Circulation of Notifications - Companies Law - CIRCULAR NO. 2,

Circulation of Notifications CIRCULAR NO. 2, DATED 23-2-1999, ISSUED BY THE DEPARTMENT OF COMPANY AFFAIRS 1. This department has recently issued three notifications as detailed below: Sl. No. Notification No. and date Title Remarks 1. G.S.R. No. 16(E), dated January 6, 1999. Companies (Central Government's) General Rules and Forms (Amendment) Rules, 1999. To facilitate trading in the over the counter exchange of India (OTCEI). 2. G.S.R. No. 17(E), dated January 6, 1999. Companies (Issue of Share Certificates) Amendment Rules, 1999. -do- 3. G.S.R- No. 23(E), dated January 12, 1999. Companies (Central Government's) General Rules and Forms (Amendment) Rules, 1999. New rules and forms introduced in the light of Companies (Amendment) Ordinance, 1999. 2. Notification No. G.S.R. No. 16(E) and G.S.R. No. 17(E), dated January 6, 1999. 2.1 These amendments to the existing rules have been done at the request of OTCEI (Over The Counter Exchange of India) who have since decided to switch over from paperless trading of securities to trading in physical certificates. OTCEI has proposed to bring about the change-over in a phased manner. As a first step, the companies whose securities are traded in OTCEI would stop issuing counter receipts (in lieu of share certificates) with effect from February 28, 1999. The existing counter receipts would be allowed to be traded at OTCEI only for a limited period and would be stopped thereafter. 2.2 Notification No. G.S.R. 16(E), dated January 6, 1999, amends the Companies (Central Government's) General Rules and Forms, 1956. It replaces the existing sub-rule (2A) of rule 5A with a new sub-rule (2A). This amendment merely facilitates continued use of Form 7BB as the form of application for share transfer so long as counter receipts are allowed to be traded. 2.3 Notification No. G.S.R. 17(E), dated January 6, 1999, amends the Companies (Issue of Share Certificates) Rules, 1960. This notification provides that with effect from February 28, 1999, companies whose securities are traded in OTCEI would not issue counter receipts. 3. Notification No. G.S.R. 23(E), dated January 12, 1999. This notification has been issued in the context of Companies Amendment Ordinance, 1999. By this notification, the Companies (Central Government's) General Rules and Forms, 1956, have been amended to introduce a few new rules (namely, 4CCC, 5C and 5D) and two new forms (namely, Form Nos. 2B and 4A), which relate to section 58A/ 109A and 77A of the Companies Act, 1956 (as amended). The notification provides for the following two forms: - A 'nomination form' to facilitate shareholders/debenture-holders/ deposit-holders to nominate a person of their choice to whom the share, etc., could be transferred in the event of their death. - A form for 'declaration of solvency' to be made by companies when they resort to buy-back of their own shares.