or brand is used by the firm or any of its partners.
2. Consecutive years shall mean all the preceding financial years for
which the firm has been the auditor until there has been a break by five
years or more.
(4) Where a company has appointed two or more individuals or firms
or a combination thereof as joint auditors, the company may follow

the rotation of auditors in such a manner that both or all of the joint
auditors, as the case may be, do not complete their term in the same
year.
7. Removal of the auditor before expiry of his term.

(1) The application to the Central Government for removal of auditor
shall be made in Form ADT-2 and shall be accompanied with fees as
provided for this purpose under the Companies (Registration Offices
and Fees) Rules, 2014.
(2) The application shall be made to the Central Government within
thirty days of the resolution passed by the Board.
(3) The company shall hold the general meeting within sixty days of
receipt of approval of the Central Government for passing the special
resolution.
8. Resignation of auditor.
For the purposes of sub-section (2) of section 140, when an auditor
has resigned from the company, he shall file a statement in Form
ADT-3.
9. 1[Omitted]
10. Disqualifications of auditor.

(1) For the purpose of proviso to sub-clause (i) of clause (d) of sub-
section (3) of section 141, a relative of an auditor may hold securities in
the company of face value not exceeding rupees one lakh:
Provided that the condition under this sub-rule shall, wherever
1. Omitted by the Companies (Audit and Auditors) Second Amendment Rules,

2018 (w.e.f. 07-05-2018). Prior to its omission, Rule 9 read as under:
“9. Liability to devolve on concerned partners only.-
In case of criminal liability of any audit firm, the liability other than fine, shall
devolve only on the concerned partner or partners, who acted in a fraudulent
manner or abetted or, as the case may be, colluded in any fraud”
relevant, be also applicable in the case of a company not having share

capital or other securities:
Provided further that in the event of acquiring any security or interest
by a relative, above the threshold prescribed, the corrective action to
maintain the limits as specified above shall be taken by the auditor
within sixty days of such acquisition or interest.
(2) For the purpose of sub-clause (ii) of clause (d) of sub-section (3) of
section 141, a person who or whose relative or partner is indebted to
the company or its subsidiary or its holding or associate company or a
subsidiary of such holding company, in excess of rupees five lakh shall
not be eligible for appointment.
(3) For the purpose of sub-clause (iii) of clause (d) of sub-section (3)
of section 141, a person who or whose relative or partner has given a
guarantee or provided any security in connection with the indebtedness
of any third person to the company, or its subsidiary, or its holding or
associate company or a subsidiary of such holding company, in excess
of one lakh rupees shall not be eligible for appointment.
(4) For the purpose of clause (e) of sub-section (3) of section 141, the
term “business relationship” shall be construed as any transaction
entered into for a commercial purpose, except -
(i) commercial transactions which are in the nature of
professional services permitted to be rendered by an auditor
or audit firm under the Act and the Chartered Accountants
Act, 1949 and the rules or the regulations made under those
Acts;
(ii) commercial transactions which are in the ordinary course
of business of the company at arm’s length price - like sale
of products or services to the auditor, as customer, in the
ordinary course of business, by companies engaged in the
business of telecommunications, airlines, hospitals, hotels
and such other similar businesses.
1
10A. For the purposes of clause (i) of sub-section (3) of section 143, for
the financial years commencing on or after 1st April, 2015, the report
of the auditor shall state about existence of 2[internal financial controls
with reference to financial statements] and its operating effectiveness:
Provided that auditor of a company may voluntarily include the
statement referred to in this rule for the financial year commencing
on or after 1st April, 2014 and ending on or before 31st March, 2015.
11. Other matters to be included in auditors report.

The auditor’s report shall also include their views and comments on the
following matters, namely:-
(a) whether the company has disclosed the impact, if any, of
pending litigations on its financial position in its financial
statement;
(b) whether the company has made provision, as required under
any law or accounting standards, for material foreseeable
losses, if any, on long term contracts including derivative
contracts;
(c) whether there has been any delay in transferring amounts,
required to be transferred, to the Investor Education and
Protection Fund by the company.
[(d) whether the company had provided requisite disclosures in
3
its financial statements as to holdings as well as dealings in

Specified Bank Notes during the period from 8th November,
2016 to 30th December, 2016 and if so, whether these are
in accordance with the books of accounts maintained by the
company.]
1. Inserted by the Companies (Audit and Auditors) Amendment Rules, 2014
(w.e.f. 14-10-2014)
2. Substituted by the Companies (Audit and Auditors) Second Amendment Rules,
2018 (w.e.f. 07-05-2018) for: “adequate internal financial controls system.”
3. Inserted by the Companies (Audit and Auditors) Amendment Rules, 2017
(w.e.f. 30-03-2017)
12. Duties and powers of the company’s auditor with reference to

the audit of the branch and the branch auditor.
(1) For the purposes of sub-section (8) of section 143, the duties and
powers of the company’s auditor with reference to the audit of the
branch and the branch auditor, if any, shall be as contained in sub-
sections (1) to (4) of section 143.
(2) The branch auditor shall submit his report to the company’s auditor.
(3) The provisions of sub-section (12) of section 143 read with rule 12
hereunder regarding reporting of fraud by the auditor shall also extend
to such branch auditor to the extent it relates to the concerned branch.
13. Reporting of frauds by auditor and other matters:

1
1. Substituted by the Companies (Audit and Auditors) Amendment Rules, 2015
(w.e.f. 14-12-2015) for:
13. Reporting of frauds by auditor.-
(1) For the purpose of sub-section (12) of section 143, in case the auditor has
sufficient reason to believe that an offence involving fraud, is being or has been
committed against the company by officers or employees of the company, he
shall report the matter to the Central Government immediately but not later
than sixty days of his knowledge and after following the procedure indicated
herein below:
(i) auditor shall forward his report to the Board or the Audit Committee, as the
case may be, immediately after he comes to knowledge of the fraud, seeking
their reply or observations within forty-five days;
(ii) on receipt of such reply or observations the auditor shall forward his report
and the reply or observations of the Board or the Audit Committee along
with his comments (on such reply or observations of the Board or the Audit
Committee) to the Central Government within fifteen days of receipt of such
reply or observations;
(iii) in case the auditor fails to get any reply or observations from the Board or
the Audit Committee within the stipulated period of forty-five days, he shall
forward his report to the Central Government along with a note containing
the details of his report that was earlier forwarded to the Board or the Audit
Committee for which he failed to receive any reply or observations within the
stipulated time.
(2) The report shall be sent to the Secretary, Ministry of Corporate Affairs in a
sealed cover by Registered Post with Acknowledgement Due or by Speed post
(1) If an auditor of a company, in the course of the performance of

his duties as statutory auditor, has reason to believe that an offence of
fraud, which involves or is expected to involve individually an amount
of rupees one crore or above, is being or has been committed against
the company by its officers or employees, the auditor shall report the
matter to the Central Government.
(2) The auditor shall report the matter to the Central Government as
under:-
(a) the auditor shall report the matter to the Board or the Audit
Committee, as the case may be, immediately but not later
than two days of his knowledge of the fraud, seeking their
reply or observations within forty-five days;
(b) on receipt of such reply or observations, the auditor shall
forward his report and the reply or observations of the Board
or the Audit Committee along with his comments (on such
reply or observations of the Board or the Audit Committee)
to the Central Government within fifteen days from the date
of receipt of such reply or observations;
(c) in case the auditor fails to get any reply or observations from
the Board or the Audit Committee within the stipulated
period of forty-five days, he shall forward his report to the
Central Government along with a note containing the details
of his report that was earlier forwarded to the Board or the
Audit Committee for which he has not received any reply or
observations;
followed by an e-mail in confirmation of the same.

(3) The report shall be on the letter-head of the auditor containing postal
address, e-mail address and contact number and be signed by the auditor with
his seal and shall indicate his Membership Number.
(4) The report shall be in the form of a statement as specified in Form ADT-4.
(5) The provision of this rule shall also apply, mutatis mutandis, to a cost
auditor and a Secretarial Auditor during the performance of his duties under
section 148 and section 204 respectively.
(d) the report shall be sent to the Secretary, Ministry of

Corporate Affairs in a sealed cover by Registered Post with
Acknowledgement Due or by Speed Post followed by an
e-mail in confirmation of the same;
(e) the report shall be on the letter-head of the auditor containing
postal address, e-mail address and contact telephone number
or mobile number and be signed by the auditor with his seal
and shall indicate his Membership Number; and
(f) the report shall be in the form of a statement as specified in
Form ADT-4.
(3) In case of a fraud involving lesser than the amount specified in
sub-rule (1), the auditor shall report the matter to Audit Committee
constituted under section 177 or to the Board immediately but not later
than two days of his knowledge of the fraud and he shall report the
matter specifying the following:-
(a) Nature of Fraud with description;
(b) Approximate amount involved; and
(c) Parties involved.
(4) The following details of each of the fraud reported to the Audit
Committee or the Board under sub-rule (3) during the year shall be
disclosed in the Board’s Report:-
(a) Nature of Fraud with description;
(b) Approximate Amount involved;
(c) Parties involved, if remedial action not taken; and
(d) Remedial actions taken.
(5) The provision of this rule shall also apply, mutatis mutandis, to a
Cost Auditor and a Secretarial Auditor during the performance of his
duties under section 148 and section 204 respectively.
14. Remuneration of the Cost Auditor.

For the purpose of sub-section (3) of section 148, –
(a) in the case of companies which are required to constitute an
audit committee –
(i) the Board shall appoint an individual, 1[who is a
cost accountant], or a firm of cost accountants in
practice, as cost auditor on the recommendations of
the Audit committee, which shall also recommend
remuneration for such cost auditor;
(ii) the remuneration recommended by the Audit
Committee under (i) shall be considered and approved
by the Board of Directors and ratified subsequently by
the shareholders;
(b) in the case of other companies which are not required to
constitute an audit committee, the Board shall appoint
an individual 1[who is a cost accountant] or a firm of cost
accountants in practice as cost auditor and the remuneration
of such cost auditor shall be ratified by shareholders
subsequently.
1. Substituted by the Companies (Audit and Auditors) Second Amendment

Rules, 2018 (w.e.f. 07-05-2018) for: “who is a cost accountant in practice”
324
COMPANIES (COST RECORDS AND AUDIT)

RULES, 2014
[G.S.R. 425 (E), Dated 30th June 2014]
In exercise of the powers conferred by sub-sections (1) and (2) of
section 469 and section 148 of the Companies Act, 2013 (18 of 2013)
and in supersession of Companies (Cost Accounting Records) Rules,
2011; Companies (Cost Audit Report) Rules, 2011; Cost Accounting
Records (Telecommunication Industry) Rules, 2011; Cost Accounting
Records (Petroleum Industry) Rules, 2011; Cost Accounting Records
(Electricity Industry) Rules, 2011; Cost Accounting Records (Sugar
Industry) Rules, 2011; Cost Accounting Records (Fertilizer Industry)
Rules, 2011 and Cost Accounting Records (Pharmaceutical Industry)
Rules, 2011, except as respects things done or omitted to be done

(1) These rules may be called the Companies (cost records and audit)
Rules, 2014.
(2) They shall come into force on the date of publication in the Official
Gazette.
2. Definitions.
In these rules, unless the context otherwise requires -
(aa) 1[Customs Tariff Act Heading” means the heading as referred
1. Substituted by the Companies (cost records and audit) Second Amendment
Rules, 2017, dated 20-12-2017(w.e.f. 01-07-2017) for :
*“Central Excise Tariff Act Heading” means the heading as referred to in the
Additional Notes in the First Schedule to the Central Excise Tariff Act, 1985
[5 of 1986]”
324
Companies (Cost Records and Audit) Rules, 2014 325
to in the Additional Notes in the First Schedule to the

Customs Tariff Act, 1975 (51 of 1975)];
(b) “Cost Accountant in practice” means a cost accountant as
defined in clause (b) of sub-section (1) of section 2 of the
Cost and Works Accountants Act, 1959 (23 of 1959), who
holds a valid certificate of practice under sub-section (1) of
section 6 of that Act and who is deemed to be in practice
under sub-section (2) of section 2 thereof, and includes a
firm or limited liability partnership of cost accountants;
(c) “cost auditor” means a Cost Accountant in practice, as
defined in clause (b), who is appointed by the Board;
1
[(d) “cost audit report” means the duly signed cost auditor’s report
on the cost records examined and cost statements which are
prepared as per these rules, including attachment, annexure,
qualifications or observations attached with or included in
such report];
(e) “cost records” means books of account relating to utilisation
of materials, labour and other items of cost as applicable to
the production of goods or provision of services as provided
in section 148 of the Act and these rules;
(f) “form” means a form annexed to these rules;
[(fa) “Indian Accounting Standards” means Indian Accounting
2
Standards as referred to in Companies (Indian Accounting

Standards) Rules, 2015.];
*Inserted by the Companies (Cost Records and Audit) Amendment Rules, 2014
(w.e.f. 31-12-2014).
1. Substituted by the Companies (cost records and audit) Amendment Rules,
2016 (w.e.f.14-07-2016) for :
“cost audit report” means the report duly audited and signed by the cost auditor
including attachment, annexure, qualifications or observations etc. to cost audit
report.”
2. Inserted by the Companies (cost records and audit) Amendment Rules, 2017,
dated 7-12-2017(w.e.f. 01-04-2016).
326 Companies (Cost Records and Audit) Rules, 2014
(g) “institute” means the Institute of Cost Accountants of India

constituted under the Cost and Works Accountants Act,
1959 (23 of 1959);
(h) all other words and expressions used in these rules but
not defined, and defined in the Act or in the Companies
(Specification of Definition Details) Rules, 2014 shall have
the same meanings as assigned to them in the Act or in the
said rules.
3. 1[Application of Cost Records
1. Substituted by the Companies (Cost Records and Audit) Amendment Rules,

2014( w.e.f. 31-12-2014) for :
“Application of cost records. – For the purpose of sub-section (1) of section
148 of the Act, the following class of companies, including Foreign Companies
defined in sub-section (42) of section 2 of the Act, shall be required to include
cost records in their books of account, namely:-
(A) Companies engaged in the production of following goods in strategic
sectors, such as:
(a) (i) machinery and mechanical appliances used in defence, space and atomic
energy sectors excluding any ancillary item or items; Explanation: - For the
purposes of this sub-clause, any company which is engaged in any item or items
supplied exclusively for use under this clause, shall be deemed to be covered
under these rules.
(ii) turbo jets and turbo propellers;
(iii) arms and ammunitions;
(iv) propellant powders; prepared explosives, (other than propellant powders);
safety fuses; detonating fuses; percussion or detonating caps; igniters; electric
detonators;
(v) radar apparatus, radio navigational aid apparatus and radio remote control
apparatus;
(vi) tanks and other armoured fighting vehicles, motorised, whether or not fitted
with weapons and parts of such vehicles, that are funded (investment made in
the company) to the extent of ninety per cent. or more by the Government or
Government Agencies;
(b) provisions of clause (A) shall be applicable, if the net worth of the company
is rupees five hundred crore or more or the turnover is rupees five hundred
crore or more.
(B) companies engaged in an industry regulated by a Sectoral Regulator or a
Ministry or Department of Central Government:
For the purpose of sub-section (1) of section 148 of the Act, the class
(a)(i) Port services of stevedoring, pilotage, hauling, mooring, re-mooring,

hooking, measuring, loading and unloading services rendered by a Port in
relation to a vessel or goods regulated by the Tariff Authority for Major Ports
under section 111 of the Major Port Trusts Act, 1963(38 of 1963);
(ii) Aeronautical services of air traffic management, aircraft operations, ground
safety services, ground handling, cargo facilities and supplying fuel rendered by
airports and regulated by the Airports Economic Regulatory Authority under
the Airports Economic Regulatory Authority of India Act, 2008 (27 of 2008);
(iii) Telecommunication services made available to users by means of any
transmission or reception of signs, signals, writing, images and sounds or
intelligence of any nature (other than broadcasting services) and regulated
by the Telecom Regulatory Authority of India under the Telecom Regulatory
Authority of India Act, 1997 (24 of 1997);
(iv) Generation, transmission, distribution and supply of electricity regulated
by the relevant regulatory body or authority under the Electricity Act, 2003 (36
of 2003), other than for captive generation (as defined under the Electricity
Rules 2005);
(v) Steel;
(vi) Roads and other infrastructure projects;
(vii) Drugs and Pharmaceuticals;
(viii) Fertilizers;
(ix) Sugar and industrial alcohol;
(x) Petroleum products regulated by the Petroleum and Natural Gas Regulatory
Board under the Petroleum and Natural Gas Regulatory Board Act, 2006(19 of
2006);
(xi) Rubber and allied products being regulated by the Rubber Board.
(b) For the purposes of clause (B), the thresholds limit shall be as under, -
(i) in the case of a multi-product or a multi services company (i.e. a company
producing more than one product or service), any product or a service for
which the individual turnover (from such specific product or such specific
service) is rupees fifty crore or more;
(ii) in the case of a company, producing any one specific product or service, if
the net worth of the company is rupees one hundred and fifty crore or more or
the turnover is rupees twenty five crore or more.
(c) in the case of companies engaged in an industry regulated by a sectoral
regulator, the requirements of sectoral regulator regarding cost records shall
be taken into account.
(C) Companies operating in areas involving public interest such as:
(a)(i) Railway or tramway locomotives, rolling stock, railway or tramway
of companies defined in clause (42) of section 2 of the Act,
fixtures and fittings, mechanical (including electro mechanical) traffic signaling

equipment’s of all kind;
(ii) Mineral products including cement;
(iii) Ores;
(iv) Mineral fuels (other than Petroleum), mineral oils etc.;
(v) Base metals;
(vi) Inorganic chemicals, organic or inorganic compounds of precious metals,
rare-earth metals of radioactive elements or isotopes, and Organic Chemicals;
(vii) Jute and Jute Products;
(viii) Edible Oil under Administrative Price Mechanism;
(ix) Construction Industry;
(x) Companies engaged in health services viz. functioning as or running
hospitals, diagnostic centres, clinical centres or test laboratories;
(xi) Companies engaged in education services, other than such similar services
falling under philanthropy or as part of social spend which do not form part of
any business.
(b) For the purposes of clause (C), the thresholds limit shall be as under, -
(i) in the case of a multi-product or a multi services company (i.e. a company
producing more than one product or service), any product or a service for
which the individual turnover (from such specific product or such specific
service) is rupees fifty crore or more;
(ii) in the case of a company producing any one specific product or service, if
the net worth of the company is rupees one hundred and fifty crore or more or
the turnover is rupees twenty five crore or more.
(D) Companies (including foreign companies other than those having only
liaison offices) engaged in the production, import and supply or trading of
following medical devices, namely:-
(a)(i) Cardiac Stents;
(ii) Drug Eluting Stents;
(iii) Catheters;
(iv) Intra Ocular Lenses;
(v) Bone Cements;
(vi) Heart Valves;
(vii) Orthopedic Implants;
(viii) Internal Prosthetic Replacements;
(ix) Scalp Vein Set;
engaged in the production of goods or services, specified

in the Table below, having an overall turnover from all its
products and services of rupees thirty-five crore or more
in the immediately preceding financial year, shall include
cost records for such products or services in their books of
account, namely:-
(x) Deep Brain Stimulator;

(xi) Ventricular peripheral Shud;
(xii) Spinal Implants;
(xiii) Automatic Impalpable Cardiac Deflobillator;
(xiv) Pacemaker (temporary and permanent);
(xv) patent ductus arteriosus, atrial septal defect and ventricular septal defect
closure device;
(xvi) Cardiac Re-synchronize Therapy ;
(xvii) Urethra Spinicture Devices;
(xviii) Sling male or female;
(xix) Prostate occlusion device; and
(xx) Urethral Stents.
(b) For the purposes of clause (D), the thresholds limit shall be as under, -
(i) in the case of a company engaged in multiple products, any product or
device for which the individual turnover (from such specific product or device)
is rupees ten crore or more, or one third of the turnover, whichever is less.
(ii) in the case of a company engaged in one specific product or device, if it
has net worth of rupees one hundred and fifty crore or more or the turnover is
rupees twenty five crores or more”
TABLE
1
(A) Regulated Sectors
S. Industry/ Sector/ Product/ Service 2

[Custom Tariff Act
No. Heading] (wherever
applicable)
1 Telecommunication services made Not applicable.
available to users by means of any
transmission or reception of signs,
signals, writing, images and sounds or
intelligence of any nature and regulated
by the Telecom Regulatory Authority
of India under the Telecom Regulatory
Authority of India Act, 1997 (24 of
1997); including activities that requires
authorisation or license issued by the
Department of Telecommunications,
Government of India under Indian
Telegraph Act, 1885 (13 of 1885);
2 Generation, transmission, distribution Generation- 2716;
and supply of electricity regulated
Other Activity- Not
by the relevant regulatory body or
Applicable
authority under the Electricity Act,
2003 (36 of 2003);
3 Petroleum products; including activities 2709 to 2715;
regulated by the Petroleum and Natural
Other Activity- Not
Gas Regulatory Board under the
Applicable
Petroleum and Natural Gas Regulatory
Board Act, 2006 (19 of 2006);
2016 ( w.e.f.14-07-2016).
Rules, 2017, dated 20-12-2017 (w.e.f. 01-07-2017) for :“Central Excise Tariff
Act Heading”.
4 Drugs and pharmaceuticals; 2901 to 2942; 3001 to

3006
5 Fertilisers; 3102 to 3105.
6 Sugar and industrial alcohol; 1701; 1703; 2207.
(B) Non-regulated Sectors
S. Industry/ Sector/ Product/ Service 1

[Custom Tariff Act
No. Heading] (wherever
applicable)
1 Machinery and mechanical appliances 8401; 8801 to 8805;
used in defence, space and atomic 8901 to 8908.
energy sectors excluding any ancillary
item or items; Explanation. – For
the purposes of this sub-clause, any
company which is engaged in any item
or items supplied exclusively for use
under this clause, shall be deemed to
be covered under these rules
2 Turbo jets and turbo propellers; 8411
3 Arms, ammunitions and Explosives; 3601 to 3603; 9301 to
9306
4 Propellant powders; prepared 3601 to 3603
explosives (other than propellant
powders); safety fuses; detonating
fuses; percussion or detonating caps;
igniters; electric detonators;
5 Radar apparatus, radio navigational 8526
aid apparatus and radio remote control
apparatus

Rules, 2017, dated 20-12-2017(w.e.f. 01-07-2017) for :“Central Excise Tariff Act
Heading”.
6 Tanks and other armoured fighting 8710

vehicles, motorised, whether or not
fitted with weapons and parts of such
vehicles, that are funded (investment
made in the company) to the extent
of ninety per cent or more by the
Government or Government agencies;
7 Port services of stevedoring, pilotage, Not Applicable
hauling, mooring, re-mooring,
hooking, measuring, loading and
unloading 1[services rendered for a
Port in relation to a vessel or goods
regulated by the Tariff Authority for
Major Ports under the Major Port
Trusts Act, 1963 (38 of 1963);]
8 Aeronautical services of air traffic Not Applicable
management, aircraft operations,
ground safety services, ground handling,
cargo facilities and supplying fuel
rendered 2[at the airports] and regulated
by the Airports Economic Regulatory
Authority under the Airports Economic
Regulatory Authority of India Act, 2008
(27 of 2008);
9 Iron and Steel; 7201 to 7229; 7301 to
7326
10 Roads and other infrastructure Not Applicable
projects corresponding to para No. (1)
(a) as specified in Schedule VI of the
Companies Act, 2013 (18 of 2013);

2018 (w.e.f. 03-12-2018), for: “services rendered by a Port in relation to a vessel
or goods regulated by the Tariff Authority for Major Ports”
2018 (w.e.f. 03-12-2018), for: “by airports”
11 Rubber and allied products; including 4001 to 4017

products regulated by the Rubber
Board constituted under the Rubber
Act, 1947 (XXIV of 1947);
12 Coffee and tea; 0901 to 0902
13 Railway or tramway locomotives, 8601 to 8608,
rolling stock, railway or tramway 1[8609].
fixtures and fittings, mechanical
(including electro mechanical) traffic
signalling equipment’s of all kind
14 Cement; 2523; 6811 to 6812
15 Ores and Mineral products; 2502 to 2522; 2524 to
2526; 2528 to 2530;
2601 to 2617
16 Mineral fuels (other than Petroleum), 2701 to 2708
mineral oils etc.;
17 Base metals; 7401 to 7403; 7405 to
7413; 7419; 7501 to
7508; 7601 to 7614;
7801 to 7802; 7804;
7806; 7901 to 7905;
7907; 8001; 8003;
8007; 8101 to 8113.
18 Inorganic chemicals, organic or 2801 to 2853; 2901 to
inorganic compounds of precious 2942; 3801 to 3807;
metals, rare-earth metals of radioactive 3402 to 3403; 3809 to
elements or isotopes, and organic 3824.
chemicals;
19 Jute and Jute Products; 5303, 1[5307] & 5310
20 Edible Oil; 1507 to 1518
1. Inserted by the Companies (Cost Records and Audit) Amendment Rules,

2018 (w.e.f. 03-12-2018).
21 Construction Industry as per para No. Not Applicable

(5) (a) as specified in Schedule VI of
the Companies Act, 2013 (18 of 2013);
22 Health services, namely functioning as Not Applicable
or running hospitals, diagnostic centres,
clinical centres or test laboratories;
23 Education services, other than Not Applicable
such similar services falling under
philanthropy or as part of social spend
which do not form part of any business;
24 Milk powder; 0402
25 Insecticides; 3808
26 Plastics and polymers; 3901 to 3914; 3916 to
3921; 3925
27 Tyres and tubes; 4011 to 4013
28 1
[Pulp & Paper;] 2
[4701 to 4704], 4801
to 4802
29 Textiles; 5004 to 5007; 5106 to
5113; 5205 to 5212;
5303; 2[5307], 5310;
5401 to 5408; 5501
to 5516
30 Glass; 7003 to 7008; 7011;
7016
31 Other machinery and Mechanical 8402 to 8487
Appliances;
32 Electricals or electronic machinery; 8501 to 8507; 8511 to
8512; 8514 to 8515;
8517; 8525 to 8536;
8538 to 8547.

2018 (w.e.f. 03-12-2018), for: “Paper”
2018 (w.e.f. 03-12-2018).
33 Production, import and supply or 9018 to 9022

trading of following medical devices,
namely:-
(i) Cardiac stents;
(ii) Drug eluting stents;
(iii) Catheters;
(iv) Intra ocular lenses;
(v) Bone cements;
(vi) Heart valves;
(vii) Orthopaedic implants;
(viii) Internal prosthetic replacements;
(ix) Scalp vein set;
(x) Deep brain stimulator;
(xi) Ventricular peripheral shud;
(xii) Spinal implants;

(xiii) Automatic impalpable cardiac
1
[defibrillators];

(xiv) Pacemaker (temporary and
permanent);
(xv) Patent ductus arteriosus, atrial
septal defect and ventricular
septal defect closure device;
(xvi) Cardiac re-synchronise therapy ;
(xvii) Urethra spinicture devices;
(xviii) Sling male or female;
(xix) Prostate occlusion device; and
(xx) Urethral stents:]

2018 (w.e.f. 03-12-2018), for: “deflobillator”
Provided that nothing contained in serial number 33 shall apply to

foreign companies having only liaison offices.
Provided further that nothing contained in this rule shall apply to a
company which is classified as a micro enterprise or small enterprise
including as per the turnover criteria under sub-section (9) of the
section 7 of the Micro, Small and Medium Enterprises Development
Act, 2006 (27 of 2006).];
4. 1[Applicability of cost audits.

(1) Every company specified in item (A) of rule 3 shall get its cost
1. Substituted by Companies (Cost Records and Audit) Amendment Rules,

2014( w.e.f. 31-12-2014) for :
“Applicability for cost audit.-
(1) Every company engaged in a strategic industry and covered under sub-
clause (b) of clause (A) of rule 3 shall be required to get its cost records audited
in accordance with these rules.
(2) In the case of a multi-product or a multi services company specified in
sub-clause (b) of clause (B) and sub-clause (b) of clause (C) of rule 3, the
requirement for cost audit shall apply to a product or a service for which the
individual turnover (from such specific product or such specific service) is
rupees one hundred crore or more;
(3) In the case of a company producing any one specific product or service
specified in sub-clause (b) of clause (B) and sub-clause (b) of clause (C) of rule
3, the requirement for cost audit shall apply if the net worth of the company is
rupees five hundred crore or more or the turnover from such product or such
service is rupees one hundred crore or more.
(4) In the case of a company engaged in medical products or devices referred to
in sub-clause (b) of clause (D) of rule 3, -
(i) which has multiple products or devices (i.e. a company producing, importing
and supplying or trading in more than one medical device or product), the
requirement for cost audit shall apply to a medical device or product for which
the individual turnover (from such specific medical device or product) is rupees
ten crore or more, or one third of the turnover, whichever is less;
(ii) which has only one product or device (i.e. a company producing, importing
and supplying or trading one medical device or product), the requirement for
cost audit shall apply if the net worth of the company is rupees one hundred
fifty crores or more or the turnover is rupees twenty five crores or more.”
records audited in accordance with these rules if the overall annual

turnover of the company from all its products and services during the
immediately preceding financial year is rupees fifty crore or more and
the aggregate turnover of the individual product or products or service
or services for which the cost records are required to be maintained
under rule 3 is rupees twenty five crore or more.
(2) Every company specified in item (B) of rule 3 shall get its cost
records audited in accordance with these rules if the overall annual
turnover of the company from all its products and services during the
immediately preceding financial year is rupees one hundred crore or
more and the aggregate turnover of the individual product or products
or service or services for which the cost records are required to be
maintained under rule 3 is rupees thirty five crore or more.
(3) The requirement for cost audit under these rules shall not apply to
a company which is covered in rule 3, and –
(i) whose revenue from exports, in foreign exchange exceeds
seventy five per cent of the total revenue;.
(ii) which is operating from a special economic zone].
1[(iii) which is engaged in generation of electricity for captive
consumption through Captive Generating Plant. For this
purpose, the term “Captive Generating Plant” shall have the
same meaning as assigned in rule 3 of the Electricity Rules,
2005.]
5. Maintenance of records.
(1) Every company under these rules including all units and
branches thereof, shall, in respect of each of its financial year
commencing on or after the 1st day of April, 2014, maintain cost
records in form CRA-1.
2016 (w.e.f. 14-07-2016).
1
[Provided that in case of company covered under serial number 12
and serial number 24 to 32 of item (B) of rule 3, the requirement under
this rule shall apply in respect of each of its financial year commencing
on or after 1st day of April, 2015.]
(2) The cost records referred to in sub-rule (1) shall be maintained on
regular basis in such manner as to facilitate calculation of per unit cost
of production or cost of operations, cost of sales and margin for each
of its products and activities for every financial year on monthly or
quarterly or half-yearly or annual basis.
(3) The cost records shall be maintained in such manner so as to enable
the company to exercise, as far as possible, control over the various
operations and costs to achieve optimum economies in utilisation of
resources and these records shall also provide necessary data which is
required to be furnished under these rules.
6. Cost audit.
(1) The category of companies specified in rule 3 and the thresholds
limits laid down in rule 4, shall within one hundred and eighty days
of the commencement of every financial year, appoint a cost auditor.
2
[Provided that before such appointment is made, the written consent
of the cost auditor to such appointment, and a certificate from him or
it, as provided in sub-rule (1A), shall be obtained.]
2
[(1A) The cost auditor appointed under sub-rule (1) shall submit a
certificate that –
(a) the individual or the firm, as the case may be, is eligible for
appointment and is not disqualified for appointment under
the Act, the Cost and Works Accountants Act, 1959(23 of
1959) and the rules or regulations made there under;
2014 (w.e.f. 31-12-2014)
2016 (w.e.f. 14-07-2016)
(b) the individual or the firm, as the case may be, satisfies the
criteria provided in section 141 of the Act, so far as may be
applicable;
(c) the proposed appointment is within the limits laid down by
or under the authority of the Act; and
(d) the list of proceedings against the cost auditor or audit
firm or any partner of the audit firm pending with respect
to professional matters of conduct, as disclosed in the
certificate, is true and correct.]
(2) Every company referred to in sub-rule (1) shall inform the cost
auditor concerned of his or its appointment as such and file a notice
of such appointment with the Central Government within a period of
thirty days of the Board meeting in which such appointment is made or
within a period of one hundred and eighty days of the commencement
of the financial year, whichever is earlier, through electronic mode, in
form CRA-2, along with the fee as specified in Companies (Registration
(3) Every cost auditor appointed as such shall continue in such capacity
till the expiry of one hundred and eighty days from the closure of the
financial year or till he submits the cost audit report, for the financial
year for which he has been appointed.
1
[Provided that the cost auditor appointed under these rules may be
removed from his office before the expiry of his term, through a board
resolution after giving a reasonable opportunity of being heard to the
Cost Auditor and recording the reasons for such removal in writing;
Provided further that the Form CRA-2 to be filed with the Central
Government for intimating appointment of another cost auditor shall
enclose the relevant Board Resolution to the effect;
Provided also that nothing contained in this sub-rule shall prejudice
the right of the cost auditor to resign from such office of the company].
2016 (w.e.f. 14-07-2016)
1
[(3A) Any causal vacancy in the office of a cost auditor, whether due to
resignation, death, or removal, shall be filled by the Board of Directors
within thirty days of occurrence of such vacancy and the company
shall inform the Central Government in Form CRA-2 within thirty
days of such appointment of cost auditor.]
2
[(3B) The cost statements, including other statements to be annexed
to the cost audit report, shall be approved by the Board of Directors
before they are signed on behalf of the Board by any of the director
authorised by the Board, for submission to the cost auditor to report
thereon.]
(4) Every cost auditor, who conducts an audit of the cost records of
a company, shall submit the cost audit report along with his or its
reservations or qualifications or observations or suggestions, if any, in
form CRA-3.
3
[(5) Every cost auditor shall forward his duly signed report to the
Board of Directors of the company within a period of one hundred and
eighty days from the closure of the financial year to which the report
relates and the Board of Directors shall consider and examine such
report, particularly any reservation or qualification contained therein.]
[(6) Every company covered under these rules shall, within a period
4
2014 (w.e.f. 31-12-2014)
2016 (w.e.f. 14-07-2016)
2016 (w.e.f. 14-07-2016) for :
“Every cost auditor shall forward his report to the Board of Directors of the
company within a period of one hundred and eighty days from the closure of
the financial year to which the report relates and the Board of Directors shall
consider and examine such report particularly any reservation or qualification
contained therein.”
2016 (w.e.f. 14-07-2016) for :
of thirty days from the date of receipt of a copy of the cost audit
report, furnish the Central Government with such report along with
full information and explanation on every reservation or qualification
contained therein, in Form CRA-4in Extensible Business Reporting
Language format in the manner as specified in the Companies (Filing
of Documents and Forms in Extensible Business Reporting language)
Rules, 2015 along with fees specified in the Companies (Registration
Offices and Fees) Rules, 2014.]
1
[Provided that the Companies which have got extension of time of
holding Annual General Meeting under section 96 (1) of the Companies
Act, 2013, may file form CRA-4 within resultant extended period of
filing financial statements under section 137 of the Companies Act,
2013.]
(7) The provisions of sub-section (12) of section 143 of the Act and the
relevant rules made there under shall apply mutatis mutandis to a cost
auditor during performance of his functions under section 148 of the
Act and these rules.
7. 2[omitted]
“Every company covered under these rules shall, within a period of thirty days
from the date of receipt of a copy of the cost audit report, furnish the Central
Government with such report along with full information and explanation on
every reservation or qualification contained therein, in form CRA-4 along with
fees specified in the Companies (Registration Offices and Fees) Rules, 2014.”
2018 (w.e.f. 03-12-2018)
2. Omitted by the Companies (Cost Records and Audit) Amendment Rules,
2014 (w.e.f. 31-12-2014). Prior to its omission, Rule 7 read us under:
“7. Rules not to apply in certain cases – The requirement for cost audit under
these rules shall not be applicable to a company which is covered under rule3,
and
(i) whose revenue from exports, in foreign exchange, exceeds seventy five per
cent of the total revenue or
(ii) which is operating from a special economic zone.”
342
COMPANIES (FILING OF DOCUMENTS

AND FORMS IN EXTENSIBLE BUSINESS
REPORTING LANGUAGE) RULES, 2015
[G.S.R. 625(E), dated 9th September, 2015]
section 469 read with section 398 of the Companies Act, 2013 (18 of
2013), and in supersession of the Companies (Filing of Documents and
Forms in Extensible Business Reporting Language) Rules, 2011, except
as respects things done or omitted to be done before such supersession,
the Central Government hereby makes the following rules, namely:

(1) These rules may be called the Companies (Filing of Documents and
Forms in Extensible Business Reporting language) Rules, 2015.
(2) They shall come into force from the date of their publication in the
Official Gazette.
2 Definitions.
(a) “Act’ means the Companies Act, 2013;
(b) “Annexure” means annexures appended to these rules;
(c) “Documents and forms” means the documents and forms
required to be filed with any authority as specified under the
Act or rules or regulations made thereunder;
(d) “Extensible Business Reporting Language” (XBRL), means
a standardised language for communication in electronic
form to express, report or file financial information by the
companies under the Act.
(e) “Taxonomy” means in XBRL, an electronic dictionary for
342
Companies (Filing of Documents and Forms in XBRL) Rules, 2015 343
reporting the business data as approved by the Central

Government in respect of any documents or forms indicated
in these rules.
them in the Act and said rules.
[3. Filing of financial statements with Registrar.
1
2
[(1)]The following class of companies shall file their financial
statements and other documents under section 137 of the Act with the
Registrar in e-form AOC-4 XBRL as per Annexure-I:-
(i) companies listed with stock exchanges in India and their
Indian subsidiaries;
1. Substituted by the Companies (Filing of Documents and Forms in Extensible

Business Reporting Language), Amendment, Rules, 2017 (w.e.f. 06-11-2017) for :
“3. Filing of financial statement with Registrar:- The following class of
companies shall file their financial statement and other documents under
section 137 of the with the Registrar in e-form AOC-4 XBRL given in
Annexure-l for the financial years commencing on or after 1st April, 2014 using
the XBRL taxonomy given in Annexure II, namely:
(i) all companies listed with any Stock Exchange(s) in India and their Indian
subsidiaries; or
(ii) all companies having paid up capital of rupees five crore or above;
(iii) all companies having turnover of rupees hundred crore or above; or
(iv) all companies which were hitherto covered under the Companies (Filing of
documents and Forms in Extensible Business Reporting Language) Rules, 2011:
*[Provided that the companies in banking, insurance, power sector, non-
banking financial companies and housing finance companies need not file
financial statements under this rule.]”
* Substituted by the Companies (Filing of Documents and Forms in Extensible
Business Reporting Language) Amendment Rules, 2016 (w.e.f. 04-04-2016) for:
“Provided that the companies in Banking, Insurance, Power Sector and Non
Banking Financial companies are exempted from XBRL filing.”
2. Inserted by the Companies (Filing of Documents and Forms in Extensible
Business Reporting Language) Amendment Rules, 2018 (w.e.f. 08-03-2018).
344 Companies (Filing of Documents and Forms in XBRL) Rules, 2015
(ii) companies having paid up capital of five crore rupees or

above;
(iii) companies having turnover of one hundred crore rupees or
above;
(iv) all companies which are required to prepare their financial
statements in accordance with Companies (Indian
Accounting Standards) Rules, 2015:
Provided that the companies preparing their financial statements
under the Companies (Accounting Standards) Rules, 2006 shall file
the statements using the Taxonomy provided in Annexure-II and
companies preparing their financial statements under Companies
(Indian Accounting Standards) Rules, 2015, shall file the statements
using the Taxonomy provided in Annexure-II A:
Provided further that non-banking financial companies, housing
finance companies and companies engaged in the business of banking
and insurance sector are exempted from filing of financial statements
under these rules.]
1
[(2) The companies which have filed their financial statements under
sub-rule (1) shall continue to file their financial statements and other
documents though they may not fall under the class of companies
specified therein in succeeding years.
(3) The companies which have filed their financial statements under
the erstwhile rules, namely the Companies (Filing of Documents and
Forms in Extensible Business Reporting Language) Rules, 2011, shall
continue to file their financial statements and other documents as
prescribed in sub-rule (1) though they do not fall under the class of
companies specified therein.]
4. Filing of cost audit report.

A company required to furnish cost audit report and other documents
1. Inserted by the Companies (Filing of Documents and Forms in Extensible

Business Reporting Language) Amendment Rules, 2018 (w.e.f. 08-03-2018).
Companies (Filing of Documents and Forms in XBRL) Rules, 2015 345
to the Central Government under sub-section (6) of section 148 of

the Act and rules made there under shall file such report and other
documents using the XBRL taxonomy given in Annexure-III for
the financial years commencing on or after 1st April, 2014 in e-form
CRA-4 specified under the Companies (Cost Records and Audit)
Rules, 2014.
346
CHAPTER XI
COMPANIES (APPOINTMENT AND
QUALIFICATION OF DIRECTORS)
RULES, 2014
[G.S.R. 259 (E), Dated 31st March, 2014]
In exercise of the powers conferred under second proviso to sub-
section (1), sub-section (4), clause (f) of sub-section (6) of section
149, sub-sections (3) and (4) of section 150, section 151, sub-section
(5) of section 152, section 153, section 154, section 157, section 160,
sub-section (1) of section 168 and section 170 read with section 469
of the Companies Act, 2013, and in supersession of the Companies
(Central Government’s) General Rules and Forms, 1956 or any other
rules prescribed under the Companies Act, 1956 (1 of 1956) on matters
covered under these rules, except as respects things done or omitted
to be done before such supersession, the Central Government hereby
makes the following rules, namely:-
1. Short Title and Commencement

(1) These rules may be called the Companies (Appointment and
Qualification of Directors) Rules, 2014.
2. Definitions.
(1) In these rules, unless the context otherwise requires, -
(c) “digital signature” means the digital signature as defined
under clause (p) of sub-section (1) of section 2 of the
346
Companies (Appointment and Qualification of Directors) Rules, 2014 347
(d) “Director Identification Number” (DIN) means an

identification number allotted by the Central Government
to any individual, intending to be appointed as director or
to any existing director of a company, for the purpose of his
identification as a director of a company:
Provided that the Director Identification Number (DIN)
obtained by the individuals prior to the notification of these
rules shall be the DIN for the purpose of the Companies Act,
2013:
Provided further that “Director Identification Number”
(DIN) includes the Designated Partnership Identification
Number (DPIN) issued under section 7 of the Limited
Liability Partnership Act, 2008 (6 of 2009) and rules made
there under;
(e) “electronic record” means the electronic record as defined
under clause (t) of sub-section (1) of section 2 of the
(f) “electronic Registry” means an electronic repository or
(g) “Fees” means the fees as specified in the Companies
(h) “Form” or “e-Form” means a form set forth in Annexure to
relates;
(i) “Regional Director” means the person appointed by the
(j) “section” means section of the Act;
(k) For the purposes of clause (d) of sub-section (1) of section
164 and clause (f) of sub-section (1) of section 167 of the
348 Companies (Appointment and Qualification of Directors) Rules, 2014
Act, “or otherwise” means any offence in respect of which he

has been convicted by a Court under the Act or under the
Companies Act, 1956.
(2) Words and expressions used in these rules and not defined
but defined under the Act or under the Securities Contracts
(Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange
Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996
(22 of 1996) or the Information Technology Act, 2000 (21 of 2000)
or the Companies (Specification of definitions details) Rules, 2014
shall have the meanings respectively assigned to them in the Act or
in those Acts or such rules.
3. Woman Director on the Board.

The following class of companies shall appoint at least one woman
director-
(i) every listed company;
(ii) every other public company having -
(a) paid–up share capital of one hundred crore rupees or
more; or
(b) turnover of three hundred crore rupees or more:
Provided that a company, which has been incorporated under the Act
and is covered under provisions of second proviso to sub-section (1)
of section 149 shall comply with such provisions within a period of six
months from the date of its incorporation:
Provided further that any intermittent vacancy of a woman director
shall be filled-up by the Board at the earliest but not later than
immediate next Board meeting or three months from the date of such
vacancy whichever is later.
Explanation. – For the purposes of this rule, it is hereby clarified that
the paid up share capital or turnover, as the case may be, as on the last
date of latest audited financial statements shall be taken into account.
4. Number of Independent Directors

[(1)] The following class or classes of companies shall have at least two
1
directors as independent directors -

(i) the Public Companies having paid up share capital of ten
crore rupees or more; or
(ii) the Public Companies having turnover of one hundred crore
rupees or more; or
(iii) the Public Companies which have, in aggregate, outstanding
loans, debentures and deposits, exceeding fifty crore rupees:
Provided that in case a company covered under this rule is required to
appoint a higher number of independent directors due to composition
of its audit committee, such higher number of independent directors
shall be applicable to it:
Provided further that any intermittent vacancy of an independent
director shall be filled-up by the Board at the earliest but not later than
immediate next Board meeting or three months from the date of such
vacancy, whichever is later:
Provided also that where a company ceases to fulfill any of three
conditions laid down in sub-rule (1) for three consecutive years, it shall
not be required to comply with these provisions until such time as it
meets any of such conditions;
Explanation. - For the purposes of this rule, it is here by clarified that,
the paid up share capital or turnover or outstanding loans, debentures
and deposits, as the case may be, as existing on the last date of latest
audited financial statements shall be taken into account:
Provided that a company belonging to any class of companies for
which a higher number of independent directors has been specified in
the law for the time being in force shall comply with the requirements
specified in such law.
1. Inserted by the Companies (Appointment and Qualification of Directors)

1
[(2) The following classes of unlisted public company shall not be
covered under sub-rule (1), namely:-
(a) a joint venture;
(b) a wholly owned subsidiary; and
(c) a dormant company as defined under section 455 of the Act.]
5. Qualifications of Independent Director

1
[(1)] An independent director shall possess appropriate skills,
experience and knowledge in one or more fields of finance, law,
management, sales, marketing, administration, research, corporate
governance, technical operations or other disciplines related to the
company’s business.
2
[(2) None of the relatives of an independent director, for the purposes
of sub-clauses (ii) and (iii) of clause (d) of sub-section (6) of section
149,-
(i) is indebted to the company, its holding, subsidiary or
associate company or their promoters, or directors; or
(ii) has given a guarantee or provided any security in connection
with the indebtedness of any third person to the company, its
holding, subsidiary or associate company or their promoters,
or directors of such holding company,
for an amount of fifty lakhs rupees, at any time during the two immediately
preceding financial years or during the current financial year.]
6. Creation and Maintenance of Databank of Persons Offering to

Become Independent Directors
(1) Anybody, institute or association (hereinafter to be referred as
1. Rule 5 numbered as sub-rule (1) by the Companies (Appointment and

Qualification of Directors) Second Amendment Rules, 2018 (w.e.f. 07-05-2018)
Second Amendment Rules, 2018 (w.e.f. 07-05-2018)
“the agency”), which has been authorised in this behalf by the Central
Government shall create and maintain a data bank of persons willing
and eligible to be appointed as independent director and such data
bank shall be placed on the website of the Ministry of Corporate Affairs
or on any other website as may be approved or notified by the Central
Government.
(2) The data bank referred to in sub-rule (1) shall contain the following
details in respect of each person included in the data bank to be eligible
and willing to be appointed as independent director-
(a) DIN (Director Identification Number);
(b) the name and surname in full;
(c) 1
[Omitted]
(d) the father’s name 2[Omitted]
(e) the date of Birth;
(f) gender;
(g) the nationality;
(h) the occupation;
(i) full Address with PIN Code (present and permanent);
(j) phone number;
(k) e-mail id;
(l) the educational and professional qualifications;
(m) experience or expertise, if any;
(n) any legal proceedings initiated or pending against such
person;
1. The words “income-tax PAN” omitted by the Companies (Appointment and
Qualification of Directors) Rules, 2014, (w.e.f. 18-09-2014).
2. The words “and mother’s name and Spouse’s name (if married)” omitted
by the Companies (Appointment and Qualification of Directors) Rules, 2014,
(w.e.f. 18-09-2014).
(o) the list of limited liability partnerships in which he is or was

a designated partner along with–
(i) the name of the limited liability partnership;
(ii) the nature of industry; and
(iii) the duration- with dates;
(p) the list of companies in which he is or was director along
with –
(i) the name of the company;
(ii) the nature of industry;
(iii) the nature of directorship – Executive or Non-
executive or Managing Director or Independent
Director or Nominee Director; and
(iv) duration – with dates.
(3) A disclaimer shall be conspicuously displayed on the website
hosting the databank that a company must carry out its own due
diligence before appointment of any person as an independent director
and “the agency” maintaining the databank or the Central Government
shall not be held responsible for the accuracy of information or lack of
suitability of the person whose particulars form part of the databank.
(4) Any person who desires to get his name included in the data bank
of independent directors shall make an application to “the agency”
1
[Omitted]
(5) The agency may charge a reasonable fee from the applicant for
inclusion of his name in the data bank of independent directors.
(6) Any person who has applied for inclusion of his name in the data
bank of independent directors or any person whose name appears in
the data bank , shall intimate to the agency about any changes in his
particulars within fifteen days of such change.
1. The words “in Form DIR-1” omitted by the Companies (Appointment and
Qualification of Directors) Rules, 2014 (w.e.f. 18-09-2014)
(7) The databank posted on the website shall –

(a) be accessible at the specified website;
(b) be substantially identical to the physical version of the data
bank;
(c) be searchable on the parameters specified in sub-rule (2);
(d) be presented in a format or formats convenient for both
printing and viewing online; and
(e) contain a link to obtain the software required to view or print
the particulars free of charge.
7. Small Shareholders’ Director

(1) A listed company, may upon notice of not less than one thousand
small shareholders or one-tenth of the total number of such
shareholders, whichever is lower, have a small shareholders’ director
elected by the small shareholders:
Provided that nothing in this sub-rule shall prevent a listed company
to opt to have a director representing small shareholders suo motu
and in such a case the provisions of sub-rule (2) shall not apply for
appointment of such director.
(2) The small shareholders intending to propose a person as a candidate
for the post of small shareholders’ director shall leave a notice of their
intention with the company at least fourteen days before the meeting
under their signatures specifying the name, address, shares held and
folio number of the person whose name is being proposed for the
post of director and of the small shareholders who are proposing such
person for the office of director:
Provided that if the person being proposed does not hold any shares in
the company, the details of shares held and folio number need not be
specified in the notice:
(3) The notice shall be accompanied by a statement signed by the person
whose name is being proposed for the post of small shareholders’
director stating -
(a) his Director Identification Number;

(b) that he is not disqualified to become a director under the Act;
and
(c) his consent to act as a director of the company
(4) Such director shall be considered as an independent director
subject to , his being eligible under sub-section (6) of section 149 and
his giving a declaration of his independence in accordance with sub-
section (7) of section 149 of the Act.
(5) The appointment of small shareholders’ director shall be subject to
the provisions of section 152 except that-
(a) such director shall not be liable to retire by rotation;
(b) such director’s tenure as small shareholders’ director shall
not exceed a period of three consecutive years; and
(c) on the expiry of the tenure, such director shall not be eligible
for re-appointment.
(6) A person shall not be appointed as small shareholders’ director of
a company, if the person is not eligible for appointment in terms of
section 164.
(7) A person appointed as small shareholders’ director shall vacate the
office if -
(a) the director incurs any of the disqualifications specified in
section 164;
(b) the office of the director becomes vacant in pursuance of
section 167;
(c) the director ceases to meet the criteria of independence as
provided in sub-section (6) of section 149.
(8) No person shall hold the position of small shareholders’ director in
more than two companies at the same time:
Provided that the second company in which he has been appointed
shall not be in a business which is competing or is in conflict with the
business of the first company.
(9) A small shareholders’ director shall not, for a period of three years
from the date on which he ceases to hold office as a small shareholders’
director in a company, be appointed in or be associated with such
company in any other capacity, either directly or indirectly.
8. Consent to Act as Director.

Every person who has been appointed to hold the office of a director
shall on or before the appointment furnish to the company a consent in
writing to act as such in Form DIR-2:
Provided that the company shall, within thirty days of the appointment
of a director, file such consent with the Registrar in Form DIR-12 along
with the fee as provided in the Companies (Registration Offices and
Fees) Rules, 2014.
9. 1[Application for allotment of Director Identification Number

before Appointment in an existing company]
2
[(1) Every applicant, who intends to be appointed as director of an
existing company shall make an application electronically in Form DIR-
3, to the central Government for allotment of a Director Identification
Number (DIN) along with such fees as provided under the companies
(Registration offices and Fees) Rules, 2014.
Provided that in case of proposed directors not having approved DIN,
the particulars of maximum three directors shall be mentioned in
Form No.INC-32 (SPlCe) and DIN may be allotted to maximum three
proposed directors through Form INC-32 (SPICe)]
1. Substituted by the Companies (Appointment and qualification of Directors)

Amendment Rules, 2018 (w.e.f. 26-01-2018) for: “Application for Allotment of
Director Identification Number”
2. Substituted by the Companies (Appointment and qualification of Directors)
Amendment Rules, 2018 (w.e.f. 26-01-2018) for: “Every individual, who is to
be appointed as director of a company shall make an application electronically
in Form DIR-3, to the Central Government for the allotment of a Director
Identification Number (DIN) along with such fees as provided in the Companies
(2) The Central Government shall provide an electronic system to

facilitate submission of application for the allotment of DIN through
the portal on the website of the Ministry of Corporate Affairs.
(3) (a) The applicant shall download Form DIR-3 from the portal, fill
in the required particulars sought 1[therein, verify and sign the form]
and after attaching copies of the following documents, scan and file the
entire set of documents electronically-
(i) photograph;
(ii) proof of identity;
(iii) proof of residence;
2[(iiia) board resolution proposing his appointment as director in an
existing company]
(iv) 3
[Omitted]
(v) specimen signature duly verified.
4
[(b) Form DIR-3 shall be signed and submitted electronically by the
1. Substituted by the Companies (Appointment and Qualification of Directors)

Rules, 2014 (w.e.f. 18-09-2014) for: “therein and sign the form”
3. The words “verification by the applicant for applying for allotment of DIN in
Form DIR-4; and” omitted by the Companies (Appointment and Qualification
of Directors) Rules, 2014 (w.e.f. 18-09-2014)
Amendment Rules, 2018 (w.e.f. 26-01-2018). Prior to its substitution sub-rule
(3) clause (b) read as under:
(b) Form DIR-3 shall be signed and submitted electronically by the applicant using
his or her own Digital Signature Certificate and shall be verified digitally by -
(i) a chartered accountant in practice or a company secretary in practice or a
cost accountant in practice; or
(ii) a company secretary in full time employment of the company or by the
managing director or director of the company in which the applicant is to be
appointed as director.
applicant using his or her own Digital signature certificate and shall be
verified digitally by a company secretary in full time employment of
the company or by the managing director or director or CEO or CFO
of the company in which the applicant is intended to be appointed as
director in an existing company]
[(4) In case the name of a person does not have a last name, then his
1
or her father’s or grandfather’s surname shall be mentioned in the last

name along with the declaration in Form No. DIR-3A.]
10. Allotment of DIN.

(1) On the submission of the Form DIR-3 on the portal and payment
of the requisite amount of fees through online mode 2[an application
number shall be generated by the system automatically].
(2) After generation of 3[application number] , the Central Government
shall process the applications received for allotment of DIN under sub-rule
(2) of rule 9, decide on the approval or rejection thereof and communicate
the same to the applicant along with the DIN allotted in case of approval
by way of a letter by post or electronically or in any other mode, within a
period of one month from the receipt of such application.
(3) If the Central Government, on examination, finds such application
to be defective or incomplete in any respect, it shall give intimation
of such defect or incompleteness, by placing it on the website and by
email to the applicant who has filed such application, directing the
applicant to rectify such defects or incompleteness by resubmitting
the application within a period of fifteen days of such placing on the
website and email:

Rules, 2014 (w.e.f. 18-09-2014)
Rules, 2014 (w.e.f. 18-09-2014) for: “the provisional DIN shall be generated by
the system automatically which shall not be utilised till the DIN is confirmed by
the Central Government”
Rules, 2014 (w.e.f. 18-09-2014) for: “the provisional DIN”
Provided that the Central Government shall -

(a) reject the application and direct the applicant to file fresh
application with complete and correct information, where
the defect has been rectified partially or the information
given is still found to be defective;
(b) treat and label such application as invalid in the electronic
record in case the defects are not removed within the given
time; and
(c) inform the applicant either by way of letter by post or
electronically or in any other mode.
(4) In case of rejection or invalidation of application, 1[Omitted] the fee
so paid with the application shall neither be refunded nor adjusted with
any other application.
(5) All Director Identification Numbers allotted to individual(s) by the
Central Government before the commencement of these rules shall be
deemed to have been allotted to them under these rules.
(6) The Director Identification Number so allotted under these rules is
valid for the life-time of the applicant and shall not be allotted to any
other person.
[10A Intimation of DIN to Company.-

2
(1) Every director, functioning as a director in one or more companies

on or before the 30th June, 2007 and who has not yet intimated his DIN
to such company or companies shall, within one month of the receipt
of Director Identification Number from the Central Government,
intimate his Director Identification Number to the company or all
companies wherein he is a director as per Form DIR-3B.
1. The words “the provisional DIN so allotted by the system shall get lapsed
automatically and” Omitted by the Companies (Appointment and Qualification
of Directors) Rules, 2014 (w.e.f. 18-09-2014).
Rules, 2014 (w.e.f. 18-09-2014).
(2) The intimation by the company of Director Identification Number

of its directors under section 157 of the Act shall be furnished in Form
DIR-3C within fifteen days of receipt of intimation under section 156.]
11. Cancellation or Surrender or Deactivation of DIN.

1
[(1)The Central Government or Regional Director (Northern Region),
Noida or any officer authorised by the Regional Director may, upon
being satisfied on verification of particulars or documentary proof
attached with the application received 2[alongwith fee as specified
in Companies (Registration Offices and Fees) Rules, 2014] from any
person, cancel or deactivate the DIN in case -
(a) the DIN is found to be duplicated in respect of the same
person provided the data related to both the DIN shall be
merged with the validly retained number;
(b) the DIN was obtained in a wrongful manner or by fraudulent
means;
(c) of the death of the concerned individual;
(d) the concerned individual has been declared as a person of
unsound mind by a competent Court;
(e) if the concerned individual has been adjudicated an
insolvent:
Provided that before cancellation or deactivation of DIN
pursuant to clause (b), an opportunity of being heard shall
be given to the concerned individual;
(f) on an application made in Form DIR-5 by the DIN holder
to surrender his or her DIN along with declaration that he
has never been appointed as director in any company and
1. Rule 11 renumbered as sub-rule (1) by the Companies (Appointment and

Qualification of Directors) fourth Amendment Rules, 2018 dated 05-07-2018
(w.e.f. 10-07-2018)
Rules, 2014 (w.e.f. 18-09-2014).
the said DIN has never been used for filing of any document
with any authority, the Central Government may deactivate
such DIN:
Provided that before deactivation of any DIN in such case, the Central
Government shall verify e-records.
Explanation. – For the purposes of clause (b) –
(i) the term “wrongful manner” means if the DIN is obtained
on the strength of documents which are not legally valid or
incomplete documents are furnished or on suppression of
material information or on the basis of wrong certification
or by making misleading or false information or by
misrepresentation;
(ii) the term “fraudulent means” means if the DIN is obtained
with an intent to deceive any other person or any authority
including the Central Government.
1
[(2) The Central Government or Regional Director (Northern Region),
or any officer authorized by the Central Government or Regional
Director (Northern Region) shall, deactivate the Director Identification
Number (DIN), of an individual who does not intimate his particulars
in e-form DIR-3-KYC within stipulated time in accordance with rule
12A:
(3) The de-activated DIN shall be re-activated only after e-form
DIR-3-KYC is filed along with fee as prescribed under Companies
(Registration Offices and Fees) Rules, 2014.]
12. Intimation of Changes in Particulars Specified in DIN

Application
(1) Every individual who has been allotted a Director Identification
Number under these rules shall, in the event of any change in his
particulars as stated in Form DIR-3, intimate such change(s) to the
Central Government within a period of thirty days of such change(s)

fourth Amendment Rules, 2018 dated 05-07-2018 (w.e.f 10-07-2018)
in Form DIR-6 in the following manner, namely;-

1
[(i) The applicant shall download Form DIR-6 from the portal,
fill in the relevant changes, verify the Form and attach duly
scanned copy of the proof of the changed particulars and
submit electronically;]
(ii) the form shall be digitally signed by a chartered accountant
in practice or a company secretary in practice or a cost
accountant in practice;
(iii) the applicant shall submit the Form DIR-6;
(2) The Central Government, upon being satisfied, after verification of
such changed particulars from the enclosed proofs, shall incorporate
the said changes and inform the applicant by way of a letter by post
or electronically or in any other mode confirming the effect of such
change in the electronic database maintained by the Ministry.
(3) The DIN cell of the Ministry shall also intimate the change(s) in
the particulars of the director submitted to it in Form DIR-6 to the
concerned Registrar(s) under whose jurisdiction the registered office
of the company(s) in which such individual is a director is situated.
(4) The concerned individual shall also intimate the change(s) in his
particulars to the company or companies in which he is a director
within fifteen days of such change.
2
[12A. Directors KYC
Every individual who has been allotted a Director Identification
Number (DIN) as on 31st March of a financial year as per these rules

Rules, 2014 (w.e.f. 18-09-2014). Prior to its substitution, sub-clause (i) read as
under:
“the applicant shall download Form DIR-6 from the portal and fill in the relevant
changes, attach copy of the proof of the changed particulars and verification in
the Form DIR-7 all of which shall be scanned and submitted electronically.»
fourth Amendment Rules, 2018 dated 05-07-2018 (w.e.f 10-07-2018)
shall, submit e-form DIR-3-KYC to the Central Government on or

before 30th April of immediate next financial year.
Provided that every individual who has already been allotted a Director
Identification Number (DIN) as at 31st March, 2018, shall submit
e-form 2[DIR-3 KYC on or 1[before 5th October, 2018].]2
13. Notice of candidature of a person for directorship

The company shall, at least seven days before the general meeting,
inform its members of the candidature of a person for the office of
a director or the intention of a member to propose such person as a
candidate for that office-
(1) by serving individual notices, on the members through electronic
mode to such members who have provided their email addresses to
the company for communication purposes, and in writing to all other
members; and
(2) by placing notice of such candidature or intention on the website of
the company, if any:
Provided that it shall not be necessary for the company to serve individual
notices upon the members as aforesaid, if the company advertises such
candidature or intention, not less than seven days before the meeting at
least once in a vernacular newspaper in the principal vernacular language
of the district in which the registered office of the company is situated,
and circulating in that district, and at least once in English language in an
English newspaper circulating in that district.
14. Disqualification of directors sub-section (2) of section 164.

(1) Every director shall inform to the company concerned about his

Sixth Amendment Rules, 2018 (w.e.f. 20-09-2018) for: before 15th September,
2018”.
Fifth Amendment Rules, 2018 (w.e.f. 21-08-2018) for: “DIR-3 KYC on or before
31st August, 2018”.
disqualification under sub-section (2) of section 164, if any, in Form

DIR-8 before he is appointed or re-appointed.
(2) Whenever a company fails to file the financial statements or annual
returns, or fails to repay any deposit, interest, dividend, or fails to
redeem its debentures, as specified in sub-section (2) of section 164,
the company shall immediately file Form DIR-9, to the Registrar
furnishing therein the names and addresses of all the directors of the
company during the relevant financial years.
(3) When a company fails to file the Form DIR-9 within a period of
thirty days of the failure that would attract the disqualification under
sub-section (2) of section 164, officers of the company specified in
clause (60) of section 2 of the Act shall be the officers in default.
(4) Upon receipt of the Form DIR-9 under sub-rule (2), the Registrar
shall immediately register the document and place it in the document
file for public inspection.
(5) Any application for removal of disqualification of directors shall be
made in Form DIR-10.
15. Notice of resignation of director.

The company shall within thirty days from the date of receipt of notice
of resignation from a director, intimate the Registrar in Form DIR-12
and post the information on its website, if any.
16. Copy of resignation of director to be forwarded by him.

Where a director resigns from his office, he 1[may] within a period
of thirty days from the date of resignation, forward to the Registrar a
copy of his resignation along with reasons for the resignation in Form
DIR-11 along with the fee as provided in the Companies (Registration
[Provided that in case a company has already filed Form DIR-12
2

Second Amendment Rules, 2018, (w.e.f. 07-05-2018) for: “shall”.
Rules, 2014 (w.e.f. 19-01-2015).
with the Registrar under rule 15, a foreign director of such company
resigning from his office may authorise in writing a practicing chartered
accountant or cost accountant in practice or company secretary in
practice or any other resident director of the company to sign Form
DIR-11 and file the same on his behalf intimating the reasons for the
resignation.]
17. Register of directors and key managerial personnel.

(1) Every company shall keep at its registered office a register of its
directors and key managerial personnel containing the following
(a) Director Identification Number (optional for key managerial
personnel);
(b) present name and surname in full;
(c) any former name or surname in full;
(d) father’s name, mother’s name and spouse’s name(if married)
and surnames in full;
(e) date of birth;
(f) residential address (present as well as permanent);
(g) nationality (including the nationality of origin, if different);
(h) occupation;
(i) date of the board resolution in which the appointment was
made;
(j) date of appointment and reappointment in the company;
(k) date of cessation of office and reasons therefore;
(l) office of director or key managerial personnel held or
relinquished in any other body corporate;
(m) membership number of the Institute of Company Secretaries
of India in case of Company Secretary, if applicable; and
(n) Permanent Account Number (mandatory for key managerial

personnel if not having DIN);
(2) In addition to the details of the directors or key managerial
personnel, the company shall also include in the aforesaid Register the
details of securities held by them in the company, its holding company,
subsidiaries, subsidiaries of the company’s holding company and
associate companies relating to-
(a) the number, description and nominal value of securities;
(b) the date of acquisition and the price or other consideration
paid;
(c) date of disposal and price and other consideration received;
(d) cumulative balance and number of securities held after each
transaction;
(e) mode of acquisition of securities ;
(f) mode of holding – physical or in dematerialized form; and
(g) whether securities have been pledged or any encumbrance
has been created on the securities.
18. Return containing the particulars of directors and the key

managerial personnel
A return containing the particulars of appointment of director or
key managerial personnel and changes therein, shall be filed with the
Registrar in Form DIR-12 along with such fee as may be provided in
the Companies (Registration Offices and Fees) Rules, 2014 within
thirty days of such appointment or change, as the case may be.
366
CHAPTER XII
COMPANIES (MEETINGS OF BOARD
AND ITS POWERS) RULES, 2014
[G.S.R. 240 (E), Dated 31st March, 2014]
In exercise of powers conferred under sections 173, 175, 177, 178,
179, 184, 185, 186, 187, 188, 189 and section 191 read with section
469 of the Companies Act, 2013 and in supersession of the Companies
Rules prescribed under the Companies Act, 1956 on matters covered
under these rules, except as respects things done or omitted to be done
before such suppression, the Central Government hereby makes the
following rules, namely:–

(1) These rules may be called the Companies (Meetings of Board and
its Powers) Rules, 2014.
2. Definitions.
(b) “Annexure” means the Annexure appended to these rules;
(c) “Fees” means the fees as specified in the Companies
(d) “Form” or “e-Form” means a form set forth in Annexure to
relates;
(e) “section” means the section of the Act.
366
Companies (Meetings of Board and its Powers) Rules, 2014 367
assigned to them in the Act or in the said Rules.
3. Meetings of Board through video conferencing or other audio

visual means.
A company shall comply with the following procedure, for convening
and conducting the Board meetings through video conferencing or
other audio visual means.
(1) Every Company shall make necessary arrangements to avoid failure
of video or audio visual connection.
(2) The Chairperson of the meeting and the company secretary, if any,
shall take due and reasonable care-
(a) to safeguard the integrity of the meeting by ensuring
sufficient security and identification procedures;
(b) to ensure availability of proper video conferencing or other
audio visual equipment or facilities for providing transmission
of the communications for effective participation of the
directors and other authorized participants at the Board
meeting;
(c) to record proceedings and prepare the minutes of the
meeting;
(d) to store for safekeeping and marking the tape recording(s) or
other electronic recording mechanism as part of the records
of the company at least before the time of completion of audit
of that particular year.
(e) to ensure that no person other than the concerned director
are attending or have access to the proceedings of the
meeting through video conferencing mode or other audio
visual means; and
(f) to ensure that participants attending the meeting through
368 Companies (Meetings of Board and its Powers) Rules, 2014
audio visual means are able to hear and see the other
participants clearly during the course of the meeting:
Provided that the persons, who are differently abled, may
make request to the Board to allow a person to accompany
him.
(3)(a) The notice of the meeting shall be sent to all the directors in
accordance with the provisions of sub-section (3) of section 173 of the
Act.
(b) The notice of the meeting shall inform the directors regarding the
option available to them to participate through video conferencing
mode or other audio visual means, and shall provide all the necessary
information to enable the directors to participate through video
conferencing mode or other audio visual means.
(c) A director intending to participate through video conferencing or
audio visual means shall communicate his intention to the Chairperson
or the company secretary of the company.
(d) If the director intends to participate through video conferencing
or other audio visual means, he shall give prior intimation to that
effect sufficiently in advance so that company is able to make suitable
arrangements in this behalf.
1
[(e) Any director who intends to participate in the meeting through
electronic mode may intimate about such participation at the beginning
of the calendar year and such declaration shall be valid for one year :
Provided that such declaration shall not debar him from participation
in the meeting in person in which case he shall intimate the company
sufficiently in advance of his intention to participate in person.]
1. Substituted by the Companies (Meetings of Board and Its Powers) Second
Amendment Rules, 2017, (w.e.f. 13-07-2017). Prior to its substitution, sub-rule
(3)(e) read as under:
“(e) The director, who desire, to participate may intimate his intention of
participation through the electronic mode at the beginning of the calendar year
and such declaration shall be valid for one calendar year.”
(f) In the absence of any intimation under clause (c), it shall be assumed
that the director shall attend the meeting in person.
(4) At the commencement of the meeting, a roll call shall be taken
by the Chairperson when every director participating through video
conferencing or other audio visual means shall state, for the record, the
following namely:-
(a) name;
(b) the location from where he is participating;
(c) that he has received the agenda and all the relevant material
for the meeting; and
(d) that no one other than the concerned director is attending
or having access to the proceedings of the meeting at the
location mentioned in clause (b);
(5) (a) After the roll call, the Chairperson or the Company Secretary shall
inform the Board about the names of persons other than the directors
who are present for the said meeting at the request or with the permission
of the Chairperson and confirm that the required quorum is complete.
Explanation. – A director participating in a meeting through video
conferencing or other audio visual means shall be counted for the
purpose of quorum, unless he is to be excluded for any items of
business under any provisions of the Act or the rules.
(b) The Chairperson shall ensure that the required quorum is present
throughout the meeting.
(6) With respect to every meeting conducted through video
conferencing or other audio visual means authorized under these rules,
the scheduled venue of the meeting as set forth in the notice convening
the meeting, 1[Omitted] shall be deemed to be the place of the said
meeting and all recordings of the proceedings at the meeting shall be
deemed to be made at such place.
1. The words “which shall be in India,” omitted by the Companies (Meetings
of Board and Its Powers) Second Amendment Rules, 2014, (w.e.f. 14-08-2014).
(7) The statutory registers which are required to be placed in the Board
meeting as per the provisions of the Act shall be placed at the scheduled
venue of the meeting and where such registers are required to be signed
by the directors, the same shall be deemed to have been signed by the
directors participating through electronic mode, if they have given
their consent to this effect and it is so recorded in the minutes of the
meeting.
(8)(a) Every participant shall identify himself for the record before
speaking on any item of business on the agenda.
(b) If a statement of a director in the meeting through video
conferencing or other audio visual means is interrupted or garbled,
the Chairperson or Company Secretary shall request for a repeat or
reiteration by the Director.
(9) If a motion is objected to and there is a need to put it to vote, the
Chairperson shall call the roll and note the vote of each director who
shall identify himself while casting his vote.
(10) From the commencement of the meeting and until the conclusion
of such meeting, no person other than the Chairperson, Directors,
Company Secretary and any other person whose presence is required
by the Board shall be allowed access to the place where any director is
attending the meeting either physically or through video conferencing
without the permission of the Board.
(11)(a) At the end of discussion on each agenda item, the Chairperson
of the meeting shall announce the summary of the decision taken on
such item along with names of the directors, if any, who dissented from
the decision taken by majority 1[and the draft minutes so recorded shall
be preserved by the company till the confirmation of the draft minutes
in accordance with sub-rule (12)].
(b) The minutes shall disclose the particulars of the directors who
attended the meeting through video conferencing or other audio visual
means.
1. Inserted by the Companies (Meetings of Board and Its Powers) Second
(12)(a) The draft minutes of the meeting shall be circulated among all
the directors within fifteen days of the meeting either in writing or in
electronic mode as may be decided by the Board.
(b) Every director who attended the meeting, whether personally or
through video conferencing or other audio visual means, shall confirm
or give his comments in writing, about the accuracy of recording
of the proceedings of that particular meeting in the draft minutes,
within seven days or some reasonable time as decided by the Board,
after receipt of the draft minutes failing which his approval shall be
presumed.
(c) After completion of the meeting, the minutes shall be entered in the
minute book as specified under section 118 of the Act and signed by
the Chairperson.
Explanation. – For the purposes of this rule, “video conferencing or other
audio visual means” means audio- visual electronic communication
facility employed which enables all the persons participating in a
meeting to communicate concurrently with each other without an
intermediary and to participate effectively in the meeting.
4. Matters not to be dealt with in a meeting through video

conferencing or other audio visual means.-
1
[The] following matters shall not be dealt with in any meeting held
through video conferencing or other audio visual means.-
(i) the approval of the annual financial statements;
(ii) the approval of the Board’s report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for 2[consideration of
financial statement including consolidated financial
Amendment Rules, 2014, (w.e.f. 14-08-2014) for: “(1) The”
Amendment Rules, 2014, (w.e.f. 14-08-2014) for: “consideration of accounts”
statement, if any, to be approved by the Board under sub-

section (1) of section 134 of the Act]; and
(v) the approval of the matter relating to amalgamation, merger,
demerger, acquisition and takeover.
1
[Provided that where there is quorum in a meeting through physical
presence of directors, any other director may participate through video
conferencing or other audio visual means.]
5. Passing of resolution by circulation.

A resolution in draft form may be circulated to the directors together
with the necessary papers for seeking their approval, by electronic
means which may include E-mail or fax.
2
[6. Committees of the Board.
1. Inserted by the Companies (Meetings of Board and Its Powers) Amendment
Rules, 2018, (w.e.f. 07-05-2018)
Amendment Rules, 2017, (w.e.f. 13-07-2017). Prior to its substitution, Rule 6
read as:
“6. Committees of the Board.-
The Board of directors of every listed companies and the following classes
of companies shall constitute an Audit Committee and a Nomination and
Remuneration Committee of the Board-
(i) all public companies with a paid up capital of ten crore rupees or more;
(ii) all public companies having turnover of one hundred crore rupees or more;
(iii) all public companies, having in aggregate, outstanding loans or borrowings
or debentures or deposits exceeding fifty crore rupees or more.
Explanation.- The paid up share capital or turnover or outstanding loans, or
borrowings or debentures or deposits, as the case may be, as existing on the
date of last audited Financial Statements shall be taken into account for the
purposes of this rule.”
*[Provided that public companies covered under this rule which were not
required to constitute Audit Committee under section 292A of the Companies
Act, 1956 (1 of 1956) shall constitute their Audit Committee within one
year from the commencement of these rules or appointment of independent
directors by them, whichever is earlier :
The Board of directors of 1[every listed public company] and a company

covered under rule 4 of the Companies (Appointment and Qualification
of Directors) Rules, 2014 shall constitute an ‘Audit Committee’ and a
‘Nomination and Remuneration Committee of the Board’.]
[6A. Omnibus approval for related party transactions on annual

2
basis.
All related party transactions shall require approval of the Audit
Committee and the Audit Committee may make omnibus approval for
related party transactions proposed to be entered into by the company
subject to the following conditions, namely:-
(1) The Audit Committee shall, after obtaining approval of the Board of
Directors, specify the criteria for making the omnibus approval which
shall include the following, namely:-
(a) maximum value of the transactions, in aggregate, which can
be allowed under the omnibus route in a year;
(b) the maximum value per transaction which can be allowed;
(c) extent and manner of disclosures to be made to the Audit
Committee at the time of seeking omnibus approval;
(d) review, at such intervals as the Audit Committee may deem
fit, related party transaction entered into by the company
pursuant to each of the omnibus approval made;
Provided further that public companies covered under this rule shall constitute
their Nomination and Remuneration Committee within one year from the
commencement of these rules or appointment of independent directors by
them, whichever is earlier.]
* Inserted by the Companies (Meetings of Board and Its Powers) Amendment
Rules, 2014, (w.e.f. 12-06-2014)
1. Substituted by the Companies (Meetings of Board and Its Powers)
Amendment Rules, 2018, (w.e.f. 07-05-2018) for: “every listed company”
2. Inserted by the Companies (Meetings of Board and Its Powers) Second
(e) transactions which cannot be subject to the omnibus

approval by the Audit Committee.
(2) The Audit Committee shall consider the following factors while
specifying the criteria for making omnibus approval, namely: -
(a) repetitiveness of the transactions (in past or in future);
(b) justification for the need of omnibus approval.
(3) The Audit Committee shall satisfy itself on the need for omnibus
approval for transactions of repetitive nature and that such approval is
in the interest of the company.
(4) The omnibus approval shall contain or indicate the following: -
(a) name of the related parties;
(b) nature and duration of the transaction;
(c) maximum amount of transaction that can be entered into;
(d) the indicative base price or current contracted price and the
formula for variation in the price, if any; and
(e) any other information relevant or important for the Audit
Committee to take a decision on the proposed transaction:
Provided that where the need for related party transaction cannot be
foreseen and aforesaid details are not available, audit committee may
make omnibus approval for such transactions subject to their value not
exceeding rupees one crore per transaction.
(5) Omnibus approval shall be valid for a period not exceeding one
financial year and shall require fresh approval after the expiry of such
financial year.
(6) Omnibus approval shall not be made for transactions in respect of
selling or disposing of the undertaking of the company.
(7) Any other conditions as the Audit Committee may deem fit.]
7. Establishment of vigil mechanism.-

(1) Every listed company and the companies belonging to the following
class or classes shall establish a vigil mechanism for their directors and
employees to report their genuine concerns or grievances-
(a) the Companies which accept deposits from the public;
(b) the Companies which have borrowed money from banks and
public financial institutions in excess of fifty crore rupees.
(2) The companies which are required to constitute an audit committee
shall oversee the vigil mechanism through the committee and if any
of the members of the committee have a conflict of interest in a given
case, they should recuse themselves and the others on the committee
would deal with the matter on hand.
(3) In case of other companies, the Board of directors shall nominate
a director to play the role of audit committee for the purpose of vigil
mechanism to whom other directors and employees may report their
concerns.
(4) The vigil mechanism shall provide for adequate safeguards
against victimisation of employees and directors who avail of the vigil
mechanism and also provide for direct access to the Chairperson of the
Audit Committee or the director nominated to play the role of Audit
Committee, as the case may be, in exceptional cases.
(5) In case of repeated frivolous complaints being filed by a director or
an employee, the audit committee or the director nominated to play the
role of audit committee may take suitable action against the concerned
director or employee including reprimand.
8. Powers of Board.
In addition to the powers specified under sub-section (3) of section 179
of the Act, the following powers shall also be exercised by the Board
of Directors only by means of resolutions passed at meetings of the
Board.-
(1) to make political contributions;
(2) to appoint or remove key managerial personnel (KMP);
(3) 1[Omitted]
(4) to appoint internal auditors and secretarial auditor;
(5) 2[Omitted]
(6) 3[Omitted]
(7) 4[Omitted]
(8) 5[Omitted]
(9) 6[Omitted]
9. Disclosures by a director of his interest.

(1) Every director shall disclose his concern or interest in any company
or companies or bodies corporate (including shareholding interest),
firms or other association of individuals, by giving a notice in writing
in Form MBP 1.
1. The words “(3) to take note of appointment(s) or removal(s) of one level
below the Key Management Personnel;” omitted by the Companies (Meetings
of Board and Its Powers) Amendment Rules, 2015, (w.e.f. 18-03-2015)
2. The words “(5) to take note of the disclosure of director’s interest and
shareholding;” omitted by the Companies (Meetings of Board and Its Powers)
3. The words “(6) to buy, sell investments held by the company (other than trade
investments), constituting five percent or more of the paid up share capital and
free reserves of the investee company;” omitted by the Companies (Meetings of
Board and Its Powers) Amendment Rules, 2015, (w.e.f. 18-03-2015)
4. The words “(7) to invite or accept or renew public deposits and related
matters;” omitted by the Companies (Meetings of Board and Its Powers)
5. The words “(8) to review or change the terms and conditions of public
deposit;” omitted by the Companies (Meetings of Board and Its Powers)
6. The words “(9) to approve quarterly, half yearly and annual financial
statements or financial results as the case may be.” omitted by the Companies
(Meetings of Board and Its Powers) Amendment Rules, 2015, (w.e.f. 18-03-
2015)
(2) It shall be the duty of the director giving notice of interest to cause
it to be disclosed at the meeting held immediately after the date of the
notice.
(3) All notices shall be kept at the registered office and such notices
shall be preserved for a period of eight years from the end of the
financial year to which it relates and shall be kept in the custody of the
company secretary of the company or any other person authorised by
10. 1[Omitted]
11. Loan and investment by a company under section 186 of the Act.
(1) Where a loan or guarantee is given or where a security has been
provided by a company to its wholly owned subsidiary company or a
joint venture company, or acquisition is made by a holding company,
by way of subscription, purchase or otherwise of, the securities of its
wholly owned subsidiary company, the requirement of sub-section (3)
of section 186 shall not apply:
Provided that the company shall disclose the details of such loans
or guarantee or security or acquisition in the financial statement as
provided under sub-section (4) of section 186.
1. Omitted by the Companies (Meetings of Board and Its Powers) Second
Amendment Rules, 2015 (w.e.f. 14-12-2015). Prior to its omission, Rule 10 read
as under:
“10 Loans to Director etc. under section 185.-
(1) Any loan made by a holding company to its wholly owned subsidiary
company or any guarantee given or security provided by a holding company in
respect of any loan made to its wholly owned subsidiary company is exempted
from the requirements under this section; and
(2) Any guarantee given or security provided by a holding company in respect
of loan made by any bank or financial institution to its subsidiary company is
exempted from the requirements under this section:
Provided that such loans made under sub-rule(1) and (2) are utilised by the
subsidiary company for its *[principal] business activities.”
*Substituted by the Companies (Meetings of Board and Its Powers) Amendment
Rules, 2015, (w.e.f. 18-03-2015) for: “principle”
(2) For the purposes of clause (a) of sub-section (11) of section 186,
the expression “business of financing of companies” shall include,
with regard to a Non-Banking Financial Company registered with
the Reserve Bank of India, “business of giving of any loan to a person
or providing any guaranty or security for due repayment of any loan
availed by any person in the ordinary course of its business”.
(3) No company registered under section 12 of the Securities and
Exchange Board of India Act, 1992 and also covered under such
class or classes of companies which may be notified by the Central
Government in consultation with the Securities and Exchange Board,
shall take any inter-corporate loan or deposits, in excess of the limits
specified under the regulations applicable to such company, pursuant
to which it has obtained certificate of registration from the Securities
and Exchange Board of India.
12. Register.
(1) Every company giving loan or giving guarantee or providing
security or making an acquisition of securities shall, from the date of
its incorporation, maintain a register in Form MBP 2 and enter therein
separately, the particulars of loans and guarantees given, securities
provided and acquisitions made as aforesaid.
(2) The entries in the register shall be made chronologically in respect
of each such transaction within seven days of making such loan or
giving guarantee or providing security or making acquisition.
(3) The register shall be kept at the registered office of the company
and the register shall be preserved permanently and shall be kept in the
custody of the company secretary of the company or any other person
authorised by the Board for the purpose.
(4) The entries in the register (either manual or electronic) shall be
authenticated by the company secretary of the company or by any other
person authorised by the Board for the purpose.
(5) For the purpose of sub-rule (4), theregister can be maintained
either manually or in electronic mode.
(6) The extracts from the register maintained under sub-section (9)
of section 186 may be furnished to any member of the company on
payment of such fee as may be prescribed in the Articles of the company
which shall not exceed ten rupees for each page.
[13. Special Resolution.

1
A resolution passed at a general meeting in terms of sub-section (3) of

section 186 to give any loan or guarantee or investment or providing
any security or the acquisition under sub-section (2) of section 186
shall specify the total amount up to which the Board of Directors are
authorised to give such loan or guarantee, to provide such security or
make such acquisition:
Provided that the company shall disclose to the members in the financial
statement the full particulars in accordance with the provisions of sub-
section (4) of section 186.]
14. Investments of company to be held in its own name.

Amendment Rules, 2018, (w.e.f. 07-05-2018) Prior to its substitution, Rule 13
read as under:
“13. Special Resolution.-
(1) Where the aggregate of the loans and investment so far made, the amount for
which guarantee or security so far provided to or in all other bodies corporate
along with the investment, loan, guarantee or security proposed to be made or
given by the Board, exceed the limits specified under section 186, no investment
or loan shall be made or guarantee shall be given or security shall be provided
unless previously authorised by a special resolution passed in a general meeting.
Explanation.- For the purpose of this sub-rule, it is clarified that it would
sufficient compliance if such special resolution is passed within one year from
the date of notification of this section.
(2) A resolution passed at a general meeting in terms of sub-section (3) of
section 186 to give any loan or guarantee or investment or providing any
security or the acquisition under sub section (2) of section 186 shall specify the
total amount up to which the Board of Directors are authorised to give such
loan or guarantee, to provide such security or make such acquisition:
Provided, that the company shall disclose to the members in the financial
statement the full particulars in accordance with the provision of sub-section
(4) of section 186.”
(1) Every company shall, from the date of its registration, maintain
a register in Form MBP3 and enter therein, chronologically, the
particulars of investments in shares or other securities beneficially
held by the company but which are not held in its own name and the
company shall also record the reasons for not holding the investments
in its own name and the relationship or contract under which the
investment is held in the name of any other person.
(2) The company shall also record whether such investments are held
in a third party’s name for the time being or otherwise.
(3) The register shall be maintained at the registered office of the
company. The register shall be preserved permanently and shall be kept
in the custody of the company secretary of the company or if there is
no company secretary, any director or any other officer authorised by
(4) The entries in the register shall be authenticated by the company
secretary of the company or by any other person authorised by the
15. Contract or arrangement with a related party.

A company shall enter into any contract or arrangement with a related
party subject to the following conditions, namely:
(1) The agenda of the Board meeting at which the resolution is proposed
to be moved shall disclose-
(a) the name of the related party and nature of relationship;
(b) the nature, duration of the contract and particulars of the
contract or arrangement;
(c) the material terms of the contract or arrangement including
the value, if any;
(d) any advance paid or received for the contract or arrangement,
if any;
(e) the manner of determining the pricing and other commercial
terms, both included as part of contract and not considered
as part of the contract;
(f) whether all factors relevant to the contract have been

considered, if not, the details of factors not considered with
the rationale for not considering those factors; and
(g) any other information relevant or important for the Board to
take a decision on the proposed transaction.
(2) Where any director is interested in any contract or arrangement
with a related party, such director shall not be present at the meeting
during discussions on the subject matter of the resolution relating to
such contract or arrangement.
1
[(3) For the purposes of first proviso to sub-section (1) of section 188,
Amendment Rules, 2014, (w.e.f. 14-08-2014). Prior to its substitution, sub-
rule(3) read as under:
“(3) For the purposes of first proviso to sub-section (1) of section 188, except
with the prior approval of the company by a special resolution-
(i) a company having a paid-up share capital of ten crore rupees or more shall
not enter into a contract or arrangement with any related party; or
(ii) a company shall not enter into a transaction or transactions, where the
transaction or transactions to be entered into–
(a) as contracts or arrangements with respect to clauses (a) to (e) of sub-section
(1) of section 188 with criteria, as mentioned below–
(i) sale, purchase or supply of any goods or materials directly or through
appointment of agents exceeding twenty five percent of the annual turnover as
mentioned in clause (a) and clause (e) respectively of sub-section (1) of section
188;
(ii) selling or otherwise disposing of, or buying, property of any kind directly
or through appointment of agents exceeding ten percent of net worth as
mentioned in clause (b) and clause (e) respectively of sub-section (1) of section
188;
(iii) leasing of property of any kind exceeding ten percent of the net worth or
exceeding ten percent of turnover as mentioned in clause (c) of sub-section (1)
of section 188;
(iv) availing or rendering of any services directly or through appointment of
agents exceeding ten percent of the net worth as mentioned in clause (d) and
clause (e) of sub-section (1) of section 188;
(b) appointment to any office or place of profit in the company, its subsidiary
except with the prior approval of the company by a 1[resolution], a

company shall not enter into a transaction or transactions, where the
transaction or transactions to be entered into,–
(a) as contracts or arrangements with respect to clauses (a) to (e)
of sub-section (1) of section 188, with criteria as mentioned
below -
(i) sale, purchase or supply of any goods or materials,
directly or through appointment of agent, 2[amounting
to ten percent or more] of the turnover of the company
or rupees one hundred crore, whichever is lower, as
company or associate company at a monthly remuneration exceeding two and

half lakh rupees as mentioned in clause (f) of sub-section (1) of section 188; or
(c) remuneration for underwriting the subscription of any securities or
derivatives thereof of the company exceeding one percent of the net worth as
mentioned in clause (g) of sub-section (1) of section 188.
Explanation.- (1) The Turnover or Net Worth referred in the above sub-rules
shall be on the basis of the Audited Financial Statement of the preceding
Financial year.
(2) In case of wholly owned subsidiary, the special resolution passed by the
holding company shall be sufficient for the purpose of entering into the
transactions between wholly owned subsidiary and holding company.
(3) The explanatory statement to be annexed to the notice of a general meeting
convened pursuant to section 101 shall contain the following particulars
namely:-
(a) name of the related party ;
(b) name of the director or key managerial personnel who is related, if any;
(c) nature of relationship;
(d) nature, material terms, monetary value and particulars of the contract or
arrangement;
(e) any other information relevant or important for the members to take a
decision on the proposed resolution.”
Amendment Rules, 2015, (w.e.f. 14-12-2015) for: “ special resolution”
Amendment Rules, 2017 (w.e.f. 30-03-2017) for: “exceeding ten per cent.”
mentioned in clause (a) and clause (e) respectively of

sub-section (1) of section 188;
(ii) selling or otherwise disposing of or buying property
of any kind, directly or through appointment of agent,
1
[amounting to ten percent or more] of net worth of
the company or rupees one hundred crore, whichever
is lower, as mentioned in clause (b) and clause (e)
respectively of sub-section (1) of section 188;
(iii) leasing of property of any kind 1[amounting to ten
percent or more] of the net worth of the company
2
[ten percent or more of turnover] of the company
or rupees one hundred crore, whichever is lower, as
mentioned in clause (c) of sub-section (1) of section
188;
(iv) availing or rendering of any services, directly or
through appointment of agent, 1[amounting to ten
percent or more] of the turnover of the company or
rupees fifty crore, whichever is lower, as mentioned
in clause (d) and clause (e) respectively of sub-section
(1) of section 188:
Explanation. – It is hereby clarified that the limits

specified in sub-clauses (i) to (iv) shall apply for
transaction or transactions to be entered into either
individually or taken together with the previous
transactions during a financial year.
(b) is for appointment to any office or place of profit in the
company, its subsidiary company or associate company at a
monthly remuneration exceeding two and half lakh rupees
as mentioned in clause (f) of subsection (1) of section 188; or

Amendment Rules, 2017 (w.e.f. 30-03-2017) for: “exceeding ten per cent.”
2.
Substituted by the Companies (Meetings of Board and Its Powers)
Amendment Rules, 2017 (w.e.f. 30-03-2017) for: “ten per cent. of turnover”
(c) is for remuneration for underwriting the subscription of any

securities or derivatives thereof, of the company exceeding
one per cent. of the net worth as mentioned in clause (g) of
sub-section (1) of section 188.
Explanation. – (1) The Turnover or Net Worth referred in the above
sub-rules shall be computed on the basis of the Audited Financial
Statement of the preceding Financial year.
(2) In case of a wholly owned subsidiary, the 1[resolution] passed by
the holding company shall be sufficient for the purpose of entering into
the transactions between the wholly owned subsidiary and the holding
company.
(3) The explanatory statement to be annexed to the notice of a general
meeting convened pursuant to section 101 shall contain the following
particulars, namely:–
(a) name of the related party ;
(b) name of the director or key managerial personnel who is
related, if any;
(c) nature of relationship;
(d) nature, material terms, monetary value and particulars of the
contract or arrangement;
(e) any other information relevant or important for the members
to take a decision on the proposed resolution.]
16. Register of contracts or arrangements in which directors are

interested.
(1) Every company shall maintain one or more registers in Form MBP
4, and shall enter therein the particulars of–
(a) company or companies or bodies corporate, firms or other
association of individuals, in which any director has any

Amendment Rules, 2015, (w.e.f. 14-12-2015) for: “ special resolution”
concern or interest, as mentioned under sub-section (1) of

section 184:
Provided that the particulars of the company or companies
or bodies corporate in which a director himself together
with any other director holds two percent or less of the paid-
up share capital would not be required to be entered in the
register;
(b) contracts or arrangements with a body corporate or firm or
other entity as mentioned under sub-section (2) of section
184, in which any director is, directly or indirectly, concerned
or interested; and
(c) contracts or arrangements with a related party with respect
to transactions to which section 188 applies.
(2) The entries in the register shall be made at once, whenever there is a
cause to make entry, in chronological order and shall be authenticated
by the company secretary of the company or by any other person
(3) The register shall be kept at the registered office of the company
and the register shall be preserved permanently and shall be kept in the
custody of the company secretary of the company or any other person
(4) The company shall provide extracts from such register to a member
of the company on his request, within seven days from the date on
which such request is made upon the payment of such fee as may be
specified in the articles of the company but not exceeding ten rupees
per page.
17. Payment to director for loss of office, etc. in connection with

transfer of undertaking, property or shares.
(1)No director of a company shall receive any payment by way of
compensation in connection with any event mentioned in sub-section
(1) of section 191 unless the following particulars are disclosed to
the members of the company and they pass a resolution at a general
meeting approving the payment of such amount –

(a) name of the director;
(b) amount proposed to be paid;
(c) event due to which compensation become payable;
(d) date of Board meeting recommending such payment;
(e) basis for the amount determined;
(f) reason or justification for the payment;
(g) manner of payment - whether payable in cash or otherwise
and how;
(h) sources of payment; and
(i) any other relevant particulars as the Board may think fit.
(2) Any payment made by a company by way of compensation for
the loss of office or as a consideration for retirement from office or in
connection with such loss or retirement, to a managing director or
whole time director or manager of the company shall not exceed the
limit as set out under section 202.
(3) No payment shall be made to the managing director or whole
time director or manager of the company by way of compensation
for the loss of office or as consideration for retirement from office
(other than notice pay and statutory payments in accordance with the
terms of appointment of such director or manager, as applicable) or in
connection with such loss or retirement if –
(a) the company is in default in repayment of public deposits or
payment of interest thereon;
(b) the company is in default in redemption of debentures or
payment of interest thereon;
(c) the company is in default in repayment of any liability,
secured or unsecured, payable to any bank, public financial
institution or any other financial institution;
(d) the company is in default in payment of any dues towards

income tax, VAT, excise duty, service tax or any other tax
or duty, by whatever name called, payable to the Central
Government or any State Government, statutory authority
or local authority (other than in cases where the company
has disputed the liability to pay such dues);
(e) there are outstanding statutory dues to the employees or
workmen of the company which have not been paid by
the company (other than in cases where the company has
disputed the liability to pay such dues); and
(f) the company has not paid dividend on preference shares or
not redeemed preference shares on due date.
Explanation : Pending notification of sub-section (1) of section 247
of the Act and finalisation of qualifications and experience of valuers,
valuation of stocks, shares, debentures, securities etc. will be conducted
by an independent merchant banker who is registered with the
Securities and Exchange Board of India or an independent chartered
accountant in practice having a minimum experience of ten years.
388
CHAPTER XIII
COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL
PERSONNEL) RULES, 2014
[G.S.R 249(E) Dated 31st March, 2014]
In exercise of the powers conferred under sub-section (4) of section
196, sub-section (5) of section 197, sub-section (12) of section
197, section 200, sub-section (1) of section 198, sub-section (1) of
section 203, sub-section (1) of section 204 and sub-section (1) of
section 205 of the Companies Act, 2013,read with sub-sections (1)
and (2) of section 469 of the Companies Act, 2013 (18 of 2013) and
in supersession of the Companies (Central Government’s) General
Rules and Forms, 1956 or any other relevant rules prescribed under
the Companies Act, 1956 (1 of 1956) on matters covered under
before such supersession, the Central Government hereby makes
the following rules, namely: -

(1) These rules may be called the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
2. Definitions.
388
Companies (Appt. & Remuneration of Managerial Personnel) Rules, 2014 389
(d) ‘‘Form’’ or “e form” means a form set forth in Annexure to

relates;
(f) ‘‘section’’ means section of the Act.
3. Filing of return of appointment.

A company shall file a return of appointment of a Managing Director,
Whole Time Director or Manager, 1[omitted] within sixty days of the
appointment, with the Registrar in Form No. MR.1 along with such fee
as may be specified for this purpose.
4. Sitting fees.
A company may pay a sitting fee to a director for attending meetings of
the Board or committees thereof, such sum as may be decided by the
Board of directors thereof which shall not exceed one lakh rupees per
meeting of the Board or committee thereof:
Provided that for Independent Directors and Women Directors, the
sitting fee shall not be less than the sitting fee payable to other directors.
5. Disclosure in Board’s report.

(1) Every listed company shall disclose in the Board’s report-
(i) the ratio of the remuneration of each director to the median
1. The words “Chief Executive Officer (CEO), Company Secretary and Chief
Financial Officer (CFO)” omitted by the Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2016 (w.e.f. 30-
06-2016)
390 Companies (Appt. & Remuneration of Managerial Personnel) Rules, 2014
remuneration of the employees of the company for the

financial year;
(ii) the percentage increase in remuneration of each director,
Chief Financial Officer, Chief Executive Officer, Company
Secretary or Manager, if any, in the financial year;
(iii) the percentage increase in the median remuneration of
employees in the financial year;
(iv) the number of permanent employees on the rolls of company;
(v) 1
[Omitted]
(vi) 2
[Omitted]
(vii) 3[omitted]
(viii) average percentile increase already made in the salaries of
employees other than the managerial personnel in the last
financial year and its comparison with the percentile increase
in the managerial remuneration and justification thereof
and point out if there are any exceptional circumstances for
1. The words “the explanation on the relationship between average increase
in remuneration and company performance” omitted by the Companies
(Appointment and Remuneration of Managerial Personnel) Amendment
Rules, 2016 (w.e.f. 30-06-2016)
2. The words “comparison of the remuneration of the Key Managerial
Personnel against the performance of the company” omitted by the Companies
Rules, 2016 (w.e.f. 30-06-2016)
3. Omitted by the Companies (Appointment and Remuneration of Managerial
Personnel) Amendment Rules, 2016 (w.e.f. 30-06-2016). Prior to omission, it
read as under:
“variations in the market capitalisation of the company, price earnings ratio as
at the closing date of the current financial year and previous financial year and
percentage increase over decrease in the market quotations of the shares of the
company in comparison to the rate at which the company came out with the
last public offer in case of listed companies, and in case of unlisted companies,
the variations in the net worth of the company as at the close of the current
financial year and previous financial year;”
increase in the managerial remuneration;

(ix) [Omitted]
1
(x) [Omitted]
2
(xi) 3
[Omitted]
(xii) affirmation that the remuneration is as per the remuneration
policy of the company.
Explanation. – For the purposes of this rule. –
(i) the expression “median” means the numerical value
separating the higher half of a population from the lower half
and the median of a finite list of numbers may be found by
arranging all the observations from lowest value to highest
value and picking the middle one;
(ii) if there is an even number of observations, the median shall
be the average of the two middle values.
(2) The board’s report shall include a statement showing 4[the names of
the top ten employees in terms of remuneration drawn and the name
of every employee, who-]
1. The words “comparison of the each remuneration of the Key Managerial
Personnel against the performance of the company” omitted by the Companies
Rules, 2016 (w.e.f. 30-06-2016)
2. The words “the key parameters for any variable component of remuneration
availed by the directors;” omitted by the Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2016 (w.e.f. 30-
06-2016)
3. The words : “the ratio of the remuneration of the highest paid director to
that of the employees who are not directors but receive remuneration in excess
of the highest paid director during the year; and” omitted by the Companies
Rules, 2016 (w.e.f. 30-06-2016)
4. Substituted by the Companies (Appointment and Remuneration of
Managerial Personnel) Amendment Rules, 2016 (w.e.f. 30-06-2016) for : “the
name of every employee of the company, who-”
(i) if employed throughout the financial year, was in receipt of

remuneration for that year which, in the aggregate, was not
less than 1[one crore and two lakh rupees];
(ii) if employed for a part of the financial year, was in receipt of
remuneration for any part of that year, at a rate which, in the
aggregate, was not less than 2[eight lakh and fifty thousand
rupees per month];
(iii) if employed throughout the financial year or part thereof,
was in receipt of remuneration in that year which, in the
aggregate, or as the case may be, at a rate which, in the
aggregate, is in excess of that drawn by the managing director
or whole-time director or manager and holds by himself or
along with his spouse and dependent children, not less than
two percent of the equity shares of the company.
(3) The statement referred to in sub-rule (2) shall also indicate -
(i) designation of the employee;
(ii) remuneration received;
(iii) nature of employment, whether contractual or otherwise;
(iv) qualifications and experience of the employee;
(v) date of commencement of employment;
(vi) the age of such employee;
(vii) the last employment held by such employee before joining
the company;
(viii) the percentage of equity shares held by the employee in the

Managerial Personnel) Amendment Rules, 2016 (w.e.f. 30-06-2016) for: “sixty
lakh rupees”
Managerial Personnel) Amendment Rules, 2016 (w.e.f. 30-06-2016) for: “five
lakh rupees per month”
company within the meaning of clause (iii) of sub-rule (2)

above; and
(ix) whether any such employee is a relative of any director or
manager of the company and if so, name of such director or
manager:
Provided that the particulars of employees posted and working
in a country outside India, not being directors or their relatives,
drawing more than sixty lakh rupees per financial year or five lakh
rupees per month, as the case may be, as may be decided by the
Board, shall not be circulated to the members in the Board’s report,
but such particulars shall be filed with the Registrar of Companies
while filing the financial statement and Board Reports:
Provided further that such particulars shall be made available
to any shareholder on a specific request made by him in writing
before the date of such Annual General Meeting wherein
financial statements for the relevant financial year are proposed
to be adopted by shareholders and such particulars shall be made
available by the company within three days from the date of receipt
of such request from shareholders:
Provided also that in case of request received even after the date of
completion of Annual General Meeting, such particulars shall be
made available to the shareholders within seven days from the date
of receipt of such request.
6. 1 [Parameters for consideration of remuneration.]

The 2[omitted] or the company shall have regard to the following
matters, namely:-
(1) the Financial and operating performance of the company during
the three preceding financial years.

Managerial Personnel) Amendment Rules, 2018 (w.e.f. 12-09-2018), for the
heading: “Application to the Central Government”.
2. The words “Central Government” omitted by the Companies (Appointment and
Remuneration of Managerial Personnel) Amendment Rules, 2018 (w.e.f. 12-09-2018).
(2) the relationship between remuneration and performance.

(3) the principle of proportionality of remuneration within the company,
ideally by a rating methodology which compares the remuneration of
directors to that of other directors on the board who receives remuneration
and employees or executives of the company.
(4) whether remuneration policy for directors differs from
remuneration policy for other employees and if so, an explanation
for the difference.
(5) the securities held by the director, including options and details of
the shares pledged as at the end of the preceding financial year.
7. Fees.
(1) Every application made to the Central Government under the
provisions of Chapter XIII shall be made in Form No. MR.2 and shall
be accompanied by fee as may be specified for the purpose.
(2) 1[Omitted].
(3) Every such application seeking approval shall be made to the
Central Government within a period of ninety days from the date of
such appointment.
8. Appointment of Key Managerial Personnel.

Every listed company and every other public company having a paid-
up share capital of ten crore rupees or more shall have whole-time key
managerial personnel.
2
[8A. Appointment of Company Secretaries in companies not
covered under rule 8.
A company other than a company covered under rule 8 which has a
1. Omitted by the Companies (Appointment and Remuneration of Managerial

Personnel) Amendment Rules, 2018 (w.e.f. 12-09-2018).
2. Inserted by the Companies (Appointment and Remuneration of Managerial
Personnel) Amendment Rules, 2014 (w.e.f. 09-06-2014).
paid up share capital of five crore rupees or more shall have a whole-
time company secretary.]
9. Secretarial Audit Report.

(1)For the purposes of sub-section (1) of section 204, the other class of
companies shall be as under-
(a) every public company having a paid-up share capital of fifty
crore rupees or more; or
(b) every public company having a turnover of two hundred fifty
crore rupees or more.
(2) The format of the Secretarial Audit Report shall be in Form
No.MR.3.
10. Duties of Company Secretary.

The duties of Company Secretary shall also discharge, the following
duties, namely:-
(1) to provide to the directors of the company, collectively and
individually, such guidance as they may require, with regard
to their duties, responsibilities and powers;
(2) to facilitate the convening of meetings and attend Board,
committee and general meetings and maintain the minutes
of these meetings;
(3) to obtain approvals from the Board, general meeting, the
government and such other authorities as required under
the provisions of the Act;
(4) to represent before various regulators, and other authorities
under the Act in connection with discharge of various
duties under the Act;
(5) to assist the Board in the conduct of the affairs of the
company;
(6) to assist and advise the Board in ensuring good corporate
governance and in complying with the corporate governance

requirements and best practices; and
(7) to discharge such other duties as have been specified under
the Act or rules; and
(8) such other duties as may be assigned by the Board from time
to time.
397
CHAPTER XIV
COMPANIES (INSPECTION, INVESTIGATION
AND INQUIRY) RULES, 2014
[G.S.R. 247(E), 31st March, 2014]
In exercise of the powers conferred under sub-section (2) of Section
211, sub-section (5) of Section 211, Section 214, sub-section (3) of
Section 210, and sub-section (11) of Section 217, read with sub-
sections (1) and (2) of Section 469 of the Companies Act, 2013 (18 of
following rules, namely:–

(1) These rules may be called the Companies (Inspection, Investigation
and Inquiry) Rules, 2014.
2. Definitions.
(d) “Form’’ or “e form” means a form set forth in Annexure to
relates;
397
398 Companies (Inspection, Investigation and Inquiry) Rules, 2014

(f) ‘‘Section’’ means the section of the Act;
3. Appointment of persons having expertise in various fields.

The Central Government may appoint persons having expertise in
the fields of investigations, cyber forensics, financial accounting,
management accounting, cost accounting and any other fields as may
be necessary for the efficient discharge of Serious Fraud Investigation
Office (SFIO) functions under the Act.
4. Terms and Condition of service.

The terms and conditions of service of Director, experts and other
officers and employees of the Serious Fraud Investigation Office under
sub-section (5) of Section 211 shall be as under–
(a) the terms and conditions of appointment of Director shall be
governed by the deputation rules under the Central Staffing
Scheme of Government of India;
(b) the terms and conditions of service of experts from the
Central Government or the State Government or Union
territory Government, Public Sector Undertaking,
Autonomous Bodies and such other organizations shall be as
per the recruitment rules which may be duly notified by the
Central Government under article 309 of the Constitution of
India;
(c) the terms and conditions of service of other officers and
employees from the Central Government or the State
Government or Union Territory Government, Public
Companies (Inspection, Investigation and Inquiry) Rules, 2014 399
Sector Undertaking, Autonomous Bodies and such other

organizations shall be as per the recruitment rules which
may be duly notified by the Central Government under
article 309 of the Constitution of India;
(d) the Central Government may appoint experts or consultants
or other professionals or professional firms on contractual
basis as per the Scheme of engagement of experts or
consultants which may be duly approved by the Central
Government.
5. Security.
(1) The Central Government may before appointing an inspector under
sub-section (3) of Section 210, require the applicant to give a security
not exceeding twenty-five thousand rupees for payment of the costs
and expenses of investigation as per the criteria given below–
S. No Turnover as per previous year Amount of

balance sheet (Rs.) security (Rs.)
1 Turnover up to Rs. 50 crore Rs. 10,000
2 Turnover more than Rs. 50 crore and Rs. 15,000
up to 200 crore
3 Turnover more than Rs. 200 crore Rs. 25,000
(2) The security shall be refunded to the applicant if the investigation
results in prosecution.
6. Letter of Request, as per Section 217.

The letter of request shall be transmitted in such manner as specified by
the Ministry of Corporate Affairs.
400
CHAPTER XV
COMPANIES (COMPROMISES,
ARRANGEMENTS AND AMALGAMATIONS)
RULES, 2016
[G.S.R. 1134(E), Dated 14th December, 2016]
section 469 read with sections 230 to 233 and sections 235 to 240 of
the Companies Act, 2013 (18 of 2013), the Central Government hereby

(1) These rules may be called the Companies (Compromises,
Arrangements and Amalgamations) Rules, 2016.
(2) They shall come into force with effect from 15th December, 2016.
2. Definitions.
(1) In these rules, unless the context otherwise requires –
(b) “Annexure” means the annexure to these rules;
(c) “Form” means a form set forth in annexure “A” to these rules
which shall be used for the matter to which it relates, and
includes an electronic version thereof;
(d) “Liquidator” means the Liquidator appointed under the Act
or under the Insolvency and Bankruptcy Code, 2016 (31 of
2016);
(2) All other words and expressions used in these rules but not defined
herein, and defined in the Act or in the Companies (Specification of
Definitions Details) Rules, 2014 or in the National Company Law
400
Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 401
Tribunal Rules, 2016, shall have the same meanings respectively

3. Application for order of a meeting.

(1) An application under sub-section (1) of section 230 of the Act may
be submitted in Form no. NCLT-1 (appended in the National Company
Law Tribunal Rules, 2016) along with:-
(i) a notice of admission in Form No. NCLT-2 (appended in the
National Company Law Tribunal Rules, 2016);
(ii) an affidavit in Form No. NCLT-6 (appended in the National
Company Law Tribunal Rules, 2016);
(iii) a copy of scheme of compromise or arrangement, which
should include disclosures as per sub-section (2) of section
230 of the Act; and
(iv) fee as prescribed in the Schedule of Fees.
(2) Where more than one company is involved in a scheme in relation to
which an application under sub-rule (1) is being filed, such application
may, at the discretion of such companies, be filed as a joint-application.
(3) Where the company is not the applicant, a copy of the notice of
admission and of the affidavit shall be served on the company, or,
where the company is being wound up, on its liquidator, not less than
fourteen days before the date fixed for the hearing of the notice of
admission.
(4) The applicant shall also disclose to the Tribunal in the application
under sub-rule (1), the basis on which each class of members or
creditors has been identified for the purposes of approval of the scheme.
4. Disclosures in application made to the Tribunal for compromise

or arrangement.
Creditors Responsibility Statement. – For the purposes of sub-clause (i)
of clause (c) of sub-section (2) of section 230 of the Act, the creditor’s
responsibility statement in Form No. CAA. 1 shall be included in the
402 Companies (Compromises, Arrangements and Amalgamations) Rules, 2016
scheme of corporate debt restructuring.

Explanation : For the purpose of this rule, it is clarified that a scheme of
corporate debt restructuring as referred to in clause (c) of sub-section
(2) of section 230 of the Act shall mean a scheme that restructures or
varies the debt obligations of a company towards its creditors.
5. Directions at hearing of the application.

Upon hearing the application under sub-section (1) of section 230 of
the Act, the Tribunal shall, unless it thinks fit for any reason to dismiss
the application, give such directions as it may think necessary in respect
of the following matters:-
(a) determining the class or classes of creditors or of members
whose meeting or meetings have to be held for considering
the proposed compromise or arrangement; or dispensing
with the meeting or meetings for any class or classes of
creditors in terms of sub-section (9) of section 230;
(b) fixing the time and place of the meeting or meetings;
(c) appointing a Chairperson and scrutinizer for the meeting or
meetings to be held, as the case may be and fixing the terms
of his appointment including remuneration;
(d) fixing the quorum and the procedure to be followed at the
meeting or meetings, including voting in person or by proxy
or by postal ballot or by voting through electronic means;
Explanation : For the purposes of these rules, “voting through

electronic means” shall take place, mutatis mutandis, in
accordance with the procedure as specified in rule 20 of
Companies (Management and Administration) Rules, 2014.
(e) determining the values of the creditors or the members, or
the creditors or members of any class, as the case may be,
whose meetings have to be held;
(f) notice to be given of the meeting or meetings and the
advertisement of such notice;
(g) notice to be given to sectoral regulators or authorities as

required under sub-section (5) of section 230;
(h) the time within which the chairperson of the meeting is
required to report the result of the meeting to the Tribunal;
and
(i) such other matters as the Tribunal may deem necessary.
6. Notice of meeting.
(1) Where a meeting of any class or classes of creditors or members has
been directed to be convened, the notice of the meeting pursuant to the
order of the Tribunal to be given in the manner provided in subsection
(3) of section 230 of the Act shall be in Form No. CAA.2 and shall be
sent individually to each of the creditors or members.
(2) The notice shall be sent by the Chairperson appointed for the
meeting, or, if the Tribunal so directs, by the company (or its liquidator),
or any other person as the Tribunal may direct, by registered post or
speed post or by courier or by email or by hand delivery or any other
mode as directed by the Tribunal to their last known address at least
one month before the date fixed for the meeting.
Explanation : It is hereby clarified that the service of notice of meeting
shall be deemed to have been effected in case of delivery by post, at the
expiration of forty eight hours after the letter containing the same is
posted.
(3) The notice of the meeting to the creditors and members shall be
accompanied by a copy of the scheme of compromise or arrangement
and a statement disclosing the following details of the compromise
or arrangement, if such details are not already included in the said
scheme:-
(i) details of the order of the Tribunal directing the calling,
convening and conducting of the meeting:-
(a) date of the Order;
(b) date, time and venue of the meeting.
(ii) details of the company including:

(a) Corporate Identification Number (CIN) or Global
Location Number (GLN) of the company;
(b) Permanent Account Number (PAN);
(c) name of the company;
(d) date of incorporation;
(e) type of the company (whether public or private or
one-person company);
(f) registered office address and e-mail address;
(g) summary of main object as per the memorandum
of association; and main business carried on by the
company;
(h) details of change of name, registered office and objects
of the company during the last five years;
(i) name of the stock exchange (s) where securities of the
company are listed, if applicable;
(j) details of the capital structure of the company
including authorised, issued, subscribed and paid up
share capital; and
(k) names of the promoters and directors along with their
addresses.
(iii) if the scheme of compromise or arrangement relates to more
than one company, the fact and details of any relationship
subsisting between such companies who are parties to such
scheme of compromise or arrangement, including holding,
subsidiary or of associate companies;
(iv) the date of the board meeting at which the scheme was
approved by the board of directors including the name of the
directors who voted in favour of the resolution, who voted
against the resolution and who did not vote or participate on
such resolution;
(v) explanatory statement disclosing details of the scheme of

compromise or arrangement including:-
(a) parties involved in such compromise or arrangement;
(b) in case of amalgamation or merger, appointed date,
effective date, share exchange ratio (if applicable) and
other considerations, if any;
(c) summary of valuation report (if applicable) including
basis of valuation and fairness opinion of the
registered valuer, if any, and the declaration that the
valuation report is available for inspection at the
registered office of the company;
(d) details of capital or debt restructuring, if any;
(e) rationale for the compromise or arrangement;
(f) benefits of the compromise or arrangement as
perceived by the Board of directors to the company,
members, creditors and others (as applicable);
(g) amount due to unsecured creditors.
(vi) disclosure about the effect of the compromise or arrangement
on:
(a) key managerial personnel;
(b) directors;
(c) promoters;
(d) non-promoter members;
(e) depositors;
(f) creditors;
(g) debenture holders;
(h) deposit trustee and debenture trustee;
(i) employees of the company:
(vii) Disclosure about effect of compromise or arrangement on

material interests of directors, Key Managerial Personnel
(KMP) and debenture trustee.
Explanation – For the purposes of these rules it is clarified

that-
(a) the term ‘interest’ extends beyond an interest in the
shares of the company, and is with reference to the
proposed scheme of compromise or arrangement.
(b) the valuation report shall be made by a registered
valuer, and till the registration of persons as valuers
is prescribed under section 247 of the Act, the
valuation report shall be made by an independent
merchant banker who is registered with the Securities
and Exchange Board or an independent chartered
accountant in practice having a minimum experience
of ten years.
(viii) investigation or proceedings, if any, pending against the
company under the Act.
(ix) details of the availability of the following documents for
obtaining extract from or for making or obtaining copies of
or for inspection by the members and creditors, namely:
(a) latest audited financial statements of the company
including consolidated financial statements;
(b) copy of the order of Tribunal in pursuance of which
the meeting is to be convened or has been dispensed
with;
(c) copy of scheme of compromise or arrangement;
(d) contracts or agreements material to the compromise
or arrangement;
(e) the certificate issued by Auditor of the company
to the effect that the accounting treatment, if
any, proposed in the scheme of compromise or

arrangement is in conformity with the Accounting
Standards prescribed under Section 133 of the
Companies Act, 2013; and
(f) such other information or documents as the Board
or Management believes necessary and relevant for
making decision for or against the scheme;
(x) details of approvals, sanctions or no-objection(s), if any, from
regulatory or any other governmental authorities required,
received or pending for the proposed scheme of compromise
or arrangement.
(xi) a statement to the effect that the persons to whom the notice
is sent may vote in the meeting either in person or by proxies,
or where applicable, by voting through electronic means.
Explanation – For the purposes of this rule, disclosure

required to be made by a company shall be made in respect
of all the companies, which are part of the compromise or
arrangement.
7. Advertisement of the notice of the meeting.

The notice of the meeting under sub-section (3) of Section 230
of the Act shall be advertised in Form No. CAA.2 in at least one
English newspaper and in at least one vernacular newspaper having
wide circulation in the State in which the registered office of the
company is situated, or such newspapers as may be directed by the
Tribunal and shall also be placed, not less than thirty days before
the date fixed for the meeting, on the website of the company (if
any) and in case of listed companies also on the website of the
SEBI and the recognized stock exchange where the securities of the
company are listed:
Provided that where separate meetings of classes of creditors or
members are to be held, a joint advertisement for such meetings may
be given.
8. Notice to statutory authorities.

(1) For the purposes of sub-section (5) of section 230 of the Act, the
notice shall be in Form No. CAA.3, and shall be accompanied with a
copy of the scheme of compromise or arrangement, the explanatory
statement and the disclosures mentioned under rule 6, and shall be
sent to –
(i) the Central Government, the Registrar of Companies, the
Income-tax authorities, in all cases;
(ii) the Reserve Bank of India, the Securities and Exchange
Board of India, the Competition Commission of India, and
the stock exchanges, as may be applicable ;
(iii) other sectoral regulators or authorities, as required by
Tribunal.
(2) The notice to the authorities mentioned in sub-rule (1) shall be sent
forthwith, after the notice is sent to the members or creditors of the
company, by registered post or by speed post or by courier or by hand
delivery at the office of the authority.
(3) If the authorities referred to under sub-rule (1) desire to make any
representation under sub-section (5) of section 230, the same shall be
sent to the Tribunal within a period of thirty days from the date of receipt
of such notice and copy of such representation shall simultaneously
be sent to the concerned companies and in case no representation is
received within the stated period of thirty days by the Tribunal, it shall
be presumed that the authorities have no representation to make on the
proposed scheme of compromise or arrangement.
9. Voting.
The person who receives the notice may within one month from the
date of receipt of the notice vote in the meeting either in person or
through proxy or through postal ballot or through electronic means to
the adoption of the scheme of compromise and arrangement.
Explanation : For the purposes of voting by persons who receive the
notice as shareholder or creditor under this rule–
(a) “shareholding” shall mean the shareholding of the members

of the class who are entitled to vote on the proposal; and
(b) “outstanding debt” shall mean all debt owed by the company
to the respective class or classes of creditors that remains
outstanding as per the latest audited financial statement,
or if such statement is more than six months old, as per
provisional financial statement not preceding the date of
application by more than six months.
10. Proxies.
(1) Voting by proxy shall be permitted, provided a proxy in the
prescribed form duly signed by the person entitled to attend and vote
at the meeting is filed with the company at its registered office not later
than 48 hours before the meeting.
(2) Where a body corporate which is a member or creditor (including
holder of debentures) of a company authorises any person to act as
its representative at the meeting, of the members or creditors of the
company, or of any class of them, as the case may be, a copy of the
resolution of the Board of Directors or other governing body of such
body corporate authorising such person to act as its representative at
the meeting, and certified to be a true copy by a director, the manager,
the secretary, or other authorised officer of such body corporate shall
be lodged with the company at its registered office not later than 48
hours before the meeting.
(3) No person shall be appointed as a proxy who is a minor.
(4) The proxy of a member or creditor blind or incapable of writing
may be accepted if such member or creditor has attached his signature
or mark thereto in the presence of a witness who shall add to his
signature his description and address :
Provided that all insertions in the proxy are in the handwriting of the
witness and such witness shall have certified at the foot of the proxy
that all such insertions have been made by him at the request and in
the presence of the member or creditor before he attached his signature
or mark.
(5) The proxy of a member or creditor who does not know English may
be accepted if it is executed in the manner prescribed in the preceding
sub-rule and the witness certifies that it was explained to the member
or creditor in the language known to him, and gives the member’s or
creditor’s name in English below the signature.
11. Copy of compromise or arrangement to be furnished by the

company.
Every creditor or member entitled to attend the meeting shall be
furnished by the company, free of charge, within one day on a
requisition being made for the same, with a copy of the scheme of the
proposed compromise or arrangement together with a copy of the
statement required to be furnished under section 230 of Act.
12. Affidavit of service.

(1) The Chairperson appointed for the meeting of the company or
other person directed to issue the advertisement and the notices of the
meeting shall file an affidavit before the Tribunal not less than seven
days before the date fixed for the meeting or the date of the first of the
meetings, as the case may be, stating that the directions regarding the
issue of notices and the advertisement have been duly complied with.
(2) In case of default under sub-rule (1), the application along with
copy of the last order issued shall be posted before the Tribunal for such
orders as it may think fit to make.
13. Result of the meeting to be decided by voting.

(1) The voting at the meeting or meetings held in pursuance of the
directions of the Tribunal under Rule 5 on all resolutions shall take
place by poll or by voting through electronic means.
(2) The report of the result of the meeting under sub - rule (1) shall be
in Form No. CAA. 4 and shall state accurately the number of creditors
or class of creditors or the number of members or class of members,
as the case may be, who were present and who voted at the meeting
either in person or by proxy, and where applicable, who voted through
electronic means, their individual values and the way they voted.
14. Report of the result of the meeting by Chairperson.

The Chairperson of the meeting (or where there are separate meetings,
the Chairperson of each meeting) shall, within the time fixed by the
Tribunal, or where no time has been fixed, within three days after the
conclusion of the meeting, submit a report to the Tribunal on the result
of the meeting in Form No. CAA.4.
15. Petition for confirming compromise or arrangement.

(1) Where the proposed compromise or arrangement is agreed to by
the members or creditors or both as the case may be, with or without
modification, the company (or its liquidator), shall, within seven days
of the filing of the report by the Chairperson, present a petition to the
Tribunal in Form No. CAA.5 for sanction of the scheme of compromise
or arrangement.
(2) Where a compromise or arrangement is proposed for the purposes
of or in connection with scheme for the reconstruction of any company
or companies, or for the amalgamation of any two or more companies,
the petition shall pray for appropriate orders and directions under
section 230 read with section 232 of the Act.
(3) Where the company fails to present the petition for confirmation
of the compromise or arrangement as aforesaid, it shall be open to any
creditor or member as the case may be, with the leave of the Tribunal,
to present the petition and the company shall be liable for the cost
thereof.
16. Date and notice of hearing.

(1) The Tribunal shall fix a date for the hearing of the petition, and
notice of the hearing shall be advertised in the same newspaper
in which the notice of the meeting was advertised, or in such other
newspaper as the Tribunal may direct, not less than ten days before the
date fixed for the hearing.
(2) The notice of the hearing of the petition shall also be served by
the Tribunal to the objectors or to their representatives under sub-
section (4) of section 230 of the Act and to the Central Government
and other authorities who have made representation under rule 8 and
have desired to be heard in their representation.
17. Order on petition.

(1) Where the Tribunal sanctions the compromise or arrangement,
the order shall include such directions in regard to any matter or such
modifications in the compromise or arrangement as the Tribunal
may think fit to make for the proper working of the compromise or
arrangement.
(2) The order shall direct that a certified copy of the same shall be filed
with the Registrar of Companies within thirty days from the date of
the receipt of copy of the order, or such other time as may be fixed by
the Tribunal.
(3) The order shall be in Form No. CAA. 6, with such variations as may
be necessary.
18. Application for directions under section 232 of the Act.

(1) Where the compromise or arrangement has been proposed for the
purposes of or in connection with a scheme for the reconstruction
of any company or companies or the amalgamation of any two or
more companies, and the matters involved cannot be dealt with or
dealt with adequately on the petition for sanction of the compromise
or arrangement, an application shall be made to the Tribunal under
section 232 of the Act, by a notice of admission supported by an
affidavit for directions of the Tribunal as to the proceedings to be taken.
(2) Notice of admission in such cases shall be given in such manner and
to such persons as the Tribunal may direct.
19. Directions at hearing of application.

Upon the hearing of the notice of admission given under rule 18 or
upon any adjourned hearing thereof, the Tribunal may make such
order or give such directions as it may think fit, as to the proceedings
to be taken for the purpose of reconstruction or amalgamation, as the
case may be, including, where necessary, an inquiry as to the creditors

of the transferor company and the securing of the debts and claims of
any of the dissenting creditors in such manner as the Tribunal may
think just and appropriate.
20. Order under section 232 of the Act.

An order made under section 232 read with section 230 of the Act shall
be in Form No.CAA.7 with such variation as the circumstances may
require
21. Statement of compliance in mergers and amalgamations.

For the purpose of sub-section (7) of section 232 of the Act, every
company in relation to which an order is made under sub-section (3)
of section 232 of the Act shall until the scheme is fully implemented,
file with the Registrar of Companies, the statement in Form No. CAA.8
along with such fee as specified in the Companies (Registration Offices
and Fees) Rules, 2014 within two hundred and ten days from the end
of each financial year.
22. Report on working of compromise or arrangement.

At any time after issuing an order sanctioning the compromise or
arrangement, the Tribunal may, either on its own motion or on the
application of any interested person, make an order directing the
company or where the company is being wound-up, its liquidator, to
submit to the Tribunal within such time as the Tribunal may fix, a
report on the working of the said compromise or arrangement and on
consideration of the report, the Tribunal may pass such orders or give
such directions as it may think fit.
23. Liberty to apply.

(1) The company, or any creditor or member thereof, or in case of a
company which is being wound-up, its liquidator, may, at any time after
the passing of the order sanctioning the compromise or arrangement,
apply to the Tribunal for the determination of any question relating to
the working of the compromise or arrangement.
(2) The application shall in the first instance be posted before the
Tribunal for directions as to the notices and the advertisement, if any,
to be issued, as the Tribunal may direct.
(3) The Tribunal may, on such application, pass such orders and give
such directions as it may think fit in regard to the matter, and may
make such modifications in the compromise or arrangement as it may
consider necessary for the proper working thereof, or pass such orders
as it may think fit in the circumstances of the case.
24. Liberty of the Tribunal.

(1) At any time during the proceedings, if the Tribunal hearing a
petition or application under these Rules is of the opinion that the
petition or application or evidence or information or statement is
required to be filed in the form of affidavit, the same may be ordered by
the Tribunal in the manner as the Tribunal may think fit.
(2) The Tribunal may pass any direction(s) or order or dispense with
any procedure prescribed by these rules in pursuance of the object of
the provisions for implementation of the scheme of arrangement or
compromise or restructuring or otherwise practicable except on those
matters specifically provided in the Act.
25. Merger or Amalgamation of certain companies.

(1) The notice of the proposed scheme, under clause (a) of subsection
(1) of section 233 of the Act, to invite objections or suggestions from
the Registrar and Official Liquidator or persons affected by the scheme
shall be in Form No. CAA.9.
(2) For the purposes of clause (c) of sub-section (1) of section 233 of the
Act the declaration of solvency shall be filed by each of the companies
involved in the scheme of merger or amalgamation in Form No. CAA.10
and Fees) Rules, 2014, before convening the meeting of members and
creditors for approval of the scheme.
(3) For the purposes of clause (b) and (d) of sub-section (1) of section
233 of the Act, the notice of the meeting to the members and creditors
shall be accompanied by –
(a) a statement, as far as applicable, referred to in sub-section
(3) of section 230 of the Act read with sub-rule (3) of rule 6
hereof;
(b) the declaration of solvency made in pursuance of clause
(c) of sub-section (1) of section 233 of the Act in Form No.
CAA.10;
(c) a copy of the scheme.
(4)(a) For the purposes of sub-section (2) of section 233 of the Act, the
transferee company shall, within seven days after the conclusion of the
meeting of members or class of members or creditors or class of creditors,
file a copy of the scheme as agreed to by the members and creditors,
along with a report of the result of each of the meetings in Form No.
CAA.11 with the Central Government, along with the fees as provided
under the Companies (Registration Offices and Fees) Rules, 2014.
(b) Copy of the scheme shall also be filed, along with Form No. CAA.
11 with –
(i) the Registrar of Companies in Form No. GNL-1 along with
fees provided under the Companies (Registration Offices
and Fees) Rules, 2014; and
(ii) the Official Liquidator through hand delivery or by registered
post or speed post.
(5) Where no objection or suggestion is received to the scheme from
the Registrar of Companies and Official Liquidator or where the
objection or suggestion of Registrar and Official Liquidator is deemed
to be not sustainable and the Central Government is of the opinion that
the scheme is in the public interest or in the interest of creditors, the
Central Government shall issue a confirmation order of such scheme
of merger or amalgamation in Form No. CAA.12.
(6) Where objections or suggestions are received from the Registrar of
Companies or Official Liquidator and the Central Government is of
the opinion, whether on the basis of such objections or otherwise, that

the scheme is not in the public interest or in the interest of creditors, it
may file an application before the Tribunal in Form No. CAA.13 within
sixty days of the receipt of the scheme stating its objections or opinion
and requesting that Tribunal may consider the scheme under section
232 of the Act.
(7) The confirmation order of the scheme issued by the Central
Government or Tribunal under sub-section (7) of section 233 of
the Act, shall be filed, within thirty days of the receipt of the order
of confirmation, in Form INC-28 along with the fees as provided
under Companies (Registration Offices and Fees) Rules, 2014 with the
Registrar of Companies having jurisdiction over the transferee and
transferor companies respectively.
(8) For the purpose of this rule, it is clarified that with respect to
schemes of arrangement or compromise falling within the purview
of section 233 of the Act, the concerned companies may, at their
discretion, opt to undertake such schemes under sections 230 to 232 of
the Act, including where the condition prescribed in clause (d) of sub-
section (1) of section 233 of the Act has not been met.
[25A. Merger or amalgamation of a foreign company with a

1
Company and vice versa.

(1) A foreign company incorporated outside India may merge with
an Indian company after obtaining prior approval of Reserve Bank of
India and after complying with the provisions of sections 230 to 232 of
the Act and these rules.
(2)(a) A company may merge with a foreign company incorporated
in any of the jurisdictions specified in Annexure B after obtaining
prior approval of the Reserve Bank of India and after complying with
provisions of sections 230 to 232 of the Act and these rules.
(b) The transferee company shall ensure that valuation is conducted
1. Inserted by the Companies (Compromises, Arrangements and

Amalgamations) Amendment Rules, 2017 (w.e.f. 13-04-2017)
by valuers who are members of a recognised professional body in the

jurisdiction of the transferee company and further that such valuation
is in accordance with internationally accepted principles on accounting
and valuation. A declaration to this effect shall be attached with the
application made to Reserve Bank of India for obtaining its approval
under clause (a) of this sub-rule.
(3) The concerned company shall file an application before the Tribunal
as per provisions of section 230 to section 232 of the Act and these rules
after obtaining approvals specified in sub-rule (1) and sub-rule (2), as
the case may be.
Explanation 1 – For the purposes of this rule the term “company” means
a company as defined in clause (20) of section 2 of the Act and the term
“foreign company” means a company or body corporate incorporated
outside India whether having a place of business in India or not:
Explanation 2 – For the purposes of this rule, it is clarified that no
amendment shall be made in this rule without consultation of the
Reserve Bank of India.]
26. Notice to dissenting shareholders for acquiring the shares.

For the purposes of sub-section (1) of section 235 of the Act, the
transferee company shall send a notice to the dissenting shareholder(s)
of the transferor company, in Form No. CAA.14 at the last intimated
address of such shareholder, for acquiring the shares of such dissenting
shareholders.
27. Determination of price for purchase of minority shareholding.

For the purposes of sub-section (2) of section 236 of the Act, the
registered valuer shall determine the price (hereinafter called as offer
price) to be paid by the acquirer, person or group of persons referred
to in sub-section (1) of section 236 of the Act for purchase of equity
shares of the minority shareholders of the company, in accordance with
the following rules:-
(1) In the case of a listed company, –
(i) the offer price shall be determined in the manner as may

be specified by the Securities and Exchange Board of India
under the relevant regulations framed by it, as may be
applicable; and
(ii) the registered valuer shall also provide a valuation report on
the basis of valuation addressed to the Board of directors of
the company giving justification for such valuation.
(2) In the case of an unlisted company and a private company,
(i) the offer price shall be determined after taking into account
the following factors:-
(a) the highest price paid by the acquirer, person or group
of persons for acquisition during last twelve months;
(b) the fair price of shares of the company to be
determined by the registered valuer after taking into
account valuation parameters including return on net
worth, book value of shares, earning per share, price
earning multiple vis-à-vis the industry average, and
such other parameters as are customary for valuation
of shares of such companies; and
(ii) the registered valuer shall also provide a valuation report on
the basis of valuation addressed to the board of directors of
the company giving justification for such valuation.
28. Circular containing scheme of amalgamation or merger.

(1) For the purposes of clause (a) of sub-section (1) of section 238
of the Act, every circular containing the offer of scheme or contract
involving transfer of shares or any class of shares and recommendation
to the members of the transferor company by its directors to accept
such offer, shall be accompanied by such information as set out in
Form No. CAA.15.
(2) The circular shall be presented to the Registrar for registration.
29. Appeal under sub-section (2) of section 238 of the Act.

Any aggrieved party may file an appeal against the order of the Registrar
of Companies refusing to register any circular under sub-section (2) of
section 238 of the Act and the said appeal shall be in the Form No.
NCLT.9 (appended in the National Company Law Tribunal Rules,
2016) supported with an affidavit in the Form No. NCLT.6 (appended
in the National Company Law Tribunal Rules, 2016).
SCHEDULE OF FEES
S. Sections of the Rule Nature of Fees

No. Companies Act, Number application or
2013 petition
1 Sub-section (1) 3(1) Application for Rs.
of section 230 compromise 5,000/-
arrangement and
Amalgamation.
2 Sub-section (2) Application Rs.
of section 235 by dissenting 1,000/-
shareholders.
3 Sub-section (2) 29 Appeal against Rs.
of section 238 order of Registrar 2,000/-
refusing to register
any circular.
1
[Annexure B
Jurisdictions referred to in clause (a) of sub-rule (2) of rule 25A
Jurisdictions –
(i) whose securities market regulator is a signatory to
International Organization of Securities Commission’s
1. Inserted by the the Companies (Compromises, Arrangements and

Amalgamations) Amendment Rules, 2017 Dated 13th April, 2017.
Multilateral Memorandum of Understanding (Appendix

A Signatories) or a signatory to bilateral Memorandum of
Understanding with SEBI, or
(ii) whose central bank is a member of Bank for International
Settlements (BIS), and
(iii) a jurisdiction, which is not identified in the public statement
of Financial Action Task Force (FATF) as:
(a) a jurisdiction having a strategic Anti-Money
Laundering or Combating the Financing of Terrorism
deficiencies to which counter measures apply; or
(b) a jurisdiction that has not made sufficient progress in
addressing the deficiencies or has not committed to
an action plan developed with the Financial Action
Task Force to address the deficiencies.”]
421
COMPANIES (MEDIATION AND

CONCILIATION) RULES, 2016
[G.S.R. 877 (E), Dated 9th September, 2016]
In exercise of the powers conferred under section 442 read with section
469 of the Companies Act, 2013 (18 of 2013), the Central Government
hereby makes the following rules, namely :

(1) These rules may be called the Companies (Mediation and
Conciliation) Rules, 2016.
Official Gazette.
2. Definitions.
(b) “Regional Director” means the person appointed by the
a Regional Director ;
(c) “Annexure” means the annexure attached to these rules ;
(d) “Form” or “e-Form” means a form set forth in the Annexure
which shall be used for the matter to which it relates ;
(e) “Panel” means the Mediation and Conciliation Panel.
Details) Rules, 2014 shall have the meanings respectively assigned to
them in the Act or the rules.
3. Panel of mediators or conciliators .

(1) Regional Director shall prepare a panel of experts willing and
421
422 Companies (Mediation and Conciliation) Rules, 2016
eligible to be appointed as mediators or conciliators in the respective

regions and such panel shall be placed on the website of the Ministry
of Corporate Affairs or on any other website as may be notified by the
Central Government.
(2) The Regional Director may invite applications from persons
interested in getting empanelled as mediator or conciliator and
possessing the requisite qualifications specified in Rule 4.
(3) A person who intends to get empanelled as mediator or conciliator
and possesses the requisite qualifications shall apply to the Regional
Director in Form MDC-1.
(4) Application received under sub-rule (3), if rejected by the Regional
Director, the Regional Director shall record the reasons in writing for
the same.
(5) The Regional Director shall invite applications from persons
interested in getting empanelled as mediator orconciliator every year
during the month of February and update the Panel which shall be
effective from 1st of April ofevery year:
Provided that for Financial Year 2016-17, the Regional Director may
call for applications from the persons interested in getting empanelled
as mediator or conciliator, within 60 days from the date of publication
of these rules and prepare the panel for the current financial year
within a period of 30 days.
4. Qualifications for empanelment.

A person shall not be qualified for being empanelled as mediator or
conciliator unless he –
(a) has been a Judge of the Supreme Court of India ; or
(b) has been a Judge of a High Court ; or
(c) has been a District and Sessions Judge ; or
(d) has been a Member or Registrar of a Tribunal constituted at
the National level under any law for the time being in force ;
or
Companies (Mediation and Conciliation) Rules, 2016 423
(e) has been an officer in the Indian Corporate Law Service or

Indian Legal Service with fifteen years experience ; or
(f) is a qualified legal practitioner for not less than ten years ; or
(g) is or has been a professional for at least fifteen years of
continuous practice as Chartered Accountant or Cost
Accountant or Company Secretary ; or
(h) has been a Member or President of any State Consumer
Forum ; or
(i) is an expert in mediation or conciliation who has successfully
undergone training in mediation or conciliation.
5. Disqualifications for empanelment.

A person shall be disqualified for being empanelled as mediator or
conciliator, if he –
(a) is an undischarged insolvent or has applied to be adjudicated
as an insolvent and his application is pending ;
(b) has been convicted for an offence which, in the opinion of
the Central Government, involves moral turpitude ;
(c) has been removed or dismissed from the service of the
Government or the Corporation owned or controlled by the
Government ;
(d) has been punished in any disciplinary proceeding, by the
appropriate disciplinary authority ; or
(e) has, in the opinion of the Central Government, such financial
or other interest in the subject matter of dispute or is related
to any of the parties, as is likely to affect prejudicially the
discharge by him of his functions as a mediator or conciliator.
6. Application for appointment of Mediator or Conciliator and his

appointment.
(1) (a) Parties concern may agree on the name of the sole mediator or
conciliator for mediation or conciliation between them;
(b) Where, there are two or more sets of parties and are unable to
agree on a sole mediator or conciliator, the Central Government or the
Tribunal or the Appellate Tribunal may ask each party to nominate the
mediator or conciliator or the Central Government or the Tribunal or
the Appellate Tribunal may appoint the mediator or conciliator, as may
be deemed necessary for mediation or conciliation between the parties.
(2) The application to the Central Government or the Tribunal or
the Appellate Tribunal, as the case may be, for referring the matter
pertaining to any proceeding pending before it for mediation or
conciliation shall be in Form MDC-2 and shall be accompanied with a
fee of one thousand rupees.
(3) On receipt of an application under sub-rule (2), the Central
Government or the Tribunal or the Appellate Tribunal shall appoint
one or more experts from the panel.
(4) The Central Government or the Tribunal or the Appellate Tribunal,
as the case may be, before which any proceeding is pending may,
suomotu, refer any matter pertaining to such proceeding to such
number of experts from the Mediation and Conciliation Panel, if it
deems fit in the interest of parties.
7. Deletion from the Panel.

The Regional Director may by recording reasons in writing and after
giving him an opportunity of being heard, remove any person from
the Panel.
8. Withdrawing name from Panel.

Any person who intends to withdraw his name from the Mediation and
Conciliation Panel may make an application to the Regional Director
indicating the reasons for such withdrawal and the Regional Director
shall take a decision on such application within fifteen days of receipt
of such application and update the Panel accordingly.
9. Duty of mediator or conciliator to disclose certain facts.

(1) It shall be the duty of a mediator or conciliator to disclose to the
Central Government or the Tribunal or the Appellate Tribunal, as

the case may be, about any circumstances which may give rise to a
reasonable doubt as to his independence or impartiality in carrying
out his functions.
(2) Every mediator or conciliator shall from the time of his appointment
and throughout continuance of the mediation or conciliation
proceedings, without any delay, disclose to the parties about existence
of any circumstance referred to in sub-rule (1).
10. Withdrawal of appointment.

The Central Government or the Tribunal or the Appellate Tribunal
as the case may be, upon receiving any disclosure furnished by the
mediator or conciliator under rule 9, or after receiving any other
information from a party or other person in any proceeding which is
pending and on being satisfied that such disclosures or information
has raised a reasonable doubt as to the independence or impartiality
of such mediator or conciliator, may withdraw his appointment and in
his place, appoint any other mediator or conciliator in that proceeding :
Provided that the mediator or conciliator may, offer to withdraw
himself from such proceeding and request the Central Government or
the Tribunal or the Appellate Tribunal as the case may be to appoint
any other mediator or conciliator.
11. Procedure for disposal of matters.

(1) For the purposes of mediation and conciliation, the mediator or
conciliator shall follow the following procedure, namely :-
(i) he shall fix, in consultation with the parties, the dates and
the time of each mediation or conciliation session, where all
parties have to be present ;
(ii) he shall hold the mediation or conciliation at the place
decided by the Central Government or the Tribunal or the
Appellate Tribunal, as the case may be, or such other place
where the parties and the mediator or conciliator jointly
agree ;
(iii) he may conduct joint or separate meetings with the parties ;

(iv) each party shall, ten days before a session, provide to the
mediator or conciliator a brief memorandum setting forth
the issues, which need to be resolved, and his position
in respect of those issues and all information reasonably
required for the mediator or conciliator to understand the
issue and a copy of such memorandum shall also be given to
the opposite party or parties:
Provided that in suitable or appropriate cases, the above
mentioned period may be reduced at the discretion of the
mediator or conciliator;
(v) each party shall furnish to the mediator or conciliator such
other information as may be required by him in connection
with the issues to be resolved.
(2) Where there is more than one mediator or conciliator, the mediator
or conciliators may first concur with the party that agreed to nominate
him and thereafter interact with the other mediator or conciliator, with
a view to resolve the dispute.
12. Mediator or Conciliator not bound by the Indian Evidence Act,

1872 or the Code of Civil Procedure, 1908.
The mediator or conciliator shall not be bound by the Indian Evidence
Act, 1872 or the Code of Civil Procedure, 1908 while disposing the
matter, but shall be guided by the principles of fairness and natural
justice, having regard to the rights and obligations of the parties, usages
of trade, if any, and the circumstances of the dispute.
13. Representation of parties.

The parties shall ordinarily be present personally or through an
authorised attorney at the sessions or meetings notified by the mediator
or conciliator:
Provided that the parties may be represented by an authorised person
or counsel with the permission of the mediator or conciliator in such
sessions or meetings and the mediator or conciliator or the Central

Government or the Tribunal or the Appellate Tribunal as the case may
be, shall be entitled to direct or ensure the presence of any party to
appear in person:
Provided further that the party not residing in India may, with the
permission of the mediator or conciliator, be represented by his or her
authorised representative at the sessions or meetings.
14. Consequences of non-attendance of parties at sessions or

meetings on due dates.
If a party fails to attend a session or a meeting fixed by the mediator
or conciliator deliberately or wilfully for two consecutive times, the
mediation or conciliation shall be deemed to have failed and mediator
or conciliator shall report the matter to the Central Government or the
Tribunal or the Appellate Tribunal, as the case may be.
15. Administrative assistance.

In order to facilitate the conduct of mediation or conciliation
proceedings, the mediator or conciliator with the consent of the parties,
may arrange for administrative assistance by a suitable institution or
person.
16. Offer of settlement by parties.

(1) Any party to the proceeding may, “without prejudice” offer a
settlement to the other party at any stage of the proceedings, with a
notice to the mediator or conciliator.
(2) Any party to the proceeding may make a, “with prejudice” offer
to the other party at any stage of the proceedings with a notice to the
mediator or conciliator.
17. Role of Mediator or Conciliator.

The mediator or conciliator shall attempt to facilitate voluntary
resolution of the dispute by the parties, and communicate the view
of each party to the other, assist them in identifying issues, reducing
misunderstandings, clarifying priorities, exploring areas of compromise

and generating options in an attempt to resolve the dispute, emphasising
that it is the responsibility of the parties to take decision which affect
them and he shall not impose any terms of settlement on the parties:
Provided that on consent of both the parties, the mediator or
conciliator may impose such terms and conditions on the parties for
early settlement of the dispute as he may deem fit.
18. Parties alone responsible for taking decision.

The parties shall be made to understand that the mediator or conciliator
facilitates in arriving a decision to resolve the dispute and that he shall
not and cannot impose any settlement nor the mediator or conciliator
give any assurance that the mediation or conciliation shall result in
a settlement and the mediator or conciliator shall not impose any
decision on the parties.
19. Time limit for completion of mediation or conciliation.

(1) The process for any mediation or conciliation under these rules
shall be completed within a period of three months from the date of
appointment of expert or experts from the Panel.
(2) On the expiry of three months from the date of appointment of
expert from the Panel, the mediation or conciliation process shall stand
terminated.
(3) In case of mediation or conciliation in relation to any proceeding
before Tribunal or Appellate Tribunal which could not be completed
within three months, the Tribunal or as the case may be, the Appellate
Tribunal, may on the application of mediator or conciliator or any
of the party to the proceedings, extend the period for mediation or
conciliation by such period not exceeding three months.
20. Parties to act in good faith.

All the parties shall commit to participate in the proceedings in good
faith with the intention to settle the dispute.
21. Confidentiality, disclosure and inadmissibility of information.

(1) When a mediator or conciliator receives factual information
concerning the dispute from any party, he shall disclose the substance
of that information to the other party, so that the other party may
have an opportunity to present such explanation as it may consider
appropriate :
Provided that when a party gives information to the mediator or
conciliator subject to a specific condition that the information may be
kept confidential, the mediator or conciliator shall not disclose that
information to the other party.
(2) The receipt or perusal, or preparation of records, reports or
other documents by the mediator or conciliator, while serving in
that capacity shall be confidential and the mediator or conciliator
shall not be compelled to divulge information regarding those
documents nor as to what transpired during the mediation or
conciliation before the Central Government or the Tribunal or the
Appellate Tribunal or as the case may be, or any other authority or
any person or group of persons.
(3) The parties shall maintain confidentiality in respect of events that
transpired during the mediation and conciliation and shall not rely on
or introduce the said information in other proceedings as to –
(i) views expressed by a party in the course of the mediation or
conciliation proceedings ;
(ii) documents obtained during the mediation or conciliation
which were expressly required to be treated as confidential
or other notes, drafts or information given by the parties or
the mediator or conciliator.
(iii) proposals made or views expressed by the mediator or
conciliator ;
(iv) admission made by a party in the course of mediation or
conciliation proceedings.
(4) There shall be no audio or video recording of the mediation or

conciliation proceedings.
(5) No statement of parties or the witnesses shall be recorded by the
mediator or conciliator.
22. Privacy.
The mediation or conciliation sessions or meetings shall be conducted
in privacy where the persons as mentioned in rule 13 shall be entitled to
represent parties but other persons may attend only with the permission of
the parties and with the consent of the mediator or conciliator.

No mediator or conciliator shall be held liable for anything, which is
done or omitted to be done by him, in good faith during the mediation
or conciliation proceedings for civil or criminal action nor shall be
summoned by any party to the suit or proceeding to appear before the
Central Government or the Tribunal or the Appellate Tribunal, as the
case may be, to testify regarding information received by him or action
taken by him or in respect of drafts or records prepared by him or
shown to him during the mediation or conciliation proceedings.
24. Communication between mediator or conciliator and the

Central Government or the Tribunal or the Appellate Tribunal.
In order to preserve the confidence of parties in the Central
Government or the Tribunal or the Appellate Tribunal as the case may
be and the neutrality of the mediator or conciliator, there shall be no
communication between the mediator or conciliator and the Central
Government or the Tribunal or the Appellate Tribunal, as the case may
be, in the subject matter :
Provided that, if any communication between the mediator or
conciliator and the Central Government or the Tribunal or the
Appellate Tribunal, as the case may be, is necessary, it shall be in writing
and copies of the same shall be given to the parties or the authorised
representative :
Provided further that communication between the mediator or

conciliator and the Central Government or the Tribunal or the Appellate
Tribunal, as the case may be, shall be limited to communication by the
mediator or conciliator:
(i) about the failure of the party to attend ;
(ii) about the consent of the parties ;
(iii) about his assessment that the case is not suited for settlement
through the mediation or conciliation;
(iv) about settlement of dispute between the parties.
25. Settlement agreement.

(1) Where an agreement is reached between the parties in regard to
all the issues or some of the issues in the proceeding, the same shall
be reduced to writing and signed by the parties and if any counsel has
represented the parties, the conciliator or mediator may also obtain the
signature of such counsel on the settlement agreement.
(2) The agreement of the parties so signed shall be submitted to the
mediator or conciliator who shall, with a covering letter signed by him,
forward the same to the Central Government or the Tribunal or the
Appellate Tribunal, as the case may be.
(3) Where no agreement is reached at between the parties, before the
time limit specified in rule 19, or where the mediator or conciliator is
of the view that no settlement is possible, he shall report the same to
the Central Government or the Tribunal or the Appellate Tribunal, as
the case may be, in writing.
26. Fixing date for recording settlement and passing order.
(1) The Central Government or the Tribunal or the Appellate Tribunal
as the case may be, shall fix a date of hearing normally within fourteen
days from the date of receipt of the report of the mediator or conciliator
under rule 25 and on such date of hearing, if the Central Government
or the Tribunal or the Appellate Tribunal, as the case may be, is satisfied
that the parties have settled their dispute, it shall pass an order in
accordance with terms thereof.
(2) If the settlement disposes of only certain issues arising in the

proceeding, on the basis of which any order is passed as stated in sub-
rule (1), the Central Government or the Tribunal or the Appellate
Tribunal, as the case may be,shall proceed further to decide the
remaining issues.
27. Expenses of the mediation and conciliation.

(1) At the time of referring the matter to the mediation or conciliation,
the case may be, may fix the fee of the mediator or conciliator and as
far as possible, a consolidated sum may be fixed rather than for each
session or meeting.
(2) The expense of the mediation or conciliation including the fee of
the mediator or conciliator, costs of administrative assistance and other
ancillary expenses concerned, shall be borne equally by the various
contesting parties or as may be otherwise directed by the Central
Government or the Tribunal or the Appellate Tribunal, as the case may
be.
(3) Each party shall bear the costs for production of witnesses on his
side including experts or for production of documents.
(4) The mediator or conciliator may, before the commencement of the
mediation or conciliation, direct the parties to deposit equal share of
the probable costs of the mediation or conciliation including the fees to
be paid to the mediator or conciliator.
(5) If any party or parties do not pay the amount referred to sub-rule (4),
the case may be, shall on the application of the mediator or conciliator,
or any party, issue appropriate directions to the concerned parties.
(6) The mediation or conciliation shall commence only on the deposit
of amount referred to in sub-rule (4) and in case amount is not paid
before such commencement, the mediation or conciliation shall be
deemed to have terminated.
28. Ethics to be followed by Mediator or Conciliator.

The mediator or conciliator shall –
(a) follow and observe the rules strictly and with due diligence ;
(b) not carry on any activity or conduct which shall reasonably
be considered as conduct unbecoming of a mediator or
conciliator ;
(c) uphold the integrity and fairness of the mediation or
conciliation process;
(d) ensure that the parties involved in the mediation or
conciliation are fairly informed and have an adequate
understanding of the procedural aspects of the process ;
(e) satisfy himself or herself that he or she is qualified to undertake
and complete the assignment in a professional manner ;
(f) disclose any interest or relationship likely to affect impartiality
or which might seek an appearance of partiality or bias ;
(g) avoid, while communicating with the parties, any impropriety
or appearance of impropriety ;
(h) be faithful to the relationship of trust and confidentiality
imposed in the office of mediator or conciliator ;
(i) conduct all proceedings related to the resolutions of a
dispute, in accordance with the relevant applicable law ;
(j) recognise that the mediation or conciliation is based on
principles of self-determination by the parties and that the
mediation or conciliation process relies upon the ability
of parties to reach a voluntary, undisclosed agreement ;
and
(k) maintain the reasonable expectations of the parties as to
confidentiality and refrain from promises or guarantees of
results.
Provided that if any party finds conduct of mediator or conciliator
violative of ethics laid down in this rule, the party may immediately
bring it to the notice of the Regional Director.
29. Resort to arbitral or judicial proceedings.

The parties shall not initiate, during the mediation or conciliation
under these rules, any arbitral or judicial proceedings in respect of
a matter that is the subject-matter of the mediation or conciliation,
except that a party may initiate arbitral or Judicial proceedings, where,
in his, opinion, such proceedings are necessary for protecting his rights.
30. Matters not to be referred to the mediation or conciliation.

The following matters shall not be referred to mediation or conciliation,
namely : –
(a) the matters relating to proceedings in respect of inspection
or investigation under Chapter XIV of the Act; or the matters
which relate to defaults or offences for which applications for
compounding have been made by one or more parties.
(b) cases involving serious and specific allegations of fraud,
fabrication of documents forgery, impersonation, coercion
etc.
(c) cases involving prosecution for criminal and non-
compoundable offences.
(d) cases which involve public interest or interest of numerous
persons who are not parties before the Central Government
or the Tribunal or the Appellate Tribunal as the case may be.
435
CHAPTER XVII
COMPANIES (REGISTERED VALUERS AND
VALUATION) RULES, 2017
[G.S.R. 1316(E), Dated 18th October 2017]
In exercise of the powers conferred by section 247 read with sections
458, 459 and 469 of the Companies Act, 2013 (18 of 2013), the Central
CHAPTER I
PRELIMINARY
1. 1[ Short title, commencement and application.]
(1) These rules may be called the Companies (Registered Valuers and
Valuation) Rules, 2017.
Official Gazette.
2
[(3) These rules shall apply for valuation in respect of any property,
stocks, shares, debentures, securities or goodwill or any other assets or
net worth of a company or its liabilities under the provision of the Act
or these rules.
Explanation.- It is hereby clarified that conduct of valuation under any
other law other than the Act or these rules by any person shall not be
affected by virtue of coming into effect of these rules.]
2. Definitions.
(1) In these rules, unless the context otherwise requires –
1. Substituted by the Companies (Registered Valuers and Valuation) Fourth

Amendment Rules, 2018 (w.e.f 13-11-2018) for the heading: “Short title and
commencement”.
2. Inserted by the Companies (Registered Valuers and Valuation) Fourth
Amendment Rules, 2018 (w.e.f 13-11-2018)
435
436 Companies (Registered Valuers and Valuation) Rules, 2017

(b) “authority” means an authority specified by the Central
Government under section 458 of the Companies Act, 2013
to perform the functions under these rules;
(c) “asset class” means a distinct group of assets, such as land
and building, machinery and equipment, displaying similar
characteristics, that can be classified and requires separate
set of valuers for valuation;
(d) “certificate of recognition” means the certificate of recognition
granted to a registered valuers organisation under sub-rule
(5) of rule 13 and the term “recognition” shall be construed
accordingly;
(e) “certificate of registration” means the certificate of
registration granted to a valuer under sub rule(6) of rule 6
and the term “registration” shall be construed accordingly;
(f) “partnership entity” means a partnership firm registered
under the Indian Partnership Act, 1932 (9 of 1932) or a
limited liability partnership registered under the Limited
Liability Partnership Act, 2008 (6 of 2009);
(g) “Annexure” means an annexure to these rules;
(h) “registered valuers organisation” means a registered valuers
organisation recognised under sub-rule (5) of rule 13;
(i) “valuation standards” means the standards on valuation
referred to in rule 18; and
(j) “valuer” means a person registered with the authority in
accordance with these rules and the term “registered valuer”
shall be construed accordingly.
(2) Words and expressions used but not defined in these rules, and
Companies (Registered Valuers and Valuation) Rules, 2017 437
CHAPTER II
ELIGIBILITY, QUALIFICATIONS AND REGISTRATION
OF VALUERS
3. Eligibility for registered valuers.

(1) A person shall be eligible to be a registered valuer if he –
(a) is a valuer member of a registered valuers organisation;
Explanation.– For the purposes of this clause, “a valuer

member” is a member of a registered valuers organisation
who possesses the requisite educational qualifications and
experience for being registered as a valuer;
(b) is recommended by the registered valuers organisation of
which he is a valuer member for registration as a valuer;
(c) has passed the valuation examination under rule 5 within
three years preceding the date of making an application for
registration under rule 6;
(d) possesses the qualifications and experience as specified in
rule 4;
(e) is not a minor;
(f) has not been declared to be of unsound mind;
(g) is not an un-discharged bankrupt, or has not applied to be
adjudicated as a bankrupt;
(h) is a person resident in India;
Explanation.– For the purposes of these rules ‘person resident

in India’ shall have the same meaning as defined in clause (v)
of section 2 of the Foreign Exchange Management Act, 1999
(42 of 1999) as far as it is applicable to an individual;
(i) has not been convicted by any competent court for an
offence punishable with imprisonment for a term exceeding
six months or for an offence involving moral turpitude, and
a period of five years has not elapsed from the date of expiry
of the sentence:
Provided that if a person has been convicted of any offence
and sentenced in respect thereof to imprisonment for a
period of seven years or more, he shall not be eligible to be
registered;
(j) has not been levied a penalty under section 271J of Income-
tax Act, 1961 (43 of 1961) and time limit for filing appeal
before Commissioner of Income-tax (Appeals) or Income-
tax Appellate Tribunal, as the case may be has expired, or
such penalty has been confirmed by Income-tax Appellate
Tribunal, and five years have not elapsed after levy of such
penalty; and
(k) is a fit and proper person:
Explanation. – For determining whether an individual is a

fit and proper person under these rules, the authority may
take account of any relevant consideration, including but not
limited to the following criteria-
(i) integrity, reputation and character,
(ii) absence of convictions and restraint orders, and
(iii) competence and financial solvency.
(2) No partnership entity or company shall be eligible to be a registered
valuer if-
(a) it has been set up for objects other than for rendering
professional or financial services, including valuation
services and that in the case of a company, it is 1[omitted] a
subsidiary, joint venture or associate of another company
or body corporate;
(b) it is undergoing an insolvency resolution or is an un-
discharged bankrupt;
1. The word ‘not’ omitted by the Companies (Registered Valuers and Valuation)
Fourth Amendment Rules, 2018 (w.e.f 13-11-2018).
(c) all the partners or directors, as the case may be, are not
ineligible under clauses (c), (d), (e), 1[(f)], (g), (h), (i), (j) and
(k) of sub-rule (1);
(d) three or all the partners or directors, whichever is lower, of
the partnership entity or company, as the case may be, are
not registered valuers; or
(e) none of its partners or directors, as the case may be, is a
registered valuer for the asset class, for the valuation of which
it seeks to be a registered valuer.
4. Qualifications and experience.

An individual shall have the following qualifications and experience to
be eligible for registration under rule 3, namely:-
(a) post-graduate degree or post-graduate diploma, in the
specified discipline, from a University or Institute established,
recognised or incorporated by law in India and at least three
years of experience in the specified discipline thereafter; or
(b) a Bachelor’s degree or equivalent, in the specified discipline,
from a University or Institute established, recognised
or incorporated by law in India and at least five years of
experience in the specified discipline thereafter; or
(c) membership of a professional institute established by an
Act of Parliament enacted for the purpose of regulation of
a profession with at least three years’ experience after such
membership 2[omitted].
Explanation-I.– For the purposes of this clause the ‘specified discipline’
shall mean the specific discipline which is relevant for valuation of an

Amendment Rules, 2018 (w.e.f 13-11-2018).
2. The words “and having qualification mentioned at clause (a) or (b)” omitted
by the Companies (Registered Valuers and Valuation) Fourth Amendment
Rules, 2018 (w.e.f 13-11-2018).
asset class for which the registration as a valuer or recognition as a

registered valuers organization is sought under these rules.
Explanation-II.– Qualifying education and experience 1[omitted]
for various asset classes, is given in an indicative manner in
Annexure–IV of these rules.
2
[Explanation III.- For the purposes of this rule and Annexure IV,
‘equivalent’ shall mean professional and technical qualifications which
are recognised by the Ministry of Human Resources and Development
as equivalent to professional and technical degree.]
5. Valuation Examination.
(1) The authority shall, either on its own or through a designated
agency, conduct valuation examination for one or more asset classes,
for individuals, who possess the qualifications and experience as
specified in rule 4, and have completed their educational courses as
member of a registered valuers organisation, to test their professional
knowledge, skills, values and ethics in respect of valuation:
Provided that the authority may recognise an educational course
conducted by a registered valuers organisation before its recognition
as adequate for the purpose of appearing for valuation examination:
Provided also that the authority may recognise an examination
conducted as part of a master’s or post graduate degree course conducted
by a University which is equivalent to the valuation examination.
(2) The authority shall determine the syllabus for various valuation
specific subjects or assets classes for the valuation examination on the
recommendation of one or more Committee of experts constituted by
the authority in this regard.
(3) The syllabus, format and frequency of the valuation examination,
1. The words “and examination or training” omitted by the Companies (Registered

Valuers and Valuation) Fourth Amendment Rules, 2018 (w.e.f 13-11-2018).
including qualifying marks, shall be published on the website of the

authority at least three months before the examination.
(4) An individual who passes the valuation examination, shall receive
acknowledgement of passing the examination.
(5) An individual may appear for the valuation examination any
number of times.
6. Application for certificate of registration.

(1) An individual eligible for registration as a registered valuer under
rule 3 may make an application to the authority in Form-A of Annexure-
II along with a non-refundable application fee of five thousand rupees
in favour of the authority.
(2) A partnership entity or company eligible for registration as a
registered valuer under rule 3 may make an application to the authority
in Form-B of Annexure-II along with a non-refundable application fee
of ten thousand rupees in favour of the authority .
(3) The authority shall examine the application, and may grant twenty
one days to the applicant to remove the deficiencies, if any, in the
application.
(4) The authority may require the applicant to submit additional
documents or clarification within twenty- one days.
(5) The authority may require the applicant to appear, within twenty
one days, before the authority in person, or through its authorised
representative for explanation or clarifications required for processing
the application.
(6) If the authority is satisfied, after such scrutiny, inspection or inquiry
as it deems necessary, that the applicant is eligible under these rules, it
may grant a certificate of registration to the applicant to carry on the
activities of a registered valuer for the relevant asset class or classes
in Form-C of the Annexure-II within sixty days of receipt of the
application, excluding the time given by the authority for presenting
additional documents, information or clarification, or appearing in
person, as the case may be.
(7) If, after considering an application made under this rule, the
authority is of the prima facie opinion that the registration ought
not be granted, it shall communicate the reasons for forming such an
opinion within forty-five days of receipt of the application, excluding
the time given by it for removing the deficiencies, presenting additional
documents or clarifications, or appearing in person, as the case may be.
(8) The applicant shall submit an explanation as to why his/its
application should be accepted within fifteen days of the receipt of the
communication under sub- rule (7), to enable the authority to form a
final opinion.
(9) After considering the explanation, if any, given by the applicant
under sub-rule (8), the authority shall either -
(a) accept the application and grant the certificate of registration;
or
(b) reject the application by an order, giving reasons thereof.
(10) The authority shall communicate its decision to the applicant
within thirty days of receipt of explanation.
7. Conditions of Registration.
The registration granted under rule 6 shall be subject to the conditions
that the valuer shall –
(a) at all times possess the eligibility and qualification and
experience criteria as specified under rule 3 and rule 4;
(b) at all times comply with the provisions of the Act , these rules
and the Bye-laws or internal regulations, as the case may be,
of the respective registered valuers organisation;
(c) in his capacity as a registered valuer, not conduct valuation of
the assets or class(es) of assets other than for which he/it has
been registered by the authority;
(d) take prior permission of the authority for shifting his/ its
membership from one registered valuers organization to
another;
(e) take adequate steps for redressal of grievances;

(f) maintain records of each assignment undertaken by him for
at least three years from the completion of such assignment;
(g) comply with the Code of Conduct (as per Annexure-I of
these rules) of the registered valuers organisation of which
he is a member;
(h) in case a partnership entity or company is the registered
valuer, allow only the partner or director who is a registered
valuer for the asset class(es) that is being valued to sign and
act on behalf of it;
(i) in case a partnership entity or company is the registered
valuer, it shall disclose to the company concerned, the extent
of capital employed or contributed in the partnership entity
or the company by the partner or director, as the case may
be, who would sign and act in respect of relevant valuation
assignment for the company;
(j) in case a partnership entity is the registered valuer, be liable
jointly and severally along with the partner who signs and
acts in respect of a valuation assignment on behalf of the
partnership entity;
(k) in case a company is the registered valuer, be liable alongwith
director who signs and acts in respect of a valuation
assignment on behalf of the company;
(l) in case a partnership entity or company is the registered
valuer, immediately inform the authority on the removal of
a partner or director, as the case may be, who is a registered
valuer along with detailed reasons for such removal; and
(m) comply with such other conditions as may be imposed by the
authority.
8. Conduct of Valuation.
(1) The registered valuer shall, while conducting a valuation, comply
with the valuation standards as notified or modified under rule 18:
Provided that until the valuation standards are notified or modified by

the Central Government, a valuer shall make valuations as per-
(a) internationally accepted valuation standards;
(b) valuation standards adopted by any registered valuers
organisation.
(2) The registered valuer may obtain inputs for his valuation report
or get a separate valuation for an asset class conducted from another
registered valuer, in which case he shall fully disclose the details of
the inputs and the particulars etc. of the other registered valuer in his
report and the liabilities against the resultant valuation, irrespective of
the nature of inputs or valuation by the other registered valuer, shall
remain of the first mentioned registered valuer.
(3) The valuer shall, in his report, state the following:-
(a) background information of the asset being valued;
(b) purpose of valuation and appointing authority;
(c) identity of the valuer and any other experts involved in the
valuation;
(d) disclosure of valuer interest or conflict, if any;
(e) date of appointment, valuation date and date of report;
(f) inspections and/or investigations undertaken;
(g) nature and sources of the information used or relied upon;
(h) procedures adopted in carrying out the valuation and
valuation standards followed;
(i) restrictions on use of the report, if any;
(j) major factors that were taken into account during the valuation;
(k) conclusion; and
(l) caveats, limitations and disclaimers to the extent they
explain or elucidate the limitations faced by valuer, which
shall not be for the purpose of limiting his responsibility for
the valuation report.
9. Temporary surrender.
(1) A registered valuer may temporarily surrender his registration
certificate in accordance with the bye-laws or regulations, as the case
may be, of the registered valuers organisation and on such surrender,
the valuer shall inform the authority for taking such information on
record.
(2) A registered valuers organisation shall inform the authority if any
valuer member has temporarily surrendered his/its membership or
revived his/ its membership after temporary surrender, not later than
seven days from approval of the application for temporary surrender or
revival, as the case may be.
(3) Every registered valuers organisation shall place, on its website, in a
searchable format, the names and other details of its valuers members
who have surrendered or revived their memberships.
10. Functions of a Valuer.

A valuer shall conduct valuation required under the Act as per these
rules 1[omitted].
11. Transitional Arrangement.

Any person who may be rendering valuation services under the Act,
on the date of commencement of these rules, may continue to render
valuation services without a certificate of registration under these rules
upto 2[31st January, 2019]:
1. The words “and he may conduct valuation as per these rules if required under
any other law or by any other regulatory authority” omitted by the Companies
(Registered Valuers and Valuation) Fourth Amendment Rules, 2018 (w.e.f 13-
11-2018).
2. Substituted by the Companies (Registered Valuers and Valuation) Third
Amendment Rules, 2018 (w.e.f 25-09-2018) for: “30th September, 2018”.*
* Substituted by the Companies (Registered Valuers and Valuation)
Amendment Rules, 2018 (w.e.f 09-02-2018) for: “31st March, 2018”.
Provided that if a company has appointed any valuer before such date
and the valuation or any part of it has not been completed before 1[31st
January, 2019], the valuer shall complete such valuation or such part
within three months thereafter.
2
[Omitted]
CHAPTER III
RECOGNITION OF REGISTERED VALUERS ORGANISATIONS
12. Eligibility for registered valuers organisations.

(1) An organisation that meets requirements under sub rule(2) may
be recognised as a registered valuers organisation for valuation of a
specific asset class or asset classes if –
(i) it has been registered under section 25 of the Companies Act,
1956 (1 of 1956) or section 8 of the Companies Act, 2013 (18
of 2013) with the sole object of dealing with matters relating
to regulation of valuers of an asset class or asset classes
and has in its bye laws the requirements specified in
Annexure-III;
(ii) 3
[it is a professional institute] established by an Act of
Parliament enacted for the purpose of regulation of a
profession;

Amendment Rules, 2018 (w.e.f 25-09-2018) for: “30th September, 2018”.
2. Omitted by the Companies (Registered Valuers and Valuation) Fourth
Amendment Rules, 2018 (w.e.f. 13-11-2018). Prior to this omission, it was read as:
Explanation. – It is hereby clarified that conduct of valuation by any person
under any law other than the Act, or these rules shall not be effected by virtue
of coming into effect of these rules unless the relevant other laws or other
regulatory bodies require valuation by such person in accordance with these
rules in which case these rules shall apply for such valuation also from the date
specified under the laws or by the regulatory bodies.
Amendment Rules, 2018 (w.e.f. 13-11-2018) for : “a professional institute”.
Provided that, subject to sub-rule (3), the following organisations

may also be recognised as a registered valuers organisation for
valuation of a specific asset class or asset classes, namely:-
(a) an organisation registered as a society under the Societies
Registration Act, 1860 (21 of 1860) or any relevant state law,
or;
(b) an organisation set up as a trust governed by the Indian Trust
Act, 1882 (2 of 1882).
(2) The organisation referred to in sub-rule (1) shall be recognised if it –
(a) conducts educational courses in valuation, in accordance
with the syllabus determined by the authority, under rule
5, for individuals who may be its valuers members, and
delivered in class room or through distance education
modules and which includes practical training;
(b) grants membership or certificate of practice to individuals,
who possess the qualifications and experience as specified in
rule 4, in respect of valuation of asset class for which it is
recognised as a registered valuers organisation ;
(c) conducts training for the individual members before a
certificate of practice is issued to them;
(d) lays down and enforces a code of conduct for valuers who
are its members, which includes all the provisions specified
in Annexure-I;
(e) provides for continuing education of individuals who are its
members;
(f) monitors and reviews the functioning, including quality of
service, of valuers who are its members; and
(g) has a mechanism to address grievances and conduct
disciplinary proceedings against valuers who are its members.
(3) A registered valuers organisation, being an entity under proviso to
sub-rule (1), shall convert into or register itself as a company under
section 8 of the Companies Act, 2013 (18 of 2013), and include in its
bye laws the requirements specified in Annexure- III, within one year
from the date of commencement of these rules.
13. Application for recognition.

(1) An eligible organisation which meets the conditions specified in
rule 12 may make an application for recognition as a registered valuers
organisation for asset class or classes to the authority in Form-D of the
Annexure-II along with a non-refundable application fee of rupees one
lakh in favour of the authority.
(2) The authority shall examine the application, and may grant twenty-
one days to the applicant to remove the deficiencies, if any, in the
application.
(3) The authority may require the applicant to submit additional
documents or clarification within twenty-one days.
(4) The authority may require the applicant to appear, within twenty-
one days, before the Authority through its authorised representative for
explanation or clarifications required for processing the application.
(5) If the authority is satisfied, after such scrutiny, inspection or
inquiry as it deems necessary that the applicant is eligible under these
rules, it may grant a certificate of recognition as a registered valuers
organisation in Form-E of Annexure-II.
(6) If, after considering an application made under sub-rule (1), the
authority is of the prima facie opinion that recognition ought not
to be granted, it shall communicate the reasons for forming such an
opinion within forty-five days of receipt of the application, excluding
the time given by it for removing the deficiencies, presenting additional
documents or clarifications, or appearing through authorised
representative, as the case may be.
(7) The applicant shall submit an explanation as to why its application
should be accepted within fifteen days of the receipt of the communication
under sub- rule (6), to enable the authority to form a final opinion.
(8) After considering the explanation, if any, given by the applicant

under sub-rule (7), the authority shall either –
(a) accept the application and grant the certificate of recognition;
or
(b) reject the application by an order, giving reasons thereof.
(9) The authority shall communicate its decision to the applicant within
thirty days of receipt of explanation.
14. Conditions of Recognition.

The recognition granted under rule 13 shall be subject to the conditions
that the registered valuers organisation shall –
(a) at all times continue to satisfy the eligibility requirements
specified under rule 12;
(b) maintain a register of members who are registered valuers,
which shall be publicly available;
(c) admits only individuals who possess the educational
qualifications and experience requirements, in accordance
with rule 4 and as specified in its recognition certificate, as
members;
(d) make such reports to the authority as may be required by
it;
(e) comply with any directions, including with regard to course
to be conducted by valuation organisation under clause (a) of
sub-rule (2) of rule 12, issued by the authority;
(f) be converted or registered as company under section 8 of
the Act, with governance structure and bye laws specified
in Annexure-III, within a period of 1[two years] from the
date of commencement of these rules if it is an organisation
referred to in proviso to sub-rule (1) of rule 12;
(g) shall have the governance structure and incorporate in its bye

Amendment Rules, 2018 (w.e.f. 25-09-2018) for: “one year”.
laws the requirements specified in Annexure-III within one

year of commencement of these rules if it is an organisation
referred to in clause (i) of sub-rule (1) of rule 12 and existing
on the date of commencement of these rules;
(h) display on its website, the status and specified details of every
registered valuer being its valuer members including action
under rule 17 being taken against him; and
(i) comply with such other conditions as may be specified by
authority.
CHAPTER IV
CANCELLATION OR SUSPENSION OF CERTIFICATE OF
REGISTRATION OR RECOGNITION
15. Cancellation or suspension of certificate of registration or

recognition.
The authority may cancel or suspend the registration of a valuer or
recognition of a registered valuers organisation for violation of the
provisions of the Act, any other law allowing him to perform valuation,
these rules or any condition of registration or recognition, as the case
may be in the manner specified in rule 17.
16. Complaint against a registered valuer or registered valuers

organisation.
A complaint may be filed against a registered valuer or registered
valuers organisation before the authority in person or by post or
courier along with a non-refundable fees of rupees one thousand in
favour of the authority and the authority shall examine the complaint
and take such necessary action as it deems fit:
Provided that in case of a complaint against a registered valuer, who is
a partner of a partnership entity or director of a company, the authority
may refer the complaint to the relevant registered valuers organisation
and such organization shall handle the complaint in accordance with
its bye laws.
17. Procedure to be followed for cancellation or suspension of

registration or recognition certificate.
(1) Based on the findings of an inspection or investigation, or a
complaint received or on material otherwise available on record, if the
authorised officer is of the prima facie opinion that sufficient cause exists
to cancel or suspend the registration of a valuer or cancel or suspend
the recognition of a registered valuers organisation, it shall issue a show
cause notice to the valuer or registered valuers organisation,:
Provided that in case of an organisation referred to in clause (ii) of sub-
rule (1) of rule 12 which has been granted recognition, the authorised
officer shall, instead of carrying out inspection or investigation, seek
the information required from the registered valuers organisation
within the time specified therein and in the case of a default, give one
more opportunity to provide the information within specified time
failing which or in the absence of sufficient or satisfactory information
provided, either initiate the process under this rule or refer the matter
to the Central Government for appropriate directions.
(2) The show-cause notice shall be in writing and shall state-
(a) the provisions of the Act and rules under which it has been
issued;
(b) the details of the alleged facts;
(c) the details of the evidence in support of the alleged facts;
(d) the provisions of the Act or rules or certificate of registration
or recognition allegedly violated, or the manner in which the
public interest has allegedly been affected;
(e) the actions or directions that the authority proposes to take
or issue if the allegations are established;
(f) the manner in which the person is required to respond to the
show-cause notice;
(g) consequences of failure to respond to the show-cause notice
within the given time; and
(h) procedure to be followed for disposal of the show-cause

notice.
(3) The show-cause notice shall be served in the following manner by-
(a) sending it to the valuer or registered valuers organisation at its
registered address by registered post with acknowledgment
due; or
(b) an appropriate electronic means to the email address provided
by the valuer or registered valuers organisation to the authority.
(4) The authorised officer shall dispose of the show-cause notice by
reasoned order in adherence to the principles of natural justice.
(5) The order in disposal of a show-cause notice may provide for-
(a) no action;
(b) warning; or
(c) suspension or cancellation of the registration or recognition; or
(d) change in any one or more partner or director or the
governing board of the registered valuers organisation.
(6) An order passed under sub-rule (5) cancelling the recognition of
a registered valuers organisation, shall specify the time within which
its members may take membership of another registered valuers
organization recognised for valuation of relevant asset class without
prejudice to their registration.
(7) The order passed under sub-rule (5) shall be issued to the concerned
person immediately, and published on the website of the authority.
(8) The order passed under sub-rule (5) shall not become effective until
thirty days have elapsed from the date of issue of the order unless stated
otherwise.
(9) Any person aggrieved by an order of the authorised officer under
sub-rule (5) may prefer an appeal before the authority.
Explanation.– For the purposes of this rule, the authorised officer shall
be an officer as may be specified by the authority.
CHAPTER V
VALUATION STANDARDS
18. Valuation Standards.
The Central Government shall notify and may modify (from time
to time) the valuation standards on the recommendations of the
Committee set up under rule 19.
19. Committee to advise on valuation matters.

(1) The Central Government may constitute a Committee to be known as
“Committee to advise on valuation matters” to make recommendations
on formulation and laying down of valuation standards and policies for
compliance by companies and registered valuers.
(2) The Committee shall comprise of –
(a) a Chairperson who shall be a person of eminence and
well versed in valuation, accountancy, finance, business
administration, business law, corporate law, economics;
(b) one member nominated by the Ministry of Corporate
Affairs;
(c) one member nominated by the Insolvency and Bankruptcy
Board of India;
(d) one member nominated by the Legislative Department;
(e) up to four members nominated by Central Government
representing authorities which are allowing valuations by
registered valuers;
(f) up to four members who are representatives of registered
valuers organisations, nominated by Central Government.
(g) Up to two members to represent industry and other
stakeholder nominated by the Central Government in
consultation with the authority;
1
[(h) Presidents of, the Institute of Chartered Accountants of India,
the Institute of Company Secretaries of India, the Institute of
Cost Accountants of India as ex-officio members.]
(3) The Chairperson and Members of the Committee shall have a
tenure of three years and they shall not have more than two tenures.
CHAPTER VI
MISCELLANEOUS
20. Punishment for contravention.

Without prejudice to any other liabilities where a person contravenes
any of the provision of these rules he shall be punishable in accordance
with sub-section (3) of section 469 of the Act.
21. Punishment for false statement.

If in any report, certificate or other document required by, or for, the
purposes of any of the provisions of the Act or the rules made there
under or these rules, any person makes a statement, –
(a) which is false in any material particulars, knowing it to be
false; or
(b) which omits any material fact, knowing it to be material, he
shall be liable under section 448 of the Act.
1. Inserted by the Companies (Registered Valuers and Valuation) Second

ANNEXURE I
MODEL CODE OF CONDUCT FOR REGISTERED VALUERS
[See clause (g) of rule 7 and clause (d) of sub-rule (2) of rule 12]
Integrity and Fairness

1. A valuer shall, in the conduct of his/its business, follow high
standards of integrity and fairness in all his/its dealings with his/its
clients and other valuers.
2. A valuer shall maintain integrity by being honest, straightforward,
and forthright in all professional relationships.
3. A valuer shall endeavour to ensure that he/it provides true and
adequate information and shall not misrepresent any facts or situations.
4.A valuer shall refrain from being involved in any action that would
bring disrepute to the profession.
5. A valuer shall keep public interest foremost while delivering his
services.
Professional Competence and Due Care

6. A valuer shall render at all times high standards of service, exercise
due diligence, ensure proper care and exercise independent professional
judgment.
7. A valuer shall carry out professional services in accordance with the
relevant technical and professional standards that may be specified
from time to time
8. A valuer shall continuously maintain professional knowledge
and skill to provide competent professional service based on up-to-
date developments in practice, prevailing regulations/guidelines and
techniques.
9. In the preparation of a valuation report, the valuer shall not disclaim
liability for his/its expertise or deny his/its duty of care, except to the
extent that the assumptions are based on statements of fact provided by
the company or its auditors or consultants or information available in

public domain and not generated by the valuer.
10. A valuer shall not carry out any instruction of the client insofar
as they are incompatible with the requirements of integrity, objectivity
and independence.
11. A valuer shall clearly state to his client the services that he would be
competent to provide and the services for which he would be relying
on other valuers or professionals or for which the client can have a
separate arrangement with other valuers.
Independence and Disclosure of Interest

12. A valuer shall act with objectivity in his/its professional dealings
by ensuring that his/its decisions are made without the presence of
any bias, conflict of interest, coercion, or undue influence of any party,
whether directly connected to the valuation assignment or not.
13. A valuer shall not take up an assignment if he/it or any of his/its
relatives or associates is not independent in terms of association to the
company.
14. A valuer shall maintain complete independence in his/its
professional relationships and shall conduct the valuation independent
of external influences.
15. A valuer shall wherever necessary disclose to the clients, possible
sources of conflicts of duties and interests, while providing unbiased
services.
16. A valuer shall not deal in securities of any subject company after
any time when he/it first becomes aware of the possibility of his/its
association with the valuation, and in accordance with the Securities
and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015 or till the time the valuation report becomes public,
whichever is earlier.
17. A valuer shall not indulge in “mandate snatching” or offering
“convenience valuations” in order to cater to a company or client’s
needs.
18. As an independent valuer, the valuer shall not charge success fee.
19. In any fairness opinion or independent expert opinion submitted
by a valuer, if there has been a prior engagement in an unconnected
transaction, the valuer shall declare the association with the company
during the last five years.
Confidentiality
20. A valuer shall not use or divulge to other clients or any other party
any confidential information about the subject company, which has
come to his/its knowledge without proper and specific authority or
unless there is a legal or professional right or duty to disclose.
Information Management
21. A valuer shall ensure that he/ it maintains written contemporaneous
records for any decision taken, the reasons for taking the decision, and
the information and evidence in support of such decision. This shall
be maintained so as to sufficiently enable a reasonable person to take a
view on the appropriateness of his/its decisions and actions.
22. A valuer shall appear, co-operate and be available for inspections
and investigations carried out by the authority, any person authorised
by the authority, the registered valuers organisation with which he/it is
registered or any other statutory regulatory body.
23. A valuer shall provide all information and records as may be
required by the authority, the Tribunal, Appellate Tribunal, the
registered valuers organisation with which he/it is registered, or any
other statutory regulatory body.
24. A valuer while respecting the confidentiality of information
acquired during the course of performing professional services, shall
maintain proper working papers for a period of three years or such
longer period as required in its contract for a specific valuation, for
production before a regulatory authority or for a peer review. In the
event of a pending case before the Tribunal or Appellate Tribunal, the
record shall be maintained till the disposal of the case.
Gifts and hospitality.

25. A valuer or his/its relative shall not accept gifts or hospitality which
undermines or affects his independence as a valuer.
Explanation. – For the purposes of this code the term ‘relative’ shall
have the same meaning as defined in clause (77) of Section 2 of the
26. A valuer shall not offer gifts or hospitality or a financial or any other
advantage to a public servant or any other person with a view to obtain
or retain work for himself/ itself, or to obtain or retain an advantage in
the conduct of profession for himself/ itself.
Remuneration and Costs.

27. A valuer shall provide services for remuneration which is charged in
a transparent manner, is a reasonable reflection of the work necessarily
and properly undertaken, and is not inconsistent with the applicable
rules.
28. A valuer shall not accept any fees or charges other than those which
are disclosed in a written contract with the person to whom he would
be rendering service.
Occupation, employability and restrictions.

29. A valuer shall refrain from accepting too many assignments, if
he/it is unlikely to be able to devote adequate time to each of his/ its
assignments.
30. A valuer shall not conduct business which in the opinion of the
authority or the registered valuer organisation discredits the profession.
ANNEXURE-II
FORM-A
[See sub-rule (1) of rule 6]
Application for registration as a valuer by an individual
(refer e-book on Companies Act, 2013 on the website of Ministry of
Corporate Affairs)
ANNEXURE III
[See sub-rule (3) of rule 12 and clauses (f) and (g) of rule 14]
Governance Structure and Model Bye Laws for registered valuers
organisation
Part I
1. Governance Structure
No person shall be eligible to be recognised as an registered valuers
organisation unless it is a company registered under section 8 of the
Companies Act, 2013 with share capital, and –
(a) its sole object is to carry on the functions of a registered
valuers organisation under the Companies Act, 2013;
(b) it is not under the control of person(s) resident outside India,
(c) not more than forty-nine per cent. of its share capital is held,
directly or indirectly, by persons resident outside India; and
(d) it is not a subsidiary of a body corporate through more than
one layer: Explanation: “layer” in relation to a body corporate
means its subsidiary;
(e) itself, its promoters, its directors and persons holding more
than ten percent. of its share capital are fit and proper
persons.
2. Registered Valuers Organisation to have Bye-Laws

(1) The registered valuers organisation shall submit to the authority its
bye-laws along with the application for its registration as a registered

valuers organisation.
(2) The bye-laws shall provide for all matters specified in the model
bye-laws in Part II.
(3) The bye-laws shall at all times be consistent with the model bye-
laws.
(4) The registered valuers organisation shall publish its bye-laws, the
composition of all committees formed, and all policies created under
the bye-laws on its website.
3. Amendment of Bye-Laws
(1) The Governing Board may amend the bye-laws by a resolution
passed by votes in favour being not less than three times the number of
the votes, if any, cast against the resolution, by the directors.
(2) A resolution passed in accordance with sub-bye law (1) shall be
filed with the authority within seven days from the date of its passing,
for its approval.
(3) The amendments to the bye-laws shall come into effect on the
seventh day of the receipt of the approval, unless otherwise specified
by the authority.
(4) The registered valuers organisation shall file a printed copy of the
amended bye-laws with the authority within fifteen days from the date
when such amendment is made effective.
4. Composition of the Governing Board.

(1) The Governing Board shall have a minimum of ____ [Insert
number] directors.
(2) More than half of the directors shall be persons resident in India at
the time of their appointment, and at all times during their tenure as
directors.
(3) Not more than one fourth of the directors shall be registered
valuers.
(4) More than half of the directors shall be independent directors at the
time of their appointment, and at all times during their tenure as direct
Provided that no meeting of the Governing Board shall be held without
the presence of at least one independent director.
(5) An independent director shall be an individual –
(a) who has expertise in the field of finance, law, management or
valuation;
(b) who is not a registered valuer;
(c) who is not a shareholder of the registered valuers
organisation; and
(d) who fulfils the requirements under sub-section (6) of section
149 of the Companies Act, 2013.
(6) The directors shall elect an independent director as the Chairperson
of the Governing Board.
Explanation - For the purposes of bye laws, any fraction contained in
(a) ‘more than half ’ shall be rounded off to the next higher number;
and
(b) ‘not more than one- fourth’ shall be rounded down to the next
lower number.
Part II
MODEL BYE-LAWS OF A REGISTERED VALUERS
ORGANISATION
I. GENERAL
1. The name of the registered valuers organisation is “..................”
(hereinafter referred to as the ‘Organisation’).
2. The ‘Organisation’ is registered as a company under section 8 of the
Companies Act, 2013 (18 of 2013) with its registered office situated at
[provide full address].
3. These bye-laws may not be amended, except in accordance with this

Annexure.
II. DEFINITIONS
4. (1) In these bye-laws, unless the context otherwise requires -
(a) “certificate of membership” means the certificate of
membership of the Organisation granted under bye-law 10;
(c) “Governing Board” means the Board of Directors or Board
of the Organisation as defined under clause (10) of section 2
of Companies Act, 2013 (18 of 2013);
(d) “relative” shall have the same meaning as assigned to it in
clause (77) of section 2 of the Companies Act, 2013 (18 of
2013);
(2) Unless the context otherwise requires, words and expressions used
and not defined in these bye-laws shall have the meanings assigned to
them in the Companies Act, 2013 (18 of 2013).
III. OBJECTIVES
5. (1) The Organisation shall carry on the functions of the registered
valuers organisation under the Companies (Registered Valuers and
Valuation) Rules, 2017, and functions incidental thereto.
(2) The Organisation shall not carry on any function other than those
specified in sub-clause (1), or which is inconsistent with the discharge
of its functions as a registered valuers organisation.
IV. DUTIES OF THE ORGANISATION

6. (1) The Organisation shall maintain high ethical and professional
standards in the regulation of its members.
(2) The Organisation shall -
(a) ensure compliance with the Companies Act, 2013 and rules,
regulations and guidelines issued thereunder governing the
conduct of registered valuers organisation and registered

valuers;
(b) employ fair, reasonable, just, and non-discriminatory
practices for the enrolment and regulation of its members;
(c) be accountable to the authority in relation to all bye-laws and
directions issued to its members;
(d) develop the profession of registered valuers;
(e) promote continuous professional development of its
members;
(f) continuously improve upon its internal regulations and
guidelines to ensure that high standards of professional and
ethical conduct are maintained by its members; and
(g) provide information about its activities to the authority.
V. COMMITTEES OF THE ORGANISATION
Advisory Committee of Members.

7. (1) The Governing Board may form an Advisory Committee of
members of the Organisation to advise it on any matters pertaining to-
(a) the development of the profession;
(b) standards of professional and ethical conduct; and
(c) best practices in respect of Valuation.
(2) The Advisory Committee may meet at such places and times as the
Governing Board may provide.
Other Committees of the Organisation.

8. (1) The Governing Board shall constitute-
(a) one or more Membership Committee(s) consisting of such
members as it deems fit;
(b) a Monitoring Committee consisting of such members as it
deems fit;
(c) one or more Grievance Redressal Committee(s), with not

less than three members,;
(d) one or more Disciplinary Committee(s) consisting of at least
one member nominated by the authority.
(2) The Chairperson of each of these Committees shall be an
independent director of the Organisation.
VI. MEMBERSHIP
Eligibility for Enrolment.

9. No individual shall be enrolled as a member if he is not eligible to be
registered as a registered valuer with the authority:
Provided that the Governing Board may provide additional eligibility
requirements for enrolment:
Provided further that such additional requirements shall not
discriminate on the grounds of religion, race, caste, gender, place of
birth or professional affiliation.
Process of Enrolment as Member.

10. (1) An individual may apply for enrolment as a member by
submitting an application in such form, in such manner and with such
fees as may be specified by the Organisation.
(2) The Organisation shall examine the application in accordance
with the applicable provisions of the rules, regulations and guidelines
thereunder.
(3) On examination of the application, the Organisation shall give an
opportunity to the applicant to remove the deficiencies, if any, in the
application.
(4) The Organisation may require an applicant to submit additional
documents, information or clarification that it deems fit, within
reasonable time.
(5) The Organisation may reject an application if the applicant does not
satisfy the criteria for enrolment or does not remove the deficiencies
or submit additional documents or information to its satisfaction, for
reasons recorded in writing.
(6) The rejection of the application shall be communicated to the
applicant stating the reasons for such rejection, within thirty days of
the receipt of the application, excluding the time given for removing
the deficiencies or presenting additional documents or clarification by
the Organisation, as the case may be.
(7) The acceptance of the application shall be communicated to the
applicant, along with a certificate of membership.
(8) An applicant aggrieved of a decision rejecting his application may
appeal to the Membership Committee of the Organisation within
thirty days from the receipt of such decision.
(9) The Membership Committee shall pass an order disposing of the
appeal in the manner it deems expedient, within thirty days of the
receipt of the appeal.
Membership Fee.
11. The Organisation may require the members to pay a fixed sum of
money as its annual membership fee.
Register of Members.
12. (1) The Organisation shall maintain a register of its professional
members, containing their-
(a) name;
(b) proof of identity;
(c) contact details;
(d) address;
(e) date of enrolment and membership number;
(f) date of registration with the authority and registration
number;
(g) details of grievances pending against him with the

Organisation;
(h) details of disciplinary proceedings pending against him with
the Organisation; and
(i) details of orders passed against him by the authority or
Disciplinary Committee of the Organisation.
(2) The records relating to a member shall be made available for
inspection to-
(a) the authority,
(b) any other person who has obtained the consent of the
member for such inspection.
VII. DUTIES OF MEMBERS

13. (1) In the performance of his functions, a member shall-
(a) act in good faith in discharge of his duties as a registered
valuer;
(b) discharge his functions with utmost integrity and objectivity;
(c) be independent and impartial;
(d) discharge his functions with the highest standards of
professional competence and professional ethics;
(e) continuously upgrade his professional expertise;
(f) comply with applicable laws in the performance of his
functions; and
(g) maintain confidentiality of information obtained in the
course of his professional activities unless required to
disclose such information by law.
14. The Organisation shall have a Code of Conduct that shall be
consistent with, and that shall provide for all matters in the Code of
Conduct as specified in the Annexure-I.
VIII. MONITORING OF MEMBERS

15. The Organisation shall have a Monitoring Policy to monitor the
professional activities and conduct of members for their adherence
to the provisions of the Act, rules, regulations and guidelines issued
thereunder, these bye-laws, the Code of Conduct and directions given
by the Governing Board.
16. A member shall submit information about ongoing and concluded
engagements as a registered valuer, in the manner and format specified
by the Organisation, at least twice a year stating inter alia, the date of
assignment, date of completion and reference number of valuation
assignment and valuation report.
17. The Monitoring Committee shall review the information and
records submitted by the members in accordance with the Monitoring
Policy.
18. The Monitoring Policy shall provide for the following -
(a) the frequency of monitoring;
(b) the manner and format of submission or collection of
information and records of the members, including by way
of inspection;
(c) the obligations of members to comply with the Monitoring
Policy;
(d) the use, analysis and storage of information and records;
(e) evaluation of performance of members; and
(f) any other matters that may be specified by the Governing
Board.
19. The Monitoring Policy shall –
(a) have due regard for the privacy of members,
(b) provide for confidentiality of information received, except
when disclosure of information is required by the authority
or by law, and
(c) be non-discriminatory.
20. The Organisation shall submit a report to the authority in the
manner specified by the authority with information collected during
monitoring, including information pertaining to -
(a) the details of the appointments made under the Act/these
Rules,
(b) the transactions conducted with stakeholders during the
period of his appointment;
(c) the transactions conducted with third parties during the
period of his appointment; and
(d) the outcome of each appointment.
IX. GRIEVANCE REDRESSALMECHANISM

21. (1) The Organisation shall have a Grievance Redressal Policy
providing the procedure for receiving, processing, redressing and
disclosing grievances against the Organisation or any member of the
Organisation by-
(a) any member of the Organisation;
(b) any person who has engaged the services of the concerned
members of the Organisation; or
(c) any other person or class of persons as may be provided by
the Governing Board.
(2) The Grievance Redressal Committee, after examining the grievance,
may –
(a) dismiss the grievance if it is devoid of merit; or
(b) initiate a mediation between parties for redressal of
grievance.
(3) The Grievance Redressal Committee shall refer the matter to the
Disciplinary Committee, wherever the grievance warrants disciplinary
action.
22. The Grievance Redressal Policy shall provide for-

(a) the format and manner for filing grievances;
(b) maximum time and format for acknowledging receipt of a
grievance;
(c) maximum time for the disposal of the grievance by way of
dismissal, reference to the Disciplinary Committee or the
initiation of mediation;
(d) details of the mediation mechanism
(e) provision of a report of the grievance and mediation
proceedings to the parties to the grievance upon dismissal or
resolution of the grievance;
(f) action to be taken in case of malicious or false complaints;
(g) maintenance of a register of grievances made and resolutions
arrived at; and
(h) periodic review of the Grievance Redressal Mechanism.
X. DISCIPLINARY PROCEEDINGS
23. The Organisation may initiate disciplinary proceedings by issuing a
show-cause notice against members-
(a) based on a reference made by the Grievances Redressal
Committee;
(b) based on monitoring of members;
(c) following the directions given by the authority or any court
of law; or
(d) suo moto, based on any information received by it.
24. (1) The Organisation shall have a Disciplinary Policy, which shall
provide for the following -
(a) the manner in which the Disciplinary Committee may
ascertain facts;
(b) the issue of show-cause notice based on the facts;

(c) disposal of show-cause notice by a reasoned order, following
principles of natural justice;
(d) timelines for different stages of disposal of show cause notice;
and
(e) rights and obligations of the parties to the proceedings.
(2) The orders that may be passed by the Disciplinary Committee shall
include-
(a) expulsion of the member;
(b) suspension of the member for a certain period of time;
(c) admonishment of the member;
(d) imposition of monetary penalty;
(e) reference of the matter to the authority, which may include,
in appropriate cases, recommendation of the amount of
restitution or compensation that may be enforced by the
authority; and
(f) directions relating to costs.
(3) The Disciplinary Committee may pass an order for expulsion of a
member if it has found that the member has committed-
(a) an offence under any law for the time being in force,
punishable with imprisonment for a term exceeding six
months, or an offence involving moral turpitude;
(b) a gross violation of the Act, rules, regulations and guidelines
issued thereunder, bye-laws or directions given by the
Governing Board which renders him not a fit and proper
person to continue acting as a registered valuer.
(4) Any order passed by the Disciplinary Committee shall be placed on
the website of the Organisation within seven days from passing of the
said order, with one copy each being provided to each of the parties to
the proceeding.
(5) Monetary penalty received by the Organisation under the orders

of the Disciplinary Committee shall be used for the professional
development.
25. (1) The Governing Board shall constitute an Appellate Panel
consisting of one independent director of the Organisation, one
member each from amongst the persons of eminence having experience
in the field of law and field of valuation, and one member nominated
by the authority.
(2) Any person aggrieved of an order of the Disciplinary Committee
may prefer an appeal before the Appellate Panel within thirty days
from the receipt of a copy of the final order.
(3) The Appellate Panel shall dispose of the appeal in the manner it
deems expedient, within thirty days of the receipt of the appeal.
XI. SURRENDER OF MEMBERSHIP AND EXPULSION FROM

MEMBERSHIP
Temporary Surrender of Membership.

26. (1) A member shall make an application for temporary surrender
of his membership of the Organisation at least thirty days before he-
(a) becomes a person not resident in India;
(b) takes up employment; or
(c) starts any business, except as specifically permitted under the
Code of Conduct; and upon acceptance of such temporary
surrender and on completion of thirty days from the date
of application for temporary surrender, the name of the
member shall be temporarily struck from the registers of
the Organisation, and the same shall be intimated to the
authority.
(2) No application for temporarily surrender of membership of the
Organisation shall be accepted if –
(a) there is a grievance or disciplinary proceeding pending
against the member before the Organisation or the authority,

and he has not given an undertaking to cooperate in such
proceeding; or
(b) the member has been appointed as a registered valuer for a
process under the Companies Act, 2013, and the appointment
of another registered valuer may be detrimental to such
process.
(3) A member may make an application to revive his temporarily
surrendered membership when the conditions for temporary
surrender as provided in sub-clause (1) cease to be applicable, and
upon acceptance of the application for revival, the name of the member
shall be re-inserted in the register of the Organisation, and the same
shall be intimated to the authority.
Surrender of Membership
27. (1) A member who wishes to surrender his membership of the
Organisation may do so by submitting an application for surrender of
his membership.
(2) Upon acceptance of such surrender of his membership, and
completion of thirty days from the date of such acceptance, the name
of the member shall be struck from the registers of the Organisation,
and the same shall be intimated to the authority.
28. Any fee that is due to the Organisation from a member surrendering
his membership shall be cleared prior to his name being struck from
the registers of the Organisation.
29. The Organisation may refuse to accept the surrender of membership
by any member if –
(a) there is any grievance or disciplinary proceeding pending
against the member before the Organisation or the authority;
or
(b) the member has been appointed as a registered valuer process
under the Companies Act, 2013, and the appointment of
another registered valuer may be detrimental to such process.
Expulsion from Membership.

30. A member shall be expelled by the Organisation –
(a) if he becomes ineligible to be enrolled under bye-law 9;
(b) on expiry of thirty days from the order of the Disciplinary
Committee, unless set aside or stayed by the Appellate Panel;
(c) upon non-payment of membership fee despite at least two
notices served in writing;
(d) upon the cancellation of his certificate of registration by the
authority;
(e) upon the order of any court of law.
[ANNEXURE-IV
1
Eligibility Qualification and Experience for Registration as Valuer

(See Explanation II to rule 4 )
Asset Class Eligibility Experience

in specified
Qualifications discipline
Plant and (i) Graduate in Mechanical, Electrical, (i) Five years

Machinery Electronic and Communication,
Electronic and Instrumentation,
Production, Chemical, Textiles,
Leather, Metallurgy, or Aeronautical
Engineering, or Graduate in Valuation
of Plant and Machinery or equivalent;
(ii) Post Graduate on above courses (ii) Three

years

Amendment Rules, 2018 (w.e.f. 13-1-2018). For details, visit ebook.mca.gov.in/
Actpagedisplay.aspx?PAGENAME=28375.
Land and (i) Graduate in Civil Engineering, (i) Five years

Building Architecture, or Town Planning or
equivalent;
(ii) Post Graduate on above courses and (ii) Three

also in valuation of land and building or years
Real Estate Valuation (a two-year full
time post-graduation course).
Securities or (i) Member of institute of Chartered Three years

Financial Assets Accountants of India, Member of
Institute of Company Secretaries
of India, Member of the Institute of Cost
Accountants of India, Master of
Business Administration or Post
Graduate Diploma in Business
Management (specialisation in finance)
(ii) Post Graduate in Finance
Any other asset class along with corresponding qualifications and experience
in accordance with rule 4 as may be specified by the Central Government.
Note : The eligibility qualification means qualification obtained from a

recognised Indian University or equivalent Institute whether in India
or abroad.
475
CHAPTER XVIII
COMPANIES (REMOVAL OF NAMES OF
COMPANIES FROM THE REGISTER OF
COMPANIES) RULES, 2016
In exercise of the powers conferred by sub-sections (1), (2) and (4) of
section 248 read with section 469 of the Companies Act, 2013 (18 of
2013) and in supersession of the Companies (Central Government)
General Rules and Forms, 1956 except as respects things done or
omitted to be done before such supersession, the Central Government
hereby makes the following rules, namely:-

(1) These rules may be called the Companies (Removal of Names of
Companies from the Register of Companies) Rules, 2016.
Official Gazette.
2. Definitions.
(b) “Form” or “e-Form” means a non-electronic form or an
electronic form annexed to these rules.
3. Removal of name of company from the Register on suo-motu basis.

(1) The Registrar of Companies may remove the name of a company
475
476 Companies (Removal of Names of Companies) Rules 2016
from the register of companies in terms of sub-section (1) of section

248 of the Act:
Provided that following categories of companies shall not be removed
from the register of companies under this rule and rule 4, namely : -
(i) listed companies;
(ii) companies that have been delisted due to non-compliance of
listing regulations or listing agreement or any other statutory
laws;
(iii) vanishing companies;
(iv) companies where inspection or investigation is ordered and
being carried out or actions on such order are yet to be taken
up or were completed but prosecutions arising out of such
inspection or investigation are pending in the Court;
(v) companies where notices under section 234 of the Companies
Act, 1956 (1 of 1956) or section 206 or section 207 of the
Act have been issued by the Registrar or Inspector and reply
thereto is pending or report under section 208 has not yet
been submitted or follow up of instructions on report under
section 208 is pending or where any prosecution arising out
of such inquiry or scrutiny, if any, is pending with the Court;
(vi) companies against which any prosecution for an offence is
pending in any court;
(vii) companies whose application for compounding is pending
before the competent authority for compounding the
offences committed by the company or any of its officers in
default;
(viii) companies, which have accepted public deposits which are
either outstanding or the company is in default in repayment
of the same;
(ix) companies having charges which are pending for satisfaction;
and
Companies (Removal of Names of Companies) Rules 2016 477
(x) companies registered under section 25 of the Companies

Act, 1956 or section 8 of the Act.
Explanation. – For the purposes of clause (iii), the expression
“vanishing company” means a company, registered under the Act or
previous company law or any other law for the time being in force and
listed with Stock Exchange which has failed to file its returns with the
Registrar of Companies and Stock Exchange for a consecutive period
of two years, and is not maintaining its registered office at the address
notified with the Registrar of Companies or Stock Exchange and none
of its directors are traceable.
(2) For the purpose of sub-rule (1), the Registrar shall give a notice in
writing in Form STK 1 which shall be sent to all the directors of the
company at the addresses available on record, by registered post with
acknowledgement due or by speed post.
(3) The notice shall contain the reasons on which the name of the
company is to be removed from the register of companies and shall seek
representations, if any, against the proposed action from the company
and its Directors along with the copies of relevant documents, if any,
within a period of thirty days from the date of the notice.
4. Application for removal of name of company.

(1) An application for removal of name of the company under sub-
section (2) of section 248 shall be made in Form STK-2 along with the
fee of five thousand rupees.
(2) Every application under sub-rule (1) shall accompany a no objection
certificate from appropriate Regulatory Authority concerned in respect
of following companies, namely :-
(i) companies which have conducted or conducting non-
banking financial and investment activities as referred to in
the Reserve Bank of India Act, 1934 (2 of 1934) or rules and
regulations there under;
(ii) housing finance companies as referred to in the Housing
Finance Companies (National Housing Bank) Directions,
2010 issued under the National Housing Bank Act, 1987 (53
of 1987);
(iii) insurance companies as referred to in the Insurance Act,
1938 (4 of 1938) or rules and regulations there under;
(iv) companies in the business of capital market intermediaries
as referred to in the Securities and Exchange Board of
India Act, 1992 (15 of 1992) or rules and regulations there
under;
(v) companies engaged in collective investment schemes as
referred to in the Securities and Exchange Board of India
Act, 1992 (15 of 1992) or rules and regulations there under;
(vi) asset management companies as referred to in the Securities
and Exchange Board of India Act, 1992 (15 of 1992) or rules
and regulations there under;
(vii) any other company which is regulated under any other law
for the time being in force.
(3) The application in Form STK 2 shall be accompanied by –
(i) indemnity bond duly notarised by every director in Form
STK 3;
(ii) a statement of accounts containing assets and liabilities of
the company made up to a day, not more than thirty days
before the date of application and certified by a Chartered
Accountant;
(iii) An affidavit in Form STK 4 by every director of the company;
(iv) a copy of the special resolution duly certified by each of the
directors of the company or consent of seventy five per cent
of the members of the company in terms of paid up share
capital as on the date of application;
(v) a statement regarding pending litigations, if any, involving
the company.
Companies (Removal of Names of Companies) Rules 2016 479
5. Manner of filing of application.

(1) The application in Form STK 2 shall be signed by a director duly
authorised by the Board in their behalf.
(2) Where the director concerned does not have a registered digital
signature certificate, a physical copy of the form duly filled in shall be
signed manually by the director duly authorised in that behalf and shall
be attached with the Form STK 2 while uploading the form.
6. Form to be certified.
The Form STK 2 shall be certified by a Chartered Accountant in whole
time practice or Company Secretary in whole time Practice or Cost
Accountant in whole time practice, as the case may be.
7. Manner of publication of notice.

(1) The notice under sub-section (1) or sub-section (2) of section 248
shall be in Form STK 5 or STK 6, as the case may be, and be-
(i) placed on the official website of the Ministry of Corporate
Affairs on a separate link established on such website in this
regard;
(ii) published in the Official Gazette;
(iii) published in English language in a leading English
newspaper and at least once in vernacular language in a
leading vernacular language newspaper, both having wide
circulation in the State in which the registered office of the
company is situated:
Provided that in case of any application made under sub-section (2) of
section 248 of the Act, the company shall also place the application on
its website, if any, till the disposal of the application.
1
Provided further that the publications of notice under clause (iii) of
this sub-rule, in respect of cases falling under sub-section (1) of section
248 shall be in Form No. STK 5A.
1. Inserted by the Companies (Removal of Names of Companies) Rules, 2016

Dated 12th April, 2017.
(2) The Registrar of Companies shall, simultaneously intimate the

concerned regulatory authorities regulating the company, viz, the
Income-tax authorities, central excise authorities and service-tax
authorities having jurisdiction over the company, about the proposed
action of removal or striking off the names of such companies and
seek objections, if any, to be furnished within a period of thirty days
from the date of issue of the letter of intimation and if no objections
are received within thirty days from the respective authority, it shall
be presumed that they have no objections to the proposed action of
striking off or removal of name.
8. Manner of notarisation, appostilisation or consularisation of

indemnity bond and declaration in case of foreign nationals or non-
resident Indians.
For the purposes of these rules, if the person is a foreign national or
non-resident Indian, the indemnity bond, and declaration shall be
notarised or appostilised or consularised.
9. Notice of striking off and dissolution of company.

The Registrar shall cause a notice under sub-section (5) of section 248
of striking off the name of the company from the register of companies
and its dissolution to be published in the Official Gazette in Form
STK 7 and the same shall also be placed on the official website of the
Ministry of Corporate Affairs.
10. Applications or forms pending before Central Government.

Any application or pending proceeding for striking off or Form-FTE
filed with the Registrar of Companies prior to the commencement
of these rules but not disposed of by such authority for want of any
information or document shall, on its submission, to the satisfaction of
the authority, be disposed of in accordance with the rules made under
the Companies Act, 1956 (1 of 1956).
481
CHAPTER XXI
COMPANIES (AUTHORISED TO REGISTER)
RULES, 2014
In exercise of the powers conferred by sub-section (1) of section 164,
sub-section (1) of section 466, section 367, and section 374 read with
sub-section (1) and sub-section (2) of section 469 of the Companies
Act, 2013 (18 of 2013) and in supersession of Companies (Central
Government’s) General Rules and Forms, 1956 prescribed under the
Companies Act, 1956 (1 of 1956) in so far as they relate to the matters
makes the following rules, namely: –
1. Short title and commencement

(1) These rules may be called the 1[Companies (Authorised to Register)
Rules, 2014]
(2) They shall come into force on 1st day of April, 2014.
2. Definitions.
(b) “Schedule” means the schedule annexed to these Rules;
(c) “fees” means the fees as specified in the Companies
1. Substituted by the Companies (Authorised to Register) Amendment Rules,

2016, (w.e.f. 31-05-2016) for: “Companies (Authorised to Registered) Rules,
2014”
481
482 Companies (Authorised to Register) Rules, 2014
(d) ‘‘Form’’ or “e-form” means the form in the schedule to these

rules which shall be used for the matter to which it relates;
(e) ‘Regional Director’ means the person appointed by the
(f) “Registrar (LLP)” means the Registrar dealing with the
matters relations to Limited Liability Partnership.
1
[(g) “firm” means a firm as defined in section 4 of the Indian
Partnership Act, 1932 (9 of 1932)]
2
[(h) “society” means a society registered under the Societies
Registration Act, 1860 (21 of 1860) and includes a society
registered under or deemed to be registered under any other
law for the time being in force;
(i) “trust” means an irrevocable public charitable or religious
trust registered under any law for the time being inforce and
represented by its trustees, in whom the trust property is
vested, as members;
(j) “Registrar of Firms” means the Registrar appointed under
section 57 of the Indian Partnership Act, 1932 (9 of 1932);
(k) “Registrar of Trusts” includes a Charity Commissioner, an
Inspector-General of Registration or such other authority
having the duty of registering trusts in a State.]
1. Inserted by the Companies (Authorised to Register) Amendment Rules,

2016, (w.e.f. 31-05-2016).
2. Inserted by the Companies (Authorised to Register) Second Amendment
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018).
Companies (Authorised to Register) Rules, 2014 483
[3. (1) For the purposes of sub-section (2) of section 366 of the Act, the
1
1. Substituted by the Companies (Authorised to Register) Second Amendment

Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018) for : 3. (1) For the purposes
of sub-section (2) of section 366 of the Act, the provision of Chapter II relating
to incorporation of company and matters incidental thereto shall be applicable
mutatis mutandis for such registration:
Provided that there shall be seven or more members for the purposes of
registration of a company under this sub rule.
(2) A company after obtaining availability of name in terms of the provisions
of section 4 of the Act, shall attach the required documents and information to
the Registrar along with Form No.URC. 1 in the following manner, namely: –
(a) For registration as a company limited by shares :
(i) A list showing the names, addresses, and occupations of all persons named
therein as members with details of shares held by them respectively, showing
separately shares allotted for consideration in cash and for consideration other
than cash alongwith the source of consideration) and distinguishing, in cases
where the shares are numbered, each share by its number, who on a day, not
being more than six clear days before the day of seeking registration, [were
partners of the Limited Liability Partnership or firm as the case may be];
(ii) a list showing the particulars of persons proposed as the first directors of the
company, their names, including surnames or family names, the DIN, passport
number (if any) with expiry date, residential addresses and their interests in
other firms or bodies corporate along with their consent to act as directors of
the company;
(iii) an affidavit from each of the persons proposed as the first directors, that
he is not disqualified to be a director under sub-section (1) of section 164 and
that all the documents filed with the Registrar for registration of the company
contain information that is correct and complete and true to the best of his
knowledge and belief;
(iv) a list containing the names and [addresses of the partners of the Limited
Liability Partnership or firm as the case may be];
[(v) in case of a firm, deeds of partnership, bye laws or other instrument
constituting or regulating the company and duly verified in the manner
provided in sub-rule (4) and in case the deed of partnership was revised at any
time in the past, copies of the principal and all subsequent deeds including the
latest deed, along with the certificate of the registration issued by Registrar of
firms, in case the firm is registered]
(vi) a statement specifying the following particulars:–
(i) the nominal share capital of the company and the number of shares into
provision of Chapter II of the Act relating to incorporation of company
which it is divided;
(ii) the number of shares taken and the amount paid on each share;
(iii) the name of the company, with the addition of the word “Limited” or
“Private Limited” as the case may require, as the last word or words thereof;
(vii) written consent or No Objection Certificate from all the secured creditors
of the applicant;
(viii) written consent from the majority of members whether present in person
or by proxy at a general meeting agreeing for registration under this part.
[(ix) an undertaking that the proposed directors shall comply with the
requirements of Indian Stamp Act, 1899 (2 of 1899) as applicable;
(x) a statement of assets and liabilities of the Limited Liability Partnership or
the firm, as the case may be, duly certified by a chartered accountant in practice
made as on a date not earlier than thirty days of the filing of form No.URC-1;
(xi) a copy of latest income tax return of the Limited Liability Partnership or
firm as the case may be.]
(b) For registration as a company limited by guarantee or as an unlimited
company:
(i) a list showing the names, addresses and occupations of all persons, who on
a day, not being more than six clear days before the day of seeking registration,
were members of the company with proof of membership;
(ii) a list showing the particulars of persons proposed as the first directors of the
company, their names, including surnames or family names, the DIN, passport
number (if any) with expiry date, residential addresses and their interests in
other firms or bodies corporate along with their consent to act as directors of
the company;
(iii) an affidavit from each of the first directors, that he is not disqualified to be
a director under sub-section (1) of section 164 and that all the documents filed
with the Registrar for registration of the company contain information that is
correct and complete and true to the best of his knowledge and belief;
(iv) a list containing the names and [addresses of the Partners of the Limited
Liability Partnership or firm as the case may be];
[(v) a copy of instrument constituting or regulating the company and duly
verified in the manner provided in sub-rule (4) and in case the deed of
partnership was revised at any time in the past, copies of principal and all the
subsequent deeds including the latest deed, along with the certificate of the
registration issued by Registrar of firms if any;]
(vi) in the case of a company intended to be registered as a company limited by
guarantee, a copy of the resolution declaring the amount guarantee.
and matters incidental thereto shall be applicable mutatis mutandis for

such registration:
Provided that there shall be two or more members for the purposes of
registration of a company under this sub-rule :
Provided further that a company with less than seven members shall
register as a private company.
(2) A company shall attach and provide the required documents and
information to the Registrar along with Form No. URC. 1 in the
(a) In case of an application by a Limited Liability Partnership or
firm for registration as a company limited by shares -
(i) a list showing the names, addresses, and occupations
of all persons named therein as partners with details of
shares held by them respectively, showing separately
(vii) Written consent or No Objection Certificate from all the secured creditors
of the applicant.
(viii) Written consent from the majority of members whether present in person
or by proxy at a general meeting agreeing for registration under this part.
[(ix) an undertaking that the proposed directors shall comply with the
requirements of Indian Stamp Act, 1899 (2 of “1899) as applicable;
(x) a statement of assets and liabilities of the Limited Liability Partnership or
the firm, as the case may be, duly certified by a chartered accountant in practice
which is made as on a date not earlier than thirty days of the filing of Form No.
URC. 1;
(xi) a copy of latest income tax return of the Limited Liability Partnership or
firm as the case may be.]
[(3) An undertaking, from all the members or partners providing that in the
event of registration as a company under Part I of Chapter XXI of the Act,
necessary documents or papers shall be submitted to the registering or other
authority with which the company was earlier registered, for its dissolution as
a firm.]
(4) The list of members and directors and any other particulars relating to
the company which are required to be delivered to the Registrar shall be duly
verified by the declaration of any two or more proposed directors, or two or
more [designated partners of the Limited Liability Partnership or authorised
partners of the firm as the case may be.]
shares allotted for consideration in cash and for

consideration other than cash along-with the source
of consideration and distinguishing, in cases where
the shares are numbered, each share by its number,
who on a day, not being more than six clear days
before the day of seeking registration, were partners
of the Limited Liability Partnership or firm as the case
may be;
(ii) a list showing the particulars of persons proposed as
the first directors of the company, alongwith Director
Identification Number (DIN), passport number, if
any, with expiry date, residential addresses and their
interests in other firm or body corporate along with
their consent to act as directors of the company;
(iii) in case of a firm, deed of partnership, bye-laws or
other instrument constituting or regulating the firm
and in case the deed of partnership was revised at
any time in the past, copies of the principal and all
subsequent deeds including the latest deed, along
with the certificate of the registration issued by the
Registrar of Firms, in case the firm is registered;
(iv) written consent or No Objection Certificate from all
the secured creditors of the applicant;
(v) written consent, from the majority of members
whether present in person or by proxy at a general
meeting, agreeing for such registration;
(vi) an undertaking that the proposed directors shall
comply with the requirements of the Indian Stamp
Act, 1899 (2 of 1899) as applicable;
(vii) a copy of the latest income tax return of the Limited
Liability Partnership or firm, as the case may be.
(b) In case of an application by a Limited Liability Partnership or
firm for registration as a company limited by guarantee or as
an unlimited company-
(i) a list showing the names, addresses and occupations
of all persons, who on a day, not being more than six
clear days before the day of seeking registration, were
partners of the Limited Liability Partnership or firm,
as the case may be with proof of membership;
the first directors of the company, alongwith DIN,
passport number, if any, with expiry date, residential
addresses and their interests in other firm or body
corporate along with their consent to act as directors
of the company;
(iii) in case of a firm, deed of partnership, bye laws or other
instrument constituting or regulating the company
and in case the deed of partnership was revised at
any time in the past, copies of the principal and all
subsequent deeds including the latest deed, along
with the certificate of the registration issued by the
Registrar of Firms, in case the firm is registered;
(iv) in the case of a company intended to be registered
as a company limited by guarantee, a copy of the
resolution declaring the amount of guarantee;
(v) written consent or No Objection Certificate from all
(vi) written consent from the majority of members
meeting agreeing for such registration;
(vii) an undertaking that the proposed directors shall
Act, 1899 (2 of 1899), as applicable;
(viii) a copy of the latest income tax return of the Limited
Liability Partnership or firm, as the case may be.
(c) In case of an application by a society for registration as a

company limited by guarantee under section 8 –
members of the society with proof of membership;
addresses and their interests in other firms or bodies
of the company;
(iii) a list containing the names and addresses of the
members of the governing body of the society;
(iv) a certified copy of the certificate of registration of the
society;
(v) written consent or No Objection Certificate from all
(vi) written consent .from the majority of members
meeting agreeing for such registration, and the
resolution shall also provide for declaration of the
amount of guarantee;
(vii) an undertaking that the proposed directors shall
(viii) a copy of the latest income tax return of the society;
(ix) details of the objects of the company alongwith a
declaration from all the members that the restrictions
and prohibitions as mentioned in clause (b) and clause
(c) of sub-section (1) of section 8 of the Act shall be
complied.
(d) In case of an application by a trust for registration as a

company limited by guarantee under section 8 –
trustees of the trust with proof thereof;
addresses and their interests in other firm or body
of the company;
(iii) a certified copy of the certificate of registration of the
trust and the trust deed;
(iv) written consent or No Objection Certificate from all
(v) written consent from the majority of members
meeting agreeing for such registration, and the
resolution shall also provide for declaration of the
amount of guarantee;
(vi) an undertaking that the proposed directors shall
(vii) a copy of the latest income tax return of the trust;
(viii) details of the objects of the company alongwith a
declaration from all the members that the restrictions
and prohibitions as mentioned in clause (b) and clause
(c) of sub-section (1) of section 8 of the Act shall be
complied.
(3) Where an application is made by a society or trust for registration
as a company limited by guarantee and it has been proved to the
satisfaction of the Registrar that the proposed company has its

objects in accordance with clause (a) of sub-section (1) of section
8 of the Act and it intends to comply with the restrictions and
prohibitions as mentioned respectively in clause (b) and clause (c)
of that sub-section, the Registrar shall issue a license in Form No.
INC. 16 to allow such society or trust to be registered as a limited
company without the addition to its name of the word “Limited”, or
as the case may be, the words “Private Limited” and thereupon issue
a certificate of incorporation in terms of sub-rule (4) of rule 4 on an
application submitted under Chapter II of the Act for incorporation
of a company:
Provided further that a society which has not filed the annual or other
returns, statutorily required to be filed with the Registrar of Societies,
shall not be eligible to apply for registration under section 366 of the
Act.
(4) An undertaking from all the members or partners or trustees
providing that in the event of registration as a company under Part
I of Chapter XXI of the Act, necessary documents or papers shall be
submitted to the registering or other authority with which the company
was earlier registered, for its dissolution:
Provided that no such undertaking shall be required to be submitted in
case the application for registration under Part I of Chapter XXI of the
Act has been made by a Limited Liability Partnership registered under
the Limited Liability Partnership Act, 2008 (6 of 2009).
(5) The list of members and directors and any other particulars relating
to the company which are required to be delivered to the Registrar
shall be duly verified by the declaration of any two or more proposed
directors.]
4. Obligation of companies seeking registration to make publication.

(1) For the purpose of clause (b) of section 374 of the Act, every
‘company’ seeking registration under the provision of Part I of Chapter
XXI shall publish an advertisement about registration under the said
Part, seeking objections, if any within twenty one clear days from
the date of publication of notice and the said advertisement shall be

in Form No. URC. 2, which shall be published 1[in a newspaper in
English and in any vernacular language, circulating in the district in
which 2[Limited Liability Partnership, firm, society or trust, as the
came may be, is situate]].
(2) A copy of the notice, as published and the copy of the notice served
on Registrar (LLP) 3[Registrar of Firms, Registrar of Societies or
Registrar of Trust, as the case may be] along with proof of service, shall
be attached with Form No.URC. 1.
(3) The Registrar shall, after considering the application and the
objections, if any, received by him within thirty days from the date
of publication of advertisement, and after ensuring that the company
has addressed the objections, suitably decide whether the registration
should or should not be granted.
(4) If the Registrar is satisfied on the basis of documents and information
filed by the applicants, decides that the applicant should be registered,
he shall issue a certificate of incorporation in Form No.INC.11.
5. Other obligations of companies seeking registration.

For the purpose of clause (d) of section 374 of the Act, –

[(i) where a firm, society or trust has obtained a certificate of
4

2016 (w.e.f. 31-05-2016) for:
“in a newspaper and in English and in the principal vernacular language of the
district in which Limited Liability Partnership is in existence and circulated in
that district”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018) for: “Limited Liability
Partnership or the firm as the case may be is situate”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018)
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018) for:
registration under section 367 of the Act, an intimation

to this effect shall be given within fifteen days of such
registration to the concerned Registrar of Firms, Registrar
of Societies or Registrar of Trusts, as the case may be, under
which it was originally registered, along with documents for
its dissolution as a firm, society or trust as the case may be;]
(ii) statement of accounts, prepared not later than fifteen days
preceding the date of seeking registration and certified by the
Auditor together with the Audited Financial Statements of
the previous year, wherever applicable shall be attached with
Form No.URC. 1:
Provided that if the assets of the existing company during
the immediately preceding three years are revalued for
the purpose of vesting of its assets with the company to be
incorporated under this Act, the surplus arising out of such
revaluation shall not be deemed to have been credited to the
capital account or current account of partners.
(iii) notice shall be given to the 1[Registrar of firms] 2[Registrar
of Societies or Registrar of Trusts, as the case may be] under
which it was originally registered and shall require that
objections, if any to be made by such concerned 3[Registrar
of Firms] 4[Registrar of Societies or Registrar of Trusts, as the
(i) where a firm has obtained a certificate of registration under section 367, an
intimation to this effect shall be given, within fifteen days of such registration to
the concerned Registrar of firms under which it was originally registered, along
with papers for its dissolution as a firm
2016 (w.e.f. 31-05-2016) for: “concerned Registrar (LLP)”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018).
2016 (w.e.f. 31-05-2016) for: “Registrar of Companies (LLP)”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018).
case may be] to the Registrar, shall be made within a period

of twenty-one days from the date of such notice, failing
which it shall be presumed that they have no objection
and the notice shall disclose the purpose and substance of
matters in relation to objections;
(iv) in case of the registration of Limited Liability Partnership
into a company under these rules, a declaration by the said
Limited Liability Partnership that it has filed all documents
which are required to be filed under the Liability Partnership
Act with the Registrar (LLP) and the declaration shall be
attached with Form No. URC. 1;
(v) 1
[a statement of proceedings, if any, by or against the
2
[Limited Liability Partnership, firm, society or trust] which
are pending in any court or any other Authority shall be
attached with Form No. URC. 1.
[(vi) in case a society or trust intending to register as a company
3
under section 366 of the Act is registered under section

12A of the Income Tax Act, 1961 (43 of 1961) for claiming
exemption on its income, an intimation in this regard shall
be sent to the Income- tax authorities and proof of its service
shall be attached with Form No. URC. 1;.
(vii) upon registration of a society or trust as a company under
the Act, no application for conversion into a company of any
other kind, except conversion from a private company to a
public company or vice-versa, shall be made till the expiry

2016 (w.e.f. 31-05-2016) for: “a statement of proceedings, if any, by or against
the Limited Liability Partnership”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018) for : “Limited Liability
Partnership or the firm.”
Rules, 2018 dated 05-07-2018 (w.e.f. 15-08-2018).
of a period of ten years from the date of incorporation under

the Act.
(viii) no application for registration as a company under the
Act shall be made by a trust during the pendency of any
proceedings under section 92 of the Code of Civil Procedure
(5 of 1908).]
495
CHAPTER XXII
COMPANIES (REGISTRATION OF FOREIGN
COMPANIES) RULES, 2014
In exercise of the powers conferred under clause (c) and clause (h) of
sub-section (1) and sub-section (3) of section 380, clause (a) of sub-
section (1) and sub-section (3) of section 381, section 385, clause (a)
of section 386, section 389 and section 390 read with section 469 of
the Companies Act, 2013, and in supersession of the Companies

(1) These rules may be called the Companies (Registration of Foreign
Companies) Rules, 2014.
(2) They shall come into force on the 1st day of April, 2014
2. Definitions.
(b) “Annexure” means the Annexure enclosed to these rules;
(c) For the purposes of clause (42) of section 2 of the Act,
«electronic mode» means carrying out electronically based,
whether main server is installed in India or not, including,
but not limited to –
(i) business to business and business to consumer
495
496 Companies (Registration of Foreign Companies) Rules, 2014
transactions, data interchange and other digital supply

transactions;
(ii) offering to accept deposits or inviting deposits or
accepting deposits or subscriptions in securities, in
India or from citizens of India;
(iii) financial settlements, web based marketing, advisory
and transactional services, database services and
(iv) online services such as telemarketing, telecommuting,
telemedicine, education and information research;
and
(v) all related data communication services,
whether conducted by e-mail, mobile devices, social media,
cloud computing, document management, voice or data
transmission or otherwise;
(d) “fees” means the fees as specified in the Companies
(e) “Form” or “e-Form” means a form set forth in Annexure to
relates;
(f) “Schedule” means the Schedule to the Act;
(g) “section” means section of the Act.
them in the Act or in the said rules.
3. Particulars Relating to Directors and Secretary to be Furnished to

the Registrar by Foreign Companies.
(1) Every foreign company shall, within thirty days of establishment of
its place of business in India, in addition to the particulars specified in
Companies (Registration of Foreign Companies) Rules, 2014 497
sub-section (1) of section 380 of the Act, also deliver to the Registrar
for registration, a list of directors and Secretary of such company.
(2) The list of directors and secretary or equivalent (by whatever name
called) of the foreign company shall contain the following particulars,
for each of the persons included in such list, namely:-
(a) personal name and surname in full;
(b) any former name or names and surname or surnames in full;
(c) father’s name or mother’s name and spouse’s name;
(d) date of birth;
(e) residential address;
(f) nationality;
(g) if the present nationality is not the nationality of origin, his
nationality of origin;
(h) passport Number, date of issue and country of issue; (if
a person holds more than one passport then details of all
passports to be given)
(i) income-tax permanent account number (PAN) , if applicable;
(j) occupation, if any ;
(k) whether directorship in any other Indian company, (Director
Identification Number (DIN), Name and Corporate
Identity Number (CIN) of the company in case of holding
directorship);
(l) other directorship or directorships held by him;
(m) Membership Number (for Secretary only); and
(n) e-mail ID.
(3) A foreign company shall, within a period of thirty days of the
establishment of its place of business in India, file with the registrar
Form FC-1 with such fee as provided in Companies (Registration
Offices and Fees) Rules, 2014 and with the documents required to be
delivered for registration by a foreign company in accordance with the

provisions of sub-section (1) of section 380 and the application shall also
be supported with an attested copy of approval from the Reserve Bank
of India under Foreign Exchange Management Act or Regulations, and
also from other regulators, if any, approval is required by such foreign
company to establish a place of business in India or a declaration from
the authorised representative of such foreign company that no such
approval is required.
(4) Where any alteration is made or occurs in the document delivered
to the Registrar for registration under sub-section (1) of section 380,
the foreign company shall file with the Registrar, a return in Form FC-2
and Fees) Rules, 2014 containing the particulars of the alteration,
within a period of thirty days from the date on which the alteration
was made or occurred.
4. Financial Statement of Foreign company.

(1) Every foreign company shall prepare financial statement of its
Indian business operations in accordance with Schedule III or as near
thereto as may be possible for each financial year including-
(i) documents required to be annexed thereto in accordance
with the provisions of Chapter IX of the Act i.e. Accounts of
Companies ;
(ii) documents relating to copies of latest consolidated financial
statements of the parent foreign company , as submitted by it
to the prescribed authority in the country of its incorporation
under the provisions of the law for the time being in force in
that country:
Provided that where such documents are not in English
language, there shall be annexed to it a certified translation
thereof in the English language:
Provided further that where the Central Government has
exempted or specified different documents for any foreign
company or a class of foreign companies, then documents as

specified shall be submitted;
(iii) Such other documents as may be required to be annexed or
attached in accordance with sub-rule (2).
(2) Every foreign company shall, along with the financial statement
required to be filed with the Registrar, attach thereto the following
documents; namely:-
(a) Statement of related party transaction, which shall include –
(i) name of the person in India which shall be deemed
to be the related party within the meaning of clause
(76) of section 2 of the Act of the foreign company
or of any subsidiary or holding company of such
foreign company or of any firm in which such foreign
company or its subsidiary or holding company is a
partner;
(ii) nature of such relationship;
(iii) description and nature of transaction;
(iv) amount of such transaction during the year with
opening, closing, highest and lowest balance during
the year and provisions made (if any) in respect of
such transactions;
(v) reason of such transaction;
(vi) material effect of such transaction on both the parties;
(vii) amount written off or written back in respect of dues
from or to the related parties;
(viii) a declaration that such transactions were carried out
at arms length basis; and
(ix) any other details of the transaction necessary to
understand the financial impact;
(b) Statement of repatriation of profits which shall include-
(i) amount of profits repatriated during the year;

(ii) recipients of the repatriation;
(iii) form of repatriation;
(iv) dates of repatriation;
(v) details if repatriation made to a jurisdiction other
than the residence of the beneficiary;
(vi) mode of repatriation; and
(vii) approval of the Reserve Bank of India or any other
authority, if any.
(c) Statement of transfer of funds (including dividends if any)
which shall, in relation of any fund transfer between place of
business of foreign company in India and any other related
party of the foreign company outside India including its
holding, subsidiary and associate company, include-
(i) date of such transfer;
(ii) amount of fund transferred or received;
(iii) mode of receipt or transfer of fund;
(iv) purpose of such receipt or transfer; and
(v) approval of Reserve Bank of India or any other
authority, if any.
(3) The documents referred to in this rule shall be delivered to the
Registrar within a period of six months of the close of the financial
year of the foreign company to which the documents relate:
Provided that the Registrar may, for any special reason, and on
application made in writing by the foreign company concerned, extend
the said period by a period not exceeding three months.
5. Audit of Accounts of Foreign Company.

(1) Every foreign company shall get its accounts, pertaining to the Indian
business operations prepared in accordance with the requirements of

clause (a) of sub-section (1) of section 381 and Rule 4, audited by a
practicing Chartered Accountant in India or a firm or limited liability
partnership of practicing chartered accountants.
Explanation. – For the purposes of this sub-rule, the expressions
“Chartered Accountant”, “Firm” and limited liability partnership shall
have the meanings respectively assigned to them under the Act and
Limited Liability Partnership Act, 2008 (6 of 2009) respectively.
(2) The provisions of Chapter X i.e. Audit and Auditors and rules made
there under, as far as applicable, shall apply, mutatis mutandis, to the
foreign company.
6. List of Places of Business of Foreign Company.

Every foreign company shall file with the Registrar, along with the
financial statement, in Form FC.3 with such fee as provided under
Companies (Registration Offices and Fees) Rules, 2014 a list of all the
places of business established by the foreign company in India as on the
date of balance sheet.
7. Annual Return.
Every foreign company shall prepare and file, within a period of sixty
days from the last day of its financial year, to the Registrar annual
return in Form FC.4 along with such fee as provided in the Companies
(Registration Offices and Fees) Rules, 2014 containing the particulars
as they stood on the close of the financial year.
8. Office Where Documents to be Delivered and Fee for Registration

of Documents.
(1) Any document which any foreign company is required to deliver
to the Registrar shall be delivered to the Registrar having jurisdiction
over New Delhi, and references to the Registrar in Chapter XXII of the
Act i.e. Companies Incorporated Outside India and these rules shall be
construed accordingly.
(2) The fee to be paid to the Registrar for registering any document
relating to a foreign company shall be such as provided in the

Companies (Registration Offices and Fees) Rules, 2014.
(3) If any foreign company ceases to have a place of business in India,
it shall forthwith give notice of the fact to the Registrar, and as from
the date on which notice is so given, the obligation of the company to
deliver any document to the Registrar shall cease, provided it has no
other place of business in India.
9. Certification.
A copy of any charter, statutes, memorandum and articles, or other
instrument constituting or defining the constitution of a Foreign
company shall be duly certified to be a true copy in the manner given
below –
(1) If the company is incorporated in a country outside the
Commonwealth-
(a) the copy aforesaid shall be certified as a true copy by –
(i) an official of the Government to whose custody the
original is situated; or
(ii) a Notary (Public) of such Country; or
(iii) an officer of the company.
(b) The signature or seal of the official referred to in sub-clause (i)
of clause (a) or the certificate of the Notary (Public) referred
to in sub-clause (ii) of clause (a) shall be authenticated by
a diplomatic or consular officer empowered in this behalf
under section 3 of the Diplomatic and Consular Officers
(Oaths and fees) Act, 1948 (XL of 1948), or where there is no
such officer, by any of the officials mentioned in section 6 of
the Commissioners of Oath Act, 1889 (52 and 53 Vic. C. 10),
or in any relevant Act for the said purpose.
(c) The certificate of the officer of the company referred to in
sub-clause (iii) of clause (a) shall be signed before a person
having authority to administer an oath as provided under
section 3 of the Diplomatic and Consular Officers (Oath and

Fees) Act, 1948 (XL of 1948), or as the case may be, by section
3 of the Commissioners of Oath Act, 1889 (52 and 53 Vic, C.
10) and the status of the person administering the oath in
the latter case being authenticated by any official specified in
section 6 of the Commissioners of Oaths Act, 1889 (52 and
53 Vic. C. 10) or in any relevant Act for the said purpose.
(2) If the company is incorporated in any part of the Commonwealth,
the copy of the document shall be certified as a true copy by-
(a) an official of the Government to whose custody the original
of the document is committed; or
(b) a Notary (Public) in that part of the Commonwealth; or
(c) an officer of the company, on oath before a person
having authority to administer an oath in that part of the
Commonwealth.
(3) Any altered document delivered to the Registrar should also be duly
certified in the manner mentioned above.
(4) If the Company is incorporated in a country falling outside the
Commonwealth, but a party to the Hague Apostille Convention, 1961-
(a) the copy of the documents shall be certified as a true copy by
an official of the Government to whose custody the original
is committed and be duly apostillised in accordance with
Hague Convention;
(b) a list of the directors and the secretary of the Company,
if any, the name and address of persons resident in India,
authorized to accept notice on behalf of the Company shall
be duly notarized and be apostillised in the Country of their
origin in accordance with Hague Convention;
(c) the signatures and address on the Memorandum of
Association and proof of identity, where required, of foreign
nationals seeking to register a company in India shall be
notarized before the notary of the country of their origin
and be duly apostillised in accordance with the said Hague

Convention.
10. Authentication of Translated Documents.

(1) All the documents required to be filed with the Registrar by
the foreign companies shall be in English language and where any
such document is not in English language, there shall be attached a
translation thereof in English language duly certified to be correct in
the manner given in these rules.
(2) Where any such translation is made outside India, it shall be
authenticated by the signature and the seal, if any, of-
(a) the official having custody of the original; or
(b) a Notary (Public) of the country (or part of the country)
where the company is incorporated:
Provided that where the company is incorporated in a country
outside the Commonwealth, the signature or seal of the
person so certifying shall be authenticated by a diplomatic or
consular officer empowered in this behalf under section 3 of
the Diplomatic and Consular Officers (Oaths and Fees) Act,
1948, or, where there is no such officer, by any of the officials
mentioned in section 6, of the Commissioners of Oaths Act,
1889 (52 and 53 Vic C 10), or in any relevant Act for the said
purpose.
(3) Where such translation is made within India, it shall be authenticated
by-
(a) an advocate, attorney or pleader entitled to appear before any
High Court; or
(b) an affidavit, of a competent person having, in the opinion of
the Registrar, an adequate knowledge of the language of the
original and of English.
11. Documents to be Annexed to Prospectus.

The following documents shall be annexed to the prospectus, namely:-
(a) any consent to the issue of the prospectus required from any
person as an expert;
(b) a copy of contracts for appointment of managing director or
manager and in case of a contract not reduced into writing, a
memorandum giving full particulars thereof;
(c) a copy of any other material contracts, not entered in the
ordinary course of business, but entered within preceding
two years;
(d) a copy of underwriting agreement; and
(e) a copy of power of attorney, if prospectus is signed through
duly authorized agent of directors.
12. Action for Improper Use or Description as Foreign Company.

If any person or persons trade or carry on business in any manner under
any name or title or description as a foreign company registered under
the Act or the rules made there under, that person or each of those
persons shall, unless duly registered as foreign company under the
Act and rules made there under, shall be liable for investigation under
section 210 of the Act and action consequent upon that investigation
shall be taken against that person.
13. Issue of Indian Depository Receipts (IDRs).

(1) For the purposes of section 390, no company incorporated or to
be incorporated outside India, whether the company has or has not
established, or may or may not establish, any place of business in
India (hereinafter in this rule called ‘issuing company’) shall make
an issue of Indian Depository Receipts (IDRs) unless such company
complies with the conditions mentioned under this rule, in addition
to the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 and any directions issued
by the Reserve Bank of India.
Explanation. – For the purposes of this rule, the term “Indian Depository
Receipt” (hereinafter referred to as ‘IDR’) means any instrument in the
form of a depository receipt created by a Domestic Depository in India

and authorized by a company incorporated outside India making an
issue of such depository receipts.
(2) The issuing company shall not issue IDRs unless –
(a) its pre-issue paid-up capital and free reserves are at least
US$ 50 million and it has a minimum average market
capitalization (during the last three years) in its parent
country of at least US$ 100 million;
(b) it has been continuously trading on a stock exchange in
its parent or home country (the country of incorporation
of such company) for at least three immediately preceding
years;
(c) it has a track record of distributable profits in terms of section
123 of the Act, for at least three out of immediately preceding
five years;
(d) It fulfills such other eligibility criteria as may be laid down
by the Securities and Exchange Board of India from time to
time in this behalf.
(3) The issuing company shall follow the following procedure for
making an issue of IDRs:
(a) the issuing company shall, where required, obtain the
necessary approvals or exemptions from the appropriate
authorities from the country of its incorporation under the
relevant laws relating to issue of capital and IDRs.
(b) issuing company shall obtain prior written approval from the
Securities and Exchange Board of India on an application
made in this behalf for issue of IDRs along with the issue size.
(c) an application under clause (b) shall be made to the Securities
and Exchange Board of India (along with draft prospectus)
at least ninety days prior to the opening date of the IDRs
issue, in such form, along with such fee and furnishing
such information as may be specified by the Securities and
Exchange Board of India from time to time:
Provided that the issuing company shall also file with the
Securities and Exchange Board of India, through a Merchant
Banker, a due diligence report along with the application
under clause (b) in the form specified by the Securities and
Exchange Board of India.
(d) the Securities and Exchange Board of India may, within a
period of thirty days of receipt of an application under clause
(c), call for such further information, and explanations, as
it may deem necessary, for disposal of such application and
shall dispose the application within a period of thirty days of
receipt of further information or explanation:
Provided that if within a period of sixty days from the date of
submission of application or draft prospectus, the Securities
and Exchange Board of India specifies any changes to be
made in the draft prospectus, the prospectus shall not be filed
with the Securities and Exchange Board of India or Registrar
of Companies unless such changes have been incorporated
therein.
(e) the issuing company shall on approval being granted by the
Securities and Exchange Board of India to an application
under clause (b), pay to the Securities and Exchange Board
of India an issue fee as may be prescribed from time to time
by the Securities and Exchange Board of India.
(f) the issuing company shall file a prospectus, certified by two
authorized signatories of the issuing company, one of whom
shall be a whole-time director and other the Chief Financial
Officer, stating the particulars of the resolution of the Board
by which it was approved with the Securities and Exchange
Board of India and Registrar of Companies, New Delhi
before such issue:
Provided that at the time of filing of said prospectus with
the Registrar of Companies, New Delhi, a copy of approval
granted by the Securities and Exchange Board of India
and the statement of fees paid by the Issuing Company to

the Securities and Exchange Board of India shall also be
attached.
(g) the prospectus to be filed with the Securities and Exchange
Board of India and the Registrar of Companies, New Delhi
shall contain the particulars as prescribed in sub-rule (8) and
shall be signed by all the whole-time directors of the issuing
company, and the Chief Financial Officer.
(h) the issuing company shall appoint an overseas custodian
bank, a Domestic Depository and a Merchant Banker for the
purpose of issue of IDRs.
(i) the issuing company may appoint underwriters registered
with the Securities and Exchange Board of India to
underwrite the issue of IDRs.
(j) the issuing company shall deliver the underlying equity shares
or cause them to be delivered to an Overseas Custodian Bank
and the said bank shall authorize the domestic depository to
issue IDRs.
(k) the issuing company shall obtain in-principle listing
permission from one or more stock exchanges having
nationwide trading terminals in India.
Explanation – For the purposes of this rule, –
(i) “Domestic Depository” means custodian of securities
registered with the Securities and Exchange Board of India
and authorized by the issuing company to issue IDRs.
(ii) “Merchant Banker” means a Merchant Banker as defined
in sub-regulation (cb) of regulation 2 of the Securities and
Exchange Board (Merchant Bankers) Regulations, 1992.
(iii) “Overseas Custodian Bank” means a banking company
which is established in a country outside India and which
acts as custodian for the equity shares of Issuing Company,
against which IDRs are proposed to be issued by having a
custodial arrangement or agreement with the Domestic

Depository or by establishing a place of business in India.
(4) The Merchant Banker to the issue of IDRs shall deliver for
registration the following documents or information to the Securities
and Exchange Board of India and Registrar of Companies at New
Delhi, namely:-
(a) instrument constituting or defining the constitution of the
issuing company;
(b) the enactments or provisions having the force of law by or
under which the incorporation of the Issuing company was
effected, a copy of such provisions attested by an officer of the
company be annexed;
(c) if the issuing company has established place of business in
India, address of its principal office in India;
(d) if the issuing company does not establish a principal place
of business in India, an address in India where the said
instrument, enactments or provision or copies thereof are
available for public inspection, and if these are not in English,
a translation thereof certified by a key managerial personnel
of the Issuing company shall be kept for public inspection;
(e) a certified copy of the certificate of incorporation of the
issuing company in the country in which it is incorporated;
(f) the copies of the agreements entered into between the
issuing company, the overseas custodian bank, the Domestic
Depository, which shall inter alia specify the rights to be
passed on to the IDR holders;
(g) if any document or any portion thereof required to be
filed with the Securities and Exchange Board of India or
the Registrar of Companies is not in English language, a
translation of that document or portion thereof in English,
certified by a key managerial personnel of the company to be
correct and attested by an authorized officer of the Embassy
or Consulate of that country in India, shall be attached to

each copy of the document.
(5) (a) No application form for the securities of the issuing company
shall be issued unless the form is accompanied by a memorandum
containing the salient features of prospectus in the specified form.
(b) An application form can be issued without the memorandum as
specified in clause (a), if it is issued in connection with an invitation to
enter into an underwriting agreement with respect to the IDRs.
(c) The prospectus for subscription of IDRs of the Issuing company
which includes a statement purporting to be made by an expert
shall not be circulated, issued or distributed in India or abroad
unless a statement that the expert has given his written consent to
the issue thereof and has not withdrawn such consent before the
delivery of a copy of the prospectus to the Securities and Exchange
Board of India and the Registrar of Companies, New Delhi, appears
on the prospectus.
(d) The provisions of the Act shall apply for all liabilities for mis-
statements in prospectus or punishment for fraudulently inducing
persons to invest money in IDRs.
(e) The person(s) responsible for issue of the prospectus shall not incur
any liability by reason of any non-compliance with or contravention of
any provision of this rule, if –
(i) as regards any matter not disclosed, he proves that he had no
knowledge thereof; or
(ii) the contravention arose in respect of such matters which in
the opinion of the Central Government or the Securities and
Exchange Board of India were not material.
(6) (a) A holder of IDRs may transfer the IDRs, may ask the Domestic
Depository to redeem them or any person may seek reissuance of IDRs
by conversion of underlying equity shares, subject to the provisions of the
Foreign Exchange Management Act, 1999, the Securities and Exchange
Board of India Act, 1992, or the rules, regulations or guidelines issued
under these Acts, or any other law for the time being in force;
(b) In case of redemption, Domestic Depository shall request the

Overseas Custodian Bank to get the corresponding underlying equity
shares released in favour of the holder of IDRs for being sold directly
on behalf of holder of IDRs, or being transferred in the books of Issuing
company in the name of holder of IDRs and a copy of such request shall
be sent to the issuing company for information.
(c) A holder of IDRs may, at any time, nominate a person to whom his
IDRs shall vest in the event of his death and Form FC-5 may be used
for this purpose.
(7) (a) The repatriation of the proceeds of issue of IDRs shall be subject
to laws for the time being in force relating to export of foreign exchange.
(b) The number of underlying equity shares offered in a financial year
through IDR offerings shall not exceed twenty five per cent. of the post
issue number of equity shares of the company.
(c) Notwithstanding the denomination of securities of an Issuing
company, the IDRs issued by it shall be denominated in Indian Rupees.
(d) The IDRs issued under this Rule shall be listed on the recognized
Stock Exchange(s) in India as specified in clause (k) of sub-rule (3)
and such IDRs may be purchased, possessed and freely transferred
by a person resident in India as defined in section 2(v) of the Foreign
Exchange Management Act, 1999, subject to the provisions of the said
Act:
Provided that the IDRs issued by an Issuing company may be purchased,
possessed and transferred by a person other than a person resident in
India if such Issuing company obtains specific approval from Reserve
Bank of India in this regard or complies with any policy or guidelines
that may be issued by Reserve Bank of India on the subject matter.
(e) Every issuing company shall comply with such continuous
disclosure requirements as may be specified by the Securities and
Exchange Board of India in this regard.
(f) On the receipt of dividend or other corporate action on the IDRs
as specified in the agreements between the Issuing company and the
Domestic Depository, the Domestic Depository shall distribute them

to the IDR holders in proportion to their holdings of IDRs.
(8) The prospectus or letter of offer shall, inter alia, contain the
following particulars, namely:-
(a) General information –
(i) Name and address of the registered office of the
company;
(ii) name and address of the Domestic Depository, the
Overseas Custodian Bank with the address of its office
in India, the Merchant Banker, the underwriter to
the issue and any other intermediary which may be
appointed in connection with the issue of IDRs;
(iii) names and addresses of Stock Exchanges where
applications are made or proposed to be made for
listing of the IDRs;
(iv) the provisions relating to punishment for fictitious
applications;
(v) statement or declaration for refund of excess
subscription;
(vi) declaration about issue of allotment letters or
certificates or IDRs within the stipulated period;
(vii) date of opening of issue;
(viii) date of closing of issue;
(ix) date of earliest closing of the issue;
(x) declaration by the Merchant Banker with regard to
adequacy of resources of underwriters to discharge
their respective obligations, in case of being required
to do so;
(xi) a statement by the Issuing company that all moneys
received out of issue of IDRs shall be transferred to a
separate domestic bank account, name and address of

the bank and the nature and number of the account to
which the amount shall be credited;
(xii) the details of proposed utilisation of the proceeds of
the IDR issue.
(b) Capital Structure of the Company- The authorized, issued,
subscribed and paid-up capital of the issuing company;
(c) Terms of the issue –
(i) rights of the IDR holders against the underlying
securities;
(ii) details of availability of prospectus and forms, i.e.,
date, time, place etc;
(iii) amount and mode of payment seeking issue of IDRs;
and
(iv) any special tax benefits for the Issuing company and
holders of IDRs in India.
(d) Particulars of Issue-
(i) the objects of the issue;
(ii) the cost of the Project, if any; and
(iii) the means of financing the projects, if any including
contribution by promoters.
(e) Company, Management and Project-
(i) the main objects, history and present business of the
company;
(ii) the Promoters or parent group or owner group and
their background:
Provided that in case there are no identifiable
promoters, the names, addresses and other particulars
as may be specified by the Securities and Exchange
Board of India of all the persons who hold five percent.

or more equity share capital of the company shall be
disclosed;
(iii) the subsidiaries of the company, if any;
(iv) the particulars of the Management or Board (i.e. Name
and complete address(es) of Directors, Manager,
Managing Director or other principal officers of the
company);
(v) the location of the project, if any;
(vi) the details of plant and machinery, infrastructure
facilities, technology etc., where applicable;
(vii) the schedule of implementation of project and
progress made so far, if applicable;
(viii) nature of product(s), consumer(s), industrial users;
(ix) the particulars of legal, financial and other defaults, if
any;
(x) the risk factors to the issue as perceived; and
(xi) consent of the Merchant Bankers, Overseas Custodian
Bank, the Domestic Depository and all other
intermediaries associated with the issue of IDRs.
(xii) the information, as may be specified by the Securities
and Exchange Board of India, in respect of listing,
trading record or history of the Issuing company on
all the stock exchanges, whether situated in its parent
country or elsewhere.
(f) Report-
(i) Where the law of a country, in which the Issuing
company is incorporated, requires annual statutory
audit of the accounts of the Issuing company, a report
by the statutory auditor of the Issuing company, in
such form as may be specified by the Securities and

Exchange Board of India on –
(A) the audited financial statements of the Issuing
company in respect of three financial years
immediately preceding the date of prospectus;
(B) the interim audited financial statements in
respect of the period ending on a date which is
less than 180 days prior to the date of opening
of the issue, if the gap between the ending
date of the latest audited financial statements
disclosed under clause (A) and the date of the
opening of the issue is more than 180 days:
Provided that if the gap between such date
of latest audited financial statements and the
date of opening of issue is 180 days or less, the
requirement under item (B) shall be deemed
to be complied with, if a statement, as may
be specified by the Securities and Exchange
Board of India, in respect of material changes
in the financial position of Issuing company
for such gap is disclosed in the Prospectus:
Provided further that in case of an
Issuing company which is a foreign bank
incorporated outside India and which is
regulated by a member of the Bank for
International Settlements or a member of
the International Organization of Securities
Commissions which is a signatory to a
Multilateral Memorandum of Understanding,
the requirement under this paragraph, in
respect of period beginning with last date of
period for which the latest audited financial
statements are made and the date of opening
of the issue shall be satisfied, if the relevant
financial statements are based on limited

review report of such statutory auditor;
(ii) Where the law of the country, in which the Issuing
company is incorporated, does not require annual
statutory audit of the accounts of the Issuing company,
a report, in such form as may be specified by the
Securities And Exchange Board of India, certified by a
Chartered Accountant in practice within the terms and
meaning of the Chartered Accountants Act, 1949 on –
(A) the financial statements of the Issuing
company, in particular on the profits and
losses for each of the three financial years
immediately preceding the date of prospectus
and upon the assets and liabilities of the
Issuing company; and
(B) the interim financial statements in respect of
the period ending on a date which is less than
one hundred and eighty days prior to the date
of opening of the issue have to be included in
report, if the gap between the ending date of
the latest financial statements disclosed under
item (A) and the date of the opening of the
issue is more than one hundred and eighty
days:
Provided that if the gap between such date
of latest audited financial statements and the
date of opening of issue is one hundred and
eighty days or less, the requirement under
item (B) shall be deemed to be complied
with if a statement, as may be specified by the
Securities And Exchange Board of India, in
respect of changes in the financial position of
Issuing company for such gap is disclosed in
the Prospectus.
(iii) the gap between date of opening of issue and date of

reports specified under sub-clauses (i) and (ii) shall
not exceed one hundred and twenty days;
(iv) If the proceeds of the IDR issue are used for investing
in other body(ies) corporate, then following details of
such body(ies) corporate shall be given-
(A) the Name and address(es) of the bodies
corporate;
(B) the reports stated in sub-clauses (i) and (ii), as
the case may be, in respect of such body(ies)
corporate also.”
(g) Other Information –
(i) the Minimum subscription for the issue;
(ii) the fees and expenses payable to the intermediaries
involved in the issue of IDRs;
(iii) the declaration with regard to compliance with the
Foreign Exchange Management Act, 1999.
(h) Inspection of Documents –
The Place at which inspection of the offer documents, the
financial statements and auditor’s report thereof shall be
allowed during the normal business hours; and
(i) any other information as specified by the Securities
and Exchange Board of India or the Income-tax
Authorities or the Reserve Bank of India or other
regulatory authorities from time to time.
518
CHAPTER XXIV
COMPANIES (REGISTRATION OFFICES AND
FEES) RULES, 2014
In exercise of the powers conferred by section 396,398, 399, 403 and
404, read with sub-sections (1) and (2) of section 469 of the Companies
Act, 2013 (18 of 2013) and in supersession of Companies (Central
Government’s) General Rules and Forms, 1956, except as respects
things done or omitted to be done before such supersession, the Central
Government hereby makes the following rules, namely: -

(1) These rules may be called of the Companies (Registration Offices
and Fees) Rules, 2014.
2. Definitions.
(b) ‘‘Annexure’’ means Annexure to these rules;
(c) “Certifying Authority” for the purpose of ‘‘Digital Signature
Certificate’’ means a person who has been granted a licence
to issue it under section 24 of the Information Technology
Act, 2000 (21 of 2000).
(d) “Digital Signature” means digital signature as defined under
clause (p) of sub-section (1) of section 2 of the Information
Technology Act, 2000;(21 of 2000);
(e) “Digital Signature Certificate” means a Digital Signature
Certificate as defined under clause (q) of subsection (1) of
518
Companies (Registration Offices and Fees) Rules, 2014 519
section 2 of the Information Technology Act, 2000 (21 of

2000);
(f) “electronic record” means electronic record as defined under
clause (t) of sub-section (1) of section 2 of the Information
Technology Act, 2000; (21 of 2000);
(g) “electronic registry” means an electronic repository or
(h) “electronic mail” means message sent, received or forwarded
in digital form using any electronic communication
mechanism such that the message so sent, received or
forwarded is storable and retrievable;
(i) ‘‘Form’’ or “e-form” means a form set forth in Annexure to
relates;
(j) ‘‘Regional Director’’ means the person appointed by the
(k) “Registrar’s Facilitation Office” means an office maintained
by the Central Government or an agency authorised by it to
facilitate e-filing of documents into the electronic registry
and their inspection and viewing;
(l) “Straight Through Process” means the process in which
an e-from is approved through system without manual
interruption.
defined in the Act and the Information Technology Act, 2000 (21 of
2000) or in Companies (Specification of definitions details) Rules, 2014
shall have the meanings respectively assigned to them in those Acts
and the said rules.
520 Companies (Registration Offices and Fees) Rules, 2014
3. Business activity.
Every company including foreign company which carries out its
business through electronic mode, whether its main server is installed
in India or outside India, which-
(i) undertakes business to business and business to consumer
transactions, data interchange or other digital supply
transactions;
(ii) offers to accept deposits or invites deposits or accepts
deposits or subscriptions in securities, in India or from
citizens of India;
(iii) undertakes financial settlements, web based marketing,
advisory and transactional services, database services or
(iv) offers online services such as telemarketing, telecommuting,
telemedicine, education and information research; or
(v) undertakes any other related data communication services,
whether conducted by e-mail, mobile devices, social media,
cloud computing, document management, voice or data
transmission or otherwise, shall be deemed to have carried
out business in India.
4. Registration offices.
(1) The Central Government shall establish such number of offices at
such places as it thinks fit, specifying their jurisdiction for the purpose
of exercising such powers and discharge of such functions as are
conferred on the Central Government by or under this Act or under
the rules made there under and for the purposes of registration of
companies under the Act.
(2) The office of the Registrar shall observe such normal working hours
as may be approved by the Central Government and shall be open for
the transaction of business with the public on all days except Saturday,
Sunday and public holidays during working hours between 10.30 a.m.
and 3.30 p.m.
(3) The offices other than the office of the Registrar shall observe such
normal working hours as may be approved by the Central Government.
5. Powers and duties of Registrars.

(1) The Registrars shall exercise such powers and discharge such duties
as are conferred on them by the Act or the rules made there under or
delegated to them by the Central Government, wherever the power or
duty has been conferred upon the Central Government by the Act or
the rules made there under.
(2) Whenever according to the Act, any function or duty is to be
discharged by the Registrar, it shall, until the Central Government
otherwise directs, be done by the Registrar, or in his absence, by such
person as the Central Government may for the time being authorise:
Provided that in the event of the Central Government altering the
constitution of the existing registry offices or any of them, any such
function or duty shall be discharged by such officer and at such place,
with reference to the local situation of the registered offices of the
companies concerned, as the Central Government may appoint.
6. Seal of Registrar.
The Registrar shall have a seal and such seal shall bear the words
“Registrar of Companies, _______(Place and State)”.
7. Manner and conditions of filing.

Every application, financial statement, prospectus, return, declaration,
memorandum, articles, particulars of charges, or any other particulars
or document or any notice, or any communication or intimation
required to be filed or delivered or served under the Act and rules
made there under, shall be filed or delivered or served in computer
readable electronic form, in portable document format (pdf) or in such
other format as has been specified in any rule or form in respect of
such application or form or document or declaration to the Registrar
through the portal maintained by the Central Government on its web-
site or through any other website notified by the Central Government:
Provided that where the documents are required to be filed on Non-

Judicial Stamp Paper, the company shall submit such documents in the
physical form, in addition to their submission in electronic form, unless
the Central Government, by an order, does not require submission in
physical form and proof of delivery of documents submitted in physical
form shall be scanned and form part of attachment to the e-form.
Provided further that if stamp duty on such documents is paid
electronically through the portal maintained by the Central
Government or through any other website notified by the Central
Government, then, the company shall not be required to make physical
submission of such documents, in addition to their submission in the
electronic form:
Provided also that in respect of certain documents filed under the Act
which are not covered for payment of stamp duty through the portal of
the Central Government, and stamp duty payable on such documents
in the respective State is equal to or less than one hundred rupees, the
company shall scan such stamped documents complete in all respects
and shall file electronically for evidencing by the Registrar and shall
not be required to submit such documents, except those which are
required to be filed for compounding of offences or adjudication of
penalties or applications to Central Government or Regional Director
in the physical form separately:
Provided also that unless otherwise stated in any law for the time being
in force, the company shall retain such documents duly stamped in
original permanently for the documents relating to incorporation
and matters incidental thereto, changes in any of the clauses of the
Memorandum and Articles of Association and in other cases for a
minimum period of eight years from the date of filing of the documents
and shall be required to produce the same as and when the same is
required for inspection and verification by the competent authority
under any law for the time being in force:
Provided also that any correspondences (physically or electronically)
and documents to be filed by any person shall contain name,
designation, address, membership number or Director Identification
Number, as the case may be, of the person signing such document and
make sure correctness thereof and in no case, correspondence, merely
with signature and writing authorised signatory shall be acceptable.
Provided also that no request for recording any event based information or
changes shall be accepted by the Registrar from such defaulting companies,
unless they file their updated Balance Sheet and Profit and Loss Account
and Annual Return with the Registrar of Companies except,-
(i) filing of order of Court or other authorities,
(ii) Balance Sheet and Profit and Loss Account,
(iii) Compounding application,
(iv) Form for transfer of money to Investor Education and
Protection Fund,
(v) Application for removal of the Auditor and
(vi) GNL-1 for making company active.
8. Authentication of documents.
(1) An electronic form shall be authenticated by authorised signatories
using digital signature.
(2) Where there is any change in directors or secretaries, the form
relating to appointment of such directors or secretaries has to be filed
by an continuing director or the secretary of the company.
(3) The authorised signatory and the professional, if any, who certify
e-form shall be responsible for the correctness of the contents of e-form
and correctness of the enclosures attached with the electronic form.
(4) Every person authorised for authentication of e-forms, documents
or applications etc., which are required to be filed or delivered under
the Act or rules made there under, shall obtain a digital signature
certificate from the Certifying Authority for the purpose of such
authentication and such certificate shall not be valid unless it is of class
II or Class III specification under the Information Technology Act,
2000 (21 of 2000).
(5) The electronic forms required to be filed under the Act or the rules
there under shall be authenticated on behalf of the company by the
Managing Director or Director or Secretary of the Company or other
key managerial personnel.
(6) Scanned image of documents shall be of original signed documents
relevant to the e-forms or forms and the scanned document image shall
not be left blank without bearing the actual signature of authorized person.
(7) It shall be the sole responsibility of the person who is signing
the form and professional who is certifying the form to ensure that
all the required attachments relevant to the form have been attached
completely and legibly as per provisions of the Act, and rules made
there under to the forms or application or returns filed.
(8) The documents or form or application filed may contain a power
of attorney issued to an Advocate or Chartered Accountant or Cost
Accountant or Company Secretary who is in whole time practice
and to any others person supported by Board resolution to make
representation to the registering or approving authority failing which a
Director or key managerial personnel can make representation before
such authority.
(9) Where any instance of filing document, application or return etc,
containing a false or misleading information or omission of material
fact, requiring action under section 448 or section 449 is observed, the
person shall be liable under section 448 and 449 of the Act.
(10) Without prejudice to any other liability, in case of certification of
any form, document, application or return under the Act containing
wrong or false or misleading information or omission of material fact
or attachments by the person, the Digital Signature Certificate shall be
de-activated by the Central Government till a final decision is taken in
this regard.
(11) The Central Government shall set up and maintain for filing of
electronic forms, documents and applications, and for viewing and
inspection of documents in the electronic registry or for obtaining
certified copies thereof-
(a) a website or portal to provide access to the electronic registry;

and
(b) as many Registrar’s Facilitation Offices as may be necessary
and at such places and for such time as the Central
Government may determine.
1
[(12)(a) The following e-forms filed by companies, other than one
person companies and small companies, under sub-rule (1) of rule 9,
shall be pre-certified by the Chartered Accountant or the Company
Secretary or as the case may be the Cost Accountant, in whole-time
practice, namely:-
INC-21, INC-22, INC-28, PAS-3, SH-7, CHG-1, CHG-4, CHG-9,
MGT- 14, DIR-6, DIR-12, MR-1, MR-2, MSC-1, MSC-3, MSC-4,
GNL-3, ADT-1, NDH-1, NDH-2, NDH-3;
(b) The following e-forms filed by companies, other than one person
companies and small companies, under sub rule (1) of rule 9, shall be
pre-certified in the following manner, namely: –
(i) GNL-1 - optional pre-certification by the Chartered
Accountant or the Company Secretary or as the case may be
the Cost Accountant, in whole-time practice;
(ii) DPT-3 – certification by Auditors of the company;
(iii) MGT-10-certification by a Company Secretary in whole-
time practice;
[(iv) AOC-4 certification by the Chartered Accountant or the
2
Company Secretary or as the case may be by the Cost

Accountant, in whole- time practice];
(c) E-form DIR-3 shall be filed along with attestation of photograph,
1. Inserted by the Companies (Registration Offices and Fees) Amendment

Rules, 2014 (w.e.f. 28-04-2014).
2. Substituted by the Companies (Registration Offices and Fees) Second
Amendment Rules, 2016 (w.e.f 07-11-2016) for: “(iv) AOC-4- certification by a
Chartered Accountant in whole-time practice;”
identity proof and proof of residence of the applicant by the Chartered

Accountant or the Company Secretary or as the case may be the Cost
Accountant, in whole-time practice.]
9. Maintaining documents electronically.

1
[(1)The Central Government shall set up and maintain a secure
centralised electronic registry in which all the applications, financial
statement, prospectus, return, register, memorandum, articles,
particulars of charges, or any particulars or returns or any other
documents under the Act shall be filed and stored electronically.]
(2) Every document or certificate or notice or other document required
to be registered or authenticated by the Registrar or an officer of the
Central Government under the Act or rules made there under, shall
be registered or authenticated through a valid digital signature of such
person or a system generated digital signature.
(3) The Registrar shall issue document, certificate, notice, receipt,
approval or communicate endorsement or acknowledgement in the
electronic mode:
Provided that where the Registrar is not able to issue any certificate,
receipt, endorsement, acknowledgement or approval in electronic
mode for the reasons to be recorded in writing, he may issue such
certificate or receipt or endorsement, acknowledgement or approval
in the physical form under manual signature affixing seal of his office.
(4) The Registrar may send any document, certificate, notice or any
other communication to the company or its authorised representative or
directors or both in the electronic manner for which the company shall
create and maintain at all times a valid electronic addresses including
1. Substituted by the Companies (Registration Offices and Fees) Amendment

Rules, 2014 (w.e.f. 28-04-2014) for:
“(1) The Central Government shall set up and maintain a secure electronic
registry in which all the applications, financial statement, prospectus,
return, register, memorandum, articles, particulars of charges, or any
particulars or returns or any other documents filed under the Act to be
electronically stored.”
e-mail, user identifications capable of receiving and acknowledging the

receipt of the document, certificate, notice or other communication,
automated or otherwise.
10. Procedure on receipt of any application or form or document

electronically.
(1) The Registrar shall examine or cause to be examined every
application or e-Form or document required or authorised to be filed
or delivered under the Act and rules made thereunder for approval,
registration, taking on record or rectification by the Registrar, as the
case may be:
Provided that save as otherwise provided in the Act, the Registrar shall
take a decision on the application, e-form or documents within thirty
days from the date of its filing excluding the cases in which an approval
of the Central Government or the Regional Director or any other
competent authority is required:
Provided further that the e-Forms or documents identified as
informative in nature and filed under Straight Through Process may be
examined by the Registrar at any time on suo-motu or on receipt of any
information or complaint from any source at any time after its filing:
Provided also that nothing contained in the first proviso shall affect the
powers of the Registrar to call information or explanation in pursuance
of section 206.
(2) Where the Registrar, on examining any application or e-Form
or document referred to in sub-rule (1), finds it necessary to call for
further information or finds such application or e-form or document
to be defective or incomplete in any respect, he shall give intimation of
such information called for or defects or incompleteness, by e-mail on
the last intimated e-mail address of the person or the company, which
has filed such application or e-form or document, directing him or it to
furnish such information or to rectify such defects or incompleteness
or to re-submit such application or e-Form or document within the
period allowed under sub-rule (3):
Provided that in case the e-mail address of the person or the company
in question is not available, the intimation shall be given by the
Registrar by post at the last intimated registered office address of the
company or the last intimated address of the person, as the case may
be and the Registrar shall preserve the facts of the intimation in the
electronic record.
(3) Except as otherwise provided in the Act, the Registrar shall allow
fifteen days’ time to the person or company which has filed the
application or e-Form or document under sub-rule (1) for furnishing
further information or for rectification of the defects or incompleteness
or for re-submission of such application or e-form or document.
1
[Provided that Registrar shall allow fifteen days’ time for re-submission
in case of reservation of a name through web service – RUN for
rectifications of defects if any.]
(4) In case where such further information called for has not been
provided or has been furnished partially or defects or incompleteness
has not been rectified or has been rectified partially or has not been
rectified as required within the period allowed under sub-rule (3),
the Registrar shall either reject or treat the application or e-form or
document, as the case may be, as invalid in the electronic record, and
shall inform the person or company, as the case may be, in the manner
as specified in sub-rule (2).
(5) Where any document has been recorded as invalid by the Registrar,
the document may be rectified by the person or company only by fresh
filing along with payment of fee and additional fee, as applicable at the
time of fresh filing, without prejudice to any other liability under the
Act.

Amendment Rules, 2018 (w.e.f. 07-05-2018) for :
*“provided that no re-submission of the application is allowed in the case of
reservation of a name through web service – RUN.”
*Inserted by the Companies (Registration Offices and Fees) Amendment Rules,
2018 (w.e.f. 26-01-2018)
(6) In case the Registrar finds any e-form or document filed under
Straight Through Process as defective or incomplete in any respect, at
any time suo-motu or on receipt of information or compliant from any
source at any time, he shall treat the e-form or document as defective
in the electronic registry and shall also issue a notice pointing out
the defects or incompleteness in thee-Form or document at the last
intimated e-mail address of the person or the company which has filed
the document, calling upon the person or company to file the e-Form or
document afresh along with fee and additional fee, as applicable at the
time of actual re-filing, after rectifying the defects or incompleteness
within a period of thirty days from the date of the notice:
Provided that in case the e-mail address of the person or the company
in question is not available, the intimation shall be given by the
Registrar by post at the last intimated registered office address of the
company or the last intimated address of the person, as the case may
be and the Registrar shall preserve the facts of the intimation in the
electronic record.
1
[7. Any further information or documents called for, in respect
of application or e-form or document, filed electronically with the
Ministry of Corporate Affairs shall be furnished in Form No. GNL-4
as an addendum.]
11. Vacation or removal of directors.

(1) In the event of vacation or removal of directors before approving or
invalidating Form No DIR-12, the Registrar shall verify the documents
as to correctness of contents and whether adequate supporting
documents namely, copy of board resolution, copy of notices sent
for calling board meeting or copy of minutes of board of directors
reflecting voted for or against.
(2) If the Registrar on verification of documents further finds that
the company has violated any of the provisions of the Act or rules, he
shall refer the matter to the Regional Director concerned, who shall
1. Inserted by the Companies (Registration Offices and Fees) Amendment

Rules, 2015 (w.e.f. 24-02-2015).
enquire the matter by giving an opportunity to the person who has

been removed or vacated as director and convey the decision of the
matter to the Registrar within ninety days from the date of reference to
him by the Registrar.
12. Fees.
(1) The documents required to be submitted, filed, registered or
recorded or any fact or information required or authorised to be
registered under the Act shall be submitted, filed, registered or
recorded on payment of the fee or on payment of such additional fee as
applicable, as mentioned in Table annexed to these rules.
(2) For the purpose of filing the documents or applications for which
no e-form is prescribed under the various rules prescribed under the
Act, the document or application shall be filed through Form
No.GNL.1or GNL.2 along with fee as applicable and in case a single
form is prescribed for multiple purposes, the fee shall be paid for each
of the purposes contained in the single form.
(3) For the purpose of filing information to sub-clause (60) of section
2 of the Act, such information shall be filed in Form No.GNL.3 along
with fee as applicable.
13. Mode of Payment.

The fees, charges or other sums payable for filing any application, form,
return or any other document in pursuance of the Act or any rule made
there under shall be paid by means of credit card; or internet banking;
or remittance at the counter of the authorised banks or any other mode
as approved by the Central Government.
14. Inspection, production and evidence of documents kept by

Registrar.
The inspection of the documents maintained in the electronic registry
so set up in pursuance of rule 9 and which are otherwise available for
inspection under the Act or rules made there under, shall be made by
any person in electronic form.
15. Inspection of documents.

Any person may –
(a) inspect any document kept by the Registrar, being documents
filed or registered by him in pursuance of this Act or the
Companies Act, 1956 (1 of 1956) or making a record of any
fact required or authorised to be recorded or registered in
pursuance of this Act, on payment for each inspection of fee.
(b) require a certificate of incorporation of any company, or a
copy or extract of any other document or any part of any
other document to be certified by the Registrar, on payment
of fee.
1
[Provided that no person shall be entitled under section 399 to inspect
or obtain copies of resolutions referred to in clause (g) of sub-section
(3) of Section117of the Act.]
1. Inserted by the Companies (Registration Offices and Fees) Second

ANNEXURE
TABLE OF FEES
(pursuant to rule 12 of the Companies (Registration of Offices and Fees)
Rules, 2014)
I. Fee for filings etc. under section 403 of the Companies Act, 2013
Table of fees for the documents required to be submitted, filed, registered
or recorded or for any fact or information required or authorized to be
registered under the Act, shall be submitted filed, registered or recorded
within the time specified in the relevant provision on payment of fee as
prescribed hereunder :-
[A. TABLE OF FEES TO BE PAID TO THE REGISTRAR

1
(I) In respect of a company having a Other OPC and

share capital : than OPCs Small
and Small Companies
Companies (in rupees)
(in rupees)
1. (a) For registration of OPC and small – –

companies whose nominal share capital
is less than or equal to Rs.10,00,000.
(b) For registration of OPC and small – 200
companies whose nominal share capital
exceed Rs. 10,00,000, the fee of Rs.
2000 with the following additional fees
regulated according to the amount of
nominal capital: For every Rs.10,000
of nominal share capital or part of
Rs.10,000 after the first Rs.10,00,000 and
up to Rs. 50,00,000.
1. Substituted by the Companies (Registration Offices and Fees) Amendment

Rules, 2018 dated 20-01-2018 (w.e.f. 26-01-2018)
2. (a) For registration of a company – –

(other than OPC and small companies)
whose nominal share capital is less than
or equal to Rs. 10,00,000 at the time of
incorporation.
(b) For registration of a company – –
(other than OPC and small companies)
whose nominal share capital exceed Rs.
10,00,000, the fee of Rs. 36,000 with
the following additional fees regulated
according to the amount of nominal
capital :
(i) for every Rs. 10,000 of nominal share 300 –
capital or part of Rs 10,000 after the first
Rs. 10,00,000 upto Rs. 50,00,000.
(ii) for every Rs. 10,000 of nominal share 100 –
capital or part of Rs. 10,000 after the first
Rs. 50,00,000 upto Rs. one crore.
(iii) for every Rs. 10,000 of nominal share 75 –
Rs. 1 crore.
Provided further that where the
additional fees, regulated according to
the amount of the nominal capital of a
company, exceed a sum of rupees two
crore and fifty lakh, the total amount
of additional fees payable for the
registration of such company shall not,
in any case, exceed rupees two crore and
fifty lakhs.
3. For filing a notice of any increase

in the nominal share capital of a
company, the difference between the
fees payable on the increased share
capital on the date of filing the notice
for the registration of a company and
the fees payable on existing authorized
capital, at the rates prevailing on the
date of filing the notice:
(a) For OPC and small companies whose – 2000
nominal share capital does not exceed
Rs. 10,00,000.
(b) For OPC and small companies, for – 200
every Rs. 10,000 of nominal share capital
or part of Rs. 10,000 after the first Rs.
10,00,000 and upto Rs. 50,00,000.
Other than OPC and small companies 5000
(c) For increase in nominal capital of a
company whose nominal share capital
does not exceed Rs. 1,00,000.
(d) For increase in nominal capital of a
company whose nominal share capital
exceed Rs. 1,00,000, the above fee of Rs.
5,000 with the following additional fees
regulated according to the amount of
nominal capital :
(i) for every Rs. 10,000 of nominal share 400 –
Rs. 1,00,000 upto Rs. 5,00,000.
(ii) for every Rs. 10,000 of nominal share 300 –
capital or part of Rs 10,000 after the first
Rs. 5,00,000 upto Rs. 50,00,000.
(iii) for every Rs. 10,000 of nominal share 100 –

Rs. 50,00,000 upto Rs. one crore.
(iv) for every Rs. 10,000 of nominal share 75 –
Rs. 1 crore.
Provided further that where the
additional fees, regulated according
to the amount of the nominal capital of
a company, exceed a sum of rupees two
crore and fifty lakh, the total amount
of additional fees payable for the
registration of such company shall not,
in any case, exceed rupees two crore and
fifty lakhs.
4. For registration of any existing
company, except such companies as are
by this Act exempted from payment
of fees in respect of registration under
this Act, the same fee is charged for
registering a new company.
5. For submitting, filing, registering or
recording any document by this Act
required or authorised to be submitted,
filed, registered or recorded:
(a) in respect of a company having a 200
nominal share capital of less than Rs.
1,00,000.
(b) in respect of a company having a 300
nominal share capital of Rs. 1,00,000
or more but less than Rs.5,00,000.
(c) in respect of a company having a 400

nominal share capital of Rs. 5,00,000 or
more but less than Rs.25,00,000.
(d) in respect of a company having a 500
nominal share capital of Rs.25,00,000 or
more but less than Rs. 1 crore or more.
(e) in respect of a company having a 600
nominal share capital of Rs. 1 crore or
more.
Provided that in case of companies to be
incorporated with effect from 26.01.2018
with a nominal capital which does not
exceed rupees ten lakhs fee shall not be
payable.
6. For making a record of or registering
any fact by this Act required or
authorised to be recorded or registered
by the Registrar:
(a) in respect of a company having a 200
nominal share capital of less than Rs.
1,00,000.
(b) in respect of a company having a 300
nominal share capital of Rs. 1,00,000 or
more but less than Rs.5,00,000.
(c) in respect of a company having a 400
nominal share capital of Rs. 5,00,000
or more but less than Rs.25,00,000.
(d) in respect of a company having a 500
nominal share capital of Rs.25,00,000 or
more but less than Rs. 1 crore or more.
(e) in respect of a company having a 600
nominal share capital of Rs. 1 crore or
more.
(II) In respect of a company not having

a share capital :
7. For registration of a company whose _
number of members as stated in the
articles of association, does not exceed
20.
8. For registration of a company whose 5000
articles of association, exceeds 20 but
does not exceed 200.
9. For registration of a company whose
articles of association, exceeds 200 but is
not stated to be unlimited, the above fee
of Rs.5,000 with an additional Rs. 10 for
every member after first 200.
10. For registration of a company in 10000
which the number of members is stated
in the articles of association to be
unlimited.
11. For registration of any increase in
the number of members made after the
registration of the company, the same fees
as would have been payable in respect of
such increase, if such increase had been
stated in the articles of association at the
time of registration :
Provided that no company shall be
liable to pay on the whole a greater fee
than Rs. 10,000 in respect of its number
of members, taking into account the
fee paid on the first registration of the
company.
12. For registration of any existing

company except such companies as
are by this Act exempted from payment
of fees in respect of registration under
this Act, the same fee as is charged for
registering a new company.
13. For filing or registering any document 200
by this Act required or authorized to be
filed or registered with the Registrar.
Provided that in case of companies
to be incorporated with effect from
26.01.2018 whose number of members as
stated in the articles of association, does
not exceed 20, fee shall not be payable.
14. For making a record of or registering 200
any fact by this Act required or
authorised to be recorded or registered
by the Registrar.]
(1) The above table prescribed for small companies (as defined
under section 2(85) of the Act) and one person companies defined
under Rule related to Chapter II read with Section 2(62) of the Act
shall be applicable provided the said company shall remain as said class
of company for a period not less than one year from its incorporation.
(2) The above table of fee shall be applicable for any such intimation
to be furnished to the Registrar or any other officer or authority
under section 159 of the Act, filing of notice of appointment of auditors
or Secretarial Auditor or Cost Auditor.
(3) The above table of fee and calculation of fee as applicable for
increase in authorised capital shall be applicable for revised capital in
accordance with sub-section (11) of 233 of the Act, (after setting off
fee paid by the transferor company on its authorised capital prior to its
merger or amalgamation with the transferee company).
(4) The above table of fee shall be applicable for filing revised financial
statement or board report under section 130 and 131 of the Act.]

1
[B. Following Table of additional fee shall be applicable for delay in
filing of forms other than for increase in Nominal Share capital or
forms under section 92/ 137 of the Act.
Sl. Period of delays Forms including

No. charge documents
01 upto 15 days (Section139 and 157) One time
02 More than 15 days and upto 30 days 2 times of normal
(Section 139 and 157) and upto 30 filing fees
days in remaining forms.
filing fees
filing fees
filing fees
06 Beyond 180 days 12 times of normal
filing fees
Note:
(1) The belated filing of documents/forms (including increasing in
nominal capital and delay caused thereon) which were due to be filed
whether in Companies Act, 1956 Act or the Companies Act, 2013
Act i.e., due for filing prior to notification of these fee rules , the fee
applicable at the time of actual filing shall be applicable.]

C. For increase in authorised capital, the additional fees shall be

applicable at the following rates:-
Delay upto 6 months Delay beyond 6 months

slab 2.5 % per month on the fees 3% per month on the fees
payable under para I.3 or II.12 payable under para I.3 or
of Table A above as the case II.12 of Table A above as the
may be. case may be.
(1) The above fee table shall also be applicable for delay in filing
application with Registrar under sub-section (11) of section 233 of the
Act.
1
[D. For Forms under section 92 or 137 : (i) In case the period within
which a document required to be submitted under section 92 or 137 of
the Act expires after 30/06/2018, the additional fee mentioned in Table
shall be payable –
TABLE
Sl. Period of delay Additional fee payable

No. (in Rs)
01 Delay beyond period provided One Hundred per day
under Section 92(4) of the Act
02 Delay beyond period provided One Hundred per day
under Section 137 (1) of the Act
(ii) In all other cases where the belated annual returns or balance
sheet/financial statement which were due to be filed whether in the
Companies Act, 1956 or the Companies Act, 2013 the following
additional fee mentioned in Table shall be payable:-

TABLE
Sl. Period of delay Additional fee payable

No. (in Rs. ) upto 30/06-2018
1 Up to 30 days 2 times of normal filing
fees
2 More than 30 days 4 times of normal filing plus Rs.
and up to 60 days fees 100 per
3 More than 60 days 6 times of normal filing day with
and up to 90 days fees effect
4 More than 90 days 10 times of normal filing from 01-
and up to 180 days fees 07-2018
5 Beyond 180 days 12 times of normal filing
fees
Note: (1)The additional fee shall also be applicable on statement or
board's report under section 130 and 131 of the Act and secretarial
audit report filed by the company secretary in practice under section
204 of the Act.
(2) The belated filing of documents/forms (including increasing in
nominal capital and delay caused thereon) which were due to be filed
whether in Companies Act, 1956 Act or the Companies Act, 2013 Act
i.e due for filing prior to notification of these fee rules, the fee payable
at the time of actual filing shall be applicable]
II. FEE ON APPLICATIONS (including Appeal) made to Central
Government under sub-section (2) of Section 459 of the Companies
Act, 2013.
1 For Application made Other OPC and

than OPCs Small
and Small Companies
Companies
(i) By a company having an
authorized share capital of:
a) Upto Rs. 25,00,000 2,000 1000

b) More than Rs.25,00,000 and 5,000 2500
upto Rs.50,00,000
c) More than Rs. 50,00,000 and 10,000 –
upto Rs. 5,00,00,000
d) More than Rs. 5,00,00,000 15,000 –
and upto Rs. 10 crores
e) More than Rs. 10 crores 20,000 –
(ii) By a company limited by 2,000 –
guarantee but not having a
share capital
(iii) By an Association or proposed 2,000 –
company for issue of license
under section 8 of the Act
(iv) By a company having a valid 2000 –
license issued under section
8 of the Act
(v) By a foreign company 5,000 –
1
[(vi) For allotment of Director 500 500
Identification Number (DIN)
under section 153 of the Act
(vii) For surrender of Director 1000 1000]
Identification Number
under rule 11(f) of the
Companies (Appointment and
Qualification of Directors)
Rules 2014
1. Substituted by the Substituted by the Companies (Registration Offices and

Fees) Amendment Rules, 2016 (w.e.f. 07-11-2016).
(1) Every application to the Registrar of Companies filed by any person

for reservation of name under sub-section (4) of section 4 of the
Companies Act, 2013 shall be accompanied with the fee of Rs. 1,000/-.
(2) For every application made to Regional Director (including appeal)
or Registrar of Companies (except specifically stated elsewhere), Table
of fees as above shall be applicable.
Note: The separate fee schedule shall be prescribed under sub- section
(2) of section 459 of the Act for applications to be filed before Tribunal.
III. Annual Fee payable by a dormant company under sub-
section (5) of section 455 of the companies Act, 2013.
1 For Application made Other OPC and

than OPCs Small
and Small Companies
Companies
(i) By a company having an
authorized share capital of:
a) Upto Rs. 25,00,000 2,000 1000
b) More than Rs.25,00,000 and 5,000 2500
upto Rs.50,00,000
c) More than Rs. 50,00,000 and 10,000 –
upto Rs. 5,00,00,000
d) More than Rs. 5,00,00,000 and 15,000 –
upto Rs. 10 crores
e) More than Rs. 10 crores 20,000 –
(ii) By a company limited by guarantee 2,000 –
but not having a share capital
IV. Fee for Inspection and providing certified copies of documents
kept by the Registrar under section 399 of the Act
(i) Under clause (a) of sub-section (1) of section 399 of the Act
– Rs.100/-
(ii) Under clause (b) of sub-section (1) of section 399 of the Act
(a) For copy of Certificate of Incorporation – Rs.100/-
(b) For copy or extract of other documents including

hard copy of such document on computer readable
media – Rs.25 per page.
V. Fee for registration of documents under section 385 of the Act.
Rs.6000/- for each document.
VI. Fees for Removal of Names of Companies from the Registrar of
Companies under section 248 (2) of the Act.
Rs.5000/-
[VII. FEE FOR FILING e- Form DIR-3 KYC under rule 12A of the
1
Companies (Appointment and Qualification of Directors) Rules, 2014.
i) Fee payable till the 30th April of every financial year –

in respect of e-form DIR-3 KYC as at the 31st March of
immediate previous year.
ii) Fee payable (in delayed case). Rs.5000
2
[Note: During the financial year (2018-2019), fee of rupees five
hundred shall be payable from 21.09.2018 to 05.10.2018 and fee of
rupees five thousand shall be payable on or after 06.10.2018]
INSTRUCTIONS
1. Payment of fees - Except as otherwise provided elsewhere, the table
of fees annexed to the Companies (Registration Offices and Fees),
Rules 2014, shall be payable in the following head.
1. Inserted by the Companies (Registration Offices and Fees) Third Amendment

Rules, 2018 dated 05-07-2018 (w.e.f. 10-07-2018)
2. Substituted by the Companies (Registration Offices and Fees) Fifth
Amendment Rules, 2018 (w.e.f. 20-09-2018) for : “Note: for the current financial
(2018-2019), no fee shall be chargeable till the 15th September, 2018 and fee of
Rs.5000 shall be payable on or after the 16th September, 2018.*
* Substituted by the Companies (Registration Offices and Fees) Fourth
Amendment Rules, 2018 (w.e.f. 21-08-2018) for : “Note: for the current
financial (2018-2019), no fee shall be chargeable till the 31st August, 2018, and
fee of Rs.5000 shall be payable on or after the 1st September, 2018.*
(1) fees payable to the Registrar in pursuance of the Act or any rule or
regulation made or notification issued thereunder shall be paid to the
Registrar on any authorized bank by the Ministry of Corporate Affairs
and acting as the agent of the Reserve Bank of India for credit under
the following head, namely : -
Major Alphanumeric Account Serial Source

Head code description Code Code category
check
digit
1475 Other general 147500105 14750006 113
Economic service
Regulation of joint
stock companies
(a) Registration 14750010599 14750032 114
fees
(b) Filing fees 14750010598 14750033 117
(c) inspection and 14750010597 14750034 112
copying fee
(d) other fees 14750010596 14750035 119
(2) Where application is filed through electronic media or through
any other computer readable media, the user may choose any one of
the following payment options namely, (i) Credit Card; or (ii) Internet
Banking; or (iii) Remittance at the Bank Counter or (iv) any other mode
as approved by the Central Government. The requisite fee as specified
in Companies (Registration Offices and Fees), Rules 2014 shall be
payable through any of the accredited branches of the following Banks.
(a) Punjab National Bank
(b) State Bank of India
(c) Indian Bank
(d) ICICI Bank
(e) HDFC Bank
(f) Union Bank of India”

(3) The fees payable to the Registrars may be paid bank drafts payable
at drawn on banks, located at the same city or town as the office of the
Registrar :
(4) Where a fee payable to the Registrar is paid through bank drafts as,
aforesaid it shall not be deemed to have been paid unless and until the
relevant drafts are cashed and the amount credited.
547
Chapter XXVI
NIDHI RULES, 2014
[G.S.R. 258(E), Dated 31st March 2014]
In exercise of the powers conferred under sub-section (1) of Section
406 read with subsections (1) and (2) of 469 of the Companies Act,
2013, the Central Government hereby makes the following rules,
namely:–

(1) These Rules may be called Nidhi Rules, 2014.
2. Application.
These rules shall apply to,–
(a) every company which had been declared as a Nidhi or Mutual
Benefit Society under sub-section (1) of Section 620A of the
Companies Act, 1956;
(b) every company functioning on the lines of a Nidhi company
or Mutual Benefit Society but has either not applied for or
has applied for and is awaiting notification to be a Nidhi or
Mutual Benefit Society under subsection (1) of Section 620A
of the Companies Act, 1956; and
(c) every company incorporated as a Nidhi pursuant to the
provisions of Section 406 of the Act.
3. Definitions.
(b) “Doubtful Asset” means a borrowal account which has
547
548 Nidhi Rules, 2014
remained a Non-performing asset for more than two years

but less than three years;
(c) “Loss Asset” means a borrowal account which has remained
a Non-performing asset for more than three years or where
in the opinion of the Board, a shortfall in the recovery of the
loan account is expected because the documents executed
may become invalid if subjected to legal process or for any
other reason;
(d) “Net Owned Funds” means the aggregate of paid up equity
share capital and free reserves as reduced by accumulated
losses and intangible assets appearing in the last audited
balance sheet:
Provided that the amount representing the proceeds of issue
of preference shares shall not be included for calculating Net
Owned Funds.
(e) “Non-Performing Asset” means a borrowal account in
respect of which interest income or instalment of loan
towards re payment of principal amount has remained
unrealised for twelve months;
(f) “Standard Asset” means the asset in respect of which no
default in re-payment of principal or payment of interest has
occurred or is perceived and which has neither shown signs
of any problem relating to re-payment of principal sum or
interest nor does it carry more than normal risk attached to
the business;
(g) “Sub-Standard Asset” means a borrowal account which is a
Non-performing asset:
Provided that reschedulement or renegotiation or rephasement
of the loan instalment or interest payment shall not change
the classification of an asset unless the borrowal account has
satisfactorily performed for at least twelve months after such
reschedulement or renegotiation or rephasement.
Nidhi Rules, 2014 549
(2) Words and expressions used herein, but not defined in these rules
and defined in the Act or in the Companies (Specification of definitions
details) Rules, 2014 shall have the same meaning as assigned to them in
the Act or in the said Rules.
4. Incorporation and incidental matters.

(1) A Nidhi to be incorporated under the Act shall be a public company
and shall have a minimum paid up equity share capital of five lakh
rupees.
(2) On and after the commencement of the Act, no Nidhi shall issue
preference shares.
(3) If preference shares had been issued by a Nidhi before the
commencement of this Act, such preference shares shall be redeemed
in accordance with the terms of issue of such shares.
(4) Except as provided under the proviso to sub-rule (e) to rule 6, no
Nidhi shall have any object in its Memorandum of Association other
than the object of cultivating the habit of thrift and savings amongst its
members, receiving deposits from, and lending to, its members only,
for their mutual benefit.
(5) Every Company incorporated as a “Nidhi” shall have the last words
‘Nidhi Limited’ as part of its name.
5. Requirements for minimum number of members, net owned

fund etc.
(1) Every Nidhi shall, within a period of one year from the
commencement of these rules, ensure that it has–
(a) not less than two hundred members;
(b) Net Owned Funds of ten lakh rupees or more;
(c) unencumbered term deposits of not less than ten per cent of
the outstanding deposits as specified in rule 14; and
(d) ratio of Net Owned Funds to deposits of not more than 1:20.
(2) Within ninety days from the close of the first financial year after its
incorporation and where applicable, the second financial year, Nidhi
shall file a return of statutory compliances in Form NDH-1 along with
such fee as provided in Companies (Registration Offices and Fees)
Rules, 2014 with the Registrar duly certified by a company secretary
in practice or a chartered accountant in practice or a cost accountant
in practice.
(3) If a Nidhi is not complying with clauses (a) or (d) of sub-rule (1)
above, it shall within thirty days from the close of the first financial year,
apply to the Regional Director in Form NDH-2 along with fee specified
in Companies(Registration Offices and Fees) Rules, 2014 for extension
of time and the Regional Director may consider theapplication and
pass orders within thirty days of receipt of the application.
Explanation. – For the purpose of this rule “Regional Director” means
the person appointed by the Central Government in the Ministry of
Corporate Affairs as a Regional Director;
(4) If the failure to comply with sub-rule (1) of this rule extends beyond
the second financial year, Nidhi shall not accept any further deposits
from the commencement of the second financial year till it complies
with the provisions contained in sub-rule (1), besides being liable for
penal consequences as provided in the Act.
6. General restrictions or prohibitions.

No Nidhi shall –
(a) carry on the business of chit fund, hire purchase finance,
leasing finance, insurance or acquisition of securities issued
by any body corporate;
(b) issue preference shares, debentures or any other debt
instrument by any name or in any form whatsoever;
(c) open any current account with its members;
(d) acquire another company by purchase of securities or
control the composition of the Board of Directors of any
other company in any manner whatsoever or enter into any

arrangement for the change of its management, unless it has
passed a special resolution in its general meeting and also
obtained the previous approval of the Regional Director
having jurisdiction over such Nidhi;
Explanation. – For the purposes of this sub-rule, “control”

shall have the same meaning assigned to it in clause (27) of
section 2 of the Act;
(e) carry on any business other than the business of borrowing
or lending in its own name:
Provided that Nidhis which have adhered to all the
provisions of these rules may provide locker facilities on
rent to its members subject to the rental income from such
facilities not exceeding twenty per cent of the gross income
of the Nidhi at any point of time during a financial year.
(f) accept deposits from or lend to any person, other than its
members;
(g) pledge any of the assets lodged by its members as security;
(h) take deposits from or lend money to any body corporate;
(i) enter into any partnership arrangement in its borrowing or
lending activities;
(j) issue or cause to be issued any advertisement in any form for
soliciting deposit:
Provided that private circulation of the details of fixed
deposit Schemes among the members of the Nidhi carrying
the words “for private circulation to members only” shall not
be considered to be an advertisement for soliciting deposits.
(k) pay any brokerage or incentive for mobilising deposits from
members or for deployment of funds or for granting loans.
7. Share capital and allotment.

(1) Every Nidhi shall issue equity shares of the nominal value of not less
than tenrupees each:
Provided that this requirement shall not apply to a company referred to
in sub-rules (a) and (b) of rule 2.
(2) No service charge shall be levied for issue of shares.
(3) Every Nidhi shall allot to each deposit holder at least a minimum of
ten equity shares or shares equivalent to one hundred rupees:
Provided that a savings account holder and a recurring deposit account
holder shall hold at least one equity share of rupees ten.
8. Membership.
(1) A Nidhi shall not admit a body corporate or trust as a member.
(2) Except as otherwise permitted under these rules, every Nidhi shall
ensure that its membership is not reduced to less than two hundred
members at any time.
(3) A minor shall not be admitted as a member of Nidhi:
Provided that deposits may be accepted in the name of a minor, if they
are made by the natural or legal guardian who is a member of Nidhi.
9. Net owned funds.

Every Nidhi shall maintain Net Owned Funds (excluding the proceeds
of any preference share capital) of not less than ten lakh rupees or such
higher amount as the Central Government may specify from time to
time.
10. Branches.
(1) A Nidhi may open branches, only if it has earned net profits after
tax continuously during the preceding three financial years.
(2) Subject to the provisions contained in sub-rule (1), a Nidhi may
open up to three branches within the district.
(3) If a Nidhi proposes to open more than three branches within the
district or any branch outside the district, it shall obtain the prior
permission of the Regional Director and an intimation is to be given
to the Registrar about opening of every branch within thirty days of
such opening.
(4) No Nidhi shall open branches or collection centres or offices or
deposit centres, or by whatever name called outside the State where its
registered office is situated.
(5) No Nidhi shall open branches or collection centres or offices or
deposit centres, or by whatever name called unless financial statement
and annual return (up to date) are filed with the Registrar.
(6) A Nidhi shall not close any branch unless it–
(a) publishes an advertisement in a newspaper in vernacular
language in the place where it carries on business at least
thirty days prior to such closure, informing the public about
such closure;
(b) fixes a copy of such advertisement or a notice informing such
closure of the branch on the notice board of Nidhi fora period
of at least thirty days from the date on which advertisement
was published under clause (a) ; and
(c) gives an intimation to the Registrar within thirty days of such
closure.
11. Acceptance of deposits by Nidhis.

(1) A Nidhi shall not accept deposits exceeding twenty times of its Net
Owned Funds (NOF) as per its last audited financial statements.
(2) In the case of companies covered under clauses (a) and (b) of rule
2 and existing on or before 26th July, 2001 and which have accepted
deposits in excess of the aforesaid limits, the same shall be restored
to the prescribed limit by increasing the Net Owned Funds position
or alternatively by reducing the deposit according to the table given
below:
TABLE
Ratio of Net Owned Funds to Date by which the company has

Deposits (as on 31.3. 2013) to achieve prescribed ceiling of
1:20
a) More than 1:20 but up to 1:35 By 31.3. 2015
b) More than 1:35 but up to 1:45 By 31.3. 2016
c) More than 1:45 By 31.3. 2017
(3) The companies which are covered under the Table in sub-rule (2)
above shall not accept fresh deposits or renew existing deposits if such
acceptance or renewal leads to violation of the prescribed ratio.
(4) The ratio specified in sub-rule (2) above shall also apply to
incremental deposits.
12. Application form for deposit.

(1) Every application form for placing a deposit with a Nidhi shall
contain the following particulars, namely:–
(a) Name of Nidhi;
(b) Date of incorporation of Nidhi;
(c) The business carried on by Nidhi with details of branches, if
any;
(d) Brief particulars of the management of Nidhi (name,
addresses and occupation of the directors, including DIN);
(e) Net profits of Nidhi before and after making provision for tax
for the preceding three financial years;
(f) Dividend declared by Nidhi during the preceding three
financial years;
(g) Mode of repayment of the deposit;
(h) Maturity period of the deposit;
(i) Interest payable on the deposit;
(j) The rate of interest payable to the depositor in case the

depositor withdraws the deposit prematurely;
(k) The terms and conditions subject to which the deposit may
be accepted or renewed;
(l) A summary of the financials of the company as per the latest
two audited financial statements as given below:
(i) Net Owned Funds
(ii) Deposits accepted
(iii) Deposits repaid
(iv) Deposits claimed but remaining unpaid
(v) Loans disbursed against–
(a) immovable property;
(b) deposits; and
(c) gold and jewellery
(vi) Profit before tax
(vii) Provision for tax
(viii) Profit after tax
(ix) Dividend per share
(m) any other special features or terms and conditions subject to
which the deposit is accepted or renewed.
(2) The application form shall also contain the following statements,
namely:–
(a) in case of Non-payment of the deposit or part thereof as per
the terms and conditions of such deposit, the depositor may
approach the Registrar of companies having jurisdiction
over Nidhi;
(b) in case of any deficiency of Nidhi in servicing its depositors,
the depositor may approach the National Consumers
Disputes Redressal Forum, the State Consumers Disputes

Redressal Forum or District Consumers Disputes Redressal
Forum, as the case may be, for redressal of his relief;
(c) a declaration by the Board of Directors to the effect
that the financial position of Nidhi as disclosed andthe
representations made in the application form are true and
correct and that Nidhi has complied with all the applicable
rules;
(d) a statement to the effect that the Central Government does
not undertake any responsibility for the financial soundness
of Nidhi or for the correctness of any of the statement or the
representations made or opinions expressed by Nidhi;
(e) the deposits accepted by Nidhi are not insured and the
repayment of deposits is not guaranteed by either the Central
Government or the Reserve Bank of India; and
(f) a verification clause by the depositor stating that he had read
and understood the financial and other particulars furnished
and representations made by Nidhi in his application form
and after careful consideration he is making the deposit with
Nidhi at his own risk and volition.
(3) Every Nidhi shall obtain proper introduction of new depositors
before opening their accounts or accepting their deposits and keep on
its record the evidence on which it has relied upon for the purpose of
such introduction.
(4) For the purposes of introduction of depositors, a Nidhi shall obtain
documentary evidence of the depositor in the form of proof of identity
and address as under:
(a) Proof of Identity (any one of the following)
(i) Passport
(ii) Unique Identification Number
(iii) Income-tax PAN card
(iv) Elector Photo Identity Card

(v) Driving licence
(vi) Ration card
(b) Proof of address (any one of the following)
(i) Passport
(ii) Unique Identification Number
(iii) Elector Photo Identity Card
(iv) Driving licence
(v) Ration card
(vi) Telephone bill
(vii) Bank account statement
(viii) Electricity bill
(documents referred to serial numbers (vi), (vii) and (viii) above shall
not be more than two months old)
13. Deposits.
(1) The fixed deposits shall be accepted for a minimum period of six
months and a maximum period of sixty months.
(2) Recurring deposits shall be accepted for a minimum period of
twelve months and a maximum period of sixty months.
(3) In case of recurring deposits relating to mortgage loans, the
maximum period of recurring deposits shall correspond to the
repayment period of such loans granted by Nidhi.
(4) The maximum balance in a savings deposit account at any given
time qualifying for interest shall not exceed one lakh rupees at
any point of time and the rate of interest shall not exceed two per
cent above the rate of interest payable on savings bank account by
nationalised banks.
(5) A Nidhi may offer interest on fixed and recurring deposits at a rate
not exceeding the maximum rate of interest prescribed by the Reserve
Bank of India which the Non-Banking Financial Companies can pay

on their public deposits.
(6) A fixed deposit account or a recurring deposit account shall
be foreclosed by the depositor subject to the following conditions,
namely:–
(a) a Nidhi shall not repay any deposit within a period of three
months from the date of its acceptance;
(b) where at the request of the depositor, a Nidhi repays any
deposit after a period of three months, the depositor shall
not be entitled to any interest up to six months from the date
of deposit;
(c) where at the request of the depositor, a Nidhi makes
repayment of a deposit before the expiry of the period for
which such deposit was accepted by Nidhi, the rate of interest
payable by Nidhi on such deposit shall be reduced by two per
cent from the rate which Nidhi would have ordinarily paid,
had the deposit been accepted for the period for which such
deposit had run:
Provided that in the event of death of a depositor, the deposit
may be repaid prematurely to the surviving depositor or
depositors in the case of joint holding with survivor clause,
or to the nominee or to legal heir with interest up to the
date of repayment at the rate which the company would
have ordinarily paid, had such deposit been accepted for the
period for which such deposit had run.
14. Un-encumbered term deposits.

Every Nidhi shall invest and continue to keep invested, in unencumbered
term deposits with a Scheduled commercial bank (other than a co-
operative bank or a regional rural bank), or post office deposits in its
own name an amount which shall not be less than ten per cent of the
deposits outstanding at the close of business on the last working day of
the second preceding month:
Provided that in cases of unforeseen commitments, temporary

withdrawal may be permitted with the priorapproval of the Regional
Director for the purpose of repayment to depositors, subject to such
conditions and time limit which may be specified by the Regional
Director to ensure restoration of the prescribed limit of ten per cent.
15. Loans.
(1) A Nidhi shall provide loans only to its members.
(2) The loans given by a Nidhi to a member shall be subject to the
following limits, namely:–
(a) two lakh rupees, where the total amount of deposits of such
Nidhi from its members is less than two crore rupees;
(b) seven lakh fifty thousand rupees, where the total amount of
deposits of such Nidhi from its members is more than two
crore rupees but less than twenty crore rupees;
(c) twelve lakh rupees, where the total amount of deposits of
such Nidhi from its members is more than twenty crore
rupees but less than fifty crore rupees; and
(d) fifteen lakh rupees, where the total amount of deposits of
such Nidhi from its members is more than fifty crore rupees:
Provided that where a Nidhi has not made profits continuously
in the three preceding financial years, it shall not make any fresh
loans exceeding fifty per cent of the maximum amounts of loans
specified in clauses (a), (b), (c) or (d).
Provided further that a member shall not be eligible for any
further loan if he has borrowed any earlier loan from the Nidhi
and has defaulted in repayment of such loan.
(3) For the purposes of sub-rule (2), the amount of deposits shall be
calculated on the basis of the last audited annual financial statements.
(4) A Nidhi shall give loans to its members only against the following
securities, namely:–
(a) gold, silver and jewellery:

Provided that the re-payment period of such loan shall not
exceed one year.
(b) immovable property:
Provided that the total loans against immovable property
[excluding mortgage loans granted on the security of property
by registered mortgage, being a registered mortgage under
section 69 of the Transfer of Property Act, 1882 (IV of 1882)]
shall not exceed fifty per cent of the overall loan outstanding
on the date of approval by the board, the individual loan shall
not exceed fifty per cent of the value of property offered as
security and the period of repayment of such loan shall not
exceed seven years.
(c) fixed deposit receipts, National Savings Certificates, other
Government Securities and insurance policies:
Provided that such securities duly discharged shall be
pledged with Nidhi and the maturity date of such securities
shall not fall beyond the loan period or one year whichever is
earlier:
Provided further that in the case of loan against fixed
deposits, the period of loan shall not exceed the unexpired
period of the fixed deposits.
16. Rate of interest.

The rate of interest to be charged on any loan given by a Nidhi shall not
exceed seven and half per cent above the highest rate of interest offered
on deposits by Nidhi and shall be calculated on reducing balance
method:
Provided that Nidhi shall charge the same rate of interest on the
borrowers in respect of the same class of loans and the rates of interest
of all classes of loans shall be prominently displayed on the notice
board at the registered office and each branch office of Nidhi.
17. Rules relating to Directors.

(1) The Director shall be a member of Nidhi.
(2) The Director of a Nidhi shall hold office for a term up to ten
consecutive years on the Board of Nidhi.
(3) The Director shall be eligible for re-appointment only after the
expiration of two years of ceasing to be a Director.
(4) Where the tenure of any Director in any case had already been
extended by the Central Government, it shall terminate on expiry of
such extended tenure.
(5) The person to be appointed as a Director shall comply with the
requirements of sub-section (4) of Section 152 of the Act and shall not have
been disqualified from appointment as provided in section 164 of the Act.
18. Dividend.
A Nidhi shall not declare dividend exceeding twenty five per cent or
such higher amount as may be specifically approved by the Regional
Director for reasons to be recorded in writing and further subject to the
following conditions, namely:–
(a) an equal amount is transferred to General Reserve;
(b) there has been no default in repayment of matured deposits
and interest; and
(c) it has complied with all the rules as applicable to Nidhis.
19. Auditor.
(1) No Nidhi shall appoint or re-appoint an individual as auditor for
more than one term of five consecutive years.
(2) No Nidhi shall appoint or re-appoint an audit firm as auditor for
more than two terms of five consecutive years:
Provided that an auditor (whether an individual or an audit firm) shall
be eligible for subsequent appointment after the expiration of two years
from the completion of his or its term:
Explanation : For the purposes of this proviso:

(i) in case of an auditor (whether an individual or audit firm),
the period for which he or it has been holding office as auditor
prior to the commencement of these rules shall be taken into
account in calculating the period of five consecutive years or
ten consecutive years, as the case may be;
(ii) appointment includes re-appointment.
20. Prudential norms.

(1) Every Nidhi shall adhere to the prudential norms for revenue
recognition and classification of assets in respect of mortgage loans or
jewel loans as contained hereunder.
(2) Income including interest or any other charges on non-performing
assets shall be recognised only when it is actually realised and any such
income recognised before the asset became non-performing and which
remains unrealised in a year shall be reversed in the profit and loss
account of the immediately succeeding year.
(3) (a) In respect of mortgage loans, the classification of assets and the
provisioning required shall be as under:
Provided that a Nidhi may make provision for exceeding the percentage
specific herein.
NATURE OF ASSET PROVISION REQUIRED

Standard Asset No provision
Sub-standard Asset 10% of the aggregate outstanding amount
Doubtful Asset 25% of the aggregate outstanding amount
Loss Asset 100% of the aggregate outstanding amount
Provided that a Nidhi may make provision for exceeding the percentage
specific herein.
(b) The estimated realisable value of the collateral security to which
a Nidhi has valid recourse may be reduced from the aggregate
outstanding amount, if the proceedings for the sale of the mortgaged
property have been initiated in a court of law within the previous two
years of the interest, income or instalment remaining unrealised.
(4) In case of companies which were incorporated on or before
26-07-2001, such companies shall make provisions in respect of loans
disbursed and outstanding as on 31-03-2002 for income reversal and
non-performing assets as per table given below:
For the year ended Extent of provision

31-03-2015 Un-provided balance on equal
31-03-2016 basis over the three years as
specified in the preceding
31-03-2017
column.
(5) (a) The Notes on the financial statements of a year shall disclose –
(i) the total amount of provisions, if any, to be made on account
of income reversal and non-performing assets remaining
unrealised;
(ii) the cumulative amount provided till the previous year;
(iii) the amount provided in the current year; and
(iv) the balance amount to be provided.
(b) Such disclosure shall continue to be made until the entire amount
to be provided has been provided for.
(6) In respect of loans against gold or jewellery–
(a) the aggregate amount of loan outstanding against the security
of gold or jewellery shall either be recovered or renewed
within three months from the due date of repayment;
(b) if the loan is not recovered or renewed and the security is
not sold within the aforesaid period of three months, the
company shall make provision in the current year’s financial
statements to the extent of unrealised amount or the
aggregate outstanding amount of loan including interest as
applicable;
(c) no income shall be recognised on such loans outstanding

after the expiry of the three months period specified in (a)
above or sale of gold or jewellery, whichever is earlier; and
(d) the loan to value ratio shall not exceed 80 per cent.
Explanation.- For the purposes of this rule, the term ‘loan to value
ratio’ means the ratio between the amount of loan given and the value
of gold or jewellery against which such loan is given.
21. Filing of half yearly return.

Every company covered under rule 2 shall file half yearly return with
the Registrar in Form NDH-3 along with such fee as provided in
Companies (Registration Offices and Fees) Rules, 2014 within thirty
days from the conclusion of each half year duly certified by a company
secretary in practice or chartered accountant in practice or cost
accountant in practice.
22. Auditor’s certificate.

The Auditor of the company shall furnish a certificate every year to the
effect that the company has complied with all the provisions contained
in the rules and such certificate shall be annexed to the audit report and
in case of non-compliance, he shall specifically state the rules which
have not been complied with.
23. Power to enforce compliance.

(1) For the purposes of enforcing compliance with these rules, the Registrar
of companies may call for such information or returns from Nidhi as he
deems necessary and may engage the services of chartered accountants,
company secretaries in practice, cost accountants, or any firm thereof from
time to time for assisting him in the discharge of his duties.
(2) In respect of any Nidhi which has violated these rules or has failed
to function in terms of the Memorandum and Articles of Association,
the concerned Regional Director may appoint a Special Officer to take
over the management of Nidhi and such Special Officer shall function
as per the guidelines given by such Regional Director:
Provided that an opportunity of being heard shall be given to the

concerned Nidhi by the Regional Director before appointing any
Special Officer.
24. Penalty for non-compliance.

If a company falling under rule 2 contravenes any of the provisions
of the rules prescribed herein, the company and every officer of the
company who is in default shall be punishable with fine which may
extend to five thousand rupees, and where the contravention is a
continuing one, with a further fine which may extend to five hundred
rupees for every day after the first during which the contravention
continues.
566
CHAPTER XXVII
NATIONAL COMPANY LAW TRIBUNAL
RULES, 2016
[G.S.R. 716(E), Dated 21st July 2016]
In exercise of the powers conferred by section 469 of the Companies
Act, 2013 (18 of 2013), the Central Government hereby makes the
following rules, namely;-
1. Short title and Commencement

(1) These rules may be called the National Company Law Tribunal
Rules, 2016.
Official Gazette.
PART – I
1
[DEFINITIONS AND FORMS ETC]
2. Definitions.
In these rules, unless the context otherwise requires,
(1) “Act” means the Companies Act, 2013 (18 of 2013);
(2) “address for service” shall mean the address furnished by a party or
his authorised representative at which service of summons, notices or
other processes may be effected under these rules;
(3) “advocate” means a person who is entitled to practice as such under
the Advocates Act, 1961 (25 of 1961);
(4) “applicant” means a petitioner or an appellant or any other person
1. Substituted by the National Company Law Tribunal (Amendment) Rules,

2016. (w.e.f.20-12-2016) for: “Definitions, forms and etc.”.
566
National Company Law Tribunal Rules, 2016 567
or entity capable of making an application including an interlocutory

application or a petition or an appeal under the Act;
(5) “application” means any application, 1[omitted] or proceedings filed
under the provisions of the Act, including any transferred application
or transferred petition as defined under sub-rule (29);
(6) “authorised representative” means a person authorised in writing
by a party to present his case before the Tribunal as the representative
of such party as provided under section 432 of the Act;
(7) “Bench” means a Bench of the Tribunal constituted under section
419 of the Act and includes Circuit Benches constituted by the
President with prior approval of the Central Government to sit at such
other geographical locations as may be necessary having regard to
requirements;
(8) “Central Registry” means the registry in which all the applications
or petitions and documents are received by the Registrar for allocation
to the concerned Bench of the Tribunal for disposal;
(9) “certified” means in relation to a copy of a document as hereunder;-
(a) certified as provided in section 76 of the Indian Evidence
Act, 1872; or
(b) certified as provided in section 6 of Information Technology
Act, 2000; or
(c) certified copy issued by the Registrar of Companies under
the Act;
(d) copy of document as may be a downloaded from any online
portal prescribed under section 398 of the Act or a photo copy
of the original pertaining to any company registered with
the Office of the Registrar of Companies of the concerned
1. Omitted by the National Company Law Tribunal (Amendment) Rules, 2016.

(w.e.f. 20-12-2016) for: “interlocutory application”.
568 National Company Law Tribunal Rules, 2016
State duly certified by a legal practitioner 1[or a chartered

accountant in practice or a cost accountant in practice or a
company secretary in practice];
(10) “certified by Tribunal” means in relation to a copy of a document,
certified to be a true copy issued by the Registry or of a Bench of the
Tribunal under its hand and seal and as provided in section 76 of the
Indian Evidence Act, 1872 (1 of 1872);
(11) “creditor” means any person to whom a debt is owed;
(12) “fee” means the amount payable in pursuance of the provisions of
the Act and these rules for any petition or application or interlocutory
application or a document or for certified copy of document or order
of the Tribunal or such other paper as may be specified in Schedule
of Fees to these rules and includes any modifications as may be made
thereto or any fee as prescribed for filing of documents to the Tribunal
by these rules;
(13) “filer” means an authorised representative of that person or any
party to the proceedings who files any document with the Tribunal in
relation to a case filed under the Act, or any rules there under;
(14) “filed” means filed in the office of the Registry of the Tribunal;
(15) “interlocutory application” means an application in any appeal or
original petition on proceeding already instituted in the Tribunal, but not
being a proceeding for execution of the order or direction of Tribunal;
(16) “party” means a person who prefers an appeal or application or
petition before the Tribunal and includes respondent or any person
interested in the said appeal or application or petition including
the Registrar of Companies or the Regional Director or Central
Government or State Government or official liquidator and any person
who has a right under the Act, or the Reserve Bank of India Act 1934
(2 of 1934) to make suggestions or submissions or objections or reply;

2016. (w.e.f.20-12-2016) for: “or a chartered accountant or a cost accountant
or a company secretary”.
(17) “petition” means a petition or an application or an appeal or a

complaint in pursuance of which any proceeding is commenced before
the Tribunal;
(18) “person interested” means a shareholder, creditor, employee,
transferee company and other company concerned in relation to the
term or context referred to in the relevant provisions of the Act or any
person aggrieved by any order or action of any company or its directors;
(19) “pleadings” means and includes application including
interlocutory application, petition, appeal, revision, reply, rejoinder,
statement, counter claim, additional statement supplementing the
original application and reply statement under these rules and as may
be permitted by the Tribunal;
(20) “reference” means a reference within the meaning of rule 88 of
these rules;
(21) “Registrar” means Registrar of the Tribunal and includes such
other officer of the Tribunal or Bench to whom the powers and
functions of the Registrar is delegated;
(22) “Registry” means the Registry of the Tribunal or any of its
Benches, as the case may be, which keeps records of the applications
and documents relating thereto;
(23) “Reserve Bank” means the Reserve Bank of India and includes
its branches and agencies as defined in the Reserve Bank of India Act,
1934 (2 of 1934);
(24) “Sealed” means sealed with the seal of the Tribunal;
(25) “Secretary” means Secretary of the Tribunal and in the absence of
Secretary, such other officer of the Tribunal to whom the powers and
functions of the Secretary are delegated.
(26) “secured creditor” means a creditor in whose favour a security
interest is created;
(27) “security interest” means right, title or interest or a claim to property,
created in favour of, or provided for a secured creditor by a transaction
which secures payment or performance of an obligation and includes

mortgage, charge, hypothecation, assignment and encumbrance or any
other agreement or arrangement securing payment or performance of
any obligation of any person:
Provided that security interest shall not include a performance
guarantee.
(28) “section” means a section of the Act;
(29) “transferred application” or “transferred petition” means any
proceeding which has been transferred to the Tribunal from the
Company Law Board, the High Court, District Court, Board for
Industrial and Financial Reconstruction as provided in clause (a), (c)
and (d) of sub-section(1) of section 434 of the Act;
(30) words and expressions used herein and not defined but defined in
the Act shall have the respective meanings assigned to them in the Act.
3. Computation of time period.

Where a period is prescribed by the Act and these rules or under any
other law or is fixed by the Tribunal for doing any act, in computing
the time, the day from which the said period is to be reckoned shall
be excluded, and if the last day expires on a day when the office of
the Tribunal is closed, that day and any succeeding days on which the
Tribunal remains closed shall also be excluded.
4. Forms.
The forms annexed as Annexure ‘A’ to these rules with such
modifications or variations as the circumstances of each case may
require shall be used for the purpose mentioned therein and where no
form is prescribed to cover a contingency, a form as may be approved
by the Registrar, shall be used.
5. Format of order or direction or rule.

Every rule, direction, order, summons, warrant or other mandatory
process shall be issued in the name of the President and shall be signed
by the Registrar or any other officer specifically authorised in that

behalf by the President, with the day, month and year of signing and
shall be sealed with the seal of the Tribunal.
6. Official seal of the Tribunal.

The official seal and emblem of the Tribunal shall be such, as the
Central Government may from time to time specify and shall be in the
custody of the Registrar.
7. Custody of the records.

The Registrar shall have the custody of the records of the Tribunal and
no record or document filed in any cause or matter shall be allowed
to be taken out of the custody of the Tribunal without the leave of the
Tribunal:
Provided that the Registrar may allow any other officer of the Tribunal
to remove any official paper or record for administrative purposes from
the Tribunal.
8. Sitting of the Tribunal.

The Tribunal shall hold its sittings either at its headquarter or at such
other place falling within its territorial jurisdiction as it may consider
convenient.
9. Sitting hours.
The sitting hours of the Tribunal shall ordinarily be from 10:30 AM to
1:00 PM and 2:00 P.M. to 4:30 PM, subject to any order made by the
President.
10. Working hours.

(1) Except on Saturdays, Sundays and other National Holiday, the office
of the Tribunal shall remain open on all working days from 09.30 A.M.
to 6.00 P.M.
(2) The Filing Counter of the Registry shall be open on all working days
from 10.30 AM to 5.00 P.M.
11. Inherent Powers.

Nothing in these rules shall be deemed to limit or otherwise affect
the inherent powers of the Tribunal to make such orders as may be
necessary for meeting the ends of justice or to prevent abuse of the
process of the Tribunal.
12. Calendar.
The calendar of days of working of Tribunal in a year shall be as decided
by the President of the Tribunal.
13. Listing of cases.

An urgent matter filed before 12 noon shall be listed before the
Tribunal on the following working day, if it is complete in all respects
as provided in these rules and in exceptional cases, it may be received
after 12 noon but before 3.00 P.M. for listing on the following day, with
the specific permission of the Bench.
14. Power to exempt.

The Tribunal may on sufficient cause being shown, exempt the parties
from compliance with any requirement of these rules and may give
such directions in matters of practice and procedure, as it may consider
just and expedient on the application moved in this behalf to render
substantial justice.
15. Power to extend time.

The Tribunal may extend the time appointed by these rules or fixed by
any order, for doing any act or taking any proceeding, upon such terms,
if any, as the justice of the case may require, and any enlargement may
be ordered, although the application therefore is not made until after
the expiration of the time appointed or allowed.
PART-II
POWER AND FUNCTIONS OF PRESIDENT, REGISTRAR
AND SECRETARY
16. Functions of the President.

In addition to the general powers provided in the Act and in these rules
the President shall exercise the following powers, namely:-
(a) preside over the consideration of cases by the Tribunal;
(b) direct the Registry in the performance of its functions;
(c) prepare an annual report on the activities of the Tribunal;
(d) transfer any case from one Bench to other Bench when the
circumstances so warrant;
(e) to withdraw the work or case from the court of a member.
(f) perform the functions entrusted to the President under
these rules and such other powers as my be relevant to carry
out his duties as head of the Tribunal while exercising the
general superintendence and control over the administrative
functions of the Members, Registrar, Secretary and other
staff of the Tribunal.
17. Functions of the Registrar.

(1) The Registrar shall have the following functions, namely:-
(a) registration of appeals, petitions and applications;
(b) receive applications for amendment of appeal or the petition
or application or subsequent proceedings.
(c) receive applications for fresh summons or notices and
regarding services thereof;
(d) receive applications for fresh summons or notices and for
short date summons and notices;
(e) receive applications for substituted service of summons or
notices;
(f) receive applications for seeking orders concerning the

admission and inspection of documents;
(g) transmission of a direction or order to the civil court as
directed by Tribunal with the prescribed certificates for
execution etc., and
(h) such other incidental or matters as the President may direct
from time to time.
(2) All adjournments shall normally be sought before the concerned
Bench in court and in extraordinary circumstances, the Registrar may,
if so directed by the Tribunal in chambers, at any time adjourn any
matter and lay the same before the Tribunal in chambers.
18. Functions of the Secretary.

(1) There shall be a Secretary at the Principal Bench of the Tribunal,
New Delhi.
(2) The Secretary shall, under the general superintendence and control
of the President, discharge such duties, functions and exercise such
powers as are prescribed under these rules and as assigned by the
President from time to time.
(3) Secretary shall –
(a) be in charge of the long term projects and initiatives of the
Tribunal;
(b) supervise the divisions and sections of the Human Resources;
(c) prepare, monitor and manage budgetary allocations and
financial managements of the Tribunal and the Benches;
(d) provide all necessary support in the day to day operations of
the Tribunal;
(e) manage and supervise the facilities and administrative
services of the Tribunal;
(f) manage and administer the public grievances mechanism of
the Tribunal;
(g) coordinate with authorised representatives and other

professionals in the smooth functioning of the Tribunal;
(h) oversee information and communication technology and
other technological facilities in the Tribunal;
(i) manage and facilitate communication and services of the
Tribunal;
(j) manage, monitor and administer the public affairs and public
safety provisions within the premises of the Tribunal; and
(k) supervise library and research wings of the Tribunal.
19. Delegation of powers by the President.

The President may assign or delegate to any suitable officer all or some
of the functions required by these rules to be exercised by the Registrar.
PART-III
INSTITUTION OF PROCEEDINGS, PETITION, APPEALS ETC.
20. Procedure.
(1) Every appeal or petition or application or caveat petition or
objection or counter presented to the Tribunal shall be in English and
in case it is in some other Indian language, it shall be accompanied by
a copy translated in English and shall be fairly and legibly type written,
lithographed or printed in double spacing on one side of standard
petition paper with an inner margin of about four centimeter width on
top and with a right margin of 2.5. cm, and left margin of 5 cm, duly
paginated, indexed and stitched together in paper book form;
(2) The cause title shall state “Before the National Company Law
Tribunal” and shall specify the Bench to which it is presented and also
set out the proceedings or order of the authority against which it is
preferred.
(3) Appeal or petition or application or counter or objections shall be
divided into paragraphs and shall be numbered consecutively and each
paragraph shall contain as nearly as may be, a separate fact or allegation

or point.
(4) Where Saka or other dates are used, corresponding dates of
Gregorian Calendar shall also be given.
(5) Full name, parentage, age, description of each party and address
and in case a party sues or being sued in are presentative character, shall
also be set out at the beginning of the appeal or petition or application
and need not be repeated in the subsequent proceedings in the same
appeal or petition or application.
(6) The names of parties shall be numbered consecutively and a separate
line should be allotted to the name and description of each party.
(7) These numbers shall not be changed and in the event of the death
of a party during the pendency of the appeal or petition or matter, his
legal heirs or representative, as the case may be, if more than one shall
be shown by sub-numbers.
(8) Where fresh parties are brought in, they may be numbered
consecutively in the particular category, in which they are brought in.
(9) Every proceeding shall state immediately after the cause title the
provision of law under which it is preferred.
21. Particulars to be set out in the address for service.

The address for service of summons shall be filed with every appeal or
petition or application or caveat on behalf of a party and shall as far as
possible contain the following items namely:-
(a) the name of the road, street, lane and Municipal Division or
Ward, Municipal Door and other number of the house;
(b) the name of the town or village;
(c) the post office, postal district and PIN Code, and
(d) any other particulars necessary to locate and identify the
addressee such as fax number, mobile number, valid e-mail
address, if any.
22. Initialing alteration.

Every interlineations, eraser or correction or deletion in any appeal or
petition or application or document shall be initialed by the party or
his authorised representative presenting it.
23. Presentation of petition or appeal.

(1) Every petition, application, caveat, interlocutory application,
documents and appeal shall be presented in triplicate by the appellant
or applicant or petitioner or respondent, as the case may be, in person
or by his duly authorised representative or by an advocate duly
appointed in this behalf in the prescribed form with stipulated fee at
the filing counter and non-compliance of this may constitute a valid
ground to refuse to entertain the same.
(2) Every petition or application or appeal may be accompanied by
documents duly certified by the authorised representative or advocate
filing the petition or application or appeal duly verified from the
originals.
(3) All the documents filed in the Tribunal shall be accompanied by an
index in triplicate containing their details and the amount of fee paid
thereon.
(4) Sufficient number of copies of the appeal or petition or application
shall also be filed for service on the opposite party as prescribed under
these rules.
(5) In the pending matters, all applications shall be presented after
serving copies thereof in advance on the opposite side or his authorised
representative.
(6) The processing fee prescribed by these rules, with required number
of envelopes of sufficient size and notice forms shall be filled alongwith
memorandum of appeal.
[23A. Presentation of joint petition.

1
(1) The Bench may permit more than one person to join together and
present a single petition if it is satisfied, having regard to the cause of
action and the nature of relief prayed for, that they have a common
interest in the matter.
(2) Such permission shall be granted where the joining of the petitioners
by a single petition is specifically permitted by the Act.]
24. Number of copies to be filed.

The appellant or petitioner or applicant or respondent shall file three
authenticated copies of appeal or petition or application or counter or
objections, as the case may be, and shall deliver one copy to each of the
opposite party.
25. Lodging of caveat.

(1) Any person may lodge a caveat in triplicate in any appeal or petition
or application that may be instituted before this Tribunal by paying the
prescribed fee after forwarding a copy by registered post or serving the
same on the expected petitioner or appellant and the caveat shall be
2
[in the Form No. NCLT 3C] and contain such details and particulars
or orders or directions, details of authority against whose orders or
directions the appeal or petition or application is being instituted by
the expected appellant or petitioner or applicant which full address for
service on other side, so that the appeal or petition or application could
be served before the appeal or petition or interim application is taken
up:
Provided, that the Tribunal may pass interim orders in case of urgency.
(2) The caveat shall remain valid for a period of ninety days from the
date of its filing.
1. Inserted by the National Company Law Tribunal (Amendment) Rules, 2016

(w.e.f. 20-12-2016).
2016 (w.e.f. 20-12-2016) for :“in the form prescribed”
26. Endorsement and Verification.

(1) At the foot of every petition or appeal or pleading there shall appear
the name and signature of the authorised representative.
(2) Every petition or appeal shall be signed and verified by the party
concerned in the manner provided by these rules.
27. Translation of document.

(1) A document other than English language intended to be used in
any proceeding before the Tribunal shall be received by the Registry
accompanied by a copy in English, which is agreed to by both the parties
or certified to be a true translated copy by authorised representative
engaged on behalf of parties in the case 1[or if the authorised
representative engaged in the case authenticates such certificate or
prepared by a translator approved for the purpose by the Registrar on
payment of such charges as he may order].
(2) Appeal or petition or other proceeding shall not be set down for
hearing until and unless all parties confirm that all the documents filed
on which they intend to rely are in English or have been translated into
English and required number of copies are filed into Tribunal.
28. Endorsement and scrutiny of petition or appeal or document.

(1) The person in charge of the filing counter shall immediately on
receipt of petition or appeal or application or document affix the date
stamp of Tribunal thereon and also on the additional copies of the
index and return the acknowledgement to the party and he shall also
affix his initials on the stamp affixed on the first page of the copies and
enter the particulars of all such documents in the register after daily
filing and assign a diary number which shall be entered below the date

2016. (w.e.f. 20-12-2016) for: “or by any other advocate or authorised
representative whether engaged in the case or not or if the advocate or
authorised representative engaged in the case authenticates such certificate or
prepared by a translator approved for the purpose by the Registrar on payment
of such charges as he may order.”
stamp and thereafter cause it to be sent for scrutiny.

(2) If, on scrutiny, the appeal or petition or application or document
is found to be defective, such document shall, after notice to the party,
be returned for compliance and if there is a failure to comply within
seven days from the date of return, the same shall be placed before the
Registrar who may pass appropriate orders.
(3) The Registrar may for sufficient cause return the said document for
rectification or amendment to the party filing the same, and for this
purpose may allow to the party concerned such reasonable time as he
may consider necessary or extend the time for compliance.
(4) Where the party fails to take any step for the removal of the defect
within the time fixed for the same, the Registrar may, for reasons to be
recorded in writing, decline to register the pleading or document.
29. Registration of proceedings admitted.

On admission of appeal or petition or caveat or application, the same
shall be numbered and registered in the appropriate register maintained
in this behalf and its number shall be entered therein.
30. Calling for records.

On the admission of appeal or petition or application the Registrar
shall, if so directed by the Tribunal, call for the records relating to the
proceedings from any adjudicating authority and retransmit the same.
31. Production of authorisation for and on behalf of an association.

Where an appeal or application or petition or other proceeding
purported to be instituted by or on behalf of an association, the person
or persons who sign (s) or verify (ies) the same shall produce along
with such application, for verification by the Registry, a true copy of
the resolution of the association empowering such person(s) to do so:
Provided that the Registrar may at any time call upon the party to
produce such further materials as he deems fit for satisfying himself
about due authorization:
Provided further that it shall set out the list of members for whose
benefit the proceedings are instituted.
32. Interlocutory applications.

Every Interlocutory application for stay, direction, condonation of
delay, exemption from production of copy of order appealed against or
extension of time prayed for in pending matters shall be in prescribed
form and the requirements prescribed in that behalf shall be complied
with by the applicant, besides filing an affidavit supporting the
application.
33. Procedure on production of defaced, torn or damaged

documents.
When a document produced alongwith any pleading appears to be
defaced, torn, or in any way damaged or otherwise its condition or
appearance requires special notice, a mention regarding its condition
and appearance shall be made by the party producing the same in the
Index of such a pleading and the same shall be verified and initialed by
the officer authorized to receive the same.
PART- IV
GENERAL PROCEDURE
34. General Procedure.

(1) In a situation not provided for in these rules, the Tribunal may,
for reasons to be recorded in writing, determine the procedure in a
particular case in accordance with the principles of natural justice.
(2) The general heading in all proceedings before the Tribunal, in all
advertisements and notices shall be in Form No. NCLT. 4.
(3) Every petition or application or reference shall be filed in form as
provided in Form No. NCLT. 1 with attachments thereto accompanied
by Form No. NCLT.2 and in case of an interlocutory application,
the same shall be filed in Form No. NCLT. 1 accompanied by such
attachments thereto along with Form No. NCLT. 3.
(4) Every petition or application including interlocutory application

shall be verified by an affidavit in Form No. NCLT.6. Notice to be issued
by the Tribunal to the opposite party shall be in Form NCLT-5.
35. Advertisement detailing petition.

(1) Where any application, petition or reference is required to be
advertised, it shall, unless the Tribunal otherwise orders, or these
rules otherwise provide, be advertised in Form NCLT-3A, not less
than fourteen days before the date fixed for hearing, at least once in
a vernacular newspaper in the principal vernacular language of the
district in which the registered office of the company is situate, and at
least once in English language in an English newspaper circulating in
that district.
(2) Every such advertisement shall state;-
(a) the date on which the application, petition or reference was
presented;
(b) the name and address of the applicant, petitioner and his
authorised representative, if any;
(c) the nature and substance of application, petition or reference;
(d) the date fixed for hearing;
(e) a statement to the effect that any person whose interest is
likely to be affected by the proposed petition or who intends
either to oppose or support the petition or reference at the
hearing shall send a notice of his intention to the concerned
Bench and the petitioner or his authorised representative,
if any, indicating the nature of interest and grounds of
opposition so as to reach him not later than two days
previous to the day fixed for hearing.
(3) Where the advertisement is being given by the company, then the
same may also be placed on the website of the company, if any.
(4) An affidavit shall be filed to the Tribunal, not less than three days
before the date fixed for hearing, stating whether the petition has been
advertised in accordance with this rule and whether the notices, if any,
have been duly served upon the persons required to be served:
Provided that the affidavit shall be accompanied with such proof of
advertisement or of the service, as may be available.
(5) Where the requirements of this rule or the direction of the Tribunal,
as regards the advertisement and service of petition, are not complied
with, the Tribunal may either dismiss the petition or give such further
directions as it thinks fit.
(6) The Tribunal may, if it thinks fit, and upon an application being
made by the party, may dispense with any advertisement required to be
published under this rule.
36. Maintenance of Cash Register.

(1) If any payment has been received by way of Indian postal orders
or demand drafts or in cash by the Registry, the transaction shall be
entered immediately by the Registration Clerk on their receipt side in a
Cash Register kept for the purpose.
(2) On every next working day or the last working day of the week, the
payments received during such day or week by way of Indian postal
orders or demand drafts shall be transmitted by the Registration Clerk
to the concerned official vested with the work pertaining to the Cashier
who after scrutiny and verification shall acknowledge the receipt of all
moneys in the Cash Register.
(3) The official referred to in sub-rule (2) shall deposit all payments
received by way of Indian postal order or demand draft or cash in the
Bank account of the Tribunal.
37. Notice to Opposite Party.

(1) The Tribunal shall issue notice to the respondent to show cause
against the application or petition on a date of hearing to be specified
in the Notice. Such notice in Form No. NCLT.5 shall be accompanied
by a copy of the application with supporting documents.
(2) If the respondent does not appear on the date specified in the
notice in Form No. NCLT.5, the Tribunal, after according reasonable
opportunity to the respondent, shall forthwith proceed ex-parte to

dispose of the application.
(3) If the respondent contests to the notice received under sub-rule (1),
it may, either in person or through an authorised representative, file
a reply accompanied with an affidavit and along with copies of such
documents on which it relies, with an advance service to the petitioner
or applicant, to the Registry before the date of hearing and such reply
and copies of documents shall form part of the record.
38. Service of Notices and processes.

(1) Any notice or process to be issued by the Tribunal may be served by
post 1[or by courier] or at the e-mail address as provided in the petition
or application or in the reply;
(2) The notice or process if to be served physically may be served in
any one of the following modes as may be directed by the Tribunal; -
(a) by hand delivery through a process server or respective
authorised representative;
(b) by registered post or speed post with acknowledgment due
1
[or by courier]; or
(c) service by the party himself.
1
[Explanation. – For the purposes of sub-rules (1) and (2), the term
‘‘courier’’ means a person or agency which delivers the document and
provides proof of its delivery.]
(3) Where a notice issued by the Tribunal is served by the party himself
by hand delivery, he shall file with the Registrar or such other person
duly authorised by the Registrar in this behalf, the acknowledgment
together with an affidavit of service and in case of service by registered
post or by speed post, file with the Registrar, or such other person duly
authorised by the Registrar in this behalf, an affidavit of service of
notice alongwith the proof of delivery.

(w.e.f. 20-12-2016).
(4) Notwithstanding anything contained in sub-rules (1) and (2), the

Tribunal may after taking into account the number of respondents and
their place of residence or work or service could not be effected in any
manner and other circumstances, direct that notice of the petition or
application shall be served upon the respondents in any other manner,
including any manner of substituted service, as it appears to the
Tribunal just and convenient.
(5) A notice or process may also be served on an authorised
representative of the applicant or the respondent, as the case may be,
in any proceeding or on any person authorised to accept a notice or
a process, and such service on the authorised representative shall be
deemed to be a proper service.
(6) Where the Tribunal directs a service under sub-rule (4), such
amount of charges, as may be determined by the Tribunal from time
to time, but not exceeding the actual charges incurred in effecting
the service, shall be deposited with the registry of the Tribunal by the
petitioner or applicant.
1
[38A. Multiple remedies
A petition shall be based upon a single cause of action and may seek
one or more reliefs provided that the reliefs are consequential to one
another.]
39. Production of Evidence by Affidavit.

(1) The Tribunal may direct the parties to give evidence, if any, by
affidavit.
(2) Notwithstanding anything contained in sub-rule (1), where the
Tribunal considers it necessary in the interest of natural justice, it may
order cross-examination of any deponent on the points of conflict
either through information and communication technology facilities
such as video conferencing or otherwise as may be decided by the
Tribunal, on an application moved by any party.
(w.e.f. 20-12-2016).
(3) Every affidavit to be filed before the Tribunal shall be in Form No.
NCLT.7.
40. Production of additional evidence before the Bench.

(1) Notwithstanding anything contained in rule39, the parties to the
proceedings shall not be entitled to produce before the Bench additional
evidence, either oral or documentary, which was in the possession or
knowledge but was not produced before the Inspector, appointed by
the Central Government for the purpose of investigating the affairs of
the concerned company, during investigation under Chapter XIV of
the Act, but if the Bench requires any additional evidence or document
to be produced or any witness to be examined or any affidavit to be
filed to enable it to pass orders or for any other substantial cause, or if
the Inspector so appointed for the said purpose has not given sufficient
opportunity to the party to adduce evidence, the Bench, for reasons to
be recorded, may allow such document to be produced or witness to
be examined or affidavit to be filed or may allow such evidence to be
produced.
(2) Such document may be produced or such witness examined or such
evidence adduced either before the Bench or before such authority as
the Bench may direct.
(3) If the document is directed to be produced or witness examined or
evidence adduced before any authority, the party shall comply with the
direction of the Bench and after compliance, send the document, the
record of the deposition of the witness or the record of the evidence
adduced, to the Bench.
(4) Additional evidence or document shall be made available by the
Bench to the parties to the proceedings other than the party adducing
the evidence and they shall be afforded an opportunity to rebut the
contents of the said additional evidence.
41. Filing of Reply and other Documents by the Respondents.

(1) Each respondent may file his reply to the petition or the application
and copies of the documents, either in person or through an authorized
representative, with the registry as specified by the Tribunal.

(2) A copy of the reply or the application and the copies of other
documents shall be forthwith served on the applicant by the respondent.
(3) To the reply or documents filed under sub-rule (1), the respondent
shall specifically admit, deny or rebut the facts stated by the applicant
in his petition or application and state such additional facts as may be
found necessary in his reply.
42. Filing of Rejoinder.

Where the respondent states such additional facts as may be necessary
for the just decision of the case, the Bench may allow the petitioner to
file a rejoinder to the reply filed by the respondent, with an advance
copy to be served upon the respondent.
43. Power of the Bench to call for further information or evidence.

(1) The Bench may, before passing orders on the petition or application,
require the parties or any one or more of them, to produce such further
documentary or other evidence as it may consider necessary:-
(a) for the purpose of satisfying itself as to the truth of the
allegations made in the petition or application; or
(b) for ascertaining any information which, in the opinion of
the Bench, is necessary for the purpose of enabling it to pass
orders in the petition or application.
(2) Without prejudice to sub-rule (1), the Bench may, for the purpose of
inquiry or investigation, as the case may be, admit such documentary
and other mode of recordings in electronic form including e-mails,
books of accounts, book or paper, written communications, statements,
contracts, electronic certificates and such other similar mode of
transactions as may legally be permitted to take into account of those
as admissible as evidence under the relevant laws.
(3) Where any party preferring or contesting a petition of oppression
and mismanagement raises the issue of forgery or fabrication of any
statutory records, then it shall be at liberty to move an appropriate
application for forensic examination and the Bench hearing the

matter may, for reasons to be recorded, either allow the application
and send the disputed records for opinion of Central Forensic Science
Laboratory at the cost of the party alleging fabrication of records, or
dismiss such application.
44. Hearing of petition or applications.

(1) The Tribunal shall notify to the parties the date and place of hearing
of the petition or application in such manner as the President or a
Member may, by general or special order, direct.
(2) Where at any stage prior to the hearing of the petition or application,
the applicant desires to withdraw his petition or application, he shall
make an application to that effect to the Tribunal, and the Tribunal
on hearing the applicant and if necessary, such other party arrayed as
opposite parties in the petition or the application or otherwise, may
permit such withdrawal upon imposing such costs as it may deem fit
and proper for the Tribunal in the interests of the justice.
45. Rights of a party to appear before the Tribunal.

(1) Every party may appear before a Tribunal in person or through
an authorised representative, duly authorised in writing in this behalf.
(2) The authorised representative shall make an appearance through
the filing of Vakalatnama or Memorandum of Appearance in Form No.
NCLT. 12 representing the respective parties to the proceedings.
(3) The Central Government, the Regional Director or the Registrar
of Companies or Official Liquidator may authorise an officer or an
Advocate to represent in the proceedings before the Tribunal.
(4) The officer authorised by the Central Government or the Regional
Director or the Registrar of Companies or the Official Liquidator shall
be an officer not below the rank of Junior Time Scale or company
prosecutor.
(5) During any proceedings before the Tribunal, it may for the purpose
of its knowledge, call upon the Registrar of Companies to submit
information on the affairs of the company on the basis of information

available in the MCA21 portal. Reasons for such directions shall be
recorded in writing.
(6) There shall be no audio or video recording of the Bench proceedings
by the parties or their authorized representatives.
46. Registration of authorised representative’s interns.
(1) No intern employed by an authorized representative shall act as
such before the Tribunal or be permitted to have access to the records
and obtain copies of the orders of a Bench of the Tribunal in which
the authorised representative ordinarily appears, unless his name is
entered in the register of interns maintained by the Bench.
(2) An authorised representative desirous of registering his intern shall
make a petition or an application to the Registrar in Form NCLT 10
and on such application being allowed by the Registrar, his name shall
be entered in the register of interns.
47. Oath to the witness.

The Bench Officer or the Court Officer, as the case may be, shall
administer the following oath to a witness:-
“I do swear in the name of God / solemnly affirm that what I shall state
shall be the truth and nothing but the truth.”
48. Consequence of non-appearance of applicant.

(1) Where on the date fixed for hearing of the petition or application
or on any other date to which such hearing may be adjourned, the
applicant does not appear when the petition or the application is called
for hearing, the Tribunal may, in its discretion, either dismiss the
application for default or hear and decide it on merit.
(2) Where the petition or application has been dismissed for default
and the applicant files an application within thirty days from the date
of dismissal and satisfies the Tribunal that there was sufficient cause for
his non-appearance when the petition or the application was called for
hearing, the Tribunal shall make an order restoring the same:
Provided that where the case was disposed of on merits the decision
shall not be re-opened.
49. Ex-parte Hearing and disposal.

(1) Where on the date fixed for hearing the petition or application or on
any other date to which such hearing may be adjourned, the applicant
appears and the respondent does not appear when the petition or the
application is called for hearing, the Tribunal may adjourn the hearing
or hear and decide the petition or the application ex-parte.
(2) Where a petition or an application has been heard ex-
parte against a respondent or respondents, such respondent or
respondents may apply to the Tribunal for an order to set it aside
and if such respondent or respondents satisfies the Tribunal that
the notice was not duly served, or that he or they were prevented
by any sufficient cause from appearing (when the petition or the
application was called) for hearing, the Tribunal may make an order
setting aside the ex-parte hearing as against him or them upon such
terms as it thinks fit.
Provided that where the ex-parte hearing of the petition or application
is of such nature that it cannot be set aside as against one respondent
only, it may be set aside as against all or any of the other respondents
also.
50. Registry to send certified copy.

The Registry shall send a certified copy of final order passed to the
parties concerned free of cost and the certified copies may be made
available with cost as per Schedule of fees, in all other cases.
51. Power to regulate the procedure.

The Tribunal may regulate its own procedure in accordance with the
rules of natural justice and equity, for the purpose of discharging its
functions under the Act.
52. Summoning of witnesses and recording Evidence.

(1) If a petition or an application is presented by any party to the
proceedings for summoning of witnesses, the Tribunal shall issue
summons for the appearance of such witnesses unless it considers that
their appearance is not necessary for the just decision of the case.
(2) Where summons are issued by the Tribunal under sub-rule (1) to
any witness to give evidence or to produce any document, the person
so summoned shall be entitled to such travelling and daily allowance
sufficient to defray the travelling and other expenses as may be
determined by the Registrar which shall be deposited by the party as
decided by the Registrar.
53. Substitution of legal representatives.

(1) Where a party to a proceeding pending before a Bench dies or is
adjudged insolvent or, in the case of a company, being wound up, the
proceeding shall not abate and may be continued by or against the
executor, administrator or other legal representative of the parties or
by or against the assignee, receiver or liquidator, as the case may be.
(2) In the case of death of a party during the pendency of the proceedings
before the Tribunal, the legal representative of the deceased party may
apply within ninety days of the date of such death for being brought
on record.
(3) Where no petition or application is received from the legal
representatives within the period specified in sub-rule (2), the
proceedings shall abate:
Provided that for good and sufficient reasons shown, the Tribunal may
allow substitution of the legal representatives of the deceased at any
time before disposing the petition on merits.
54. Assessors or valuers.

(1) In any enquiry into a claim, the Tribunal may call in the aid of
assessor or valuer, not exceeding two in number, who possess any
technical or special knowledge with respect to any matter before the
Tribunal for the purpose of assisting the Tribunal.
(2) An assessor or valuer shall perform such functions as the Tribunal

may direct.
(3) The remuneration, if any, to be paid to an assessor or valuer shall
in every case be determined by the Tribunal and be paid by it in the
manner as may be specified by the Tribunal.
55. Pleadings before the Tribunal.

No pleadings, subsequent to the reply, shall be presented except by the
leave of the Tribunal upon such terms as the Tribunal may think fit.
56. Application for execution.

For execution of order passed by the Tribunal, the holder of an order
shall make an application to the Tribunal in Form NCLT.8.
57. Issue of process of execution.

(1) On receipt of an application under rule 56 the Tribunal shall issue a
process for execution of its order in such Form as provided in the Code
of Civil Procedure, 1908 (5 of 1908).
(2) The Tribunal shall consider objection, if any, raised by the
respondent and make such order as it may deem fit and shall issue
attachment or recovery warrant in such form as provided in the Code
of Civil Procedure, 1908 (5 of 1908), as the case may be.
58. Effect of non-compliance.

Failure to comply with any requirement of these rules shall not
invalidate any proceeding, merely by reason of such failure, unless the
Tribunal is of the view that such failure has resulted in miscarriage of
justice.
59. Procedure for imposition of penalty under the Act.

(1) Notwithstanding anything to the contrary contained in any rules
or regulations framed under the Act, no order or direction imposing a
penalty under the Act shall be made unless the person or the company
or a party to the proceeding, during proceedings of the Bench, has been
given a show cause notice and reasonable opportunity to represent his

or her or its case before the Bench or any officer authorised in this
behalf.
(2) In case the Bench decides to issue show cause notice to any person
or company or a party to the proceedings, as the case may be, under
sub-rule (1), the Registrar shall issue a show cause notice giving not less
than fifteen days asking for submission of the explanation in writing
within the period stipulated in the notice.
(3) The Bench shall, on receipt of the explanation, and after oral hearing
if granted, proceed to decide the matter of imposition of penalty on the
facts and circumstances of the case.
PART-V
ISSUANCE OF ORDERS AND DISPOSAL OF CASES
60. Matters relating to the Judgments or Orders of the Tribunal.

(1) Once the final text of the judgment has been approved and adopted,
the judgment shall be signed and dated by the President or the
concerned Members or Member and the Registrar, and shall contain
the names of the Members who have taken part in the decision.
(2) Any Member differing as to the grounds upon which the judgment
was based or some of its conclusions, or dissenting from the judgment,
may append a separate or dissenting opinion.
(3) In case the members who have heard the case are equally divided
in passing the order or judgment, then the President shall constitute a
Bench as referred in sub-section (5) of section 419 of the Act.
61. Amicus Curiae.

(1) The Tribunal may, as its discretion, permit any person or persons,
including the professionals and professional bodies to render or to
communicate views to the Tribunal as amicus curiae on any point or points
or legal issues as the case may be as assigned to such amicus curiae.
(2) The Tribunal may permit amicus curiae to have access to the
pleadings of the parties and the Tribunal shall enable the parties to
submit timely observations on brief provided by the amicus curiae.
(3) The Tribunal shall be at liberty to direct either of the parties or both
the parties to the proceedings involving a point on which the opinion
of the amicus curiae has been sought, to bear such expenses or fee as
may be ordered by the Tribunal.
(4) The judgment and any appended opinions shall be transmitted to
the parties and to amicus curiae.
62. Recusal.
(1) For the purpose of maintaining the high standards and integrity of
the Tribunal, the President or a Member of the Tribunal shall rescue
himself:-
(a) in any cases involving persons with whom the President or
the Member has or had a personal, familial or professional
relationship;
(b) in any cases concerning which the President or the Member
has previously been called upon in another capacity,
including as advisor, representative, expert or witness; or
(c) if there exists other circumstances such as to make the
President or the Member’s participation seem inappropriate
(2) The President or any Member rescuing himself may record reasons
for recusal:
Provided that no party to the proceedings or any other person shall
have a right to know the reasons for recusal by the President or the
Member in the case.
PART-VI
OTHER PROCEDURES
63. Presentation and scrutiny of petitions or applications.

In case of the scrutiny of the petitions or applications as provided in
Part III and elsewhere in these rules, if any person is aggrieved of the
decision of the Registrar or such other officer officiating as the Registrar
of the Benches, an appeal against the order of the Registrar shall be
made within fifteen days of the making of such order to the President
of the Principal Bench and at other places to any Member of the Bench
designated by the President, and whose decision thereon shall be final.
PART- VII
PROCEDURES IN RESPECT OF MATTERS EARLIER DEALT
BY OTHER QUASI-JUDICIAL BODIES, COURTS AND
TRIBUNALS
64. Matter earlier dealt by Company Law Board.

(1) Notwithstanding anything contained in any other law for the time
being in force, an original civil action or case arising out of the Act,
or any other corresponding provision of the Companies Act, 1956 or
Reserve Bank of India Act, 1934 is filed or pending before the Company
Law Board on the date on which the Tribunal is constituted, and the
relevant provisions of the Act dealing with the Tribunal have been given
effect, or the Company Law Board has been dissolved in pursuance of
the provisions of the Act, then all the cases on such date pending with
the Company Law Board or such Benches shall stand transferred to the
respective Benches of the Tribunal exercising corresponding territorial
jurisdiction as if the case had been originally filed in the Tribunal
or its Bench to which it is transferred on the date upon which it was
actually filed in the Company Law Board or its Bench from which it
was transferred:
Provided that the Tribunal shall consider any action taken under the
regulations of the Company Law Board as deemed to have been taken
or done under the corresponding provisions of these rules and the
provisions of the Act, and shall thereupon continue the proceedings,
except in a case where the order is reserved by the Company Law
Board or its Bench and in such a case, the Tribunal shall reopen the
matter and rehear the case as if the hearing had not taken place:
Provided further that the Tribunal is at liberty to call upon the parties
in a case to produce further evidence or such other information or
document or paper or adduce or record further depositions or evidence
as may deem fit and proper in the interest of justice.
(2) It shall be lawful for the President or such Member to whom the
powers are so delegated, to provide that matters falling under all other
sections of the Act, shall be dealt with by such Benches consisting
of one or more members as may be constituted in exercising of such
power as enshrined in the Act:
Provided that matters pending before the Principal Bench of the
Company Law Board as on the date of constitution of Tribunal shall
continue and be disposed of by a bench consisting of not less than two
Members of the Tribunal having territorial jurisdiction.
(3) It shall be lawful for the Tribunal to dispose of any case transferred
to it wherever the Tribunal decides that further continuance of such
application or petition transferred before the Tribunal shall be an
unnecessary proceeding on account of changes which have taken place
in the Act either upon an application filed by either of the parties to the
proceedings or suo motu.
(4) A fresh petition or an application may also be filed in Form NCLT 1
corresponding to those provisions of the Act, if both the parties thereto
so consent with the approval of the Tribunal while withdrawing the
proceedings as already continued before the Company Law Board and
serve a copy of the petition on the parties thereto including the Central
Government, Regional Director, Registrar of Companies, Official
Liquidator or Serious Fraud Investigation Office, as the case may be, as
provided in the Act, in the manner as provided under Part III.
(5) Upon an application to the Tribunal if the permission is granted to
file a petition or an application in physical form, then the same shall be
filed accompanied with the documents or papers to be attached thereto
as required to prove the case subject to the provisions of the Act, and
rules hereto.
(6) The same procedure shall also apply to other parties to application
or petition for filing reply or counter thereto.
(7) Notwithstanding the above and subject to section 434 of the Act,
the Tribunal may prescribe the rules relating to numbering of cases and
other procedures to be followed in the case of transfer of such matters,
proceedings or cases.
65. Petition or Application under sub-section (2) of section 45QA of

the Reserve Bank of India Act, 1934 (2 of 1934).
Provisions of these rules shall apply, mutatis mutandis, to the application
or petition made under sub-section (2) of section 45QA of the Reserve
Bank of India Act, 1934 (2 of 1934) or under such other analogous
provision of the other Act(s).
PART- VIII
SPECIAL PROCEDURE
66. Application under sub- section (7) of section 7.

(1). An application under sub-section (7) of section 7 of the Act shall
be filed to the Tribunal in Form NCLT-1 and shall be accompanied by
such documents as are mentioned in Annexure-B.
(2) Every application filed under sub rule (1) shall also set out the
following particulars, namely:-
(a) Name of the company and other details including date
of incorporation, name and address of the subscribers,
promoters and first directors; and
(b) details of false or incorrect information or representation or
material facts or information suppressed.
(c) details of such documents in or declaration filed or made for
incorporating such company,
(d) involvement of promoters, subscribers and first directors in
committing fraud during the course of incorporation;
(3) Subject to the provisions contained in Proviso to sub-section (7)
of Section 7, the Tribunal may pass such orders, as it may think fit in
accordance with clauses (a) to (e) of said sub-section (7).
67. Petition under sub-section (41) of section 2.

The Petition under the sub-section (41) of Section 2 be filed to
the Tribunal in Form NCLT-1 and shall be accompanied by such
documents as are mentioned in Annexure –B.
68. Petition under section 14.

(1) A petition under the second provision to sub-section (1) of section
14 of the Act for the conversion of a public company into a private
company, shall, not less than three months from the date of passing
of special resolution, be filed to the Tribunal in Form No. NCLT. 1
and shall be accompanied by such documents as are mentioned in
Annexure B.
(2) Every petition filed under sub-rule (1) shall set out the following
particulars:
(a) the date of the Board meeting at which the proposal for
alteration of Articles was approved;
(b) the date of the general meeting at which the proposed
alteration was approved;
(c) State at which the registered office of the company was situated;
(d) number of members in the company, number of members
attended the meeting and number of members of voted for
and against;
(e) reason for conversion into a private company, effect of such
conversion on shareholders, creditors, debenture holders
and other related parties.
(f) listed or unlisted public company;
(g) the nature of the company, that is, a company limited by
shares, a company limited by guarantee (having share capital
or not having share capital) and unlimited company;
(h) details as to whether a company registered under section 8 of
the Act.

the date of filing of petition by not more than two months, setting forth
the following details, namely:-
debts, claims or liabilities;
(c) in respect of any contingent or unascertained debt or any
such claim admissible to proof in winding up of the company,
the value, so far as can be justly estimated of such debt or
claim:
Provided that the petitioner company shall file an affidavit, signed
by the company secretary of the company, if any, and not less than
two directors of the company, one of whom shall be a managing
director, where there is one, to the effect that they have made a full
enquiry into the affairs of the company and, having done so, have
formed an opinion that the list of creditors is correct, and that the
estimated value as given in the list of the debts or claims payable
on a contingency or not ascertained are proper estimates of the
values of such debts and claims and that there are no other debts
of , or claims against, the company to their knowledge.
registered office of the company and any person desirous of inspecting
the same may, at any time during the ordinary hours of business,
inspect and take extracts from the same on payment of the sum of
rupees ten per page to the company.
(5) The company shall at least fourteen days before the date of
hearing; -
(a) advertise the petition in accordance with rule 35;
individual notice in Form NCLT. No. 3B to the effect set out
in sub-rule (a) on each debenture-holder and creditor of the

company; and
(c) serve, by registered post with acknowledgement due, a
notice together with the copy of the petition to the Central
Government, Registrar of Companies and to the Securities
and Exchange Board of India, in the case of listed companies
and to the regulatory body, if the company is regulated under
any other Act.
(6) Where any objection of any person whose interest is likely to be
affected by the proposed petition has been received by the petitioner,
it shall serve a copy thereof to the Registrar on or before the date of
hearing.
(7) While passing an order, the Tribunal may, if it is satisfied, having
regard to all the circumstances of the case, that the conversion would
not be in the interest of the company or is being made with a view
to contravene or to avoid complying with the provisions of the Act,
disallow the conversion with reasons to be recorded in writing.
1
[68A. Application to cancel variation of rights under sub-section
(2) of section 48.
(1) Where an application to cancel a variation of the rights attached
to the shares of any class is made on behalf of the shareholders of that
class entitled to apply for cancellation under sub-section (2) of section
48 by the letter of authority signed by the shareholders so entitled,
authorising the applicant or applicants to present the application on
their behalf, such letter of authority shall be annexed to the application,
and the names and addresses of all the shareholders, the number of
shares held by each of them, aggregate number of such shares held
and percentage of the issued shares of that class shall be set out in the
Schedule to the application.
(w.e.f.20-12-2016).
(2) The application in Form No. NCLT. 1 shall be accompanied by

documents required for the purposes of the case and shall set out -
(a) the particulars of registration;
(b) the capital structure, the different classes of shares into which
the share capital of the company is divided and the rights
attached to each class of shares;
(c) the provisions of the memorandum or articles authorising
the variation of the rights attached to the various classes of
shares;
(d) the total number of shares of the class whose rights have
been varied;
(e) the nature of the variation made, and so far as may have been
ascertained by the applicants, the number of shareholders
of the class who gave their consent to the variation or voted
in favour of the resolution for variation and the number of
shares held by them;
(f) the number of shareholders who did not consent to the
variation or who voted against the resolution, and the
number of shares held by them;
(g) the date on which the consent was given or the resolution
was passed; and
(h) the reasons for opposing the variation.
(3) The applicant shall at least fourteen days before the date of the filing
of the petition advertise the application in accordance with rule 35.
affected by the proposed application is received by the applicant, a copy
thereof shall be served to the Registrar of Companies and Regional
Director on or before the date of hearing.
(5) On any application, the Tribunal, after hearing the applicant and
any other person, as appears to it, to be interested in the application,
may, if it is satisfied, having regard to all the circumstances of the case
that the variation would unfairly prejudice to the shareholders of the

class represented by the applicant, cancel the variation and shall, if not
so satisfied, confirm the variation for reasons to be recorded:
Provided that the Tribunal may, at its discretion, make such orders as
to cost as it thinks fit.]
69. Petition under sub-section (3) of section 55.

(1) The petition under sub-section (3) of section 55 of the Act shall
be in Form No. NCLT. 1 and shall be accompanied by documents
mentioned in Annexure B and setting out:
(a) particulars of registration
(b) capital structure, the different classes of shares into which the
share capital of the company is divided;
(c) the provisions of the memorandum or articles authorizing
the issue of preference shares;
(d) total number of preference shares issued;
(e) details of such preference shares that are not redeemed or
unable to pay dividend;
(f) terms and conditions of issue of such existing preference
shares;
(g) total number of such preference shares (unredeemed) and
number of holders consented for with value of such preference
shares and percentage of holders who have consented for; and
(h) date or dates on which the consent was given or the resolution
was passed.
(2) On petition under sub-section (1), the Tribunal, after hearing the
petitioner and any other person as appears to it to be interested in the
petition, may, if it is satisfied, having regard to all the circumstances
of the case, approve for issue of further redeemable preference shares
equal to the amount due, including the dividend thereon, in respect of
unredeemable preference shares:
Provided that the Tribunal shall, while giving approval, order the
redemption forthwith of preference shares held by such persons who
have not consented to the issue of further redeemable preference shares:
Provided further that the Tribunal may, at its discretion, make such
orders as to costs as it thinks fit.
1
(3)[omitted].
70. Appeal under sections 58 and 59.

(1) The appeals against the refusal for registration of transfer or
transmission of securities under section 58 or for rectification of
register of members under section 59 shall be made to the Tribunal by
way of a petition in Form No. NCLT. 1 and shall be accompanied by
such documents as are mentioned in Annexure B:
Provided that a copy of the appeal shall be served on the concerned
company at its registered office immediately after filing of the petition
with the Tribunal.
(2) The petitioner shall at least fourteen days before the date of hearing
advertise the petition in accordance with rule 35.
affected by the proposed petition has been received by the petitioner, it
shall serve a copy thereof to the Registrar on or before the date of hearing:
(4) The Tribunal may, while dealing with a petition under section 58 or
59, at its discretion, make-
(a) order or any interim order, including any orders as to
injunction or stay, as it may deem fit and just;
(b) such orders as to costs as it thinks fit; and
(c) incidental or consequential orders regarding payment of
dividend or the allotment of bonus or rights shares.
1. Omitted by the National Company Law Tribunal (Amendment) Rules, 2016
(w.e.f. 20-12-2016) for: “(3) The decision of the Tribunal on the petition shall
be final.”
(5) On any petition under section 59, the Tribunal may-

(a) decide any question relating to the title of any person who is
a party to the petition to have his name entered in, or omitted
from, the register;
(b) generally decide any question which is necessary or expedient
to decide in connection with the application for rectification.
1
(6) [omitted]
71. Application under proviso to clause (b) of sub-section (1) of

section 61.
(1)An application for obtaining the approval of the Tribunal for the
consolidation and division of all or any of the share capital into shares
of a larger amount than its existing shares which results in changes in
the voting percentage of shareholders shall be filed in Form No. NCLT.
1 and shall be accompanied by such documents as are mentioned in
Annexure B.
(2) The application shall, inter alia, set forth the following:-
(a) provision of articles authorising such consolidation or
division;
(b) existing capital structure of the company;
(c) new capital structure of the company after the consolidation
or division;
(d) class of shares being consolidated or divided;
(e) face value of shares pre and post consolidation or division;
(f) justification for such consolidation or division;
(3) The company shall at least fourteen days before the date of hearing
(a) advertise the petition in accordance with rule 35; and
(b) serve, by registered post with acknowledgement due, a notice
1. Omitted by the National Company Law Tribunal (Amendment) Rules, 2016
(w.e.f. 20-12-2016) for : “the decision of the Tribunal on any such petition shall
be final”.
together with the copy of the application to the 1[Regional

Director], Registrar of Companies and to the Securities and
Exchange Board of India, in the case of listed companies and
to the regulatory body, if the company is regulated under any
other Act.
affected by the proposed application has been received by the applicant,
it shall serve a copy thereof to the 1[Regional Director], Registrar of
Companies and the Securities Exchange Board of India, in the case
of listed companies and to any regulator, if the company is regulated
under any other Act on or before the date of hearing.
(5) Upon hearing the application or any adjourned hearing thereof, the
Tribunal may pass such order, subject to such terms and conditions, as
it thinks fit.
72. Appeal against the order of the Government under Section 62(4).
(1) Where any Government by virtue of provisions of sub-section (4) of
section 62, in public interest, converts the debentures or loan or any part
thereof into shares in the company on such terms and conditions as appear
to the Government to be reasonable in the circumstances of the case even
in terms of the issue of such debentures or the raising of such loans do not
include a term for providing for an option for such conversion.
(2) If such terms and conditions of conversion are not acceptable to the
company, it may, within sixty days from the date of communication
of such order, appeal to the Tribunal, in Form – NCLT-9, which shall
after hearing the company and the Government, pass such order as it
deems fit.
73. Application under sections 71(9), 71(10), section 73(4) or

section 74(2) and 76(2).
(1) Where a company fails to redeem the debentures or repay the
deposits or any part thereof or any interest thereon, an application

2019 (w.e.f. 15-01-2019) for : “Central Government.”
under sub-section (10) of section 71 or under sub-section (4) of

section 73 of the Act or section 45QA of the Reserve Bank of India
Act, 1934 (2 of 1934), shall be filed to the Tribunal, in Form No. NCLT.
11 in duplicate and shall be accompanied by such documents as are
mentioned in Annexure B, by-
(a) in case of debentures, all or any of the debenture holders
concerned, or debenture trustee; or
(b) in case of deposits, all or any of the depositors concerned, or
where the deposits are secured, by the deposit trustee.
(2) There shall be attached to the application, a list of depositors or
debenture holders, as the case may be, setting forth the following
details in respect of every such depositor or debenture holder:-
(a) full name, age, father’s/ mother’s/ spouse’s name, occupation
and full residential address;
(b) fixed deposit receipt number or debenture certificate
number, as the case may be;
(c) date of maturity;
(d) amount due to the person by the company;
(e) amount already paid by the company, if any;
(f) total amount due as on the date on the application:
Provided that where the company is the applicant, it shall file an
affidavit stating that the list of depositors or debenture holders, as the
case may be, is correct, and that the estimated values as given in the
list of the amount payable to such depositors or debenture holders are
proper estimates of the values of such debts and claims.
(3) The Tribunal shall pass an appropriate order within a period of sixty
days from the date of receipt of application under sub-rule (1):
Provided that the Tribunal shall, before making any order under this
rule, give a reasonable opportunity of being heard to the company and
any other person interested in the matter.
(4) The Tribunal may, if it is satisfied, on the application filed under

sub-rule (1), that it is necessary so to do, to safeguard the interests of
the company, the debenture holders or the depositors, as the case may
be, or in the public interest, direct, by order, the company to make
repayment of such deposit or debenture or part thereof forthwith or
within such time and subject to such conditions as may be specified
in the order:
Provided that while passing the order, the Tribunal shall consider the
financial condition of the company, the amount or deposit or debenture
or part thereof and the interest payable thereon.
(5) The application under sub-section (2) of section 74 and sub-section
(2) of section 76 read with section 74(2) shall be in Form NCLT-1 and
shall accompanied with the documents as per Annexure B.
(6) A copy of application under sub-section (2) of section 76 and under
sub-section (2) of section 74 shall be served on the Regional Director
and the Registrar of Companies before the date of hearing.
(7) The Registrar of Companies in consultation with Regional
Director shall submit before the Tribunal, the report on the affairs
of the company within thirty days from the date of the receipt of the
application and Tribunal may consider any observation made by the
Registrar of Companies before passing an order.
74. Application for calling or obtaining a direction to call annual

general meeting.
(1) An application under section 97 for calling or obtaining a direction
to call the annual general meeting of the company shall be made
by any member of the company in Form No. NCLT. 1 and shall be
accompanied by the documents specified in Annexure B.
(2) A copy of the application shall be served on the Registrar of
Companies on or before the date of hearing.
75. Application for obtaining an order for calling of general meeting
(other than Annual General Meeting).
(1) An application under section 98 for obtaining an order for calling of
a general meeting (other than Annual General Meeting) shall be made

by any director or member of the company in Form No. NCLT. 1 and
shall be accompanied by the documents specified in Annexure B.
(2) A copy of the application shall be served on the Registrar of
Companies on or before the date of hearing.
76. Inspection of minute-books of general meeting.

Where any member has requested the company for inspection of
minute-book of general meeting on payment of requisite fee and the
company refused to give such inspection, he may apply to the Tribunal
in Form No NCLT-9 for direction to the company for inspection of
minute-book of general meeting.
[76A. Application under section 130.

1
The Central Government, the Income-tax authorities, the Securities

and Exchange Board of India, any other statutory regulatory body or
authority or any person concerned may file an application in Form
No. NCLT. 9 for re-opening of books of accounts and for re-casting of
financial statement of a company under section 130 of the Act and such
application shall be accompanied by such documents as mentioned in
Annexure-B.]
77. Application under section 131.

(1) Where it appears to the directors of a company that the financial
statement of the company or the report of the Board do not comply
with the provisions of section 129 or section 134, the application shall
be filed in Form No. NCLT-1 within fourteen days of the decision taken
by the Board.
(2) In case the majority of the directors of company or the auditor of
the company has been changed immediately before the decision is
taken to apply under section 131, the company shall disclose such facts
in the application.

(w.e.f.20-12-2016)
(3) The application shall, inter alia, set forth the following particulars,
namely’-
(a) financial year or period to which such accounts relates;
(b) the name and contact details of the Managing Director, Chief
Financial Officer, directors, Company Secretary and officer
of the company responsible for making and maintaining
such books of accounts and financial statement;
(c) where such accounts are audited, the name and contact
details of the auditor or any former auditor who audited such
accounts;
(d) copy of the Board resolution passed by the Board of
Directors;
(e) grounds for seeking revision of financial statement or Board’s
Report.
(4) The company shall at least fourteen days before the date of hearing
advertise the application in accordance with rule 35.
(5) The Tribunal shall issue notice and hear the auditor of the original
financial statement, if present auditor is different and after considering
the application and hearing the auditor and any other person as the
Tribunal may deem fit, may pass appropriate order in the matter.
(6) A certified copy of the order of the Tribunal shall be filed with the
Registrar of Companies within thirty days of the date of receipt of the
certified copy.
(7) On receipt of approval from Tribunal a general meeting may be
called and notice of such general meeting along with reasons for change
in financial statements may be published in newspaper in English and
in vernacular language.
(8) In the general meeting, the revised financial statements, statement
of directors and the statement of auditors may be put up for
consideration before a decision is taken on adoption of the revised
financial statements.
(9) On approval of the general meeting, the revised financial statements

along with the statement of auditors or revised report of the Board, as
the case may be, shall be filed with the Registrar of Companies within
thirty days of the date of approval by the general meeting.
78. Application under Section 140.

(1) An application may be filed by the director on behalf of the
company or the aggrieved auditor to the Tribunal in Form NCLT-1
and shall be accompanied by such documents as are mentioned in
Annexure “B”.
(2) Where the Tribunal is satisfied on an application of the company
or the aggrieved person that the rights conferred by the provisions
of section 140 are being abused by the auditor, then, the copy of the
representation need not be sent and the representation need not be
read out at the meeting.
(3) If the application is made by the Central Government and the
Tribunal is satisfied that any change of the auditor is required, it shall
within fifteen days of receipt of such application make an order that the
auditor shall not function as an auditor and the Central Government
may appoint another auditor in his place.

The Company or any other person who claims to be aggrieved may
make an application to the Tribunal in Form NCLT-1 and shall be
accompanied with such documents as are mentioned in Annexure B.
80. Application under section 213 for investigation.

An application under section 213 may be made in Form NCLT-1
and shall be accompanied with such documents as are mentioned in
Annexure B.

(1) An Application under clause (a) or clause (b) of sub-section (1) of
section 241 of the Act, shall be filed in the Form NCLT-1 and shall be
accompanied with such documents as are mentioned in Annexure B.
(2) Where an application is presented under section 241 on behalf of

any members of a company entitled to apply under sub-section (1) of
the said section, by any one or more of them, the letter of consent signed
by the rest of the members so entitled authorising the applicant or the
applicants to present the petition on their behalf, shall be annexed to
the application, and the names and addresses of all the members on
whose behalf the application is presented shall be set out in a schedule
to the application, and where the company has a share capital, the
application shall state whether the applicants have paid all calls and
other sums due on their respective shares.
(3) A copy of every application made under this rule shall be served on
the company, other respondents and all such persons as the Tribunal
may direct.
82. Withdrawal of Application filed under section 241.

(1) An application under clause (a) or clause (b) of sub-section (1) of
section 241 of the Act, shall not be withdrawn without the leave of the
Tribunal.
(2) An Application for withdrawal under sub-rule (1) shall be filed in
the Form NCLT-9.

(1) An application under clause (b) of sub-section (1) of section
243 of the Act for leave to any of the persons mentioned therein to
be appointed or to act as the managing director or other director or
manager of the company, shall be filed as per the appropriate Form
NCLT-1 and shall be accompanied with such documents as are
mentioned in Annexure B.
(2) An application under sub - rule (1) shall state whether a notice of
intention to apply for such leave, as required under the proviso to sub-
section (1) of section 243 of the Act, has been given to the Central
Government and such application shall also be accompanied by a copy
of such notice.
(3) The notice of the date of hearing of the application together with a
copy of the application shall be served on the Central Government not

less than fifteen days before the date fixed for the hearing.
1
[83A. Application under sub-section (1) of section 244.
An application in Form No. NCLT. 9 may be filed before the Tribunal
for waiver of requirement of clause (a) or (b) of Section 244 of the
Act which shall be accompanied by such documents as mentioned in
Annexure-B.]
84. Right to apply under section 245.
(1) An application under sub-section (1) of section 245, read with sub-
section (3) of section 245 of the Act, shall be filled in Form NCLT-9.
(2) A copy of every application under sub-rule (1) shall be served on
the company, other respondents and all such persons as the Tribunal
may direct.
85. Conducting a class action suit.

(1) Without prejudice to the generality of the provisions of sub-section
(4) of section 245 of the Act, the Tribunal may, while considering the
admissibility of an application under the said section, in addition to the
grounds specified therein, take into account the following:
(a) whether the class has so many members that joining them
individually would be impractical, making a class action
desirable;
(b) whether there are questions of law or fact common to the class;
(c) whether the claims or defences of the representative parties
are typical of the claims or defences of the class;
(d) whether the representative parties will fairly and adequately
protect the interests of the class.
(2) For the purposes of clause (c) of sub-section (4) of section 245,
(w.e.f.20-12-2016).
while considering the desirability of an individual or separate action

as opposed to a class action, the Tribunal may take into account, in
particular, whether admitting separate actions by member or members
or depositor or depositors would create a risk of:-
(a) inconsistent or varying adjudications in such separate
actions; or
(b) adjudications that, as a practical matter, would be dispositive
of the interests of the other members;
(c) adjudications which would substantially impair or impede
the ability of other members of the class to protect their
interests.
86. Rule of opt-out.

(1) A member of a class action under section 245 of the Act is entitled to
opt-out of the proceedings at any time after the institution of the class
action, with the permission of the Tribunal, as per Form No. NCLT-1.
(2) For the purposes of this rule, a class member who receives a notice
under clause (a) of sub section (5) of section 245 of the Act shall be
deemed to be the member of a class, unless he expressly opts out of
the proceedings, as per the requirements of the notice issued by the
Tribunal in accordance with rule 38.
(3) A class member opting out shall not be precluded from pursuing a
claim against the company on an individual basis under any other law,
where a remedy may be available, subject to any conditions imposed
by the Tribunal.
87. Publication of notice.

(1) For the purposes of clause (a) of sub section (5) of section 245 of the
Act, on the admission of an application filed under sub-section (1) of
section 245 of the Act, a public notice shall be issued by the Tribunal as
per Form No. NCLT-13 to all the members of the class by –
(a) publishing the same within seven days of admission of the
Application by the Tribunal at least once in a vernacular
newspaper in the principal vernacular language of the State

in which the registered office of the company is situated and
at least once in English in an English newspaper that is in
circulation in that State;
(b) requiring the company to place the public notice on the
website of such company, if any, in addition to publication of
such public notice in newspaper under sub-clause (a):
Provided that such notice shall also be placed on the websites of the
Tribunal and the Ministry of Corporate Affairs, the concerned Registrar
of Companies and in respect of a listed company on the website of the
concerned stock exchange where the company has any of its securities
listed, until the application is disposed of by the Tribunal.
(2) The date of issue of the newspaper in which such notice appears
shall be considered as the date of serving the public notice to all the
members of the class.
(3) The public notice shall, inter alia, contain the following-
(a) name of the lead applicant;
(b) brief particulars of the grounds of application;
(c) relief sought by such application;
(d) statement to the effect that application has been made by the
requisite number of members/depositors;
(e) statement to the effect that the application has been admitted
by the Tribunal after considering the matters stated under
sub-section (4) of section 245 and these rules and it is
satisfied that the application may be admitted;
(f) date and time of the hearing of the said application;
(g) time within which any representation may be filed with the
Tribunal on the application;
(h) the details of the admission of the application and the date
by which the form of opt out has to be completed and sent
as per Form NCLT-1 and shall be accompanied with such
documents as are mentioned in Annexure “B”, and such

other particulars as the Tribunal thinks fit.
(4) The cost or expenses connected with the publication of the public
notice under this rule shall be borne by the applicant and shall be
defrayed by the company or any other person responsible for any
oppressive act in case order is passed in favour of the applicant.
1
[87A. Appeal or application under sub-section (1) and sub-section
(3) of section 252.
(1) An appeal under subsection (1) or an application under sub-section
(3) of section 252, may be filed before the Tribunal in Form No. NCLT.
9, with such modifications as may be necessary.
(2) A copy of the appeal or application, shall be served on the Registrar
and on such other persons as the Tribunal may direct, not less than
fourteen days before the date fixed for hearing of the appeal or
application, as the case may be.
(3) Upon hearing the appeal or the application or any adjourned
hearing thereof, the Tribunal may pass appropriate order, as it deems
fit.
(4) Where the Tribunal makes an order restoring the name of a
company in the register of companies, the order shall direct that-
(a) the appellant or applicant shall deliver a certified copy to the
Registrar of Companies within thirty days from the date of
the order;
(b) on such delivery, the Registrar of Companies do, in his official
name and seal, publish the order in the Official Gazette;
(c) the appellant or applicant do pay to the Registrar of
Companies his costs of, and occasioned by, the appeal or
application, unless the Tribunal directs otherwise; and

(w.e.f.05-07-2017).
(d) the company shall file pending financial statements and

annual returns with the Registrar and comply with the
requirements of the Companies Act, 2013 and rules made
there under within such time as may be directed by the
Tribunal.
(5) An application filed by the Registrar of Companies for restoration
of name of a company in the register of companies under second
proviso to sub-section (1) of section 252 shall be in Form No. NCLT 9
and upon hearing the application or any adjourned hearing thereof, the
Tribunal may pass an appropriate order, as it deems fit.]
88. Reference to the Tribunal.

Any reference to the Tribunal by the Registrar of Companies under
section 441 of the Act, or any reference to the Tribunal by the Central
Government under proviso to sub-section (5) of section 140, 221, sub-
section (2) of section 224, sub-section (5) of section 224, sub-section
(2) of section 241 of the Act, or reference under sub-section (2) of
section 75 or any complaint by any person under sub-section (1) of
section 222, or any reference by a company under clause (c) of sub-
section (4) of section 22A of the Securities Contracts (Regulations)
Act, 1956 shall be made by way of a petition or application in Form
No. NCLT- 9 in Annexure A and shall be accompanied by documents
mentioned in Annexure-B.
PART IX
CAUSE LIST
89. Preparation and publication of daily cause list.

(1) The Registry shall prepare and publish on the notice board of the
Registry before the closing of working hours on each working day the
cause list for the next working day and subject to the directions of the
President, listing of cases in the daily cause list shall be in the following
order of priority, unless otherwise ordered by the concerned Bench;
namely:-
(a) cases for pronouncement of orders;

(b) cases for clarification;
(c) cases for admission;
(d) cases for orders or directions;
(e) part-heard cases, latest part-heard having precedence; and
(f) cases posted as per numerical order or as directed by the
Bench;
(2) The title of the daily cause list shall consist of the number of the
appeal or petition, the day, date and time of the court sitting, court hall
number and the coram indicating the names of the President, Judicial
Member and Technical Member constituting the Bench.
(3) Against the number of each case listed in the daily cause list, the
following shall be shown, namely:-
(a) names of the legal practitioners appearing for both sides and
setting out in brackets the rank of the parties whom they
represent;
(b) names of the parties, if unrepresented, with their ranks in
brackets.
(4) The objections and special directions, if any, of the Registry shall be
briefly indicated in the daily cause list in remarks column, whenever
compliance is required.
90. Carry forward of cause list and adjournment of cases on account

of non-sitting of a Bench.
(1) If by reason of declaration of holiday or for any other unforeseen
reason, the Bench does not function for the day, the daily cause list for
that day shall, unless otherwise directed, be treated as the daily cause
list for the next working day in addition to the cases already posted for
that day.
(2) When the sitting of a particular Bench is cancelled for the reason
of inability of a Member of the Bench, the Registrar shall, unless
otherwise directed, adjourn the cases posted before that Bench to a
convenient date and the adjournment or posting or directions shall be

notified on the notice board of the Registry.
PART X
RECORD OF PROCEEDINGS
91. Diaries.
(1) Diaries shall be kept by the clerk-in-charge in such form as may
be specified in each appeal or petition or application and they shall be
written legibly.
(2) The diary in the main file shall contain a concise history of the
appeal or petition or application, the substance of the order passed
thereon and in execution proceedings, it shall contain a complete
record of all proceedings in execution of order or direction or rule
and shall be checked by the Deputy Registrar and initialed once in a
fortnight.
92. Order sheet.

(1) The Court Master of the Bench shall maintain order sheet in every
proceedings and shall contain all orders passed by the Tribunal from
time to time.
(2) All orders passed by the Tribunal shall be in English and the same
shall be signed by the Members of the Tribunal constituting the Bench:
Provided that the routine orders, such as call for of the records, put
up with records, adjourned and any other order as may be directed by
the Member of the Tribunal shall be signed by the Court Master of the
Bench.
(3) The order sheet shall also contain the reference number of the
appeal or petition or application, date of order and all incidental details
including short cause title thereof.
93. Maintenance of court diary.

(1) The Court Master of the Bench shall maintain legibly a Court Diary,
wherein he shall record the proceedings of the court for each sitting
with respect to the applications or petitions or appeals listed in the
daily cause list.
(2) The matters to be recorded in the court Diary shall include details as
to whether the case is adjourned, or part-heard or heard and disposed
of or heard and orders reserved, as the case may be, along with dates of
next sitting wherever applicable.
94. Statutes or citations for reference.

The parties or legal practitioners shall, before the commencement of
the proceedings for the day, furnish to the Court Master a list of law
journals, reports, statutes and other citations, which may be needed for
reference or photocopy of full text thereof.
95. Calling of cases in court.

Subject to the orders of the Bench, the Court Master shall call the cases
listed in the cause list in the serial order.
96. Regulation of court work.

(1) When the Tribunal is holding a sitting, the Deputy Registrar shall
ensure –
(a) that no inconvenience or wastage of time is caused to the
Bench in making available the services of Court Master or
stenographer or peon or attender;
(b) the Court Master shall ensure that perfect silence is
maintained in and around the Court Hall and no disturbance
whatsoever is caused to the functioning of the Bench and
that proper care is taken to maintain dignity and decorum of
the court.
(2) When the Bench passes order or issues directions, the Court
Master shall ensure that the records of the case along with proceedings
or orders of the Bench are transmitted immediately to the Registry
and the Registry shall verify the case records received from the Court
Master with reference to the cause list and take immediate steps to
communicate the directions or orders of the Bench.
PART XI
MAINTENANCE OF REGISTERS
97. Registers to be maintained.

The following Registers shall be maintained and posted on a day to
day basis by the Registry of the Tribunal by such ministerial officer
or officers as the Registrar may, subject to any order of the President,
direct –
(a) register of petitions;
(b) register of unnumbered petitions or appeals;
(c) register of caveats lodged; and
(d) register of interlocutory applications;
98. Arrangement of records in pending matters.

The record of appeal or petition shall be divided into the following four
parts and shall be collated and maintained –
(a) main file : (Petition being kept separately);
(b) miscellaneous application file;
(c) process file; and
(d) execution file
99. Contents of main file.

The main file shall be kept in the following order and it shall be
maintained as permanent record till ordered to be destroyed under the
rules –
(a) index;
(b) order sheet;
(c) final order or judgment;

(d) memo of appeal or petition, as the case may be, together with
any schedule annexed thereto;
(e) counter or reply or objection, if any;
(f) (i) oral evidence or proof of affidavit;
(ii) evidence taken on commission; and
(iii) documentary evidence;
(g) written arguments.
100. Contents of process file.

The process file shall contain the following items; namely –
(a) index;
(b) power of attorney or vakalatnama;
(c) summons and other processes and affidavits relating thereof;
(d) applications for summoning witness;
(e) letters calling records; and
(f) all other miscellaneous papers such as postal acknowledgements.
101. Execution file.

The execution file shall contain the following items, namely-
(a) index;
(b) the order sheet;
(c) the execution application;
(d) all processes and other papers connected with such execution
proceedings;
(e) transmission of order to civil court, if ordered; and
(f) result of execution;
102. File for miscellaneous applications.

For all miscellaneous applications there may be only one file with a title
page prefixed to it and immediately after the title page, the diary, the
miscellaneous applications, supporting affidavit, the order sheet and all
other documents shall be filed.
103. Preservation of Record.
(1) All necessary documents and records relating to petitions or
applications dealt with by the Tribunal shall be stored or maintained
as provided in these rules and other physical records kept in a record
room shall be preserved for a period of five years after the passing of
the final order.
(2) Notwithstanding anything contained in sub-rule (1) the record
of the petitions or applications dealt with by the Tribunal including
the orders and directions passed by the Tribunal, shall be maintained
by the Registry of the Tribunal for a period of fifteen years after the
passing of the final order.
104. Retention, Preservation and Destruction of Records.
(1) The Record Keeper or any other officer so designated shall be
responsible for the records consigned to the Record Room. He shall
scrutinize the records received by him within three days and prepare
an index.
(2) On the expiry of the period for preservation of the records specified
under rule 103, the Registrar shall weed out the record.
PART XII
SERVICE OF PROCESS/APPEARANCE OF RESPONDENTS
AND OBJECTIONS
105. Issue of notice.
(1) Where notice of an appeal or petition for caveat or interlocutory
application is issued by the Tribunal, copies of the same, the affidavit
in support thereof and if so ordered by the Tribunal, the copy of other
documents filed therewith, if any, shall be served along with the notice
on the other side.
(2) The aforesaid copies shall show the date of presentation of the appeal
or petition for caveat or interlocutory application and the name of the
authorised representative, if any, of such party with his full address for
service and the interim order, if any, made thereon.
(3) The Tribunal may order for issuing notice in appropriate cases and
also permit the party concerned for service of the said notice on the
other side by Dasti and in such case, deliver the notice to such party
and it is for such party to file affidavit of service with proof.
(4) Acknowledgement under sub-rule (3) shall be filed by the party
with the Registry before the date fixed for return of notice.
106. Summons.
Whenever summons or notice is ordered by private service, the
appellant or applicant or petitioner, as the case may be, unless already
served on the other side in advance, shall arrange to serve the copy
of all appeals or petition or application by registered post or courier
service and file affidavit of service with its proof of acknowledgement
before the date fixed for hearing.
107. Steps for issue of fresh notice.

(1) If any notice issued under rule 105 is returned unserved, that fact
and the reason thereof shall be notified immediately on the notice
board of the Registry.
(2) The applicant or petitioner or his authorised representative shall
within seven days from the date of the notification, take steps to serve
the notice afresh.
108. Consequence of failure to take steps for issue of fresh notice.

Where, after a summon has been issued to the other side, and returned
unserved, and the applicant or petitioner or appellant, as the case
may be, fails to take necessary steps within a period as ordered by the
Tribunal from the date of return of the notice on the respondent, the
Registrar shall post the case before the Bench for further directions or
for dismissal for non-prosecution.
109. Entries regarding service of notice or process.

The judicial branch of the Registry shall record in the column in the
order sheet ‘Notes of the Registry’, the details regarding completion of
service of notice on the respondents, such as date of issue of notice,
date of service, date of return of notice, if unserved, steps taken for
issuing fresh notice and date of completion of services, etc.
110. Default of appearance of respondent and consequences.

Where the respondent, despite effective service of summons or notice
on him does not appear before the date fixed for hearing, the Tribunal
may proceed to hear the appeal or application or petition ex-parte and
pass final order on merits:
Provided that it is open to the Tribunal to seek the assistance of
any counsel as it deems fit in case the matter involves intricate and
substantial questions of law having wide ramifications.
111. Filing of objections by respondent, form and consequences.
(1) The respondent, if so directed, shall file objections or counter within
the time allowed by the Tribunal.
(2) The objections or counter shall be verified as an appeal or petition
and wherever new facts are sought to be introduced with the leave of the
Tribunal for the first time, the same shall be affirmed by a supporting
affidavit.
(3) The respondent, if permitted to file objections or counter in any
proceeding shall also file three copies thereof after serving copies of
the same on the appellant or petitioner or their Counsel on record or
authorized representative, as the case may be.
PART XIII
FEE ON PETITION OR APPEAL, PROCESS FEE AND AWARD
OF COSTS
112. Fees.
(1) In respect of the several matters mentioned in the Annexures, there
shall be paid fees as prescribed in the Schedule of Fees appended to

these rules;
Provided that no fee shall be payable or shall be liable to be collected
on a petition or application filed or reference made by the Registrar
of Companies, Regional Director or by any officer on behalf of the
Central Government.
(2) In respect of every interlocutory application, there shall be paid fees
as prescribed in Schedule of Fees of these rules:
Provided that no fee shall be payable or shall be liable to be collected on
an application filed by the Registrar of Companies, Regional Director
or by an officer on behalf of the Central Government.
(3) In respect of a petition or appeal or application filed or references
made before the Principal Bench or the Bench of the Tribunal, fees
referred to in this Part shall be paid by means of 1[an Indian Postal
Order or by] a bank draft drawn in favour of the Pay and Accounts
Officer, Ministry of Corporate Affairs, New Delhi/Kolkata/Chennai /
Mumbai, as the case may be or as decided by the President.
113. Award of costs in the proceedings.

(1) Whenever the Tribunal deems fit, it may award cost for meeting the
legal expenses of the respondent of defaulting party.
(2) The Tribunal may in suitable cases direct appellant or respondent
to bear the cost of litigation of the other side, and in case of abuse of
process of court, impose exemplary costs on defaulting party.
PART XIV
INSPECTION OF RECORD
114. Inspection of the records.

(1) The parties to any case or their authorised representative may be

(w.e.f.20-12-2016).
allowed to inspect the record of the case by making an application in

writing to the Registrar and by paying the fee prescribed thereof.
(2) Subject to such terms and conditions as may be directed by the
President by a general or special order, a person who is not a party to
the proceeding, may also be allowed to inspect the proceedings after
obtaining the permission of the Registrar in writing.
115. Grant of inspection.

Inspection of records of a pending or decided case before the Tribunal
shall be allowed only on the order of the Registrar.
116. Application for grant of inspection.

(1) Application for inspection of record under sub-rule (1) and (2) of
rule 114, shall be presented at Registry between 10.30 AM and 3.00 PM
on any working day and two days before the date on which inspection
is sought, unless otherwise permitted by the Registrar.
(2) The Registry shall submit the application with its remarks before
the Registrar, who shall, on consideration of the same, pass appropriate
orders.
(3) Inspection of records of a pending case shall not ordinarily be
permitted on the date fixed for hearing of the case or on the preceding
day.
117. Mode of inspection.

(1) On grant of permission for inspection of the records, the Deputy
Registrar shall arrange to procure the records of the case and allow
inspection of such records on the date and time fixed by the Registrar
between 10.30 AM and 12.30 PM and between 2.30 PM and 4.30 PM
in the immediate presence of an officer authorised in that behalf by the
Registrar.
(2) The person inspecting the records shall not in any manner cause
dislocation, mutilation, tampering or damage to the records in the
course of inspection.
(3) The person inspecting the records shall not make any marking
on any record or paper so inspected and taking notes, if any, of the
documents or records inspected may be done only in pencil.
(4) The person supervising the inspection, may at any time prohibit
further inspection, if in his opinion, any of the records are likely to
be damaged in the process of inspection or the person inspecting the
records has violated or attempted to violate the provisions of these
rules and shall immediately make a report about the matter to the
Registrar and seek further orders from the Registrar and such notes
shall be made in the Inspection Register.
118. Maintenance of register of inspection.

The Deputy Registrar shall cause to maintain a Register for the purpose
of inspection of documents or records and shall obtain therein the
signature of the person making such inspection on the Register as well
as on the application on the conclusion of inspection.
PART XV
APPEARANCE OF AUTHORISED REPRESENTATIVE
119. Appearance of authorised representative.

Subject to as hereinafter provided, no legal practitioner or authorised
representative shall be entitled to appear and act, in any proceeding
before the Tribunal unless he files into Tribunal vakalatnama or
Memorandum of Appearance as the case may, duly executed by or on
behalf of the party for whom he appears.
120. Consent for engaging another legal practitioner.

A legal practitioner proposing to file a Vakalatnama or Memorandum
of Appearance as the case may be, in any pending case or proceeding
before the Tribunal in which there is already a legal practitioner or
authorised representative on record, shall do so only with the written
consent of the legal practitioner or the authorised representative
on record or when such consent is refused, with the permission of
the Tribunal after revocation of Vakalatnama or Memorandum of
Appearance as the case may be, on an application filed in this behalf,

which shall receive consideration only after service of such application
on the counsel already on record.
121. Restrictions on appearance.

A legal practitioner or the authorised representative as the case may
be, who has tendered advice in connection with the institution of any
case or other proceeding before the Tribunal or has drawn pleadings in
connection with any such matter or has during the progress of any such
matter acted for a party, shall not, appear in such case or proceeding or
other matter arising there from or in any matter connected therewith
for any person whose interest is opposed to that of his former client,
except with the prior permission of the Tribunal.
122. Restriction on party’s right to be heard.

The party who has engaged a legal practitioner or authorized
representative to appear for him before the Tribunal may be restricted
by the Tribunal in making presentation before it.
123. Empanelment of special authorised representatives by the

Tribunal.
(1) The Tribunal may draw up a panel of authorised representatives
or valuers or such other experts as may be required by the Tribunal to
assist in proceedings before the Tribunal.
(2) The President may call upon any of the persons from panel under
sub-rule (1) for assistance in the proceedings before the Bench, if so
required.
(3) The remuneration payable and other allowances and compensation
admissible to such persons shall be specified in consultation with the
Tribunal.
124. Professional dress for the authorised representatives.

While appearing before the Tribunal, the authorised representatives
shall wear the same professional dress as prescribed in their Code of
Conduct.
PART XVI
AFFIDAVITS
125. Title of affidavits.

Every affidavit shall be titled as ‘Before the National Company Law
Tribunal’ followed by the cause title of the appeal or application or
other proceeding in which the affidavit is sought to be used.
126. Form and contents of the affidavit.

The affidavit shall conform to the requirements of order XIX, rule 3 of
Civil Procedure Code, 1908 (5 of 1908).
127. Persons authorised to attest.

Affidavits shall be sworn or affirmed before an advocate or notary, who
shall affix his official seal.
128. Affidavits of illiterate, visually challenged persons.

Where an affidavit is sworn or affirmed by any person who appears to
be illiterate, visually challenged or unacquainted with the language in
which the affidavit is written, the attester shall certify that the affidavit
was read, explained or translated by him or in his presence to the
deponent and that he seemed to understand it, and made his signature
or mark in the presence of the attester in Form NCLT-14.
129. Identification of deponent.

If the deponent is not known to the attester, his identity shall be testified
by a person known to him and the person identifying shall affix his
signature in token thereof.
130. Annexures to the affidavit.

(1) Document accompanying an affidavit shall be referred to therein as
Annexure number and the attester shall make the endorsement thereon
that this is the document marked putting the Annexure number in the
affidavit.
(2) The attester shall sign therein and shall mention the name and his
designation.
PART XVII
DISCOVERY, PRODUCTION AND RETURN
OF DOCUMENTS
131. Application for production of documents, form of summons.

(1) Except otherwise provided hereunder, discovery or production and
return of documents shall be regulated by the provisions of the Code of
Civil Procedure, 1908 (5 of 1908).
(2) An application for summons to produce documents shall be on
plain paper setting out the document the production of which is sought,
the relevancy of the document and in case where the production of a
certified copy would serve the purpose, whether application was made
to the proper officer and the result thereof.
(3) A summons for production of documents in the custody of a
public officer other than a court shall be in Form NCLT-15 and shall
be addressed to the concerned Head of the Department or such other
authority as may be specified by the Tribunal.
132. Suo motu summoning of documents.

Notwithstanding anything contained in these rules, the Tribunal may,
suo motu, issue summons for production of public document or other
documents in the custody of a public officer.
133. Marking of documents.

(1) The documents when produced shall be marked as follows :
(a) If relied upon by the appellant’s or petitioner’s side, they shall
be numbered as ‘A’ series.
(b) If relied upon by the respondent’s side, they shall be marked
as ‘B’ series.
(c) The Tribunal exhibits shall be marked as ‘C’ series.
(2) The Tribunal may direct the applicant to deposit with the Tribunal
by way of Demand Draft or Indian Postal Order drawn in favour of the
Pay and Accounts Officer, Ministry of Corporate Affairs, New Delhi, a
sum sufficient to defray the expenses for transmission of the records
before the summons is issued.
134. Return and transmission of documents.

(1) An application for return of the documents produced shall be
numbered and no such application shall be entertained after the
destruction of the records.
(2) The Tribunal may, at any time, direct return of documents produced
subject to such conditions as it deems fit.
PART XVIII
EXAMINATION OF WITNESSES AND ISSUE OF
COMMISSIONS
135. Procedure for examination of witnesses, issue of Commissions.

The provisions of the Orders XVI and XXVI of the Code of Civil
Procedure, 1908 (5 of 1908), shall mutatis mutandis apply in the matter
of summoning and enforcing attendance of any person and examining
him on oath and issuing commission for the examination of witnesses
or for production of documents.
136. Examination in camera.
The Tribunal may in its discretion examine any witness in camera.
137. Form of oath or affirmation to witness.

Oath shall be administered to a witness in the following form :
“ I do swear in the name of God/solemnly affirm that what I shall state
shall be truth, the whole truth and nothing but the truth”.
138. Form of oath or affirmation to interpreter.

Oath or solemn affirmation shall be administered to the interpreter in
the following form before the Bench Officer or the Court Officer as the
case may be, as taken for examining a witness:
“I do swear in the name of God/solemnly affirm that I will faithfully
and truly interpret and explain all questions put to and evidence given
by witness and translate correctly and accurately all documents given
to me for translation.”
139. Officer to administer oath.

The oath or affirmation shall be administered by the Court Master.
140. Form recording of deposition.

(1) The Deposition of a witness shall be recorded in Form NCLT-16.
(2) Each page of the deposition shall be initialed by the Members
constituting the Bench.
(3) Corrections, if any, pointed out by the witness may, if the Bench is
satisfied, be carried out and duly initialed. If not satisfied, a note to the
effect be appended at the bottom of the deposition.
141. Numbering of witnesses.

The witnesses called by the applicant or petitioner shall be numbered
consecutively as PWs and those by the respondents as RWs.
142. Grant of discharge certificate.

Witness discharged by the Tribunal may be granted a certificate in
Form NCLT-17 by the Registrar.
143. Witness allowance payable.

(1) Where the Tribunal issues summons to a Government servant to
give evidence or to produce documents, the person so summoned may
draw from the Government travelling and daily allowances admissible
to him as per rules.
(2) Where there is no provision for payment of Travelling Allowances
and Daily Allowance by the employer to the person summoned to give
evidence or to produce documents, he shall be entitled to be paid as

allowance, (a sum in the opinion of the Registrar sufficient to defray the
travelling and other expenses), having regard to the status and position
of the witness.
(3) The party applying for the summons shall deposit with the Registrar
the amount of allowance as estimated by the Registrar well before the
summons is issued.
(4) If the witness is summoned as a court witness, the amount estimated
by the Registrar shall be paid as per the directions of the Tribunal.
(5) The aforesaid provisions would govern the payment of batta to the
interpreter as well.
144. Records to be furnished to the Commissioner.

(1) The Commissioner shall be furnished by the Tribunal with such of
the records of the case as the Tribunal considers necessary for executing
the Commission.
(2) Original documents shall be furnished only if a copy does not serve
the purpose or cannot be obtained without unreasonable expense or
delay and delivery and return of records shall be made under proper
acknowledgement.
145. Taking of specimen handwriting, signature etc.

The Commissioner may, if necessary, take specimen of the handwriting,
signature or fingerprint of any witness examined before him.
PART XIX
DISPOSAL OF CASES AND PRONOUNCEMENT OF ORDERS
146. Disposal of Cases.

On receipt of an application, petition, appeal etc, the Tribunal, after
giving the parties a reasonable opportunity of being heard, pass such
orders thereon as it thinks fit:
Provided that the Tribunal, after considering an appeal, may summarily
dismiss the same, for reasons to be recorded, if the Tribunal is of

opinion that there are no sufficient grounds for proceedings therewith.
147. Operative portion of the order.

All orders or directions of the Bench shall be stated in clear and precise
terms in the last paragraph of the order.
148. Corrections.
Every Member of the Bench who has prepared the order shall initial all
corrections and affix his initials at the bottom of each page.
149. Power to impose Costs.

The Tribunal may, in its discretion, pass such order in respect of
imposing costs on the defaulting party as it may deem fit.
150. Pronouncement of Order.

(1) The Tribunal, after hearing the applicant and respondent, shall
make and pronounce an order either at once or, as soon as thereafter as
may be practicable but not later than thirty days from the final hearing.
(2) Every order of the Tribunal shall be in writing and shall be signed
and dated by the President or Member or Members constituting the
Bench which heard the case and pronounced the order.
(3) A certified copy of every order passed by the Tribunal shall be given
to the parties.
(4) The Tribunal, may transmit order made by it to any court for
enforcement, on application made by either of the parties to the order
or suo motu.
(5) Every order or judgment or notice shall bear the seal of the Tribunal.
151. Pronouncement of order by any one member of the Bench.

(1) Any Member of the Bench may pronounce the order for and on
behalf of the Bench.
(2) When an order is pronounced under this rule, the Court Master
shall make a note in the order sheet, that the order of the Bench
consisting of President and Members was pronounced in open court
on behalf of the Bench.
152. Authorising any member to pronounce order.

(1) If the Members of the Bench who heard the case are not readily
available or have ceased to be Members of the Tribunal, the President
may authorise any other Member to pronounce the order on his behalf
after being satisfied that the order has been duly prepared and signed
by all the Members who heard the case.
(2) The order pronounced by the Member so authorised shall be
deemed to be duly pronounced.
(3) The Member so authorised for pronouncement of the order shall
affix his signature in the order sheet of the case stating that he has
pronounced the order as provided in this rule.
(4) If the order cannot be signed by reason of death, retirement or
resignation or for any other reason by any one of the Members of the
Bench who heard the case, it shall be deemed to have been released
from part heard and listed afresh for hearing.
153. Enlargement of time.

Where any period is fixed by or under these rules, or granted by
Tribunal for the doing of any act, or filing of any document or
representation, the Tribunal may, in its discretion from time to time
in the interest of justice and for reasons to be recorded, enlarge such
period, even though the period fixed by or under these rules or granted
by the Tribunal may have expired.
154. Rectification of Order.

(1) Any clerical or arithmetical mistakes in any order of the Tribunal or
error therein arising from any accidental slip or omission may, at any
time, be corrected by the Tribunal on its own motion or on application
of any party by way of rectification.
(2) An application under sub-Rule (1) may be made in Form No. NCLT.
9 within two years from the date of the final order for rectification of
the final order not being an interlocutory order.
155. General power to amend.

The Tribunal may, within a period of thirty days from the date of
completion of pleadings, and on such terms as to costs or otherwise, as it
may think fit, amend any defect or error in any proceeding before it; and
all necessary amendments shall be made for the purpose of determining
the real question or issue raised by or depending on such proceeding.
156. Making of entries by Court Master.

Immediately on pronouncement of an order by the Bench, the Court
Master shall make necessary endorsement on the case file regarding the
date of such pronouncement, the nature of disposal and the constitution
of the Bench pronouncing the order and he shall also make necessary
entries in the court diary maintained by him.
157. Transmission of order by the Court Master.

(1) The Court Master shall immediately on pronouncement of order,
transmit the order with the case file to the Deputy Registrar.
(2) On receipt of the order from the Court Master, the Deputy Registrar
shall after due scrutiny, satisfy himself that the provisions of these rules
have been duly compiled with and in token thereof affix his initials with
date on the outer cover of the order.
(3) The Deputy Registrar shall thereafter cause to transmit the case file
and the order to the Registry for taking steps to prepare copies and
their communication to the parties.
158. Format of order.

(1) All orders shall be neatly and fairly typewritten in double space on
one side only on durable foolscap folio paper of metric A-4 size (30.5
cm long and 21.5 cm wide) with left side margin of 5 cm and right side
margin of 2.5 cm. Corrections, if any, in the order shall be carried out
neatly and sufficient space may be left both at the bottom and at the top
of each page of the order to make its appearance elegant.
(2) Members constituting the Bench shall affix their signatures in the
order of their seniority from right to left.
159. Indexing of case files after disposal.

After communication of the order to the parties or legal practitioners,
the official concerned shall arrange the records with pagination
and prepare in the Index Sheet in Form no. to be prescribed by the
Tribunal. He shall affix initials and then transmit the records with the
Index initials to the records room.
160. Transmission of files or records or orders.

Transmission of files or records of the cases or orders shall be made
only after obtaining acknowledgement in the movement register
maintained at different sections or levels as per the directions of the
Registrar.
161. Filing of Order of the Tribunal with the Registrar of Companies.

The certified copy of the order passed by the Tribunal shall be filed by
the company in form INC-28 alongwith fee of Rupees five hundred
with the Registrar of Companies within the time specified in the Act
or specified by the Tribunal. Where no time limit is prescribed by the
Tribunal, such order shall be filed within thirty days from the date of
receipt of certified copy of the order.
162. Copies of orders in library.

(1) The officer in charge of the Registry shall send copies of every final
order to the library of the Tribunal.
(2) Copies of all orders received in each month shall be kept at the library
in a separate folder, arranged in the order of date of pronouncement,
duly indexed and stitched.
(3) At the end of every year, a consolidated index shall also be prepared
and kept in a separate file in the library.
(4) The order folders and the indices may be made available for
reference in the library to the legal practitioners.
PART XX
NATIONAL COMPANY LAW TRIBUNAL ORDERS
163. Register of Appeals, Petitions, etc.

(1) A Register in Form NCLT-18 shall be maintained in regard to
appeals, petitions, etc., against the orders of the Tribunal to the National
Company Law Appellate Tribunal and necessary entries therein be
promptly made by the judicial branch.
(2) The register shall be placed for scrutiny by the President in the first
week of every month.
164. Placing of National Company Law Appellate Tribunal orders
before Tribunal.
Whenever an interim or final order passed by the National Company
Law Appellate Tribunal in an appeal or other proceeding preferred
against a decision of the Tribunal is received, the same shall forthwith
be placed before the President and Members for information and kept
in the relevant case file and immediate attention of the Registrar shall
be drawn to the directions requiring compliance.
165. Registrar to ensure compliance of National Company Law
Appellate Tribunal orders.
It shall be the duty of the Registrar to take expeditious steps to comply
with the directions of the National Company Law Appellate Tribunal.
SCHEDULE OF FEES
S. Section of the Nature of application / petition Fees

No. Companies
Act, 2013
1 Sec. 2 (41) Application for change in financial 5,000/-
year
2. Sec. 7 (7) Application to Tribunal where 5,000/-
company has been incorporated by
furnishing false or incorrect info
or by any fraudulent action.
3. Sec. 14 (1) Conversion of public company 5,000/-

into a private company.
4. Sec. 55 (3) Application for issue further 5,000/-
redeemable preference shares.
5. Sec. 58 (3) Appeal against refusal of 1,000/-
registration of shares.
6. Sec. 59 Appeal for rectification of register 1,000/-
of member.
7. Sec. 62 (4) Appeal against order of Govt. fixing 5,000/-
terms and conditions for conversion
of debentures and shares.
8. Sec. 71 (9) Petition by Debenture-trustees 2,000/-
9. Sec. 71 (10) Application in the event of failure 1,000/-
of redeeming of Debentures
10. Sec. 73 (4) Application by 1[depositor] for 500/-
repayment of deposit or interest.
11. Sec. 74 (2) Application to allow further time 5,000/-
as considered reasonable to the
company to repay deposits.
12. Sec. 97 (1) Application for calling of Annual 1,000/-
General meeting.
13. Sec. 98 (1) Application for calling of general 1,000/-
meeting of company other than
annual general meeting
14. Sec. 119 (4) Petition to pass an order directing 500/-
immediate inspection of minute’s
books or directing a copy thereof
be sent forthwith to person
requiring it.

2016 (w.e.f.20-12-2016) for :“deposition”.
15. Sec. 130 (1) Application for re-opening of books 5,000/-

of account, if made by any person
other than Central Government,
Income Tax authorities, SEBI or
any other statutory regulatory
body or authority.
16. Sec. 131 (1) Application by company for 5,000/-
voluntary revision of financial
statement on Board’s report.
17. Sec. 140 (4) Application for not sending the 1,000/-
copy of representation of auditor
to the members
18. Sec. 140 (5) Application by any other person 2,000/-
concerned for change of auditors.
19. Sec. 169 (4) Application for not sending copies 1,000/-
of representation
20. Sec. 213 Application to Tribunal for 5,000/-
investigation into company affairs.
21. Sec. 218 (1) Application for approval for action 1,000/-
proposed against Employee
22. Sec. 222 (1) 22Application for imposition of 2500/-
restrictions on securities.
23. Sec. 241 (1) Application in cases of oppression 10,000/-
and mismanagement.
24. Sec. 242 (4) Application for regulating the 2,500/-
conduct of company.
25. Sec.243(1) (b) Application for appointment as 5,000/-
Managing Director
26. Sec. 244 (1) Application for waiver of 2,500/-
requirement specified in clause (a)
or (b) of Sec. 244 (1)
27. Sec 245 Class action suits 5000/-
28. Sec. 441 Application for compounding of 1,000/-

certain offences
29. Section 421 Appeals to NCLAT 5,000/-
30. Application under any other 1,000/-
provisions specifically not
mentioned herein above
31. Fee for obtaining certified true 5/- per
copy of final order passed to page.
parties other than the concerned
parties under Rule 50
ANNEXURE-B
LIST OF DOCUMENTS TO BE ATTACHED WITH A PETITION
OR APPLICATION
S. Section of Nature of Enclosures to the Petition

No. the Act Petition
1. Sec. 2 (41) Application 1. Copy of the memorandum and
for change in articles of association.
financial year
2. Copy of balance sheet of
companies.
3. Affidavit verifying the petition.
4. Bank draft evidencing payment
of application fee.
5. Memorandum of appearance
with copy of the Board Resolution
or the executed Vakalatnama, as
the case may be.
2 Sec. 7 (7) Application 1. Copy of the memorandum and

to Tribunal articles of association.
where company
2. Document in proof of false
has been
or incorrect information or
incorporated by
fraudulent action.
furnishing false
or incorrect 3. Affidavit verifying the petition.
info or by any
fraudulent
of application fee.
action.
the case may be.
3. Sec. 14 (1) Conversion of 1 Copy of the memorandum and
public company articles of association.
into a private
2. Copy of the documents
company.
showing that the company ceased
to become a public company.
of application fee.
the case may be.
4. Sec. 55 (3) Application for 1. Copy of the memorandum and
issue further articles of association.
redeemable
2. Documents showing the terms
preference
of issue of the existing preference
shares.
shares.
3. Copy of the Board Resolution
and resolution of general meeting
for issue of further redeemable
preference shares.
4. Copy of the latest audited

balance sheet with the profit and
loss account of the company with
auditor’s report and director’s
report.
of application fee.
the case may be.
5. Sec. 58 (3) Appeal against Where the company is the
or 59 refusal of petitioner.
registration of
1. Copy of the memorandum and
shares;
articles of association
or
2. Latest audited balance-sheet
Appeal for and profit and loss account,
rectification auditor’s report and director’s
of register of report.
member.
3. Authenticated copy of the
extract of the Register of
Members.
4. Copy of the resolution of the
Board or Committee of Directors
(where applicable)
5. Any other relevant documents.
of application fee.
the case may be.
9. Two extra copies of the

petition.
Where the petition is made by
any other person.
1. Documentary evidence in
support of the statements made
in the petition including the
copy of the letter written by
the petitioner to the company
for purpose of registering the
transfer of, or the transmission
of the right to, any share, or
interest in, or debentures as also
a copy of the letter of refusal of
the company.
2. Copies of the documents
returned by the company.
3. Any other relevant document.
of application fee.
with copy of the Board’s
Resolution or the executed
petition.
6. Sec. 61 (1) Application to 1. Copies of memorandum and
Tribunal for articles of association;
cons olidation
2. Copies of audited balance
and division of
sheets for past 3 years;
share capital.
3. Resolution for allowing such
consolidation or division and
providing justification for the
same;
4. Documents in proof of new

capital structure and class of
shares being consolidated or
divided;
of application fee.
application.
7. Sec. 73 (4) Applicat ion 1. Copy of the deposit receipt
by deposition
2. Copy of the correspondence
for repayment
with the company.
of deposit or
interest. 3. Bank draft evidencing payment
of application fee.
8. Sec. 74 (2) Applicat ion 1. Names and addresses of the
to allow officers of the company.
further time
2. Full details of small depositors
as considered
such as names, addresses, amount
reasonable to
of deposits, rate of interest, dates
the company to
of maturity and other terms and
repay deposits.
conditions of deposits.
3. Reasons for nonpayment or
late payment.
4. Annual Reports for the last
three years.
5. Projection and cash flow
statement for the next three
financial years duly certified by
Statutory Auditors of the company.
6. Any other relevant document
9. Sec. 97 (1) Application 1. Affidavit verifying the petition.

for calling of
Annual General
of application fee.
meeting.
10. Sec. 98 (1) Application 1. Documentary evidence in
for calling of proof of status of the applicant.
general meeting
of company
other than 3. Bank draft evidencing payment
annual general of application fee.
meeting
11. Sec. 119 (4) Petition to 1. Documentary evidence, if
pass an order any, showing the refusal of the
directing company to give inspection to
immediate the petitioner.
inspection of
minutes books
or directing a 3. Bank draft evidencing payment
copy thereof be of application fee.
sent forthwith
to person
requiring it.
12. Sec. 131 (1) Application 1. Audited Financial statements
by company of relevant period;
for voluntary
2. Copies of memorandum and
revision of
articles of association.
financial
statement on
Board's report.
3. The details of the Managing

Director, Chief Financial Officer,
directors, Company Secretary
and officer of the company
responsible for making and
maintaining such books of
accounts and financial statement.
3. Where such accounts are
audited, documents in proof of
the name and contact details of
the auditor or any former auditor
who audited such accounts.
4. Copy of the Board resolution
passed by the Board of Directors.
of application fee.
648
NATIONAL COMPANY LAW APPELLATE

TRIBUNAL RULES, 2016
[G.S.R. 717(E), Dated 21st July 2016]
In exercise of the powers conferred by section 469 of the Companies

Act, 2013 (18 of 2013), the Central Government hereby makes the
(1)These rules may be called the National Company Law Appellate
Tribunal Rules, 2016.
(2)They shall come into force on the date of their publication in the
Official Gazette.
CHAPTER I
DEFINITIONS, FORMS ETC.
2. Definitions.
In these rules, unless the context otherwise requires,-
(b) “advocate” means a person who is entitled to practice the
profession of law under the Advocates Act, 1961 (25 of 1961);
(c) “Appeal” means an appeal preferred under sub-section (1) of
section 421 of the Act;
(d) “authorised representative” means a person authorised in
writing by a party to present his case before the Appellate
Tribunal as provided under section 432 of the Act;
(e) “form” means a form set forth in Annexure ‘A’ to these rules.
(f) “interlocutory application” means an application in any
appeal already instituted in the Appellate Tribunal, but not
648
National Company Law Appellate Tribunal Rules, 2016 649
being a proceeding for execution of the order or direction of

the Appellate Tribunal;
(g) “party” means a person who prefers an appeal before the
Appellate Tribunal and includes respondent of any person
interested in the appeal;
(h) “Registrar” means the Registrar of the Appellate Tribunal;
(i) “section” means a section of the Act;
(j) All other words and expressions used in these rules but
not defined herein and defined in the Act and National
Company Law Tribunal Rules, 2016 shall have the meanings
respectively assigned to them in the Act and in the said rules.
3. Computation of time period.

Where a period is prescribed by the Act and these rules or under
any other law or is fixed by the Appellate Tribunal for doing any
act, in computing the time, the day from which the said period is to
be reckoned shall be excluded, and if the last day expires on a day
when the office of the Appellate Tribunal is closed, that day and any
succeeding day on which the Appellate Tribunal remains closed shall
also be excluded
4. Forms.
The forms prescribed by these rules with such modifications or
variations as the circumstances of each case may require shall be used
for the purpose mentioned therein.
5. Format of order or direction or rule.

Every rule, direction, order, summons, warrant or other mandatory
process shall be issued in the name of the Chairperson and shall be
signed by the Registrar or any other officer specifically authorised
in that behalf by the Chairperson, with the day, month and year of
signing and shall be sealed with the official seal of the Appellate
Tribunal.
650 National Company Law Appellate Tribunal Rules, 2016
6. Official seal of the Appellate Tribunal.

The official seal and emblem of the Appellate Tribunal shall be such, as
the Central Government may from time to time specify and shall be in
the custody of the Registrar.
7. Custody of the records.

The Registrar shall have the custody of the records of the Appellate
Tribunal and no record or document filed in any cause or matter shall
be allowed to be taken out of the custody of the Appellate Tribunal
without the leave of the Appellate Tribunal:
Provided that the Registrar may allow any other officer of the Appellate
Tribunal to remove any official paper or record for administrative
purposes from the Appellate Tribunal.
8. Sitting of Appellate Tribunal.

The Appellate Tribunal shall hold its sitting at its headquarters in New
Delhi.
9. Sitting hours of the Appellate Tribunal.

The sitting hours of the Appellate Tribunal shall ordinarily be from
09.30 AM. to 01.00 P.M. and from 2.15 P.M. to 5.00 P.M. subject to any
order made by the Chairperson and this shall not prevent the Appellate
Tribunal to extend its sitting as it deems fit.
10. Working hours of office.

(1) The office of the Appellate Tribunal shall remain open on all
working days from 09:30 A.M. to 6.00 P.M.
(2) The filing counter of the Registry shall be open on all working days
from 10.30 AM to 5.00 P.M.
11. Inherent powers.

Noting in these rules shall be deemed to limit or otherwise affect the
inherent powers of the Appellate Tribunal to make such orders or give
such directions as may be necessary for meeting the ends of justice or

to prevent abuse of the process of the Appellate Tribunal.
12. Calendar.
The Calendar of days of working of Appellate Tribunal in a year shall be
as decided by the Chairperson and Members of the Appellate Tribunal.
13. Listing of cases.

All urgent matters filed before 12 noon shall be listed before the
Appellate Tribunal on the following working day, if it is complete
in all respects as provided in these rules and in exceptional cases, it
may be received after 12 noon but before 3.00 P.M. for listing on the
following day, with the specific permission of the Appellate Tribunal
or Chairperson.
14. Power to exempt.

The Appellate Tribunal may on sufficient cause being shown, exempt
the parties from compliance with any requirement of these rules and
may give such directions in matters of practice and procedure, as it may
consider just and expedient on the application moved in this behalf to
render substantial justice.
15. Power to extend time.

The Appellate Tribunal may extend the time appointed by these rules
or fixed by any order, for doing any act or taking any proceeding,
upon such terms, if any, as the justice of the case may require, and any
enlargement may be ordered, although the application therefore is not
made until after the expiration of the time appointed or allowed.
PART - II
POWERS OF THE REGISTRAR
16. Powers and functions of the Registrar.

The Registrar shall have the following powers and functions, namely:-
(a) registration of appeals, petitions and applications;

(b) receive applications for amendment of appeal or the petition
or application or subsequent proceedings.
(c) receive applications for fresh summons or notices and
regarding services thereof;
(d) receive applications for fresh summons or notice and for
short date summons and notices;
(e) receive applications for substituted service of summons or
notices;
(f) receive applications for seeking orders concerning the
admission and inspection of documents;
(g) transmission of a direction or order to the civil court as
directed by Appellate Tribunal with the prescribed certificate
for execution etc; and
(h) such other incidental or matters as the Chairperson may
direct from time to time.
17. Power of adjournment.

All adjournments shall normally be sought before the concerned
Bench in court and in extraordinary circumstances, the Registrar may,
if so directed by the Tribunal in chambers, at any time adjourn any
matter and lay the same before the Tribunal in chambers.
18. Delegation powers of the Chairperson.

The Chairperson may assign or delegate to a Deputy Registrar or to
any other suitable officer all or some of the functions required by these
rules to be exercised by the Registrar.
PART - III
INSTITUTION OF APPEALS - PROCEDURE
19. Procedure for proceedings.
(1) Every appeal to the Appellate Tribunal shall be in English and in
case it is in some other Indian language, it shall be accompanied by a

copy translated in English and shall be fairly and legibly type-written or
printed in double spacing on one side of standard paper with an inner
margin of about four centimeters width on top and with a right margin
of 2.5 cm, and left margin of 5 cm, duly paginated, indexed and stitched
together in paper book form.
(2) The cause title shall state “In the National Company Law Appellate
Tribunal” and also set out the proceedings or order of the authority
against which it is preferred.
(3) Appeal shall be divided into paragraphs and shall be numbered
consecutively and each paragraph shall contain as nearly as may be, a
separate fact or allegation or point.
(4) Where Saka or other dates are used, corresponding dates of
Gregorian calendar shall also be given.
(5) Full name, parentage, description of each party and address and in
case a party sue or being sued in a representative character, shall also be
set out at the beginning of the appeal and need not be repeated in the
subsequent proceedings in the same appeal.
(6) The names of parties shall be numbered consecutively and a
separate line should be allotted to the name and description of each
party and these numbers shall not be changed and in the event of the
death of a party during the pendency of the appeal, his legal heirs or
representative, as the case may be, if more than one shall be shown by
sub numbers.
(7) Where fresh parties are brought in, they may be numbered
consecutively in the particular category, in which they are brought in.
(8) Every proceeding shall state immediately after the cause title and
the provision of law under which it is preferred.
20. Particulars to be set out in the address for service.

The address for service of summons shall be filed with every appeal on
behalf of a party and shall as far as possible contain the following items
namely:-
(a) the name of the road, street, lane and Municipal Division or
Ward, Municipal Door and other number of the house;
(b) the name of the town or village;
(c) the post office, postal district and PIN Code; and
(d) any other particular necessary to identify the addressee such
as fax number, mobile number and e-mail address, if any.
21. Initialing alteration.

Every inter lineation, eraser or correction or deletion in any appeal
shall be initialed by the party or his authorised representative.
22. Presentation of appeal.

(1) Every appeal shall be presented in Form NCLAT-1 in triplicate by
the appellant or petitioner or applicant or respondent, as the case may
be, in person or by his duly authorised representative duly appointed
in this behalf in the prescribed form with stipulated fee at the filing
counter and non-compliance of this may constitute a valid ground to
refuse to entertain the same.
(2) Every appeal shall be accompanied by a certified copy of the
impugned order.
(3) All documents filed in the Appellate Tribunal shall be accompanied
by an index in triplicate containing their details and the amount of fee
paid thereon.
(4) Sufficient number of copies of the appeal or petition or application
shall also be filed for service on the opposite party as prescribed.
(5) In the pending matters, all other applications shall be presented
after serving copies thereof in advance on the opposite side or his
advocate or authorised representative.
(6) The processing fee prescribed by the rules, with required number of
envelopes of sufficient size and notice forms as prescribed shall be filled
along with memorandum of appeal.
23. Number of copies to be filed.

The appellant or petitioner or applicant or respondent shall file three
authenticated copies of appeal or counter or objections, as the case may
be, and shall deliver one copy to each of the opposite party.
24. Endorsement and verification.

At the foot of every appeal or pleading there shall appear the name
and signature of the authorised representative and every appeal or
pleadings shall be signed and verified by the party concerned in the
manner provided by these rules.
25. Translation of document.

(1) A document other than English language intended to be used in
any proceeding before the Appellate Tribunal shall be received by the
Registry accompanied by a copy in English, which is agreed to by both
the parties or certified to be a true translated copy by the authorized
representative engaged on behalf of parties in the case.
(2) The Registrar may order translation, certification and authentication
by a person approved by him for the purpose on payment of such fee to
the person, as specified by the Chairperson.
(3) Appeal or other proceeding shall not be set down for hearing until
and unless all parties confirm that all the documents filed on which
they intend to rely are in English or have been translated into English
and required number of copies are filed with the Appellate Tribunal.
26. Endorsement and scrutiny of petition or appeal or document.

(1) The person in charge of the filing-counter shall immediately on
receipt of appeal or document affix the date and stamp of the Appellate
Tribunal thereon and also on the additional copies of the index and
return the acknowledgement to the party and he shall also affix his
initials on the stamp affixed on the first page of the copies and enter the
particulars of all such documents in the register after daily filing and
assign a diary number which shall be entered below the date stamp and
thereafter cause it to be sent for scrutiny.
(2) If, on scrutiny, the appeal or document is found to be defective, such

document shall, after notice to the party, be returned for compliance
and if there is a failure to comply within seven days from the date of
return, the same shall be placed before the Registrar who may pass
appropriate orders.
(3) The Registrar may for sufficient cause return the said document for
rectification or amendment to the party filing the same, and for this
purpose may allow to the party concerned such reasonable time as he
may consider necessary or extend the time for compliance.
(4) Where the party fails to take any step for the removal of the defect
within the time fixed for the same, the Registrar may, for reasons to
be recorded in writing, decline to register the appeal or pleading or
document.
27. Registration of proceedings admitted.

On admission of appeal, the same shall be numbered and registered in
the appropriate register maintained in this behalf and its number shall
be entered therein.
28. Ex-parte amendments.

In every appeal or application, arithmetical, grammatical, clerical
and such other errors may be rectified on the orders of the Registrar
without notice to Parties.
29. Calling for records.

On the admission of appeal, the Registrar shall, if so directed by the
Appellate Tribunal, call for the records relating to the proceedings
from the respective Bench of Tribunal or adjudicating authority and
retransmit the same at the conclusion of the proceedings or at any
time.
30. Production of authorisation for and on behalf of an association.

Where an appeal purported to be instituted by or on behalf of an
association, the person who signs or verifies the same shall produce
along with such appeal, for verification by the Registry, a true copy of
the resolution of the association empowering such person to do so:
Provided that the Registrar may at any time call upon the party to
produce such further materials as he deems fit for satisfying himself
about due authorization:
Provided further that it shall set out the list of members for whose
benefit the proceedings are instituted.
31. Interlocutory applications.

Every interlocutory application for stay, direction, condonation of
delay, exemption from production of copy of order appealed against
or extension of time prayed for in pending matters shall be in Form
NCLAT-2 and the requirements prescribed in that behalf shall be
complied with by the applicant, besides filing a affidavit supporting the
application.
32. Procedure on production of defaced, torn or damaged documents.

When a document produced along with any pleading appears to be
defaced, torn, or in any way damaged or otherwise its condition or
appearance requires special notice, a mention regarding its condition
and appearance shall be made by the party producing the same in the
Index of such a pleading and the same shall be verified and initialed by
the officer authorized to receive the same.
PART IV
CAUSE LIST
33. Preparation and publication of daily cause list.

(1) The Registry shall prepare and publish on the notice board of the
Registry before the closing of working hours on each working day the
cause list for the next working day and subject to the directions of
the Chairperson, listing of cases in the daily cause list shall be in the
following order of priority, unless otherwise ordered by the concerned
Bench; namely;-
(a) cases for pronouncement of orders;

(b) cases for clarification;
(c) cases for admission;
(d) cases for orders or directions;
(e) part-heard cases, latest part-heard having precedence; and
(f) cases posted as per numerical order or as directed by the
Bench;
(2) The title of the daily cause list shall consist of the number of the
appeal, the day, date and time of the sitting Bench hall number and the
coram indicating the names of the Chairperson, Judicial member and
Technical members constituting the Bench.
(3) Against the number of each case listed in the daily cause list, the
following shall be shown, namely:-
(a) names of the legal practitioners or authorised representative
appearing for both sides and setting out in brackets the
designation of the parties whom they represent;
(b) names of the parties, if unrepresented, with their ranks in
brackets.
(4) the objections and special directions, if any, of the Registry shall be
briefly indicated in the daily cause list in remarks’ column, whenever
compliance is required.
34. Carry forward of cause list and adjournment of cases on account

of non-sitting of an Appellate Tribunal.
(1) If by reason of declaration of holiday or for any other unforeseen
reason, the Appellate Tribunal does not function for the day, the daily
cause list for that day shall, unless otherwise directed, be treated as the
daily cause list for the next working day in addition to the cases already
posted for that day.
(2) When the sitting of a particular Bench is cancelled for the reason
of inability of any Member of the Bench, the Registrar shall, unless
otherwise directed, adjourn the cases posted before that Bench to a

convenient date.
(3) The adjournment or posting or directions shall be notified on the
notice board.
PART V
RECORD OF PROCEEDINGS
35. Diaries.
(1) Diaries shall be kept by the clerk-in-charge in such form as may
be specified by the Registrar in each appeal and they shall be written
legibly.
(2) The diary in the main file shall contain a concise history of the
appeal, the substance of the order passed thereon and in execution
proceedings it shall contain a complete record of all proceedings in
execution of order or direction or rule and shall be checked by the
Deputy Registrar and initialed once in a fortnight.
36. Order sheet.

(1) Order sheet shall be maintained in every proceedings by the Court
Master and shall contain all orders passed by the Appellate Tribunal
from time to time.
(2) All orders passed by the Appellate Tribunal shall be in English and
the same shall be signed by the Members of the Appellate Tribunal
constituting the Bench:
Provided that the routine orders, such as call for of the records, put up
with records, adjourned and any other order as may be directed by the
Member of the Appellate Tribunal shall be signed by the Court Master.
(3) The order sheet shall also contain the reference number of the
appeal or petition or application, date of order and all incidental details
including short cause title thereof.
37. Maintenance of diary.
(1) The Court Master of the Bench concerned shall maintain legibly a
Diary, wherein he shall record the proceedings of the Bench for each
sitting with respect to the applications or petitions or appeals listed in
the daily cause list.
(2) The matters to be recorded in the Diary shall include details as to
whether the case is adjourned, or part-heard or heard and disposed of
or heard and orders reserved, as the case may be, along with dates of
next sitting wherever applicable.
38. Statutes or citations for reference.

The parties or authorised representatives shall, before the commencement
of the proceedings for the day, furnish to the Court Master a list of law
journals, reports, statutes and other citations, which may be needed for
reference or photo copy of full text thereof.
39. Calling of cases in Bench.

Subject to the orders of the Bench, the Court Master shall call the cases
listed in the cause list in the serial order.
40. Regulation of Bench work.

(1) When a Bench is holding a sitting, the Deputy Registrar shall
ensure :-
(a) that no inconvenience or wastage of time is caused to the
Bench in making available the services of Court Master or
Stenographer or Peon or Attender;
(b) the Court Master shall ensure that perfect silence is
maintained in and around the Bench hall and no disturbance
whatsoever is caused to the functioning of the Appellate
Tribunal and that proper care is taken to maintain dignity
and decorum of the Appellate Tribunal.
(2) When the Appellate Tribunal passes order or issues directions,
the Court Master shall ensure that the records of the case along with
proceedings or orders of the Court are transmitted immediately to the
Registry and the Registry shall verify the case records received from the
Court Master with reference to the cause list and take immediate steps
to communicate the directions or orders of the Court.
PART VI
MAINTENANCE OF REGISTERS
41. Registers to be maintained.

The following Registers shall be maintained and posted on a day to
day basis by the Registry of the Appellate Tribunal by such ministerial
officer or officers as the Registrar may, subject to any order of the
Chairperson, direct:-
(a) register of appeals;
(b) register of unnumbered appeals; and
(c) register of Interlocutory applications;
42. Arrangement of records in pending matters.

The record of appeal shall be divided into the following four parts and
shall be collated and maintained.
(a) Main file: (Appeal being kept separately);
(b) miscellaneous application file;
(c) process file; and
(d) execution file
43. Contents of main file.

The main file shall be kept in the following order and it shall be
maintained as permanent record till ordered to be destroyed under the
rules:-
(a) Index;
(b) order Sheet;
(c) Final order or judgment;
(d) memo of appeal or petition as the case may be together with

any schedule annexed thereto;
(e) counter or reply or objection, if any;
(f) (i) oral evidence or proof of affidavit
(ii) evidence taken on commission; and
(iii) documentary evidence.
(g) written arguments.
44. Contents of process file.

The process file shall contain the following items; namely,-
(a) index;
(b) powers of attorney or vakalatnama or memo of appearance;
(c) summons and other processes and affidavits relating thereof;
(d) applications for summoning witness;
(e) letters calling records; and
(f) all other miscellaneous papers such as postal
acknowledgements
45. Execution file.

The execution file shall contain the following items, namely,-
(a) index;
(b) the order sheet;
(c) the execution application;
(d) all processes and other papers connected with such execution
proceedings;
(e) transmission of order to civil court, if ordered; and
(f) result of execution;
46. File for miscellaneous applications.

For all miscellaneous applications there may be only one file with a title
page prefixed to it and immediately after the title page, the diary, the
miscellaneous applications, supporting affidavit, the order sheet and all
other documents shall be filed.
47. Destruction of record.

Record of Appellate Tribunal, except permanent record, shall be
ordered to be destroyed by the Registrar or Deputy Registrar after six
years from the final conclusion of the proceedings after obtaining prior
order of the Chairperson.
Explanation: For the purpose of this rule, permanent record shall
include order; appeal register, petition register and such other record
as may be ordered to be included by the Chairperson.
PART VII
SERVICE OF PROCESS / APPEARANCE OF RESPONDENTS
AND OBJECTIONS
48. Issue of notice.

(1) Where notice of an appeal or petition or interlocutory application
is issued by the Appellate Tribunal, copies of the same, the affidavit in
support thereof and if so ordered by the Appellate Tribunal the copy of
other documents filed therewith, if any, shall be served along with the
notice on the other side.
(2) The copies of the documents referred to sub-rule (1) shall show the
date of presentation of the appeal or interlocutory application and the
name of the authorised representative, if any, of such party with his full
address for service and the interim order, if any, made thereon.
(3) The Appellate Tribunal may order for issuing notice in appropriate
cases and also permit the party concerned for service of said notice on
the other side by Dasti and in such case, deliver the notice to such party
and it is for such party to file affidavit of service with proof.
49. Summons.
Whenever summons or notice is ordered by private service, the
appellant or applicant or petitioner as the case may be, unless already
served on the other side in advance, shall arrange to serve the copy
of all appeals or petitions or applications by registered post or courier
service and file affidavit of service with its proof of acknowledgement
before the date fixed for hearing.
50. Steps for issue of fresh notice.

(1) If any notice issued under rule 46 is returned unserved, that fact
and the reason thereof shall be notified immediately on the notice
board of the Registry.
(2) The applicant or petitioner or his authorised representative shall
within seven days from the date of the notification, take steps to serve
the notice afresh.
51. Consequence of failure to take steps for issue of fresh notice.

Where, after a summon has been issued to the other side, and returned
unserved, and the applicant or petitioner or appellant, as the case
may be, fails to take necessary steps within the period as ordered by
the Appellate Tribunal from the date of return of the notice on the
respondent(s), the Registrar shall post the case before the Appellate
Tribunal for further directions or for dismissal for non-prosecution.
52. Entries regarding service of notice or process.

The Judicial Section of the Registry shall record in the column in the
order sheet ‘Notes of the Registry’, the details regarding completion of
service of notice on the respondents, such as date of issue of notice,
date of service, date of return of notice, if unserved, steps taken for
issuing fresh notice and date of completion of services etc.
53. Non-appearance of respondent and consequences.
Where the respondent, despite effective service of summons or notice
on him does not appear before the date fixed for hearing, the Appellate
Tribunal may proceed to hear the appeal ex-parte and pass final order
on merits.
Provided that it is open to the Appellate Tribunal to seek the assistance of
any authorised representative as it deems fit in case the matter involves
intricate and substantial questions of law having wide ramifications.
54. Filing of objections by respondent, form and consequences.

(1) The respondent, if so directed, shall file objections or counter within
the time allowed by the Appellate Tribunal.
(2) The objections or counter shall be verified as an appeal and
wherever new facts are sought to be introduced with the leave of the
Appellate Tribunal for the first time, the same shall be affirmed by a
supporting affidavit.
(3) The respondent, if permitted to file objections or counter in any
proceeding shall also file three copies thereof after serving copies of the
same on the appellant or petitioner or their authorised representatives,
as the case may be.
PART VIII
FEE FOR APPEAL, PROCESS FEE AND AWARD OF COSTS
55. Fee.
(1) Fee for filing appeal or interlocutory application, and process fee
shall be, as prescribed in the Schedule of fee to these rules.
(2) The fee and process fee shall be deposited by separate demand
draft or Indian Postal Order favouring the Pay and Accounts Officer,
Ministry of Corporate Affairs, payable at New Delhi.
(3) The Appellate Tribunal may, to advance the cause of justice and
in suitable cases, waive payment of such fee or portion thereof, taking
into consideration the economic condition or indigent circumstances
of the petitioner or appellant or applicant or such other reason, as the
case may be.
56. Award of costs in the proceedings.

(1) Whenever the Appellate Tribunal deems fit, it may award cost for
meeting the legal expenses of the respondent or defaulting party.
(2) The Appellate Tribunal may in suitable cases direct appellant or
respondent to bear the cost of litigation of the other side, and in case of
abuse of process of court, impose exemplary costs on defaulting party.
PART IX
INSPECTION OF RECORD
57. Inspection of the records.

(1) The parties to any case or authorised representative may be allowed
to inspect the record of the case by making an application in writing to
the Registrar and fee prescribed therein.
(2) Subject to such terms and conditions as may be prescribed by the
Chairperson by a general or special order, a person who is not a party
to the proceeding, may also be allowed to inspect the proceedings after
obtaining the permission of the Registrar in writing.
58. Grant of inspection.

Inspection of records of a pending or decided case before the Appellate
Tribunal shall be allowed only on the order of the Registrar.
59. Application for grant of inspection.

(1) Application for inspection of record under rule 58 shall be in the
Form NCLAT-3 and presented at the filing counter of the Registry
between 10.30 AM and 3.00 PM on any working day and two days
before the date on which inspection is sought, unless otherwise
permitted by the Registrar.
(2) The Registry shall submit the application with its remarks before
the Registrar, who shall on consideration of the same, pass appropriate
orders.
(3) Inspection of records of a pending case shall not ordinarily be

permitted on the date fixed for hearing of the case or on the preceding
day.
60. Fee payable for inspection.

Fee as given in the Schedule of the fees appended to these rules shall be
payable by way of Demand Draft or Indian Postal Order to be drawn in
favour of the Pay and Accounts Officer, Ministry of Corporate Affairs,
New Delhi on any application for inspection of records of a pending or
decided case.
61. Mode of inspection.

(1) On grant of permission for inspection of the records, the Deputy
Registrar shall arrange to procure the records of the case and allow
inspection of such records on the date and time fixed by the Registrar
between 10.30 AM and 12.30 PM and between 2.30 PM and 4.30 PM in
the immediate presence of an officer authorized in that behalf.
(2) The person inspecting the records shall not in any manner cause
dislocation, mutilation, tampering or damage to the records in the
course of inspection.
(3) The person inspecting the records shall not make any marking
on any record or paper so inspected and taking notes, if any, of the
documents or records inspected may be done only in pencil.
(4) The person supervising the inspection, may at any time prohibit
further inspection, if in his opinion, any of the records are likely to
be damaged in the process of inspection or the person inspecting the
records has violated or attempted to violate the provisions of these
rules and shall immediately make a report about the matter to the
Registrar and seek further orders from the Registrar and such notes
shall be made in the Inspection Register.
62. Maintenance of register of inspection.

The Deputy Registrar shall cause to maintain a Register for the purpose
of inspection of documents or records and shall obtain therein the
signature of the person making such inspection on the Register as well

as on the application on the conclusion of inspection.
PART X
APPEARANCE OF AUTHORISED REPRESENTATIVE
[63. Appearance of authorised representative.

1
(1) Subject to provisions of section 432 of the Act, a party to any

proceedings or appeal before the Appellate Tribunal may either appear
in person or authorise one or more chartered accountants or company
secretaries or cost accountants or legal practitioners or any other
person to present his case before the Appellate Tribunal.
(2) The Central Government, the Regional Director or the Registrar
of Companies or Official Liquidator may authorise an officer or
an Advocate to represent in the proceedings before the Appellate
Tribunal.
(3) The officer authorised by the Central Government or the Regional
Director or the Registrar of Companies or the Official Liquidator shall
be an officer not below the rank of Junior Time Scale or company
prosecutor.]
64. Proof of engagement.

(1) Where an advocate is engaged to appear for and on behalf of the
parties, he shall submit Vakalatnama.
(2) The professionals like chartered accountants or company secretaries
or cost accountants shall submit Memorandum of Appearance.
1. Substituted by the National Company Law Appellate Tribunal (Amendment)

Rules, 2017 (w.e.f.23-08-2017) for:
“63. Appearance of authorised representative – Subject to provisions of
Section 432 of the Act, a party to any proceedings or appeal before the Appellate
Tribunal may either appear in person or authorise one or more chartered
accountants or company secretaries of cost accountants or legal practitioners of
any other person to present his case before the Appellate Tribunal.”
65. Restriction on party’s right to be heard.

The party who has engaged authorised representative to appear for him
before the Appellate Tribunal shall not be entitled to be heard in person
unless permitted by the Appellate Tribunal.
66. Professional dress for the authorised representative.

While appearing before the Appellate Tribunal, the authorised
representative shall wear the same professional dress as prescribed in
their Code of Conduct.
PART XI
AFFIDAVITS
67. Title of affidavits.

Every affidavit shall be titled as “Before the National Company Law
Appellate Tribunal.” followed by the cause title of the application or
other proceeding in which the affidavit is sought to be used.
68. Form and contents of the affidavit.

The affidavit as per Form NCLAT-4 shall conform to the requirements
of order XIX, rule 3 of Civil Procedure Code, 1908 (5 of 1908).
69. Persons authorised to attest.

Affidavits shall be sworn or affirmed before an Advocate or Notary,
who shall affix his official seal.
70. Affidavits of illiterate, visually challenged persons.

Where an affidavit is sworn or affirmed by any person who appears to
be illiterate, visually challenged or unacquainted with the language in
which the affidavit is written shall be in Form NCLAT-5, the attest or
shall certify that the affidavit was read, explained or translated by him
or in his presence to the deponent and that he seemed to understand it,
and made his signature or mark in the presence of the attestor.
71. Identification of deponent.

If the deponent is not known to the attest or, his identity shall be
testified by a person known to him and the person identifying shall
affix his signature in token thereof.
72. Annexures to the affidavit.

(1) Document accompanying an affidavit shall be referred to therein
as Annexure number and the attest or shall make the endorsement
thereon that this is the document marked putting the Annexure
number in the affidavit.
(2) The attest or shall sign therein and shall mention the name and his
designation.
PART XII
DISCOVERY, PRODUCTION AND RETURN OF DOCUMENTS
73. Application for production of documents, form of summons.

(1) Except otherwise provided hereunder, discovery or production and
return of documents shall be regulated by the provisions of the Code of
Civil Procedure, 1908 (5 of 1908).
(2) An application for summons to produce documents shall be on plain
paper setting out the documents the production of which is sought,
the relevancy of the documents and in case where the production of a
certified copy would serve the purpose, whether application was made
to the proper officer and the result thereof.
(3) A summons for production of documents in the custody of a public
officer other than a court shall be addressed to the concerned Head
of the Department or such other authority as may be specified by the
Appellate Tribunal.
74. Suo motu summoning of documents.

Notwithstanding anything contained in these rules, the Appellate
Tribunal may, suo motu, issue summons for production of public
document or other documents in the custody of a public officer in

Form NCLAT-6.
75. Marking of documents.

(1)The documents when produced shall be marked as follows:
(a) if relied upon by the appellant’s or petitioner’s side, they shall
be numbered as ‘A’ series.
(b) if relied upon by the respondent’s side, they shall be marked
as ‘B’ series.
(c) The Appellate Tribunal exhibits shall be marked as ‘C’ series.
(2) The Appellate Tribunal may direct the applicant to deposit
with Appellate Tribunal by way of Demand Draft or Indian Postal
Order drawn in favour of the Pay and Accounts Officer, Ministry of
Corporate Affairs, New Delhi, a sum sufficient to defray the expenses
for transmission of the records before the summons is issued.
76. Return and transmission of documents.

(1) An application for return of the documents produced shall
be numbered and such application shall be entertained after the
destruction of the records.
(2) The Appellate Tribunal may, at any time, direct return of documents
produced subject to such conditions as it deems fit.
PART XIII
EXAMINATION OF WITNESSES AND ISSUE OF
COMMISSIONS
77. Procedure for examination of witnesses, issue of Commissions.

The provisions of section 424 of the Act and relevant provisions of the
Orders XVI and XXVI of the Code of Civil Procedure, 1908 (5 of 1908),
shall apply in the matter of summoning and enforcing attendance of
any person and examining him on oath and issuing commission for the
examination of witnesses or for production of documents.
78. Examination in camera.

The Appellate Tribunal may in its discretion examine any witness in
camera.
79. Form of oath or affirmation to witness.

Oath shall be administered to a witness in the following form : “ I do
swear in the name of God/solemnly affirm that what I shall state shall
be truth, the whole truth and nothing but the truth”.
80. Form of oath or affirmation to interpreter.

Oath or solemn affirmation shall be administered to the Interpreter
in the following form before his assistance as taken for examining a
witness :
“I do swear in the name of God/solemnly affirm that I will
faithfully and truly interpret and explain all questions put to and
evidence given by witness and translate correctly and accurately all
documents given to me for translation.”
81. Officer to administer oath.

The oath or affirmation shall be administered by the Branch Officer or
Court Master.
82. Recording of deposition.

(1) The deposition of a witness shall be recorded in Form NCLAT-7.
(2) Each page of the deposition shall be initialed by the Members
constituting the Bench.
(3) Corrections, if any, pointed out by the witness may, if the Bench is
satisfied, be carried out and duly initialed, and if not satisfied, a note to
the effect be appended at the bottom of the deposition.
83. Numbering of witnesses.

The witnesses called by the applicant or petitioner shall be numbered
consecutively as ‘PWs’ and those by the respondents as ‘RWs’.
84. Grant of discharge certificate.

Witness discharged by the Appellate Tribunal may be granted a
certificate in Form NCLAT-8 by the Registrar.
85. Witness allowance payable.

(1) Where the Appellate Tribunal issues summons to a Government
servant to give evidence or to produce documents, the person so
summoned may draw from the Government travelling and daily
allowances admissible to him as per rules.
(2) Where there is no provision for payment of Travelling Allowance
and Daily Allowance by the employer to the person summoned to
give evidence or to produce documents, he shall be entitled to be paid
as allowance, (a sum found by the Registrar sufficient to defray the
traveling and other expenses), having regard to the status and position
of the witness.
(3) The party applying for the summons shall deposit with the Registrar
the amount of allowance as estimated by the Registrar well before the
summons is issued.
(4) If the witness is summoned as a court witness, the amount estimated
by the Registrar shall be paid as per the directions of the Appellate
Tribunal.
(5) The aforesaid provisions shall govern the payment of allowance to
the interpreter as well.
86. Records to be furnished to the Commissioner.

(1) The Commissioner shall be furnished by the Appellate Tribunal
with such of the records of the case as the Appellate Tribunal considers
necessary for executing the Commission.
(2) Original documents shall be furnished only if a copy does not serve
the purpose or cannot be obtained without unreasonable expense or delay.
(3) Delivery and return of records shall be made under proper
acknowledgement.
87. Taking of specimen handwriting, signature etc..

The Commissioner may, if necessary, take specimen of the handwriting,
signature or fingerprint of any witness examined before him.
PART XIV
PRONOUNCEMENT OF ORDERS
88. Order.
The final decision of the Appellate Tribunal on an appeal or proceedings
before the Appellate Tribunal shall be delivered by way of Judgment.
89. Operative portion of the order.

All orders or directions of the Bench shall be stated in clear and precise
terms in the last paragraph of the order.
90. Corrections.
The Member of the Bench who has prepared the order shall initial all
corrections and affix his initials at the bottom of each page.
91. Pronouncement of order.

(1) The Appellate Tribunal shall as far as possible pronounce the order
immediately after the hearing is concluded.
(2) When the orders are reserved, the date for pronouncement of
order shall be notified in the cause list which shall be a valid notice of
intimation of pronouncement.
(3) Reading of the operative portion of the order in the open court shall
be deemed to be pronouncement of the order.
92. Pronouncement of order by any one member of the Bench.

(1) Any Member of the Appellate Tribunal may pronounce the order
for and on behalf of the Bench.
(2) When an order is pronounced under this rule, the Court Master
shall make a note in the order sheet, that the order of the Bench
consisting of Chairperson and Members was pronounced in open

court on behalf of the Bench .
93. Authorizing any Member to pronounce order.

(1) If the Members of the Bench who heard the case are not readily
available or have ceased to be Members of the Appellate Tribunal,
the Chairperson may authorise any other Member to pronounce the
order on his behalf after being satisfied that the order has been duly
prepared and signed by all the Members who heard the case and the
order pronounced by the Member so authorised shall be deemed to be
duly pronounced.
(2) The Member so authorised for pronouncement of the Order shall
affix his signature in the Order sheet of the case stating that he has
pronounced the order as provided in this rule.
(3) If the Order cannot be signed by reason of death, retirement or
resignation or for any other reason by any one of the Members of the
Appellate Tribunal who heard the case, it shall be deemed to have been
released from part-heard and listed afresh for hearing.
94. Making of entries by Court Master.

Immediately on pronouncement of an order by the Appellate Tribunal,
the Court Master shall make necessary endorsement on the case file
regarding the date of such pronouncement, the nature of disposal and
the constitution of the Bench pronouncing the order and he shall also
make necessary entries in the court diary maintained by him.
95. Transmission of order by the Court Master.

(1) The Court Master shall immediately on pronouncement of order,
transmit the order with the case file to the Deputy Registrar.
(2) On receipt of the order from the Court Master, the Deputy Registrar
shall after due scrutiny, satisfy himself that the provisions of these rules
have been duly compiled with and in token thereof affix his initials with
date on the outer cover of the order.
(3) The Deputy Registrar shall thereafter cause to transmit the case file
and the order to the Registry for taking steps to prepare copies and
their communication to the parties.
96. Format of order.

(1) All orders shall be neatly and fairly typewritten in double space on
one side only on durable foolscap folio paper of metric A-4 size (30.5
cm long and 21.5 cm wide) with left side margin of 5 cm and right side
margin of 2.5 cm and corrections, if any, in the order shall be carried
out neatly and sufficient space may be left both at the bottom and at the
top of each page of the order to make its appearance elegant.
(2) Members constituting the Bench shall affix their signatures in the
order of their seniority from right to left.
97. Indexing of case files after disposal.

After communication of the order to the parties or legal representative,
the official concerned shall arrange the records with pagination and
prepare in the Index Sheet in Form no. to be prescribed by the Appellate
Tribunal and he shall affix initials and then transmit the records with
the Index initials to the records room.
98. Transmission of files or records or orders.

Transmission of files or records of the cases or orders shall be made only
after obtaining acknowledgement in the movement register maintained
at different sections or levels as per the directions of the Registrar.
99. Copies of Orders in library.

(1) The officer in charge of the Registry shall send copies of every final
order to the library.
(2) Copies of all Orders received in each month shall be kept at
the library in a separate folder, arranged in the order of date of
pronouncement, duly indexed and stitched.
(3) At the end of every year, a consolidated index shall also be prepared
and kept in a separate file in the library.
(4) The Order folders and the indices may be made available for
reference in the library to the legal practitioners.
PART XV
SUPREME COURT ORDERS
100. Register of Special Leave Petitions/Appeal.

(1) A Register in Form NCLAT-9 shall be maintained in regard to
Special Leave Petitions or Appeals against the orders of the Appellate
Tribunal to the Supreme Court and necessary entries therein be
promptly made by the Judicial Branch.
(2) The register shall be placed for scrutiny by the Chairperson in the
first week of every month.
101. Placing of Supreme Court orders before Appellate Tribunal.

Whenever an interim or final order passed by the Supreme Court of
India in an appeal or other proceeding preferred against a decision of
the Appellate Tribunal is received, the same shall forthwith be placed
before the Chairperson or Members for information and kept in the
relevant case file and immediate attention of the Registrar shall be
drawn to the directions requiring compliance.
102. Registrar to ensure compliance of Supreme Court orders.

It shall be the duty of the Registrar to take expeditious steps to comply
with the directions of the Supreme Court.
PART XVI
MISCELLANEOUS
103. Filling through electronic media.

The Appellate Tribunal may allow filing of appeal or proceedings
through electronic mode such as online filing and provide for
rectification of defects by e-mail or internet and in such filing, these
rules shall be adopted as nearly as possible on and form a date to be
notified separately and the Central Government may issue instructions

in this behalf from time to time.
104. Removal of difficulties and issue of directions.

Notwithstanding anything contained in the rules, wherever the
rules are silent or not provisions is made, the Chairperson may issue
appropriate directions to remove difficulties and issue such orders or
circulars to govern the situation or contingency that may arise in the
working of the Appellate Tribunal.
SCHEDULE OF FEES
S.No. Section of the Nature of Appeal etc Fees (in

Companies Rupees)
Act, 2013/ Rule
1. Sec. 218(3)) Protection of employee 1,000/-

during investigation
2. Section 421(1) Appeals to National 5,000/-

Company Law
Appellate Tribunal
679
NATIONAL COMPANY LAW TRIBUNAL

(PROCEDURE FOR REDUCTION OF SHARE
CAPITAL OF COMPANY) RULES, 2016
[G.S.R. 1147(E), Dated 15th December 2016]
In exercise of the powers conferred by sub-section (1) and (2) of section

469 read with section 66 of the Companies Act, 2013 (18 of 2013) the
Central Government hereby makes the following rules namely:-

(1) These rules may be called the National Company Law Tribunal
(Procedure for reduction of share capital of Company) Rules, 2016.
Official Gazette.
defined in the Companies Act, 2013 (hereinafter referred to as the Act)
or in the Companies (Specification of Definitions Details) Rules, 2014
or the National Company Law Tribunal Rules, 2016 shall have the
meanings respectively assigned to them in the Act or the said rules.
2. Form of application or petition for Reduction of share capital

under section 66.
(1) An application to the Tribunal to confirm a reduction of share
capital of a company shall be in Form No. RSC-1 and fee shall be, as
prescribed in the Schedule of fee to these rules.
(2) An application to confirm a reduction of share capital of a company
shall be accompanied with –
(a) the list of creditors duly certified by the Managing Director,
or in his absence, by two directors, as true and correct, which
is made as on a date not earlier than fifteen days prior to
the date of filing of an application showing the details of the
679
680 NCLT (Procedure for Reduction of Share Capital of Company) Rules, 2016
creditors of the company, class-wise, indicating their names,

addresses and amounts owed to them;
(b) a certificate from the auditor of the company to the effect
that the list of creditors referred to in clause (a) is correct as
per the records of the company verified by the auditor;
(c) a certificate by the auditor and declaration by a director of
the company that the company is not, as on the date of filing
of the application, in arrears in the repayment of the deposits
or the interest thereon; and
(d) a certificate by the company’s auditor to the effect that
the accounting treatment proposed by the company for
the reduction of share capital is in conformity with the
accounting standards specified in section 133 or any other
provisions of Act.
(3) Copies of the list of creditors shall be kept at the registered office
of the company and any person desirous of inspecting the same may,
at any time during the ordinary hours of business, inspect and take
extracts from the same on payment of the sum of rupees fifty for
inspection and for taking extracts on payment of the sum of rupees ten
per page to the company.
3. Issue of notice and directions by the National Company Law

Tribunal.
(1) The Tribunal shall, within fifteen days of submission of the
application under rule 2, give notice, or direct that notice be given to –
(i) the Central Government, Registrar of Companies, in all
cases, in Form No. RSC-2;
(ii) the Securities and Exchange Board of India, in the case of
listed companies in Form No. RSC 2;
(iii) the creditors of the company, in all cases in Form No. RSC-3;
seeking their representations and objections, if any.
(2) The notice under clause (iii) of sub-rule (1) shall be sent, within
NCLT (Procedure for Reduction of Share Capital of Company) Rules, 2016 681
seven days of the direction given under that sub-rule or such other
period as may be directed by the Tribunal, to each creditor whose name
is entered in the list of creditors submitted by the company about the
presentation of the application and of the said list, stating the amount
of the proposed reduction of share capital and the amount or estimated
value of the debt or the contingent debt or claim or both for which such
creditor’s name is entered in the said list, and the time within which the
creditor may send his representations and objections.
(3) The Tribunal shall along with directions under sub-rule (1) give
directions for the notice to be published, in Form No. RSC-4 within
seven days from the date on which the directions are given, in English
language in a leading English newspaper and in a leading vernacular
language newspaper, both having wide circulation in the State in which
the registered office of the company is situated, or such newspapers as
may be directed by the Tribunal and for uploading on the website of the
company (if any) seeking objections from the creditors and intimating
about the date of hearing.
(4) The notice under sub-rule (3) shall state the amount of the proposed
reduction of share capital, and the places, where the aforesaid list of
creditors may be inspected, and the time as fixed by the Tribunal within
which creditors of the company may send their objections:
Provided that the objections, if any, shall be filed in the Tribunal within
three months from the date of publication of the notice with a copy
served on the company.
(5) The company or the person who was directed to issue notices and
the publication in the newspaper under this rule shall, as soon as may
be, but not later than seven days from the date of issue of such notices,
file an affidavit in Form No. RSC- 5 confirming the despatch and
publication of the notice.
(6) Where the Tribunal is satisfied that the debt or claim of every
creditor has been discharged or determined or has been secured or his
consent is obtained, it may dispense with the requirement of giving
of notice to creditors or publication of notice under this rule or both.
682 NCLT (Procedure for Reduction of Share Capital of Company) Rules, 2016
4. Representation by Central Government, Registrar etc. under sub-

section (2) of section 66.
If the authorities or the creditors of the company referred to in clause
(i), clause (ii) and clause (iii) of sub-rule (1) of rule 3 desire to make
any representation under sub-section (2) of section 66, the same shall
be sent to the Tribunal within a period of three months from the date of
receipt of notice and copy of such representation shall simultaneously
be sent to the company and in case no representation has been received
within the said period by the Tribunal it shall be presumed that they
have no objection to the reduction.
5. Procedure with regard to representations and objections received.

(1) The company shall submit to the Tribunal, within seven days of
expiry of period upto which representations or objections were sought,
the representations or objections so received along with the responses
of the company thereto.
(2) The Tribunal may give such directions as it may think fit with respect
to holding of any enquiry or adjudication of claims or for hearing the
objection or otherwise.
(3) At the hearing of the application, the Tribunal may, if it thinks fit,
give such directions as may deem proper with reference to securing
the debts or claims of creditors who do not consent to the proposed
reduction, and the further hearing of the petition may be adjourned to
enable the company to comply with such directions.
6. Order on application and Minute thereof.

(1) Where the Tribunal makes an order confirming a reduction, the
order confirming the reduction and approving the minute may include
such directions or terms and conditions as the Tribunal deems fit .
(2) The order confirming the reduction of share capital and approving
the minute shall be in Form No. RSC - 6 on such terms and conditions
as may be deemed fit.
(3) The Certificate issued by the Registrar under sub-section (5) of
section 66 shall be in Form No. RSC -7.
NCLT (Procedure for Reduction of Share Capital of Company) Rules, 2016 683
SCHEDULE OF FEES
Sl. Section of the Nature of application / Fees in

No Companies Act, petition Rs.
2013
1. Sub-Section (1) of Application for reduction of 5,000/-

Section 66 share capital
684
COMPANIES (TRANSFER OF PENDING

PROCEEDINGS) RULES, 2016
In exercise of the powers conferred under sub-sections (1) and (2) of
section 434 of the Companies Act, 2013 (18 of 2013) read with sub-
section (1) of section 239 of the Insolvency and Bankruptcy Code,
2016 (31 of 2016) (hereinafter referred to as the Code), the Central
Government hereby makes the following rules, namely:–

(1) These rules may be called the Companies (Transfer of Pending
Proceedings) Rules, 2016.
(2) They shall come into force with effect from the 15th December,
2016, except rule 4, which shall come into force from 1st April, 2017.
2. Definitions.
(1) In these rules, unless the context otherwise requires-
(a) “Code” means the Insolvency and Bankruptcy Code, 2016
(31 of 2016);
(b) “Tribunal” means the National Company Law Tribunal
constituted under section 408 of the Companies Act, 2013.
(2) Words and expressions used in these rules and not defined, but defined
in the Companies Act, 1956 (1 of 1956) (herein referred to as the Act), the
Companies Act, 2013 (18 of 2013) or the Companies (Court) Rules, 1959
or the Code shall have the meanings respectively assigned to them in the
respective Act or rules or the Code, as the case may be.
3. Transfer of pending proceedings relating to cases other than

Winding up.
All proceedings under the Act, including proceedings relating to
684
Companies (Transfer of Pending Proceedings) Rules, 2016 685
arbitration, compromise, arrangements and reconstruction, other than

proceedings relating to winding up on the date of coming into force
of these rules shall stand transferred to the Benches of the Tribunal
exercising respective territorial jurisdiction:
Provided that all those proceedings which are reserved for orders for
allowing or otherwise of such proceedings shall not be transferred.
[4. Pending proceeding relating to voluntary winding up.

1
All proceedings relating to voluntary winding up of a company where

notice of the resolution by advertisement has been given under sub-
section (1) of section 485 of the Act but the company has not been
dissolved before the 1st day of April, 2017 shall continue to be dealt
with in accordance with provisions of the Act.]
[5. Transfer of pending proceedings of Winding up on the ground

2
1. Substituted by the Companies (Transfer of Pending Proceedings) Second

Amendment Rules, 2017 (w.e.f. 30-06-2017) for :
“4. Pending proceeding relating to Voluntary Winding up : All
applications and petitions relating to voluntary winding up of companies
pending before a High Court on the date of commencement of this rule,
shall continue with and dealt with by the High Court in accordance with
provisions of the Act.”
2. Substituted by the Companies (Transfer of Pending Proceedings) Second
Amendment Rules, 2017, dated 29.06.2017 (w.e.f.16-06-2017) for :
“5. Transfer of pending proceedings of Winding up on the ground of
inability to pay debts.–
(1) All petitions relating to winding up under clause (e) of section 433 of the
Act on the ground of inability to pay its debts pending before a High Court,
and where the petition has not been served on the respondent as required
under rule 26 of the Companies (Court) Rules, 1959 shall be transferred
to the Bench of the Tribunal established under sub-section (4) of section
419 of the Act, exercising territorial jurisdiction and such petitions shall be
treated as applications under sections 7, 8 or 9 of the Code, as the case may
be, and dealt with in accordance with Part II of the Code:
Provided that the petitioner shall submit all information, other than
information forming part of the records transferred in accordance with Rule
7, required for admission of the petition under sections 7, 8 or 9 of the Code,
686 Companies (Transfer of Pending Proceedings) Rules, 2016
of inability to pay debts.

(1) All petitions relating to winding up of a company under clause (e)
of section 433 of the Act on the ground of inability to pay its debts
pending before a High Court, and, where the petition has not been
served on the respondent under rule 26 of the Companies (Court)
Rules, 1959 shall be transferred to the Bench of the Tribunal established
under sub-section (4) of section 419 of the Companies Act, 2013
exercising territorial jurisdiction to be dealt with in accordance with
Part II of the Code:
Provided that the petitioner shall submit all information, other than
information forming part of the records transferred in accordance with
rule 7, required for admission of the petition under sections 7, 8 or
9 of the Code, as the case may be, including details of the proposed
insolvency professional to the Tribunal upto 15th day of July, 2017,
failing which the petition shall stand abated:
Provided further that any party or parties to the petitions shall, after
the 15th day of July, 2017, be eligible to file fresh applications under
sections 7 or 8 or 9 of the Code, as the case may be, in accordance with
the provisions of the Code:
Provided also that where a petition relating to winding up of a
company is not transferred to the Tribunal under this rule and remains
in the High Court and where there is another petition under clause
(e) of section 433 of the Act for winding up against the same company
as the case may be, including details of the proposed insolvency professional
to the Tribunal within *[six months] from date of this notification, failing
which the petition shall abate.
(2) All cases where opinion has been forwarded by Board for Industrial and
Financial Reconstruction, for winding up of a company to a High Court and
where no appeal is pending, the proceedings for winding up initiated under
the Act, pursuant to section 20 of the Sick Industrial Companies (Special
Provisions) Act, 1985 shall continue to be dealt with by such High Court in
accordance with the provisions of the Act.”
* Substituted by the Companies (Transfer of Pending Proceedings) Amendment
Rules, 2017, (w.e.f.28-02-2017) for: “sixty days”.
Companies (Transfer of Pending Proceedings) Rules, 2016 687
pending as on 15th December, 2016, such other petition shall not be

transferred to the Tribunal, even if the petition has not been served on
the respondent.]
6. Transfer of pending proceedings of Winding up matters on the

grounds other than inability to pay debts.
All petitions filed under clauses (a) and (f) of section 433 of the
Companies Act, 1956 pending before a High Court and where the
petition has not been served on the respondent as required under
rule 26 of the Companies (Court) Rules, 1959 shall be transferred to
the Bench of the Tribunal exercising territorial jurisdiction and such
petitions shall be treated as petitions under the provisions of the
7. Transfer of Records.
Pursuant to the transfer of cases as per these rules the relevant records
shall also be transferred by the respective High Courts to the National
Company Law Tribunal Benches having jurisdiction forthwith over the
cases so transferred.
8. Fees not to be paid.

Notwithstanding anything contained in the National Company
Law Tribunal Rules, 2016, no fee shall be payable in respect of any
proceedings transferred to the Tribunal in accordance with these rules.
688
CHAPTER XXIX – PART I

COMPANIES (ADJUDICATION OF
PENALTIES) RULES, 2014
[G.S.R. 254 (E), Dated 31st March 2014]
In exercise of the powers conferred by section 454 read with section
469 of the Companies Act, 2013, the Central Government hereby
makes the following rules, namely: –

(1) These rules may be called the Companies (Adjudication of
Penalties) Rules, 2014.
2. Definitions.
(b) “Annexure” means the Annexure enclosed to these Rules;
(c) “Fees” means fees as prescribed in the Companies
relates;
(e) “Regional Director” means the person appointed by the
(f) “section” means section of the Act;
(2) Words and expressions used in these rules but not defined, and
defined in the Act or in the Companies(Specification of definitions
688
Companies (Adjudication of Penalties) Rules, 2014 689

3. Adjudication of penalties.
(1) The Central Government may appoint any of its officers, not below
the rank of Registrar, as adjudicating officers for adjudging penalty
under the provisions of the Act.
(2) Before adjudging penalty, the adjudicating officer shall issue a
written notice to the company and to every officer of the company who
is in default, to show cause, within such period as may be specified in
the notice (not being less than fifteen days and more than forty five
days from the date of service thereon), why the inquiry should not be
held against him:
Provided that every notice issued under this sub-rule, shall clearly
indicate the nature of non-compliance or default under the Act alleged
to have been committed or made by such company and officer in
default, as the case may be:
Provided further that the adjudicating officer may, for reasons to be
recorded in writing, extend the period referred to above by a further
period not exceeding fifteen days, if the company or officer (as
applicable) satisfies the said officer that it has sufficient cause for not
responding to the notice within the stipulated period.
(3) If, after considering the cause, if any, shown by such company or
officer, the adjudicating officer is of the opinion that an inquiry should
be held, he shall issue a notice fixing a date for the appearance of such
company, through its authorised representative, or officer of such
company whether personally or through his authorised representative
(4) On the date fixed for hearing and after giving a reasonable opportunity
of being heard to the person(s) concerned, the adjudicating officer may,
subject to reasons to be recorded in writing, pass any order as he thinks
fit including an order for adjournment of the hearing to a future date.
(5) Every order passed under sub-rule (4), shall be dated and signed by
the adjudicating officer.
690 Companies (Adjudication of Penalties) Rules, 2014
(6) The adjudicating officer shall send a copy of the order passed by it to
the concerned company or officer who is in default and to the Central
Government.
(7) While holding an inquiry, the adjudicating officer shall have the
following powers, namely:—
(a) to summon and enforce the attendance of any person
acquainted with the facts and circumstances of the case;
(b) to order for evidence or to produce any document, which in
the opinion of the adjudicating officer, may be useful for or
relevant to the subject matter of the inquiry.
(8) If any person fails, neglects or refuses to appear as required under
sub-rule (7) before the adjudicating officer, the adjudicating officer may
proceed with the inquiry in the absence of such person after recording
the reasons for doing so.
(9) While adjudging quantum of penalty, the adjudicating officer shall
have due regard to the following factors, namely:—
(a) the amount of disproportionate gain or unfair advantage,
wherever quantifiable, made as a result of the default;
(b) the amount of loss caused to an investor or group of investors
or creditors as a result of the default;
(c) the repetitive nature of the default.
(10) All sums realised by way of penalties under the Act shall be
credited to the Consolidated Fund of India.
4. Appeal against the order of adjudicating officer.

(1) Every appeal against the order of the adjudicating officer shall be
filed in writing with the Regional Director having jurisdiction in the
matter within a period of sixty days from the date of receipt of the order
of adjudicating officer by the aggrieved party, in Form ADJ setting
forth the grounds of appeal and shall be accompanied by a certified
copy of the order against which the appeal is sought:
Companies (Adjudication of Penalties) Rules, 2014 691
Provided that where the party is represented by an authorised

representative, a copy of such authorisation in favour of the
representative and the written consent thereto by such authorised
representative shall also be appended tothe appeal:
Provided further that an appeal in Form ADJ shall not seek relief(s)
therein against more than one order unless the reliefs prayed for are
consequential.
(2) Every appeal filed under this rule shall be accompanied by such fee as
provided in the Companies (Registration Offices and Fees) Rules, 2014.
5. Registration of appeal.
(1) On the receipt of an appeal, office of the Regional Director shall
endorse the date on such appeal and shall sign such endorsement.
(2) If, on scrutiny, the appeal is found to be in order, it shall be duly
registered and given a serial number:
Provided that where the appeal is found to be defective, the Regional
Director may allow the appellant such time, not being less than fourteen
days following the date of receipt of intimation by the appellant from
the Regional Director about the nature of the defects, to rectify the
defects and if the appellant fails to rectify such defects within the time
period allowed as above, the Regional Director may by order and for
reasons to be recorded in writing, decline to register such appeal and
communicate such refusal to the appellant within a period of seven
days thereof:
Provided further that the Regional Director may, for reasons to be
recorded in writing, extend the period referred to in the first proviso
above by a further period of fourteen days if an appellant satisfies
the Regional Director that the appellant had sufficient cause for not
rectifying the defects within the period of fourteen days referred to in
the first proviso.
6. Disposal of appeal by Regional Director.

(1) On the admission of the appeal, the Regional Director shall serve
692 Companies (Adjudication of Penalties) Rules, 2014
a copy of appeal upon the adjudicating officer against whose order the
appeal is sought along-with a notice requiring such adjudicating officer
to file his reply thereto within such period, not exceeding twenty-one
days, as may be stipulated by the Regional Director in the said notice:
Provided that the Regional Director may, for reasons to be recorded in
writing, extend the period referred to in sub-rule (1) above for a further
period of twenty-one days, if the adjudicating officer satisfies the Regional
Director that he had sufficient cause for not being able to file his reply to
the appeal within the above-said period of twenty-one days.
(2) A copy of every reply, application or written representation filed by
the adjudicating officer before the Regional Director shall be forthwith
served on the appellant by the adjudicating officer.
(3) The Regional Director shall notify the parties, the date of hearing of
the appeal which shall not be a date earlier than thirty days following
the date of such notification for hearing of the appeal.
(4) On the date fixed for hearing the Regional Director may, subject
to the reasons to be recorded in writing, pass any order as he thinks
fit including an order for adjournment of the hearing to a future date.
(5) In case the appellant or the adjudicating officer does not appear on
the date fixed for hearing, the Regional Director may dispose of the
appeal ex-parte:
Provided that where the appellant appears afterwards and satisfies
the Regional Director that there was sufficient cause for his non-
appearance, the Regional Director may make an order setting aside the
ex-parte order and restore the appeal.
(6) Every order passed under this rule shall be dated and signed by the
Regional Director.
(7) A certified copy of every order passed by the Regional Director
shall be communicated to the adjudicating officer and to the appellant
forthwith and to the Central Government.
693
CHAPTER XXIX – PART II

COMPANIES (MISCELLANEOUS) RULES, 2014
[G.S.R. 253(E), Dated 31st March 2014]
In exercise of the powers conferred under section 455, sub-section (2)
of section 459 and sub-section (1) of section 464 read with section 469
of the Companies Act, 2013, and in supersession of the Companies

(1) These rules may be called the Companies (Miscellaneous) Rules,
2014.
2. Definitions.
(b) “Annexure” means Annexure enclosed to these Rules;
(c) “Fees” means fees as prescribed in the Companies
(d) “Form” or “e-Form” means a form set forth in Annexure to
relates;
(e) “section” means section of the Act;
(2) Words and expressions used in these rules but not defined, and
defined in the Act or in the Company (Specification of definitions
693
694 Companies (Miscellaneous) Rules, 2014

3. Application for obtaining status of dormant company.

For the purposes of sub-section (1) of section 455, a company may make
an application in Form MSC-1 along with such fee as provided in the
Companies (Registration Offices and Fees) Rules, 2014 to the Registrar
for obtaining the status of a Dormant Company in accordance with the
provisions of section 455 after passing a special resolution to this effect
in the general meeting of the company or after issuing a notice to all the
shareholders of the company for this purpose and obtaining consent of
at least 3/4th shareholders (in value):
Provided that a company shall be eligible to apply under this rule only,
if –
(i) no inspection, inquiry or investigation has been ordered or
taken up or carried out against the company;
(ii) no prosecution has been initiated and pending against the
company under any law;
(iii) the company is neither having any public deposits which
are outstanding nor the company is in default in payment
thereof or interest thereon;
(iv) the company is not having any outstanding loan, whether
secured or unsecured:
Provided that if there is any outstanding unsecured loan,
the company may apply under this rule after obtaining
concurrence of the lender and enclosing the same with Form
MSC-1 ;
(v) there is no dispute in the management or ownership of the
company and a certificate in this regard is enclosed with
Form MSC-1;
(vi) the company does not have any outstanding statutory taxes,
dues, duties etc. payable to the Central Government or any
State Government or local authorities etc.;
Companies (Miscellaneous) Rules, 2014 695
(vii) the company has not defaulted in the payment of workmen’s

dues;
(viii) the securities of the company are not listed on any stock
exchange within or outside India.
4. Certificate of status of dormant company.

The Registrar shall, after considering the application filed in Form
MSC-1, issue a certificate in Form MSC-2 allowing the status of a
Dormant Company to the applicant.
5. Register of dormant companies.

The Register maintained under the portal maintained by the Ministry
of Corporate Affairs on its website www.mca.gov.in or any other website
notified by the Central Government, shall be the register for dormant
companies.
6. Minimum number of directors for dormant company.

A dormant company shall have a minimum number of three directors
in case of a public company, two directors in case of a private company
and one director in case of a One Person Company:
Provided that the provisions of the Act in relation to the rotation of
auditors shall not apply on dormant companies.
7. Return of dormant companies.

A dormant company shall file a “Return of Dormant Company”
annually, interalia, indicating financial position duly audited by a
chartered accountant in practice in Form MSC-3 along with such
annual fee as provided in the Companies (Registration Offices and
Fees) Rules, 2014 within a period of thirty days from the end of each
financial year:
Provided that the company shall continue to file the return or returns
of allotment and change in directors in the manner and within the time
specified in the Act, whenever the company allots any security to any
person or there is any change in the directors of the company.
696 Companies (Miscellaneous) Rules, 2014
8. Application for seeking status of an active company.

(1) An application, under sub-section (5) of section 455, for obtaining
the status of an active company shall be made in Form MSC-4 along
with fees as provided in the Companies (Registration Offices and Fees)
Rules, 2014 and shall be accompanied by a return in Form MSC-3 in
respect of the financial year in which the application for obtaining the
status of an active company is being filed:
Provided that the Registrar shall initiate the process of striking off the
name of the company if the company remains as a dormant company
for a period of consecutive five years.
(2) The Registrar shall, after considering the application filed under
sub-rule (1), issue a certificate in Form MSC-5 allowing the status of an
active company to the applicant.
(3) Where a dormant company does or omits to do any act mentioned
in the Grounds of application in Form MSC-1 submitted to Registrar
for obtaining the status of dormant company, affecting its status of
dormant company, the directors shall within seven days from such
event, file an application, under sub-rule (1) of this rule, for obtaining
the status of an active company.
(4) Where the Registrar has reasonable cause to believe that any
company registered as ‘dormant company’ under his jurisdiction has
been functioning in any manner, directly or indirectly, he may initiate
the proceedings for enquiry under section 206 of the Act and if, after
giving a reasonable opportunity of being heard to the company in this
regard, it is found that the company has actually been functioning,
the Registrar may remove the name of such company from register of
dormant companies and treat it as an active company.
9. Fees for application to Central Government.

For the purposes of sub-section (2) of section 459, every application
which may be, or is required to be, made to the Central Government
under any provision of the Act-
(a) in respect of any approval, sanction, consent, confirmation
Companies (Miscellaneous) Rules, 2014 697
or recognition to be accorded by that Government to, or in

relation to, any matter; or
(b) in respect of any direction or exemption to be given or
granted by that Government in relation to any matter; or
(c) in respect of any other matter,
shall be accompanied by such fee as provided in the Companies
10. Association or partnership of persons exceeding certain number.

No association or partnership shall be formed, consisting of more than
fifty persons for the purpose of carrying on any business that has for its
objects the acquisition of gain by the association or partnership or by
individual members thereof, unless it is registered as a company under
the Act or is formed under any other law for the time being in force.
[11. Applications or forms pending before Central Government,

1
Regional Director or Registrar of Companies.

Any application or form filed with the Central Government or Regional
Director or Registrar(hereinafter referred to as ‘the authority’) prior to
the commencement of these rules but not disposed of by such authority
for want of any information or document shall, on its submission, to
the satisfaction of the authority, be disposed of in accordance with the
rules made under the Companies Act, 1956 (1 of 1956).]
1. Inserted by the Companies (Miscellaneous) Amendment Rules, 2014 (w.e.f.

17-07-2014).
698
COMPANIES (ARRESTS IN CONNECTION

WITH INVESTIGATION BY SERIOUS FRAUD
INVESTIGATION OFFICE) RULES, 2017
[G.S.R. 1062(E), Dated, 24th August, 2017]
In exercise of the powers conferred under sub-section (1) of section
469 read with section 212 of the Companies Act, 2013 (18 of 2013), the
Central Government hereby makes the following rules namely:

(1) These rules may be called the Companies (Arrests in connection
with Investigation by Serious Fraud Investigation Office) Rules, 2017.
Official Gazette.
2. (1) Where the Director, Additional Director or Assistant Director
of the Serious Fraud Investigation Office (herein after referred to
as SFIO) investigating into the affairs of a company other than
a Government company or foreign company has, on the basis of
material in his possession, reason to believe (the reason for such
belief to be recorded in writing) that any person has been guilty of
any offence punishable under section 212 of the Act, he may arrest
such person;
Provided that in case of an arrest being made by Additional Director
or Assistant Director, the prior written approval of the Director SFIO
shall be obtained.
(2) The Director SFIO shall be the competent authority for all decisions
pertaining to arrest.
3. Where an arrest of a person is to be made in connection with a
Government company or a foreign company under investigation,
such arrest shall be made with prior written approval of the Central
Government.
698
Companies (Arrests in Connection with Investigation by SFIO) Rules, 2017 699
Provided that the intimation of such arrest shall also be given to

the Managing Director or the person in-charge of the affairs of the
Government Company and where the person arrested is the Managing
Director or person in-charge of the Government Company, to the
Secretary of the administrative ministry concerned, by the arresting
officer.
4. The Director, Additional Director or Assistant Director, while
exercising powers under sub-section (8) of section 212 of the Act, shall
sign the arrest order together with personal search memo in the Form
appended to these rules and shall serve it on the arrestee and obtain
written acknowledgement of service.
5. The Director, Additional Director or Assistant Director shall forward
a copy of the arrest order along with the material in his possession and
all the other documents including personal search memo to the office
of Director, SFIO in a sealed envelope with a forwarding letter after
signing on each page of these documents, so as to reach the office of the
Director, SFIO within twenty four hours through the quickest possible
means.
6. An arrest register shall be maintained in the office of Director,
SFIO and the Director or any officer nominated by Director shall
ensure that entries with regard to particulars of the arrestee, date
and time of arrest and other relevant information pertaining to the
arrest are made in the arrest register in respect of all arrests made
by the arresting officers.
7. The entry regarding arrest of the person and information given
to such person shall be made in the arrest register immediately on
receipt of the documents as specified under rule 5 in the arrest register
maintained by the SFIO office.
8. The office of Director, SFIO shall preserve the copy of arrest order
together with supporting materials for a period of five years
(a) from the date of judgment or final order of the Trial Court,
in cases where the said judgment has not been impugned in
the appellate court; or
700 Companies (Arrests in Connection with Investigation by SFIO) Rules, 2017
(b) from the date of disposal of the matter before the final
appellate court, in cases where the said judgment or final
order has been impugned, whichever is later.
9. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974),
relating to arrest shall be applied mutatis mutandis to every arrest made
under this Act.

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THE

© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

Laser typesetting at: AArushi Graphics

n Companies (Specification of Definitions Details) Rules, 2014 1

n Companies (Incorporation) Rules, 2014 9

n Companies (Prospectus and Allotment of Securities) 69

n Companies (Share Capital and Debentures) Rules, 2014 92

n Companies (Acceptance of Deposits) Rules, 2014 141

n Companies (Registration of Charges) Rules, 2014 168

n Companies (Management and Administration) Rules, 2014 174

n Companies (Declaration and Payment of Dividend) 216

n Companies (Accounts) Rules, 2014 249

n Companies (Audit and Auditors) Rules, 2014 310

n Companies (Appointment and Qualification of Directors) 346

n Companies (Meetings of Board and its Powers) Rules, 2014 366

n Companies (Appointment and Remuneration of 388

n Companies (Inspection, Investigation and Inquiry) 397

n Companies (Compromises, Arrangements and 400

n Companies (Registered Valuers and Valuation) Rules, 2017 435

n Companies (Removal of Names of Companies from 475

n Companies (Authorised to Register) Rules, 2014 481

n Companies (Registration of Foreign Companies) Rules, 2014 495

n Companies (Registration Offices and Fees) Rules, 2014 518

n Nidhi Rules, 2014 547

n National Company Law Tribunal Rules, 2016 566

CHAPTER XXIX – PART I

n Companies (Adjudication of Penalties) Rules, 2014 688

CHAPTER XXIX – PART II

n Companies (Miscellaneous) Rules, 2014 693

1. Short title and commencement.

(e) “Director Identification Number” (DIN) means an

and transactional services, database services and

Central Government in the Ministry of Corporate Affairs as

4. List of relatives in terms of clause (77) of section 2.

1. Omitted by the Companies (Specification of Definitions Details) Amendment

(1) Father : Provided that the term “Father” includes step-father.

In exercise of the powers conferred under proviso to clause (87) of

1. Short title and Commencement.

2. Restriction on number of layers for certain classes of holding

(b) a non-banking financial company as defined in clause (f)

where the contravention is a continuing one, with a further fine which

(d) ‘‘Fees’’ means fees as specified in the Companies (Registration

3. One Person Company.

(1) Only a natural person who is an Indian citizen and resident in

1. Substituted by the Companies (Incorporation) Third Amendment Rules,

4. Nomination by the subscriber or member of One Person

1. Substituted by the Companies (Incorporation) Third Amendment Rules,

mentioned in the memorandum of One Person Company and 1[such

1. Substituted by the Companies (Incorporation) Fifth Amendment Rules, 2016

6. One Person Company to convert itself into a public company or a

1. Omitted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f

7. Conversion of private company into One Person Company.

1. Substituted by the Companies (Incorporation) Amendment Rules, 2015

1. Inserted by the Companies (Incorporation) Amendment Rules, 2015 (w.e.f.

(h) misspelled words, whether intentionally misspelled or not,

1. Substituted by the Companies (Incorporation) Third Amendment Rules,

mark which is subject of an application for registration under

1. Omitted by the Companies (Incorporation) Amendment Rules, 2016 dated

word India or name of any Indian state or city, if otherwise

1. Omitted by the Companies (Incorporation) Amendment Rules, 2016 dated

(xi) the proposed name is identical to the name of a company

1. Omitted by the Companies (Incorporation) Amendment Rules, 2016 dated

(5) The applicant shall declare in affirmative or negative (to affirm or