Hi Folks Let me begin by wishing you all a happy, prosperous, peaceful & fulfilling New Year 2017 ! It is already the 2nd week of January and am sure the spate of new year wishes has subsided by now. As I look back on what I focussed on during 2016, it seems a myriad of things – right from the incredible way in which the Government of India announced the Start Up India, Stand Up India initiative followed by the promise of ‘no-taxes’ (largely misunderstood by the startup community) to the surge in entrepreneurship post Budget 2016-17 to a reality check in funding during the later part of the year; the silver jubilee of the 1991 LPG (Liberalisation, Privatisation & Globalisation) to passing of the GST bill to setting up of the NCLT (National Company Law Tribunal) to the introduction of the Insolvency & Bankruptcy Code 2016; the ongoing flurry of notifications under the Companies Act, 2013 coupled with the technical bloopers of the unapologetic Infosys managed MCA website (which has turned our lives into a nightmare); the surgical strike of the army to the mother of all surgical strikes on the parallel economy – Demonitisation to Brexit !! While these were on the professional side, I had a take on Karun Nair’s triple century and sports as a career in our country and in our rotting education system. I had also shared with you a deeply philosophical poem by my little niece which was very well received. I do not know what lies in store for us this year. I am not a future gazer. I will go with the flow and take life as it comes. But I would definitely like to place before you 4 pointers to the future that Prof. Vasanthi Srinivasan of IIMB highlighted in her recent inspiring talk “What does future ready leadership mean?”. –    Change is happening as we speak, thanks largely due to technology. Will continue at a higher intensity and a magnitude that we cannot anticipate. Decisions are to be made. Every decision has a consequence. Every consequence is intended and somewhat unintended. A leader requires the capacity to anticipate the unintended changes and manage the risk . How to manage unintended change ? Reengineer our management tools and orientation to lead our lives. –    Forecasting is a thing of past. Vocabulary of forecasting is linearity. Capacity to anticipate and see patterns is a defining capability. Requires diagnosis and capability to sense a phenomenon. A leader requires this medical vocabulary of Prognosis-diagnosis, Proscribe-prescribe and Diagnosie-derisk. –    Yesterday’s competitors are todays collaborators. Alliance building and partnership forging is required. A leader can build alliances when he can see other person’s strength, since it is human to see differences. –    Self-awareness is fine but most important is self-development. So the important question is what is the one thing you will acquire that you didn’t last year ? What is the one thing you didn’t do that you will do now ? As I leave you with the above thoughts, I do hope you will find this 161st issue of Lexspeak in the New Year informative and useful. Should you wish to refer to any of our older issues of Lexspeak, do visit our Resource Centre at sharadasc.com. Wishing also a bountiful Harvest & Kite Festival – Sankranthi !! Warm regards W.e.f. 26th December, 2016, Sections 248 to 252 of the Companies Act, 2013 have become effective along with newly notified rules (w.e.f. 27th December, 2016) for Removal of Name of Company from the Register i.e. Striking off the name of Defunct Company. This replaces the erstwhile Section 560 of the Companies Act, 1956. The above rules lay down the procedure for filing of application for removal of name, forms to be used, and other related compliances required to be done in respect of removal of name of Company from the Register of Companies. W.e.f. 19th December, 2016 Central Government has delegated its powers under the following matters to the Regional Directors (RD) at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong: Section 8(4)(i) – For alteration of Memorandum in case of conversion of Section 8 company into another kind of company. Section 8(6) – Power to revoke the licence granted to Section 8 Company. Section 13(4) and (5) – Approval of application for shifting of registered office from one State to another. Section 16 – Rectification of name of Company Section 87 – Power to order rectification or condonation in register of charges. Section 111(3) – Power to declare on application that the rights conferred by this section are being abused to secure needless publicity for defamatory matters. Section 140(1) – Approval for removal of the auditor. Section 230 (5) – Sending the notice of meeting for compromise and arrangements. Section 233 (2) to (6) – Confirmation for merger or amalgamation between 2 or more small companies or between a holding company and its wholly owned subsidiary company. 1st & 2nd proviso of Section 272(3) – Obtaining previous sanction by Registrar to the presentation of a petition for winding up. Section 348(1) – Power to exempt the Company Liquidator from filing a statement if winding up of a company is not concluded within 1 year after its commencement. Sections 361 to 362; 364 to 365 – Procedure for Liquidation, Sale of Assets and Appeal by Creditors Clause (i) of proviso to Section 399 (1) – Power to allow inspection of documents filed under Section 26 and 388. Section 442 – All powers of Central Government referred to under Mediation and Conciliation.

MCA has notified the Companies (Incorporation) Fifth Amendment Rules, 2016 w.e.f. 1st January, 2017. Major highlights of the rules are: Removal of E-Form INC-2 for One Person Company (OPC) E-Form INC-7 shall now be used only for incorporating Part I companies and Companies with more than 7 subscribers only. Newly Integrated SPICE E-Form INC-32 along with E-Form 33 and E-Form 34. Section 8 Companies and Companies having upto 7 subscribers can only use SPICE form for incorporation. Filing fees reduced from Rs. 2000 to Rs. 500. Resubmission of forms allowed only twice. Revised E-form INC-7 shall be available for filing w.e.f 15th January, 2017. With so much of churn in the incorporation process it is advisable to hold until 15th January!! W.e.f. 20th December, 2016, the above Rules have been notified to provide for Rectification of certain errors Clarification in certain cases Enabling Joint Petitions and Multiple Remedies Application to Tribunal for cancelling of variation of shareholders’ rights Application by any Statutory Authority/any other person in Form NCLT-9 for Re-opening of books of accounts and re-casting of financial statements by a Company in case of fraud or mismanagement Waiver of requirement of minimum number of members for filing a petition for oppression or mismanagement RBI has provided flexibility for Foreign Portfolio Investors (FPIs) to acquire non-convertible debentures (NCDs) / bonds issued by Indian Companies, either directly or in any manner as per the prevalent or approved market practice, as against the earlier requirement of purchase of such securities on repatriation basis subject to terms and conditions specified by SEBI and RBI. Rule 114E of the Income Tax Rules require reporting of cash receipts exceeding Rs. 2 lakhs. Doubts were raised whether such transactions were to be aggregated for reporting. It has been clarified that the limit applies to each transaction. Under Section 44AD of the Income Tax Act, income of small businesses up to a turnover of Rs. 2 Crores is presumed to be 8% of turnover. A scheme has been announced for lowering this to 6% in case of digital transactions for a turnover up to Rs. 2 crores. The Direct Tax Dispute Resolution Scheme, 2016 incorporated as Chapter X of the Finance Act, 2016 provides an opportunity to tax payers who are under litigation to come forward and settle the dispute in accordance with the provisions of the Scheme. The threshold limit of wages for mandatory ESI coverage has been raised to Rs. 21,000 from Rs. 15,000 per month w.e.f 1st January, 2017. W.e.f 19th December, 2016, the above rules comes into force. Previously, the Service Tax Mega Exemption Notification 25/2012 carried the list of exempted services. One amongst them was the online information and database access or retrieval services received by persons specified in entry no. 34 of the Mega Exemption 25/2012 from a non taxable territory. This exemption had been withdrawn vide Notification 47/2016 dated 9.11.2016. As a consequential amendment, the service provider located outside India providing service to non-assesees located in the taxable territory has to issue invoices and pay service tax. Invoices may be signed digitally. However, as a relaxation, the invoices need not be authenticated digitally up to 31.1.2017.

Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. Lex Valorem disclaims all liability on action taken without professional advice.

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