Benefits to Senior Citizens- Budget 2018 BY CS DIVYA BAJPAI

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Budget 2018 brings so much full of bucket for the elder resident of India. Even you can say this budget as “Oldies Budget”. Now, we discuss various provisions briefly with examples.
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• Deduction available to senior citizens in respect of health insurance premium and medical treatment:- Under section 80 D, the monetary limit of deduction is raised from rupees 30,000 to rupees 50,000. Such deduction is allowed in respect of payments towards annual premium on health insurance policy, or preventive health check-up of a senior citizen, or medical expenditure of very senior citizens. In case of single premium health insurance policies having cover of more than 1 year, the deduction is allowed on proportionate basis for the number of years for which health insurance cover is provided. This provision is effective from 1st April, 2019 and apply to the AY 2019-20.

Comment:-Under Section 80D, the limit of deduction is increased from 30k to 50k.
For example, Mr. Rahul, aged 65 years made payment towards annual premium of rupees 40,000 per year on health insurance policy ( 5 year policy)
Thus, the deduction allowed under Section 80 D for AY 2019-20 is rupees 10,000 on proportionate basis.( Rupees 50,000/ 5 years). Total taxable amount 40,000-10,000(deduction u/s 80D on proportionate basis)= 30,000.
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• Deduction to senior citizens for medical treatment of specified diseases:- Under Section 80 DDB, the monetary limit of deduction is increased to rupees 1,00,000 for both senior citizen and very senior citizens. This provision is effective from 1st April, 2019 and apply to the AY 2019-20.

Comment:-Under Section 80 DDB, the limit of deduction is raised from rupees 60,000 to 1,00,000 in case of senior citizens(age of 60 years or more) and from rupees 80,000 to 1,00,000 in case of very senior citizens(age of 80 years or more).
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• For Example, Mr. Sukh, aged 65 year is suffering from specified disease covered under section 80 DDB, for which medical treatment amounts to rupees 2,00,000.

Mr. Sukh will get deduction of rupees 1,00,000 for AY 2019-20. The total taxable amount is equal to rupees 1,00,000 (2,00,000- 1,00,000).
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• What if Mr. Sukh aged 85? Will the answer be same?

Yes the answer will be the same.

• Deduction in respect of interest income to senior citizen:- A new Section 80 TTB is inserted to allow deduction upto Rupees 50,000 in respect of interest income from deposits held by senior citizens. However, no deduction under section 80TTA shall be allowed in these cases. This provision is effective from 1st April, 2019 and apply to the AY 2019-20. Further as per Section 194 A, the deduction of tax at source on interest income for senior citizens is raised to rupees 50,000.This provision is effective from 1st April, 2018.

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Comment:- A new Section is inserted 80 TTB with deduction on interest income from deposit for senior citizen upto Rupees 50,000 but then the assessee can not avail the deduction of rupees 10,000 on interest income from saving account under section 80TTA. Hence, the senior citizen can take benefit of either section 80 TTA or newly inserted section 80 TTB. It is advisable for senior citizens to take benefit of Section 80 TTB as the additional deduction of rupees 40,000 (50,000-10,0000) is available.
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For Example, Mr. Manish, aged 62 years deposited his money in Post Office(PO) getting interest income of rupees 1,00,000 in a year. He also get interest income on Saving Bank Account(SBA) of rupees 50,000 in a year.
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The total deduction availed by Mr. Manish for AY 2019-20 is equal to rupees 50,ooo under provisions of newly inserted Section 80 TTB. If the deduction under 80 TTB is allowed then deduction under 80 TTA can not be claimed by the assessee. The Income chargeable to tax is equal to 1,00,000 [1,00,000(PO interest) + 50,000(SBA interest) - 50,000 (deduction u/s 80 TTB)]
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• Standard Deduction on Salary Income:- A Standard deduction is allowed upto rupees 40,000 or amount of salary received, whichever is less. In lieu of this, the Transport Allowance(except in case of differently abled persons) and reimbursement of medical expenses is proposed to be withdrawn. However, Pension is taxable under the head salaries in your Income Tax Return. The pensioner who did not get benefit of Transport Allowance and reimbursement of medical expenses after retirement from job now get standard deduction of rupees 40,000 from his income by way of pension. This provision is effective from 1st April, 2019 and apply to the AY 2019-20

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Comment:- The Standard Deduction of rupees 40,000 is given in lieu of transport allowance and reimbursement of medical expenses. But the senior citizens who get their pension can avail this standard deduction of rupees 40,000, as income from pension is taxable under the head Salaries under Income Tax Act.
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For Example, Mr, Saurabh, aged 64 years retired employee getting monthly pension of rupees 3o,ooo from the organisation where he worked for more than 30 years.
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Mr. Saurabh is a pensioner and pension is taxable under head salaries of the income tax. The total pension for AY 2019-20 is rupees 3,60,000 and the standard deduction allowed is rupees 40,000. Thus, the total taxable income is equal to Rupees 3,20,000 [3,60,000 (Annual Pension) -40,000 (Standard deduction)]
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Disclaimer:- The Article is written only for informational purpose and prepared on the basis of information existing at the time of the preparation of the Article. LEX Diligent LLP and the Author of the Article do not constitute any liability in case of any loss/damage cause to you. The Author has undertaken utmost care to give the fair view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the information from the original sources before acting upon it.
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WRITTEN BY: CS DIVYA BAJPAI. Author can be contacted at divya@lexdiligent.com

Highlights of Secretarial Standard on DIVIDEND (SS-3)- By CS ANJALI GORSIA

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In this piece of writing, we will cover the topic “Secretarial Standards on Dividend [SS-3] issued by issued by the Council of the Institute of Company Secretaries of India. Before we proceed to details discussion of context of [SS-3], please note the highlights of these standards so issued as stated below:

• To be effective from 01^st January, 2018.
• Adherence to these standards is “Recommendatory” not “Mandatory”.
• This Standard prescribes a set of principles in relation to the declaration and payment of Dividend and matters related thereto
• Standards are in conformity to:

1. the provisions of the Securities Contracts (Regulation) Act, 1956 and
2. the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are applicable to listed companies

• Income Tax Provisions 1961
• Non applicability of these standards: (1) company limited by guarantee not having share capital and (2) does not deal with Dividend, if any declared by companies under liquidation.
• Please Note: The companies having licence under Section 8 of the Act are prohibited by their constitution from paying any dividend to its members. They apply the profits in promoting the objects of the company
• For the purposes of this Standard, capitalization of profits in the form of bonus shares is not Dividend. [Explanation:_____________________________________________________________________]

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DIVIDEND:
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A dividend is a payment made by a company to its shareholders, usually as a distribution of profits. When a company earns a profit or surplus, the company is able to re-invest the profit in the business (called retained earnings) and pay a proportion of the profit as a dividend to shareholders.
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The term ‘dividend’ has been defined under Section 2(35) of the Companies Act, 2013. The term “Dividend” includes any interim dividend. According to the generally accepted definition, “dividend” means the profit of a company, which is not retained in the business and is distributed among the shareholders in proportion to the amount paid-up on the shares held by them. Dividends are usually payable for a financial year after the final accounts are ready and the amount of distributable profits is available.
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It is paid on equity as well as preference share Capital of company provided; “Preference Shareholder” means a holder of such shares which carry a preferential right, in respect of payment of Dividend, of a fixed amount or an amount calculated at a fixed rate and in respect of capital, to repayment of capital.
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Following terms are defined, which are used in the standards issued:
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“Final Dividend” means the Dividend recommended by the Board of Directors and declared by the Members at an Annual General Meeting.  . “Interim Dividend” means the Dividend declared by the Board of Directors.  . Please note: [Dividend for a financial year of the company (which is called ‘final dividend’) are payable only if it is declared by the company at its annual general meeting on the recommendation of the Board of directors. This constitutes an item of ordinary business to be transacted at every annual general meeting  . Sometimes dividends are also paid by the Board of directors between two annual general meetings without declaring them at an annual general meeting (which is called ‘interim dividend’). However, as a measure of good practice, payment of Interim Dividend should be recorded at the Annual General Meeting.  . . Declaration of Dividend: .       Dividend shall be declared only on the recommendation of the Board, made at a meeting of the Board.       Where a company has an Audit Committee, this Committee shall consider the annual financial statements before submission to the Board       Dividend shall be declared only at an Annual General Meeting.

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DECLARATION OF DIVIDEND OUT OF PROFITS: These standard is articulated in line with the provisions of section 123(1) (a) of the Companies Act, 2013 which provides for following thing;

• Dividend to be declared out of the profits of the company for that year or out of the profits of the company for any previous financial.
• After providing for depreciation in accordance with the provisions of Schedule II to the Act and remaining undistributed, or out of both.
• previous losses and depreciation not provided in previous year are set off against profit of the company of the current year the loss or depreciation

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DECLARATION OF DIVIDEND OUT OF RESERVES: In a year in which the profits are inadequate or there are no profits, the company may declare Dividend out of Free Reserves subject to the fulfilment of the conditions as prescribed in Rule 3 of Companies (Declaration and Payment of Dividend) Rules, 2014.
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Please note: No Interim Dividend is declared in case the profits are inadequate or there are no profits. Only “final dividend”, recommended by board and declared in Annual General Meeting.
DECLARATION OF DIVIDEND: Out of the money provided by Central or State Government for payment of dividend in pursuance of guarantee given by that, if any
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DIVIDEND NOT TO BE DECLARALED FROM FOLLOWING SOURCES:

• Securities Premium Account or
• the Capital Redemption Reserve or
• Revaluation Reserve or Amalgamation Reserve or
• out of profits on re-issue of forfeited shares or
• out of profits earned prior to incorporation of the company;

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RESTRICTIONS ON DECLARATION OF DIVIDEND:

• it has defaulted in redemption of debentures or payment of interest thereon or creation of debenture redemption reserve,
• it has defaulted in redemption of preference shares or creation of capital redemption reserve,
• it has defaulted in payment of dividend declared in the current or previous financial year(s), or
• it has defaulted in repayment of any term loan to a bank or financial institution or interest thereon, till such time the default is subsisting

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PAYMENT & MANNER OF PAYMENT OF DIVIDEND:

• Dividend shall be deposited in a separate bank account within 5 days from the date of declaration. [Section 123(4)]
• To be paid within 30 days of declaration. (includes holidays)
• Amount deposited to be used only for said purpose.

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Manner: In line with section 123 (5): Dividend shall be paid in cash and not in kind

• In cash
• In Cheque
• In warrant

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[The cheque or warrant shall be sent to the registered address of the Member and, in the case of joint holders, to the registered address of the member named first in the Register of Members or to such person or to such address as the Member or the joint holders have directed, in writing In case of payment of dividend through warrant or cheque payable at par, if the amount of dividend exceeds one thousand and five hundred rupees, the company shall ensure to despatch such dividend warrant or cheque either by speed post or registered post to the concerned Member at his registered address A cheque or warrant for payment of Dividend shall be valid for a period of three months from the date of issue If remain unpaid, a fresh instrument shall be issued in lieu thereof, within fifteen days of the receipt of a valid request in this regard for again next three month. Duplicate Cheque or warrant In case of defaced, torn or decrepit to be issued only after obtaining requisite indemnity/ declaration from the concerned member and after ascertaining the encashment status of the original Dividend cheque or warrant. Particulars of every fresh/ duplicate cheque or warrant issued by the company shall be entered in a Register of Dividend Warrants. The Dividend cheque or warrant shall be accompanied by a statement in writing showing required prescribed details.

• Any Electronic Mode approved by RBI:[ Where Dividend is remitted through electronic mode, , the company shall send to the member, a statement in writing showing the amount of Dividend paid]

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TREATMENT OF UNPAID DIVIDEND:
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The roots of this concept, which is arising from Section 124 of the Companies Act, 2013: “Unpaid Dividend” which provides for transfer of unpaid/unclaimed dividend i.e dividend which is not paid or claimed within 30 days from its date of declaration, then the company within 7 days shall transfer such amount to a special account namely “Unpaid Dividend Account” which will be opened by Company in a schedule bank as per section 124(1) of the Act, 2013.
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Within 90 days of transferring such amount to “Unpaid Dividend Account”, statement containing details of Members will be prepared.
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Such statement shall be uploaded on the website of the company, if any, and also on the website specified by the Central Government for this purpose.
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Such statement shall remain on the website(s) till such time the unpaid or unclaimed Dividend is transferred to the Fund.
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Transfer to Investor Education and Provident Fund:
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Further any amount transferred to “Unpaid Dividend Account” remains unpaid or unclaimed for a period of 7 years from date of transfer, and then as per section 124 (5) same shall be transferred to ‘Investor Education and Provident Fund”, a fund established by Central Government within thirty days from the expiry of seven years and ensure compliance therein. Further any interest earned on the Unpaid Dividend Account shall also be transferred to the Investor Education and Protection Fund
Before transferring such amount: “The company shall intimate the concerned Members individually of the amount of Dividend remaining unclaimed or unpaid which is liable to be transferred to the Fund and advise the Members to claim such amount of Dividend from the company before such transfer”
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 At last, pursuant to the provisions of section 124 (6) of the Companies Act, 2013 read with the IEPF Rules, 2016 as amended from time to time, the Company is mandated to transfer all the shares in the name of Investor Education and Provident Fund in respect of which dividends .have not been paid or claimed for seven consecutive years or more. (Refer another article on link provided for detailed process and recent amendments related thereto.)https://anjalics.blogspot.com/2018/01/transfer-of-shares-to-iepf-authority.html
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REVOCATION:
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Dividend, once declared, becomes a debt and shall not be revoked, mandatory to be paid.
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DISCLOSURES OF DIVIDEND DECLARED:

• Balance Sheet: Notes to Accounts and under Current liabilities Head
• Board Report: The amount of interim dividend, if any, paid during the financial year and final Dividend recommended by the Board of directors. [Section 134(3)(k)]
• Annual Report: (i) disclose the total amount lying in the Unpaid Dividend Account of the company in respect of the last seven years. (ii) The amount of Dividend, if any, transferred by the company to the Investor Education and Protection Fund during the year shall also be disclosed

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PRESERVATION OF RECORDS:

• Dividend cheques or warrants returned by the Bank, after payment thereof, and the Dividend Registers shall be preserved by the company for a period of eight years.
• Where the company has given an undertaking to the Bank for preservation or safe keeping of paid Dividend cheques or warrants for a specified period, the said instruments shall be preserved for such specified period or eight years from the date of the instrument, whichever is longer.
• Records to be destroyed after approval of Board or in accordance with policy.

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WRITTEN BY: CS ANJALI GORSIA, NAGPUR

FAQs on Condonation of Delay Scheme-2018

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Q1. What is Condonation of Delay Scheme 2018 [CODS 2018][1]?
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Ans. Condonation of Delay Scheme 2018 is a Scheme introduced by Central Government as an golden opportunity for the non-compliant defaulting companies to rectify the default, in exercise of its powers conferred under sections 403, 459 and 460 of the Companies Act, 2013. It is to be operational from January 1 to March 31, 2018, scheme to be complied within 3 months
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Q2. Why this scheme?
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Ans: The Condonation of Delay Scheme, which is rolled out by the Ministry of Corporate Affairs, is came as a relief for disqualified directors, and giving chance to them to do  good and be a compliance compliant.
As per MCA September 2017, Around 3,09,614 Directors were recently disqualified u/s 164(2) by the Ministry of Corporate Affairs for continuing default in filing company annual return, which as a result vacation of office u/s 167 of the Act, 2013 was attracted consequently.
Aggrieved by the disqualification many disqualified Directors had made representations to the Ministry of Corporate Affairs and approached the National Company Law Tribunal and High Courts for staying order of disqualification. Taking into consideration the representations made by various stakeholders, the Central Government and Ministry of Corporate Affairs has now introduced the Condonation of Delay Scheme to provide a final opportunity for defaulting companies and Directors to regularize compliance before 31st March, 2018.
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Q3. To whom this Scheme is Applicable?
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Ans: All companies registered in India including private limited company, one person company, limited company, section 8 company and others are required to file annual return with the Ministry of Corporate Affairs each year.
Therefore, this Scheme applies to every Company (herein referred as ‘Defaulting Company), which has not filed its financial statements or annual returns as required under the Companies Act 1956/ Companies Act 2013, for a period of 3 years.
Please note: This scheme applies to only “Defaulting Company” whose status is still ACTIVE on MCA Portal.
It means directors (disqualified directors) of defaulting Company whose status is still active on MCA Portal have chance to remove their disqualification.
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Q4. Will this scheme apply to Companies whose status is shown “Strike OFF” on MCA portal?
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Ans: NO, this scheme will not apply to defaulting companies whose names have been removed from the register of companies under section 248 of the Act
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Q5. Disqualification of directors of Companies which have been struck off can be removed?
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Ans: In the event of defaulting companies whose names have been removed from the register of companies under section 248 of the Act and which have filed applications for revival under section 252 of the Act up to the date of this scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing of all overdue documents.
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Q6. What is procedure to Comply with this scheme?
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Ans: ◊ Deactivated DIN of Defaulting directors will be activated for temporary purpose only.
◊ Defaulting Company will file “overdue documents:”
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Where overdue documents can be referred here in as:
√ Financial Statements (Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL)
√ Annual Return (Form Number 20B/MGT-7)
√ Compliance Certificate[2] (Form No 66)
√ Auditor Appointment (Form 23B/ADT-1)
√ Or any other associated documents as required under the Companies Act 1956/ Companies Act 2013
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Please note overdue documents up to June 30, 2017, can be filed under this scheme.
◊  The defaulting company shall file the overdue documents in the respective prescribed e-Forms paying the statutory filing fee and additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 for filing these overdue documents.
◊ The defaulting company after filing documents under this scheme, shall seek condonation of delay by filing form e-CODS 2018 attached to this scheme along with a fee of Rs. 30,000/- (Rs. Thirty Thousand only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme.
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(PLEASE NOTE:  E-FORM CODS 2018, will be available form 20.02.2018 or other alternate date as may be prescribed by MCA)
◊ Where o Company have been restored after an application to NCLT, DIN of Directors of such companies will also be re-activated.
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Q7. Implication of compliance under this scheme?
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Ans: ◊ The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme.
◊ this scheme is without prejudice to action under section 167(2) of the Act or civil and criminal liabilities, if any, of such disqualified directors during the period they remained disqualified.
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Q8. Implication of Non Compliance of this scheme?
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Ans: The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the eform CODS, and these are not taken on record in the MCA21 registry and are still found to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.
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Q9. Specific disclosure required in E FORM CODS 2018?
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Ans: Disclosure like:
◊ Whether any appeal(s) was filed against any notice issued or complaint filed before the competent court for violation of the provisions under the Act in respect of the above mentioned document(s). lf yes, attach proof of withdrawal of such appeal.
◊ Whether any prosecution(s) is pending in court against the company and its officers in respect of belated documents filed under the scheme. lf yes, provide details thereof as an attachment
◊ Whether any director(s) of the company is declared as proclaimed offender or facing criminal case(s) for economic offences. lf yes, provide details of such director(s) as an attachment. Etc.
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WRITTEN BY:  CS Anjali Gorsia
Source: TAXGURU

Article on COMPANY SECRETARIES : THE GOLDEN PEOPLES 

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As being a member or a student of ICSI (company secretary course it always comes in our mind that what is a company secretary course how is started? How do we initiate? What is the scope of this Course? So here through our article all the question which comes in our mind as being a member or the student of the company secretary course .
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so possibly we tried to answer the entire question through our this article.

1. Why our profession called as company secretary?

Around 56 years back when our nation tries to uplift itself or on a path of development and growth pace and a number of companies registered itself as a corporate entity in India then there is a need arises  for the compliances in the company and to carry on a companies in a systematic manner and as well a need  of person who  will be abide by rules and regulations  able to help to the business entities to comply the rules and regulations and take a burden on their shoulder for the proper compliances of rules and regulation of the corporate entities . to fulfill this emptiness in the corporate field a course framed that is company secretary .now again the question is here why the word company secretary has been used for this profession so the answer is here, Secretary means a person a person employed by an individual or in an office to assist with correspondence, make appointments, and carry out administrative tasks, and same work the company secretary will do for the corporate entity to

• assist the entities;
• to organize different avenues of profit and compliances in the business world;
• to administer the corporate entities;

So the word company secretary came into picture and our profession names as   

Define Company Secretary:

Company		Secretary
C	Compliances	S	Specialized
O	Observers	E	Energetic
M	Management	C	Controller
P	Professional	R	Realistic
A	Abide by rules	E	Enthusiastic
N	Nurture	T	Trained
Y	Yield maximize	A	Agent
		R	Regulator
		Y	Your company

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2. But the major question how it started?

So here the answer is the in the year of 1960 the company law board started a course in company secretary ship leading to the award of government diploma in company secretary ship course grew the government promoted on 4 the October 1968 institute of company secretaries of India under section 25 of the companies act 1956for taking over from the government the conduct of company secretary ship examination the institute of company secretararies of India have ever since been converted into a statutory body w.e.f 1^st of January 1981under the company secretary act 1980.

 Presently the institute of company secretaries of India divided into five regional council:

Northern Region 11 Chapters & 11 Sate light Chapters	Southern Region 11 Chapters & 5 Sate light Chapters
Western Region 9 Chapters & 2 Sate light Chapters	Eastern  Region 5 Chapters
International Chapter                Dubai (UAE)

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3. Now the question who will be company secretary?

 So the act itself answer the question that

 (a) Any person who immediately before the commencement of this Act was an Associate or a Fellow (including an Honorary Fellow) of the dissolved company;

 (b) Any person who is a holder of the Diploma in Company Secretary Ship awarded by the Government of India;

 (c) any person who has passed the examinations conducted by the institute and has completed training either as specified by the institute or as prescribed by the Council, except any such person who is not a permanent resident of India;

(d) Any person who has passed such examination and completed such training, as may be prescribed for membership of the Institute;

 (e) any person who has passed such other examination and completed such other training without India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed under this Act for membership of the Institute : Provided that in the case of any person belonging to any of the classes mentioned in this above  who is not permanently residing in India, the Central Government or the Council may impose such further conditions as it may deem to be necessary or expedient in the public interest.

So a person who is mentioned above can be company secretary.

The first person who became company secretary in India was

 Mr. SH NARAYAN SWAMI with a membership number “A1” from Chennai.  

After that so many came and now the membership number reached near about 48000+.

So this was the golden history of our valuable profession called COMPANY SECRETARIES (THE COMPLIANCE HEADS OF THE COMPANY)

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4. Now the question is how to become a company secretary (The Observers)?

So the institute of company secretaries of India gave brief guidelines to grace his or her name with the initial called (CS)

Stages to become a Company Secretary:

The student who would like to join the Course after 10+2 pass or equivalent has to undergo three stages to pursue the Company Secretaries Course i.e. 
                                      

• Foundation Programme 
• Executive Programme
• Professional Programme

The Student who would like to join the Course after passing the Graduation has to undergo two stages of the Company Secretary ship i.e. 
Executive Programme
Professional Programme

Foundation Programme which is of eight months duration can be pursued by 10+2 pass or equivalent students of Arts, Science or Commerce stream (Excluding Fine Arts)

Executive Programme can be pursued by a Graduate of all streams except Fine Arts.

Professional Programme can be pursued only after clearing the Executive Programme of CS Course

(Time To Time Institute Do Efforts to Make This Profession Abreast)

So after going through all the stages and after completing the necessary training of two years under a professional a person can grace his name with such dignified degree i.e. Company Secretaries (The Corporate Personality )

After successful completion of the examination and the completion of the training a person have to apply for the membership number and after due verification the institute will provide a membership no to the person and register a person MEMBER OF THE INSTITUTE

  THERE IS TWO PHASES OF MEMBERSHIP:

1. ASSOCIATE COMPANY SECRETARY MEMBER (ACS)
2. FELLOW COMPANY SECRETARY MEMBER (FCS)

AS soon as the person qualifies all the level of examination and complete all the necessary training and applied for the membership number the INSTITUTE provide a membership number to the candidate termed as ASSOCIATE MEMBERSHIP NO.

And after successful completion of 5 year a person who is holding an associate membership will be eligible to become a FELLOW MEMBER of the institute.

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5. Now the question is how the company secretary (the regulator) works?

After getting a membership number a company secretary can do a work in two ways:

• Company secretary whole time in practice
• Company secretary whole time in employment

The company secretary who according to:

Section 2(2) of the Company Secretaries Act, 1980 (hereinafter called the Act) provides that a member of the Institute shall be deemed to be in practice when, individually or in partnership with one or more members of the Institute in practice or in partnership with members of such other recognised professions as may be prescribed, does any of the following in consideration of remuneration received or to be received: engages himself in the practice of the profession of company secretaries to, or in relation to, any company; or

(b) Offers to perform or performs services in relation to the promotion, formation, incorporation, amalgamation, reconstruction, reorganisation or winding up of companies; or

(c) Offers to perform or performs such services as may be performed by:

(i) An authorised representative of a company with respect to filing, registering, presenting, attesting or verifying any documents (including forms, applications and returns) by or on behalf of the company,

(ii) A share transfer agent,

(iii) An issue house,

(iv) A share and stock broker, a secretarial auditor or consultant, an advisor to a company on management including any legal or procedural matter falling under the Capital Issues (Control) Act, 1947

** the Industries (Development and Regulation) Act, 1951, the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, any of the rules or bye-laws made by a recognised stock exchange, the Monopolies and Restrictive Trade Practices Act, 1969, the Foreign Exchange Regulation Act, 1973*, or under any other law for the time being in force,

(vii) Issuing certificates on behalf of or for the purposes of, a company; or

(d) Holds himself out to the public as a company secretary in practice; or

(e) Renders professional services or assistance with respect to matters of principle or detail relating to the practice of the profession of company secretaries; or renders such other services as, in the opinion of the Council, are or may be rendered by a company secretary in practice

A person is called in whole time employment when a member of the institute of company secretaries of India is appointed by the company an employee of itself and provides a salary for their work done then that member is called as a member whole time in employment.

 Then what is the criterion of appointment of a company secretary in companies?

So according to the companies act 2013

Section 203 of Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, necessitated that every listed company and every other public company having paid-up share capital of Rs 5 crores or more to appoint the Company Secretary in whole-time employment.
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6. Now what are the avenues of work of company secretary (the agent)?

A company secretary whether in employment or in whole time practice have vast avenue of working like:

• SEBI Act,
• Securities Contracts (Regulation) Act, Rules and Regulations made there under
• SEBI Regulations and Guidelines
• Listing Agreement
• Competition Act, 2012
• Limited Liability Partnership Act, 2008
• Companies act 2013
  
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7. Now what are the Roles and responsibilities of company secretary (person who is abiding by law)?

    A company secretary should perform the various roles mentioned below

• Corporate Laws professional
• Corporate Governance professional
• Corporate Administration professional
• Board and Shareholders Meetings organizer
• Corporate Compliance Management professional
• Stakeholder Relationship professional
• IPO, ADRs / GDRs professional
• Capital Markets, Stock Exchanges & Listing professional
• Drafting Agreement professional
• Mergers & Amalgamations professional
• Insider Trading & Takeovers professional
• Representations professional
• Arbitration & Reconciliation professional
• Direct and Indirect Taxes professional
• Investor Education and Protection professional

It’s not enough now more avenues are ready to open for the company secretary:

• It is also proposed under the direct tax laws to include the company secretary in the definition of accountant which is mentioned under the direct tax law of clause 88 of direct tax code 2013 in which says meaning of accountant as per clause 320(2) a accountant means chartered accountant within the meaning of the chartered accountant act 1949and who holds a valid certificate of practice under section 6(1) and shall include

Company secretary within the meaning of company secretaries’ act, 1980.

• The Institute Of Company Secretaries Of India have a memorandum of understanding with the ACES to establish a Certified Filing Centre (CFC)
• Company Secretary Can Do Concurrent And The Internal Auditor Of The Depository Registered Under The Depositories Act
• It Is Also Proposed That A Company Secretary Will Be Included In The Definition Of The Auditor  In Service Tax Act
• Company secretary will appear before different tribunals like BIFR,AAIFR

, NCLT, NCALT.

So there is a different opportunities are available for the profession company secretary

THE INSTITUE OF COMPANY SECRETATIES OF INDIA HAVE A MEMORENDUM OF UNDERSTANDING WITH DIFFERENT INSTITUTES TO.

1. The Institute of Chartered Secretaries and Administrators (ICSA), Londonfor reciprocal membership for members of both the Institutes on passing of certain papers, exchange of journals/publications etc;
2. National Law School of India University, Bangalorefor undertaking joint-research, holding   of professional development programmes, exchange of faculty, publications and sharing of facilities;

• The National Institute of Small Industry Extension Training (NISIET)for jointly organising training programmes, undertaking research and rendering consultancy services;

1. NALSAR University of Law (National Academy of Legal Studies & Research), Hyderabad aims at holding jointly workshops and educational   programmes for practicing professionals and corporate executives on the theme of topical and professional interest;
2. Bombay Stock Exchange Ltd. for holding training programmes, exchange of resources, co-operation in developing curriculum on academic and continuing education programmes, and exchange of faculty.
3. Symbiosis International Universityto enable members to avail training in soft skills, communication skills, leadership skills and other interactive skills.

• ASSOCHAMfor making collaborative efforts in promoting Corporate Social Responsibility and Corporate Governance.
• Indian Institute of Banking and Finance (IIBF) to offer educational support services to the students enrolled for Diploma in Banking and Finance (DBF), partner to offer certificate course in project finance, design, develop and certify a course in compliance to risk management for the banking sector and to develop, offer and hold seminars, workshops, conferences for mutual benefit and interest.

1. The Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI)for holding workshops, seminars, continuing education and training programmes for practicing professionals and corporate executives on the themes of topical corporate and professional interest; conducting joint research projects, etc.
2. Merchant Chamber of Commerce (MCC), Kolkatafor holding jointly workshops and seminars, continuing education and training programmes for practicing professionals and corporate executives on the themes of topical corporate and professional interest; conducting joint research projects, etc.
3. Bangalore Chamber of Industry & Commerce (BCIC), Bangalorefor holding jointly workshops and seminars, continuing education and training programmes for practicing professionals and corporate executives on the themes; of topical corporate and professional interest; conducting joint  research projects, etc.

• Indira Gandhi National Open University (IGNOU) for offering specialised B.Com Course with Major in Corporate Affairs and Administration and M.Com Course in Business Policy and Corporate Governance for CS students and members, carrying out joint   research,   conducting   short-term   courses, programmes,   seminars/conferences,   workshops   on contemporary subjects of mutual interest, recognizing CS Qualification for the purpose of pursuing Ph.D Course in Commerce, Law and Management, etc.
• Pithampur Audhyogik Sangathan (PAS), Indorefor holding jointly workshops and seminars, continuing education and training   programmes for practicing   professionals and corporate executives on the themes of topical corporate and professional interest; conducting joint research projects, etc.
• Urla Industries Association (UIA), Raipur (Chhattisgarh State)for holding jointly workshops and seminars, continuing education and training programmes   for practicing professionals and corporate executives on the themes of topical corporate and professional interest; conducting joint research projects, etc.

1. The Chartered Institute for Securities & Investment (Erstwhile Securities and Investment Institute (Sll)), London,with a view to provide opportunity to company secretaries to have better access to International Financial Markets.   

• National Stock Exchange of India, Mumbaifor imparting  training to Company Secretaries in Securities markets and areas of Corporate Governance; jointly organisation of Investor Awareness Programmes, Compliance Seminar for Trading members of NSE and compliance officers of the listed Companies, regular exchange of resources of mutual interest.
• The Capital Markets and Corporate Governance Institute (CMCGI)Of the Capital Market Development Authority (CMDA) Maldives- to assist in providing study material and coaching support to participants and conduct of examinations; conduct of practical and management training to professionals; jointly holding seminars , professional development programmes and conferences etc.
• The Institute of Public Enterprises , Hyderabad for holding jointly workshops and seminars, continuing education and training programmes for practicing professionals and corporate executives on the themes of topical corporate and professional interest; exchange of journals, course materials, case studies;  undertaking joint research projects, etc.
• Federation of Karnataka Chamber of Commerce & Industry, Bangalore,for holding jointly workshops and seminars, continuing education and training programmes for practicing professionals and corporate executives on the themes of topical corporate and professional interest;  exchange of journals , undertaking joint research  projects etc. .

1. Central Board of Excise and Customs for setting up ACES Certified Facilitation Centre.

• MCX –SX Stock Exchange Ltd (MCX-SX), Mumbaifor organizing seminars on financial markets, corporate governance and compliance; conducing of research and various kinds of certification programmes on financial markets; organizing short term courses etc.
• Ministry of Corporate Affairs, New Delhi to frame the rules prescribed under the companies Bill, 2009.
  .
  .

8. THE company secretary a restricted to the India only?

NO, the profession company secretaries are not only restricted up to the territorial limits of the country the institute of company secretaries of India comply their responsibility time to time and give a very precious mou with the different nations and  open the ways in the another nation too. There are some MOU which THE INSTITUTE OF COMPANY SECRETARIES OF INDIA MADE

MOU WITH THE ICSA LANDON

A Memorandum of Understanding between the ICSI and ICSA was signed on November 11, 1995 at Jaipur, India which recognized the common interest both the Institutes have in promoting best practice in `Company Secretary ship’ and professional administration and it was agreed to explore positive ways of ensuing a close relationship between them.

OTHER BODIES ALL OVER THE GLOBE OF COMPANY SECRETARY

1. CANADIAN SOCIETY OF CORPORATE SECRETARIES (CANADA)
2. Corporate Secretaries International Association
3. The Society of Corporate Secretaries & Governance Professionals(North America)
4. Chartered Secretaries Canada
5. The Hong Kong Institute of Chartered Secretaries
6. The Institute of Chartered Secretaries and Administrators, UK
7. The Faculty of Secretaries and Administrators, UK
8. Institute of Corporate secretaries of Pakistan
9. Governance Institute of Australia

So the profession of company secretary is not restricted up to one nation it spread all over the globe the only need is to open your feathers and grab the opportunities it only upon the capabilities how much a member is able to grab it .

Sometimes we also here that company secretary profession do not have any scope of working But I hope I well elaborated all the avenues of working of company secretary in India as well in abroad. So this is rightly said by some eminent authors that

“Difficulties mastered are opportunities won”.

So in each and every path of success there is difficulties and the warrior is he who over come such difficulties

“Mrs. SMRITI IRANI (member of parliament ) said in her speech in NATIONAL CONVENTION Of the institute of company secretaries of India the all over the number of company secretaries are near about 75000 in which 50000 are from India “

And the person on whom the responsibilities lies on their shoulder are the person who is responsible enough and the company secretary is a designation on which whole building of the company stands and it is rightly said that

“MAY HIGHER RESPONSIBILITIES WITH HIGHER DEGRAA OF POWER AND WIDE RANGE OF COMFORTS”

And for such a valuable profession members of the company secretary should take a pledge that all the work which they done will be in the ambit of the rules and regulation because they are the regulators of the rules and regulation as well.

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Written By: CS RAVISHANKAR PERIWAL 
                        CS SHEFALI BHARTI

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The Author can be Reached at csraviperiwal@gmail.com and csshefalibharti@gmail.com

NIDHI COMPANY Under Companies Act 2013 & Nidhi Rules 2014

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Meaning of word “NIDHI”

The word Nidhi contains a meaning itself “wealth “.so under companies act 2013 or in 1956 the companies which are incorporated as a Nidhi company shall carry the business of lending and depositing the amount from and to their members

 . 

Definition under Companies Act 2013

Nidhi Company defined in companies’ act 2013 under section 406.

 In this section Nidhi means

Which has been incorporated as Nidhi with the object of cultivating the habit of thrift and saving amongst its members receiving deposits from and lending to its members only for their mutual benefit and which complies such rules as are prescribed by the central government for regulation of such class of companies

(Point to be considered – Nidhi Company can take deposits and give loan to their members only, and have to follow the rules guidelines issued by the central government time to time)

Central government may by notification direct that any provisions of this act shall not apply, or shall apply with such exception, modification and adaptation as may be specified in that notification to any nidhi and nidhi of any class or description as may be specified in notification

(Point to be considered – central govt. may allow exemption or modification on the applicability of the notification on Nidhi companies)

Every notification proposed to be issued shall be laid before the house of parliament while is in session .for a total no of 30 days which may be comprises of one session or in two or more successive sessions any such acceptance and modification in the notification shall be approved by both the houses 

(Point to be considered – the notification shall be approved or modified only if the house of parliament is in session).

Meaning of Nidhi Company under companies’ act 1956

Under section 620A of companies act 1956 means a company which   a central government by a notification in official gazette declare to be a Nidhi or a Mutual Benefit Society as the case may be.

(Point to be consideration – under companies act 1956 nidhi company is considered as a nidhi company only if it comes under the purview of the notification issued by a central government, but under companies act 2013 nidhi company   means a company which formed under sec 406 of companies act 2013 and   with the object to cultivating the habit of thrift and saving the money into their (members)

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Process of formation of Nidhi company

The Requirements of formation of Nidhi Company:

1. Name of the company
2. 3 Directors
3. 7 Members
4. Minimum capital (10,00,000/- INR)
5. Registered office

 Documents required:

 For the directors first need there DSC (digital signature certificate)

For this the application of DSC colored photo graph, pan card and a residence proof is mandatory

 After availing a DSC apply for the Director Identification Numberpursuant to section 153 of companies act and rule 9(1) of the companies’ appointment and qualification of directors

For this DIR -3 form has to be filed and the above mentioned document is required for the application of the Director Identification number too. For all the 3 directors

Application for name approval

• After getting the Din No of all the directors application of Name Approval has to be filed with the registrar of companies in INC-1 pursuant to section 4(4) ofcompanies’ act 2013 and pursuant to rule 8 and 9 of companies’ incorporation rules 2014
• Apply for 6 name according to the order of preference the most suitable name will be approved by the registrar of companies.
• After the approval of the Name, THE MOA (memorandum of articles and the article of association) get drafted according to the rules mentioned in companies’ act 2013 and rules thereunder
• And apply for the registered office under section 12(2) and (4) of the companies act 2013and rules 25 and 27 of the companies incorporation rules 2014 in INC-22

 After compiling all the steps Registrar of Companies will issue the certificate of incorporation in for inc-11 and the company will be registered with MINISTRY OF AFFAIRS.

While incorporating a Nidhi company the Following point should be consider  in mind:

Every Nidhi shall within a period of one year from the commencement of the rules ensure that it has:

• NOT LESS THAN 200 MEMBERS
• NET OWNED FUNDS OF 10,00,000 /-INR OR MORE
• UNECUMBERED DEPOSITS OF NOT LESS THAN 10%OF THE OUTSTANDING DEPOSITS ARE SPECIFIED IN RULE 14:
• RATIO OF NET OWNED FUNDS TO DEPOSITS OF NOT MORE THAN 1:20

Point to be consideration – Within The Incorporation Of One Year From The Date Of Incorporation Of The Nidhi Company It Has To Comply The Above Mentioned Criteria’s If It Is Unable To Comply All Of Such Above Mentioned Conditions Then It May Ask For An Extension From The Central Government But If It Is Not Able To Comply Within Such Period Of Extension It Will Ceases To Be A Nidhi Company .

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Compliances for Nidhi Company

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1. Within 90 days from the close of the first financial year after its incorporation and where applicable , the second financial year  a nidhi company has to file a return of statutory return in a FORM –NDH-1 along with such fees as prescribed in (companies registration offices and fees) rules 2014  duly certified by the company secretary in practice or a chartered accountant in practice or cost accountant in practice
2. If Nidhi Company unable to comply with the condition above mentioned it shall within 30 days from the close of first financial year apply to regional director in form NDH-2 along with the fees specified in companies (registration and fees ) rules 2014  for the extension time and the regional director may consider the application and pass orders within 30 days of receipts of application 
3. A nidhi company covered under rule 2 shall file half yearly return with the registrar in form NDH-3 along with such fees prescribed in companies (registration and office)rules 2014  within 30 days from the conclusion of  each half year duly certified by the company secretary in practice or chartered accountant in practice or cost accountant in practice

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Point for consideration:

NDH-1 is for the annual compliance of return that Nidhi Company fulfill          all of such conditions

NDH -2 is for the extension to the regional director if the company is unable to comply such conditions.

NDH-3 for half yearly compliance which a nidhi company has to file with the registrar of companies

RESTRICTION OR A PROHIBITION ON NIDHI COMPANIES

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1. A Nidhi Company shall not carry any chit fund, hire purchase finance leasing finance insurance or acquisition of securities issued by any Body corporate
2. Nidhi Company is not allowed to issue any kind of preference shares or any debt instruments by any name whatsoever.
3. Nidhi company is prohibited to open any current account with its members
4. Nidhi company is prohibited to do any compromise or arrangement or takeover unless it is passed by a Special Resolution in the General Meeting and also obtained the previous approval from the Regional Director having jurisdiction over such nidhi company
5. Carry on any business other than the business of borrowing or lending in its own name :

Nidhi Company which follows above rules can provide a locker facility to their members on rent and subject to the rental income from such facilities not exceeding 20%of gross income of the nidhi at any point of time during the financial year.

1. Nidhi company is prohibited to accept deposits or lend amount other than its members
2. Pledge any of the assets lodged by its members as security
3. Nidhi company is prohibited to take deposits or lend money to any Body corporate
4. These companies are prohibited to enter into any partnership arrangement in its borrowing or lending activities
5. Nidhi company prohibited to issue any advertisement in any form for soliciting deposits :

Private circulation of the details of fixed deposits schemes among the members of the nidhi carrying the words “ for private circulation of members only “ shall not be considered to be an advertisement for soliciting deposits .

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Exemption Exceptions and Modification Applicable On Nidhi Company

S.no	Sections under companies act 2013	EXEMPTION , MODIFICATION
1	SECTION 20(2)	IN  of nidhi companies the document may be served  Only on members who hold shares of more than 1%of the total paid up capital
2	Section 42 except section 42(1)	private placement
3	Section 47(1) (b)	no company shall exercise voting rights on poll in
4	Section 62	Excess of 5%of total voting rights of equity shareholders issue of further share capital shall not apply on nidhi Companies
5	Section 67(1) (restriction on purchase of Own shares by the company)	company from a member on his ceasing to be a Depositor or borrower and it shall not be considered as Reduction of capital under section 66 of companies act 2013
6	Section 123(5)(declaration of dividend)	shall apply  subject to the modification that any dividend payable in cash may be paid by crediting the same to the account of member if the dividend is not claimed within 30 days from the date of declaration of the dividend
7.	Section 127(punishment for the failure to distribute dividend	subject to the modification that  where the dividend amount is 100 rupees or less it shall sufficient compliance of the section if the dividend declaration is through the local language newspaper of wide circulation and announcement of the said declaration is displayed on the notice board of nidhi for last 3 months
8.	Section 136(1) (right of members to copies                 Of audited financial statement	this section apply with a modification that in the case of members who do not individually  or jointly hold shares of more than 1000 rupees in face value or more than 1% of the total paid up share capital whichever is less it shall be sufficient compliance for the provision of section if an intimation is sent by public notice in newspaper circulated in the district in which the registered office of the nidhi company is situated stating the date time and venue of annual general meeting be inspected at registered office of the company and the financial statement which enclosures are affixed in the board in the notice of the company and is entitled to vote either in person or through proxy
9.	Section 160(right of the persons other the Retiring directors to stand for directorship	Word 100000 is substituted with 10000
10	Section 185(loan to directors)	A company can give a loan to  their directors or their relatives in the capacity as the member of the company is allowed and must be disclosed in the annual return of the company
11	Section 197( overall maximum managerial Remuneration in case of absence or inadequacy of profits	This section with the modification that the remuneration of a directors  who is neither a managing director nor whole time director or manager for performing special services to the nidhi specified  in the article of association may be paid by way of monthly payment in the approval of the company in general meeting  and also to be the provision of section 197 : Provided that no approval of the company in general meeting shall be required where a)      A nidhi does  not have a managing director ,whole time director or a manager b)     The remuneration does not exceed 10% of net profits of nidhi or 1500,000 whichever is lower  to all the directors c)      The remuneration payable under clause (b) is approved by a special resolution passed in this behalf by the nidhi.
12.	Section 403(Fee for filing etc.)	This  section will be applicable  with modification that the filing fees in respect of every return of allotment under sub section (9) of section  42 shall be calculated at the rate of one rupee for every one hundred rupees or parts thereof  on the face value of the shares  included in the return but shall not exceed the amount of normal filing fee payable

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Conclusion

We Can Understand Nidhi Company Is a Company Which Can Be Incorporated Under SECTION 406 of company’s act 2013 with the object of cultivating the habit of thrift, saving a money. Many people have this myth that for the incorporation of Nidhi company, RESERVE BANK OF INDIA approval is necessary but no need to take an approval of RBI for the incorporation of Nidhi Company. 

The Author of This Article can be Reached at csshefalibharti@gmail.com                                                                                                                        

BY
SHEFALI BHARTI
Practicing Company Secretary
Csshefalibharti@gmail.com