Regulatory updates

Section 234 of the Companies Act, 2013 read with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (Rules) prescribe the regulations pertaining to merger of a company with a foreign company. As per these regulations, a foreign company may merge with an Indian company after obtaining prior approval of the Reserve Bank of India (RBI) and complying with Sections 230 to 232 of the Companies Act, 2013 (which requires companies to obtain approval of the National Company Law Tribunal (NCLT)). On 9 September 2024, MCA issued the Companies (Compromises, Arrangements and Amalgamation) Amendment Rules, 2024 (Amendment Rules), which has laid down changes to Rule 25A of the Rules. The Amendment Rules now permit foreign holding companies to enter into a merger or amalgamation with their wholly owned Indian subsidiaries after obtaining approval from the RBI and complying with Section 233 of the Companies Act, 2013, which deals with fast-track mergers. In this case, approval of NCLT is not required, however, approval of Registrar of Companies (RoC), shareholders and creditors would still be required.

Effective date: The Amendment Rules are effective from 17 September 2024.

To access the text of the Amendment Rules, please click here

MCA vide its circular (the circular) dated 19 September 2024 has issued a clarification, allowing companies whose AGM’s are due in year 2024 or 2025, to conduct their AGM’s through Video Conferencing (VC) or Other Audio Visual Means (OAVM) on or before 30 September 2025. Further, the circular also permits companies to conduct their EGM’s through VC or OAVM or transact items through postal ballot upto 30 September 2025. However, the circular clarifies that it does not provide any extension in statutory timeline for holding of AGM’s by the companies under the Companies Act, 2013) and the companies failing to adhere to these timelines would be liable to the consequences as specified in provisions of the Companies Act, 2013.

To access the text of the circular, please click here

Rule 12 of the Companies (Accounts) Rules, 2014 requires every company covered under the Corporate Social Responsibility (CSR) provisions⁴ Companies falling under Section 135(1) of the Companies Act, 2013 are obligated to file form CSR-2. This includes companies that attain particular financial threshholds such as: net worth exceeding ₹500 crore, an annual turnover surpassing ₹1,000 crore, or a net profit greater than ₹5 crore. to furnish a report in Form CSR-2 to the Registrar of Companies as an addendum to Form AOC-4 and its variants⁵ This includes AOC-4, AOC-4 XBRL or AOC-4 NBFC (Ind AS) . MCA vide its notification dated 24 September 2024, issued the Companies (Accounts) Amendment Rules, 2024 which requires the Form CSR-2 for the financial year 2023-24 to be filed separately on or before 31 December 2024. This filing is to be done after filing of Form AOC-4 and its variants.

Effective date: The notification comes into force on the date of its publication in the Offical Gazette.

To access the text of the Amendment Rules, please click here