News Summary

MCA Updates

LLP (Second Amendment) Rules, 2022

Vide notification dated 04.03.2022, MCA has notified the LLP (Second Amendment) Rules,2022 (“Amendment Rules”), which has amended the LLP Rules, 2009. Highlights of the Amendment Rules are as follows:

  • Changes w.r.t. incorporation of LLPs:
    • Rule 11(1) Earlier while filing for incorporation through Form FiLLiP, DIN could be applied for only 2 proposed Designated partners (DP). Now 5 DIN applications can be made through FiLLiP.
    • Rule 11(3) The revised FiLLiP enables data to be filled in for PAN and TAN. Accordingly, the Certificate of Incorporation issue by the Registrar will also contain the PAN and TAN allotted to the LLP.
    • Form 9 –Consent to act as DP has been made an e-Form with an option for proposed DPs to apply for DIN through the FiLLiP form and submit the same as a PDF attachment.
    • Other noteworthy changes:
      • The latitude and longitude details of the Registered address of the LLP is to be mentioned in the FiLLiP Form. This is similar to the Form INC-22A (ACTIVE) notified in 2019 through which all Companies were required to intimate Registered office details to the Registrar.
      • The form allows details of proposed DPs to be auto populated from Digilocker.
  • Form 29 for intimating changes in foreign LLP omitted and included in Form 28 (Reporting of alteration or closure).
  • Signing of Statement of Account and Solvency and Annual Return by Insolvency Resolution Professional or Resolution Professional or LLP administrator in case of Corporate Insolvency Resolution Process under IBC or liquidation under LLP Act has been added.
  • In case of LLPs having turnover upto 5 crores or contribution upto 50 lakhs, the Annual Return needs to be certified by the DP as well.
  • Web based forms have been introduced for all LLP filings.

Open Notification No. G.S.R. G.S.R. 173(E) dtd. 04.03.2022

Ind AS standards amended as part of Annual Improvements to Ind AS (2021)

In February, 2021 the International Accounting Standards Board had made various changes to the International Financial Reporting Standard (IFRS). Consequently, changes were made to the Indian Accounting Standards (“Ind AS”) to align them with IFRS as part of the Annual Improvements to Ind AS (2021).
In continuation of the same MCA has notified amendments to the Companies (Indian Accounting Standards) Rules, 2015 which shall take effect from 01.04.2022. Following Ind ASs have been amended:

  1. Ind AS 101 – First time adoption of IndAS
  2. Ind AS 103 – Business Combination
  3. IInd AS 109 – Financial Instruments
  4. IInd AS 16 – Property, Plant and Equipment
  5. IInd AS 37 – Provisions, Contingent Liabilities and Contingent Assets
  6. IInd AS 41 – Agriculture

Please refer to the notification for details.

Open Notification dtd. 23.03.2022

RBI Updates

Valuation Certificate for transfer of shares should not be older than 90 days

The RBI Master Direction on Foreign Investment in India has been updated upto 17.03.2022. Post the updation, under the heading:

8.10 -Non-applicability of pricing guidelines

8.10.3 has been added as below:

The valuation certificate issued by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant must not be more than ninety days old as on the date of the transfer.
The general understanding is that the Valuation certificate is valid for 6 months from the date of issue. It is interesting to note that for the first time RBI mentions the validity as 90 days and that too w.r.t. “date of transfer”. Does it mean that this validity period is not relevant for issue of Equity Instruments?
Although, Authorised Dealer Banks have been following the practice of ensuring the Valuation Certificate is not older than 90 days, for the first time the same has been introduced through the Master Direction. However, no amendment has been carried out to the Non-Debt Instruments Rules, 2019.

Open Master Directions

SEBI Updates

Separation of Roles of CEO/MD and Chairperson

SEBI had amended Schedule II of the LODR Regulation vide notification dated 22.03.2022, pursuant to which every listed entity is mandatorily required to appoint different persons as the Chairperson and MD/CEO and the Chairperson shall be a non-executive director and not be a relative of the CEO/MD.

The notification also omitted sub-regulation 1(B) under Regulation 17 – Composition of Board which required only top 500 listed entities to appoint a Chairperson who is a non-executive director and not a relative of MD/CEO.
The separation of roles has to be ensured by all listed entities now.

Open Notification No. SEBI/ LAD-NRO/GN/2022/76 dtd 22.03.2022