TMI BlogChapter VII - The Companies (Management and Administration) Rules, 2014.X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Short title and commencement.- (1) These rules may be called the Companies (Management and Administration) Rules, 2014. (2) They shall come into force on the 1 st 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) Annexure means the Annexure to these Rules; (c) Fees means the fees as specified in the Companies (Registration offices and fees) Rules, 2014 ; (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; (e) Regional Director means the person appointed by the Central Government in the Ministry of Corporate Affairs as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 in duplicate, within a period of thirty days 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 in duplicate. (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 in duplicate, within thirty days after acquiring such benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnual return shall be filed with the Registrar with such fee as may be specified for the purpose. 13. Return of changes in shareholding position of promoters and top ten shareholders.- 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, either value or volume of the shares, within fifteen days of such change. Explanation.- For the purpose of this sub-rule, the 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under section 88 or entries therein and annual return filed under section 92 shall be furnished to any 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 meeti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by electronic 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 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 unauthorised access, use, disclosures, disruption, modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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; (xi) the scrutinizer shall, within a period of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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 thereunder, 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 scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice 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) 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. (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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized 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 sub-clause (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 : Provided that One Person Company and other companies having members 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. (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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the records are capable of being dated and signed digitally wherever it is required under the provisions of the Act or the rules made there under; (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, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 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, conv ..... 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