Ministry of Corporate Affairs latest Notification amend rule 8A and rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2O14

Ministry of Corporate Affairs latest Notification dated 03rd January 2019

In exercise of the powers conferred by sub-section (1) of section 203 of the companies Act, 2Ol3 read with section 469 of the said Act, the central Government hereby makes the following rules further to amend the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2O14

Sec 203 of Companies Act 2013

Every company belonging to such class or classes of companies as may be prescribed in *Rule 8 and **8A shall have the following whole-time key managerial personnel,—

(i) Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;

(ii) company secretary; and

(iii) Chief Financial Officer :

Provided that an individual shall not be appointed or reappointed as the chairperson of the company, in pursuance of the articles of the company, as well as the managing director or Chief Executive Officer of the company at the same time after the date of commencement of this Act unless,—

(a) the articles of such a company provide otherwise; or

(b) the company does not carry multiple businesses:

*Rule 8

Every listed company and every other public company having a paid-up share capital of ten crore rupees or more shall have whole-time key managerial personnel.

**Rule 8A

A company other than a company covered under rule 8 which has a paid up share capital of five crore rupees or more shall have a whole-time company secretary

👉🏻 MCA amends the Rule 8A and provides that every private company which has a paid up share capital of ten crore rupees or more shall have a whole -time company secretary.

Sec 204 of Companies Act 2013

(1) Every listed company and a company belonging to other class of companies as prescribed in  ***Rule 9 shall 

annex with its Board’s report made in terms of sub-section (3) of section 134, a secretarial audit report, given by a company secretary in practice, in such form as may be prescribed in ***Rule 9.

(2) It shall be the duty of the company to give all assistance and facilities to the company secretary in practice, for auditing the secretarial and related records of the company.

(3) The Board of Directors, in their report made in terms of sub-section (3) of section 134, shall explain in full any qualification or observation or other remarks made by the company secretary in practice in his report under sub-section (1).

(4) If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

***Rule 9

(1) For the purposes of sub-section (1) of section 204, the other class of companies shall be as under-

(a) Every public company having a paid-up share capital of fifty crore rupees or more;

or

(b) Every public company having a turnover of two hundred fifty crore rupees or more;

👉🏻 Further, the MCA has also amended the Rule 9 to extent the scope of Secretarial Audit Report and added a clause (c) that every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more. 

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