DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTOR

 

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTOR

(Pursuant to Section 149 (7) of Companies Act, 2013) 

To,

The Board of Directors,

___________________

 I, _______, son of ______________, resident of ______________________ hereby confirm that I meet the criteria for holding office as Independent Director of ______________(‘Company’), as specified in Section 149(6) of the Companies Act, 2013 and further declare and confirm that:  

 1.    My Director Identification Number (DIN) is __________and the said DIN is active.

2.    I am neither a Promoter nor was a Promoter of the Company or its Holding, Subsidiary or Associate Company or member of the promoter group of the Company.

3.    I am not related to promoters or directors in the Company, its holding, subsidiary or associate company; 

4.    I have / had no pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten percent of my total income or such amount as may be prescribed, with the Company, its Holding, Subsidiary or Associate Company, or their Promoters, or Directors, during the two immediately preceding financial years or during the current financial year.

5.    None of my relatives, as defined in Section 2(77) of the Companies Act, 2013-

(A)    is holding securities of or interest in the Company, its holding, subsidiary or associate company during the two immediately preceding financial years or during the current financial year of face value in excess of fifty lakh rupees or two percent of the paid-up capital of the Company, its holding, subsidiary or associate company, respectively or such higher sum as may be specified;

(B)      is indebted to the Company, its holding, subsidiary or associate company or their promoters or directors, in excess of such amount as may be specified during the two immediately preceding financial years or during the current financial year;

(C)    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, for such amount as may be specified during the two immediately preceding financial years or during the current financial year; or

(D)    has any other pecuniary transaction or relationship with the Company, its holding, subsidiary or associate company amounting to two percent or more of its gross turnover or total income singly or in combination with the transactions referred to in sub-clause (A), (B) or (C):

Provided that the pecuniary relationship or transaction, if any with the Company, its holding, subsidiary or associate company or their promoters, or directors in relation to points (A) to (D) above will not exceed two percent of its gross turnover or total income or fifty lakh rupees or such higher amount as may be specified from time to time, whichever is lower, during my tenure as an Independent Director. 

6.    Neither myself nor any of my relatives-

(i)    hold or has held the position of a Key Managerial Personnel or is or has been an employee of the company or its Holding, Subsidiary or Associate Company or any company belonging to the promoter group of the Company, in any of the three financial years immediately preceding the financial year  ________; or

(ii)    is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year __________, of-

            a) a firm of auditors or company secretaries in practice or cost auditors of the Company or its Holding, Subsidiary or Associate Company; or

             b) any legal or a consulting firm that has or had any transaction with the Company, its Holding, Subsidiary or Associate Company amounting to 10% or more of the gross turnover of such firm; or

(iii)    hold(s) individually or together with my relatives 2% or more of the total voting power of the Company; or

(iv)    is a Chief Executive or Director, by whatever name called, of any non-profit organization that receives 25% or more of its receipts or corpus from the Company, any of its Promoters, Directors or its holding, subsidiary or Associate Company or that holds 2% or more of the total voting power of the Company.

7.    Pursuant to the Rule 6 of the Companies (Appointment and Qualification of Directors), 2014, I am registered with the Independent Directors’ Data Bank vide registration number _________________ and is valid till _______________.

8.      I am not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact my ability to discharge my duties with an objective independent judgment and without any external influence.

            I further confirm that I satisfy all the requirements and don’t fall under any disqualifications of Independent Directors as prescribed under Section 149(6) of the Companies Act, 2013 and that there are no circumstances or situation which exist or may be reasonably anticipated that could impair my ability to discharge my duties as Independent Director of the Company with an objective independent judgment and without any external influence. I am fully aware and agree that the Board of Directors of the Company shall rely on my affirmation to compile the statement on declaration to be given by independent directors under sub-section (6) of section 149 which will form part of the Board’s report.

 

 

                                                                                                                                       

	___________
Place:	DIN: _________
Date:

 

Disclaimer: The content of this blog is for informational and educational purposes only and does not constitute legal advice or opinion

Procedure for Fresh Application of Director Identification Number (DIN)

Procedure for Fresh Application of Director Identification Number (DIN)

1. Introduction

A Director Identification Number (DIN) is a unique number allotted by the Ministry of Corporate Affairs (MCA) to an individual intending to become a director in an Indian company.

As per Section 153 of the Companies Act, 2013, every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.

Fresh DINs can be applied through the following modes:

• Through SPICe+ (Form INC-32) during incorporation of a new company; or
• Through Form DIR-3, for appointment in an existing company (if not already allotted)

2. Modes of Fresh Application for DIN

A. Through SPICe+ (For First-Time Directors in a New Company)

If any person is not having DIN and willing to be appointed as Director in proposed to be incorporated Company, he will be allotted DIN upon incorporation of Company. In SPICe+ Form (INC-32), while filing for incorporation, DINs for proposed first directors can be applied directly within the SPICe+ form. A maximum of 3 DINs can be applied for in one SPICe+ form. Upon approval of the incorporation form, DINs are automatically generated and allotted to the first-time directors.

B. Through Form DIR-3 (For Appointment in an Existing Company)

If a person is being appointed as a director in an existing company and does not have a DIN, they must file Form DIR-3.

Procedure:

• Obtain Digital Signature Certificate (DSC).
• Register on MCA V3 Portal.
• Prepare and File Form DIR-3
• Pay DIN application fee of Rs. 500 online.

3. Documents and Information required for filling Form DIR-3:

1. Name
2. Father’s Name
3. Nationality
4. Residential Status
5. Occupation
6. Education Qualifications
7. Date of Birth
8. Gender
9. Income Tax PAN
(Above Details will be verified with PAN and Copy of PAN need to be attached)
10. Aadhaar Number, if available
(Copy of Aadhaar need to be attached)
11. Voter ID Card Number, if available
(Copy of Voter ID need to be attached)
12. Driving License Number, if available
(Copy of DL need to be attached)
13. Passport Number, if available
(it is Mandatory if person is not citizen of India, Copy of Passport need to be attached)
14. Permanent Residential Address
15. Present Residential Address
16. Phone Number
17. Mobile Number
18. Email ID\
19. Address proof (not older than 2 months)
20. Photograph
21. Board resolution from the existing Company proposing appointment
22. Get the form digitally signed by the applicant, and Authorised Signatory of the Company proposing the Appointment.

Upon successful verification, DIN is generated and DIN Allotment letter is mailed to applicant by MCA.

Disclaimer: The content of this blog is for informational and educational purposes only and does not constitute legal advice or opinion 

Closure of Company- Strike Off Name of the Company under the Companies Act, 2013

STRIKE OFF THE NAME OF COMPANY UNDER SECTION 248 OF THE COMPANIES ACT, 2013

Conditions for Strike Off:

• A company has failed to commence its business within one year of its incorporation or
• A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company
• The subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration in Form 20A to this effect has not been filed within 180 days of its incorporation.
• The company is not carrying on any business or operations, as revealed after the physical verification carried out by ROC.

Restrictions on Making Applications for Strike Off

Companies are restricted on filing applications for strike-off, if at any time during the last three months, it has:

• has changed its name or shifted its registered office from one State to another;
• has made a disposal for value of property or rights held by it, immediately before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
• has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company, or complying with any statutory requirement;
• has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or
• is being wound up under Chapter XX of this Act or under the Insolvency and Bankruptcy Code, 2016.

Disqualification for Strike Off:

Following categories of companies shall not be Strike off :

• listed companies;
• companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
• vanishing companies;
• 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;
• 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;
• companies against which any prosecution for an offence is pending in any court;
• 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;
• companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
• companies having charges which are pending for satisfaction; and
• companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

Steps for Making Application for Strike off the Name of Company:

• Ensure company has filed form AOC-4 and MGT-7 up to the end of the financial year in which the company ceased to carry its business operations
• Hold Board Meeting for Approval and Authorisation to File Strike Off Application
• Call EGM for Approval of Members by way of Special Resolution

Or

• Obtain written Consent of 75% Members in terms of Paid up Share Capital
• File Application for Strike Off In Form STK-2 along with Following Supporting Documents

            a. Indemnity Bond duly notarized by all director(STK-3)
            b. A statement of liabilities comprising of all assets and liabilities of the companies certified by                 Chartered Accountant (made up to a day, not more than thirty days before the date of                             application) (STK-8)
            c. An affidavit from all Directors in Form STK 4
            d. CTC of Special Resolution or Consent from Members
            e. A statement concerning any pending litigations with respect to the company
            f. Bank Closure Certificate
            g. Latest Income Tax Return Acknowledgement
            h. KYC Documents of Directors and Shareholders


Disclaimer: The content of this blog is for informational and educational purposes only and does not constitute legal advice or opinion

Debentures vs Deposits

 

Debentures vs Deposits: An Overview

Understanding the Regulatory Framework: The Companies (Acceptance of Deposits) Rules, 2014, define "deposit" under Rule 2(1)(c) as any receipt of money by way of deposit, loan, or in any other form by a company. However, certain receipts are excluded from this definition, particularly under specific circumstances related to debentures and bonds.

Key Exemptions:

• Secured Debentures: Debentures that are secured by a first charge or a pari passu charge on the company’s tangible assets (excluding intangible assets) and do not exceed the market value of those assets (as assessed by a registered valuer) are not considered deposits.
• Compulsory Conversion: Debentures that are compulsorily convertible into shares within ten years are excluded from the definition of deposits.
• Listed Non-Convertible Debentures (NCDs): Non-convertible debentures (NCDs) that are listed on a recognized stock exchange are also excluded from the purview of deposits.

Notably, if debentures initially issued as unsecured later become secured through a mortgage and a trust deed is executed and registered with the Registrar of Companies (ROC), they are exempt from being classified as deposits.

Types of Debentures and Deposit Status:

Debentures - Deposit Status

Type of Debenture	Deposit or Not?	Remarks
Convertible, Unlisted, Unsecured	No	Exempt if convertible within 10 years
Convertible, Listed, Unsecured	No	Exempt if convertible within 10 years
Convertible, Listed, Secured	No	Exempt due to both convertibility within 10 years and secured by first charge
Non-Convertible, Unlisted, Unsecured	Yes	Must be listed to remain exempt
Non-Convertible, Listed, Unsecured	No	Exempt by virtue of listing
Non-Convertible, Unlisted, Secured	No	Exempt if secured

Important Compliance Notes:

• Debenture Trustees: Companies must appoint debenture trustees, execute a trust deed, and file the necessary charge documents when issuing secured debentures.
• Tenure Limitation: According to Rule 18(1)(a) of the Companies (Share Capital & Debentures) Rules, 2014, secured debentures must be redeemable within ten years from the date of issue.

Conclusion: Proper classification and compliance regarding debentures are crucial for companies to ensure that the instruments do not fall under the regulatory regime of deposits. Companies should pay careful attention to the listing requirements, security creation, and conversion timelines to avoid non-compliance under the Companies Act, 2013.

 

Disclaimer: The content of this blog is for informational and educational purposes only and does not constitute legal advice or opinion