Matters Requiring Special Notice:-

• Important Concepts Of Matters Requiring Special Resolution & Special Notice
  
  Csp Final Student
  
  As per Companies Act 1956, there are various issues which require special resolutions, these are as follows:
  
  Matters requiring Special Resolution:-
  
  1. To alter the provisions of the memorandum so as to change the registered office of the company form one state to another subject to confirmation of the Company Law Board or to change the object of the Company (section 17)
  
  2. To change the name of the company with approval of the Central Government (Section 21)
  
  3. To alter the articles of association (Section 31)
  
  4. To change the name of the company by omitting “Limited” or “Private Limited”, the central Govt. by license permitting the company with charitable objects to do so by special resolution (Section 25)
  
  5. Issue of further shares to persons other than existing members (Section 81(1A))
  
  6. Issue of debentures having conversion option [Section 81(3)]
  
  7. To decide that any part of the uncalled share capital shall not be called up except for the purpose of winding up (Section 99)
  
  8. To reduce the share capital subject to the confirmation of the Court (Section 100)
  
  9. To vary the rights f different classes of shareholders. This can be done either by obtaining the consent in writing of the holders of 3/4thsof issued capital of that class or by special resolution of share holders of that class (Section 106)
  
  10. To remove the registered office of t he company outside the local limits of the city, town or village in which it is situated (Section 146)
  
  11. To commence any new business [section 149(2A)]
  
  12. To keep registers and returns in a place other than a place within the city, town or village in which the registered office of the company is situated (Section 163)
  
  13. To pay interest on share capital under certain circumstances (Section 208)
  
  14. To appoint auditor or a company in which not less than 25% of the subscribed capital held by a public financial institution or a govt. company or by central Govt. or by a State Govt. etc. (Section 224A)
  
  15. To enable the Central Govt. to appoint inspectors to investigate the affairs of a company (Section 237)
  
  16. To appoint sole selling agents in specified cases [Section 294AA(3)]
  
  17. To determine the remuneration payable to any director including managing director, if articles allow (Section 309)
  
  18. To authorize a director, a relative or partner of such director, director of a private company of which he is a director, or manager to hold office of profit in the company (Section 314)
  
  19. To alter the memorandum for rendering the liability of its directors or manager unlimited (Section 323)
  
  20. To authorise inter-corporate loans/giving of guarantee/security or inter corporate investments exceeding the prescribed limits (Section 372A)
  
  21. To obtain an order from the Court for the winding up of a company (Section 433)
  
  22. To wind up a company voluntarily [Section 484(1)(b)]
  
  23. To confer general authority on the liquidator or an authority in respect of any particular arrangement with reference to a proposed sale of property of a company in voluntary liquidation (Section 494)
  
  24. To enable a liquidator in members voluntary winding up to exercise certain powers (Section 512)
  
  25. To render binding on company and creditors any arrangement entered into between a company about to be, or in the course of being, wound up and its creditors, if it is acceded to by the three-fourths in number and value of the creditors (Section 517)
  
  26. To authorise liquidator to exercise certain specified powers in voluntary winding up (Section 546)
  
  27. To direct the manner of disposing of a company’s books and papers when the affairs of the company have to be completely wound up in a voluntary winding up (Section 550)
  
  28. To render possible the application of Table A of Schedule I to a company registered under Part IX of the Act to the extent as it is adopted by the special resolution (Section 578)
  
  29. To alter the form and constitution of the company by substituting a memorandum and articles for a deed of settlement in the case of a company registered in pursuance of Part IX of the Act (Section 578)
  
  Matters Requiring Special Notice:-
  
  1. Resolution for appointment of an auditors other than retiring auditor at an annual general meeting [Section 225(1)]
  
  2. Resolution at an annual general meeting to provide that a retiring auditor shall not be re-appointed [Section 225(1)]
  
  3. Resolution to remove a director before the expiry of his period of office (Section 284)
  
  4. Where the articles of a company provide for the giving of a special notice for a resolution in respect of any specified matter of matters

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Brief On Customs Valuation in India

Introduction

India is presently following the provisions of the WTO Agreement on Customs Valuation (ACV) for determination of value on imported goods where Customs duty is levied with reference to value (ad-valorem rates). However, this does not apply to cases where tariff values have been fixed (see legal provisions below).

2.         India is a founding Member of the GATT (presently WTO) and was actively involved in the GATT negotiations (Tokyo Round, 1973-79), which developed the Agreement on Customs Valuation (ACV). India implemented the ACV in August 1988.Legal provisions

3.         Section 2(41) of the Customs Act, 1962 defines ‘Value’ in relation to any goods to mean the value thereof determined in accordance with the provisions of sub-section (1) of Section 14 thereof.

4.         Sub-section (1) of Section 14, in turn, states that when a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be: -“The price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale”.

5.                  The provisions of sub-section (1) of Section 14 apply for the valuation of both imported goods and export goods. However, a common valuation law at international level applies only to imported goods and its basic principles are laid down in Article VII of General Agreement on Tariffs and Trade (GATT), 1948, currently known as GATT 1994 (administered by the World Trade organization, WTO). The Indian valuation law under Section 14(1) of the Indian Customs Act is based on the principles of Article VII of the GATT. This is, however, a deemed value allowing uplifting (loading) of declared value in a given case even when it represents the actual price of transaction. The Agreement on Customs Valuation (ACV), which came into force on 1st January 1981, lays down well defined methods of valuation to be strictly followed so as to ensure uniformity and certainty in valuation approach and to avoid arbitrariness.

6.                  Sub-section 1 A of the Indian Customs Act 1962 requires that the value of imported goods shall be determined under the Rule made in this behalf. The Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 lays down the methods of valuation based on the ACV. Transaction value, which is the price paid or payable for the imported goods, is the primary basis for valuation. If the transaction value method is not applicable in a specific case, the other methods of valuation prescribed in the Rules (based on ACV) have to be followed in a hierarchical order, subject to certain exceptions

7.                  Under the Customs Act, 1962, the Central Government has also been empowered to fix Tariff Values (sub-section (2) of Section 14) for any product. If Tariff Value is fixed for any goods, then ad-valorem duties are to be calculated with reference to such Tariff Value. The tariff values may be fixed for any class of imported or export goods having regard to the trend of value of such or like goods and the same has to be notified in the official gazette. This measure is resorted to only in rare cases where the price fluctuations in the market are rampant having significant economic impact.  Currently tariff values have been fixed in respect of imported Crude Palm Oil, RBD Palm Oil, Crude Palmolein, RBD Palmolein, Crude Soyabean Oil and Brass Scrap.

8.                  As far as export goods are concerned, provisions of sub-section (1) of Section 14 provide a complete code of valuation by itself and there are no separate valuation rules for that purpose.Methods of Valuation

9.                   The Customs Valuation Rules, 1988, lays down six methods for the valuation of imported goods. The primary basis for valuation is the “Transaction Value”. However, it is subject to adjustment by certain Valuation Factors (see Rule 9). There are also certain conditions for the transaction value method to be applicable (see sub-rule 2 of Rule 4). In certain situations, the Customs authorities could reject the declared value (transaction value method), if the truth or accuracy of the declaration is reasonably suspected (see Rule 10 A). In all such cases where the transaction value method is not applied, goods shall be valued by applying the subsequent methods in a strictly hierarchical order (see Rule 3).

10.              In order to enable the Customs to determine the value by application of the most appropriate method, the importer is required to truthfully declare the full particulars concerning the goods under import.  These include full description and specifications of the goods, basis of valuation applied, relationship with the supplier, conditions and restrictions if any attached with the sale, elements of cost not included in the invoice price, royalty and license fee payable in relation to the imported goods, etc.  These details are to be declared in a special Valuation Declaration Format designed for the purpose. This is in addition to the entry declaration  (Bill of Entry). In respect of EDI processing, the valuation declaration is integrated as a part of the Electronic Declaration. The importer should also provide copies of invoice, purchase contract and other supporting documents.Transaction Value method:

11.        Rule 3(i) of the Customs Valuation Rules, 1988 states that the value of imported goods shall be the transaction value. Rule 4(i) thereof defines “transaction value” as the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9.

12.        The price actually paid or payable should be adjusted to include all the costs and services (dutiable valuation factors) specified in sub-Rule 9 (1) (see below) if not already included in the invoice value. In short, the transaction value should be determined by suitably adjusting the declared value so as to include all payments made as a condition of sale of the imported goods by the buyer to the seller or by the buyer to a third party to satisfy an obligation of the seller. Since the assessment is on CIF basis, the invoice value should be suitably adjusted to include the freight, insurance and handling charges as applicable under sub-Rule 9 (2).Valuation factors:

13.        Valuation Factors (see Rule 9) are the various elements (dutiable factors), which should be added while determining the Customs value. The factors should be added to the extent they are not already included in the price actually paid or payable (invoice value). These dutiable factors are:Commissions and brokerage, except buying commissions;The cost of containers which are treated as being one for Customs purposes with the goods in question;The cost of packing whether for labor or materials;The value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or payable:-material, components, parts and similar items incorporated in the imported goods;tools, dies, moulds and similar items used in the production of the imported goods;materials consumed in the imported goods;engineering, developing, artwork, design work, and plans and sketches undertaken elsewhere than in the importing country and necessary for the production of imported goods;Royalties and license fees related to goods being valued that the buyer must pay either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;The value of any part of the proceeds of any subsequent resale, disposal or use of the goods that accrues directly or indirectly to the seller;Advance payments;Freight charges up to the place of importation;Loading, unloading and handling charges associated with transporting the goods;Insurance.Non-dutiable Factors:

14.        The following charges are not to be added for the purposes of determining the Customs value provided they are clearly distinguishable and separately declared in the commercial invoice:-Buying commission:Interest charges for deferred payment;Post-importation charges (e.g. inland transportation charges, installation or erection charges, etc.);Duties and taxes payable in India.Transaction value method not applicable to certain cases

15.               The Transaction value method cannot be applied in cases where the transactions do not comply with the definition under Rule 4 (1).  Thus, if there is no sale for export to India in respect of any importation, such as gifts and consignment imports for subsequent sale, there is no transaction value and hence the method is not applicable.

16.        The conditions referred to under Sub-Rule 4(2) are also required to be satisfied for applying the transaction value method. These are:The sale is in the ordinary course of trade under fully competitive conditions;The sale does not involve any abnormal discount or reduction from the ordinary competitive price;The sale does not involve special discounts limited to exclusive agents;Objective and quantifiable data exist with regard to the adjustments to be made under Rule 9;There are no restrictions concerning the disposition or use of the goods by the buyer (subject to certain exceptions);The sale or price is not subject to some condition or consideration;No part of the proceeds of the goods (by resale, disposal or use) after importation accrues to the seller;Buyer and seller are not related, and if related, the relationship should not have influenced the price.

17.            Transaction value method also does not apply to situations where valuation fraud (under valuation, wrong description, misdeclaration of quantity, grade, specifications, etc) are shown to have taken place. These are cases where Customs do have adequate evidence to establish the fraud.  In cases of suspected fraud, Rule 10 A could be applied to reject the declared value and the transaction value method (see below).Related Party transactions

18.        The transaction value method cannot be applied in cases where the buyer and seller are related and the relationship has influenced the price.  The scope of relationship is defined in Sub-Rule 2 (2) of the Customs Valuation Rules.  In such cases the burden of proof shifts to the importer, who should satisfy the Customs that the declared price closely approximates to the test values prescribed in sub-Rule 4(4). If the importer fails to discharge this responsibility, the declared value could be rejected and valuation done under any of the subsequent methods applied in hierarchical order.Other valuation methods:

19.               Transaction value method cannot be applied for determination of Customs value in several situations. These include cases where there is no sale for export, restrictions under Sub-Rule 4 (2) apply, relationship between buyer and seller has influenced, cases where valuation fraud has taken place and cases of suspected valuation fraud (see rule 10 A). In all such cases, the valuation should be under the subsequent methods. These methods are to be applied in sequential order, unless otherwise permitted under the valuation Rules. There are five such valuation methods:Transaction Value of Identical goods (Rule 5). This is based on the previously determined transaction value of identical goods, as defined in the Valuation Rules (see Sub-Rule 2.1), imported at or about the same time;Transaction Value of Similar goods (Rule 6). This is again based on the transaction value of similar goods (defined in Su-Rule 2.1) imported at or about the same time;Deductive Value Method (Rule 7). This is calculated based on the selling price of imported goods or identical/similar goods in India after deducting selling expenses, margin of profit, duties and taxes;Computed Value Method (Rule 7 A). The computed value is arrived at from the cost of materials used in production of imported goods, cost of fabrication or other processing charges at the country of production, profit and general expenses, and other dutiable factors as may be applicable under Rule 9;Fallback Method (Rule 8). These include a flexible application of previous valuation methods in a manner consistent with the provisions of Section 14(1) of the Customs Act.Rule 10 A

20.               Rule 10 A provides a unique procedure for rejection of transaction value method in cases of suspected valuation fraud. The Authority for this Rule is not from the Customs valuation Agreement itself, but from a separate decision by the WTO Valuation Committee (Decision 6.1). This applies to cases where there is reason to doubt the truth or accuracy of the value declared by the importer, but there is no evidence with the Customs to establish fraud. It was one of the results of Uruguay Round negotiations (which led to the establishment of World Trade Organization (WTO) in 1994) based on an Indian proposal. The Indian proposal was to provide adequate flexibility in the Valuation Agreement to deal with cases of suspected fraud, particularly those where the declared value was far below a series of contemporaneous transactions. In such cases the Customs could ask the importer to produce additional information and evidence to justify the declared value. If the information/ documents produced are not adequate to dispel the doubt regarding the truth or accuracy of the declaration or if the importer fails to produce any supporting evidence, the Customs could reject the declared value. An appealable order should be issued in such cases after giving the importer a reasonable opportunity to be heard. The goods should then be valued by applying any of the subsequent methods as laid down in the Valuation Rules. In short, Rule 10 A provides only an authority to reject the declared value and is not a method of valuation by itself.

21.               The National Import data Base (NIDB) provides reliable tool for comparison of declared values with contemporaneous import prices. It is an electronic database previous importations which have been analyzed by a special software (see brief under NIDB). The NIDB is made available on a weekly basis to all Customs stations. It is also made available on the Directorate of Valuation Web site (www.dov.gov.in).Export value information from exporting country

22.               It is also possible to seek information on export value declared at the exporting country in cases; where under valuation on import is reasonably suspected. The export value information could be used to establish valuation fraud at the importing country. The mechanism for Exchange of Customs valuation information among Member countries has been made possible paragraph 8.3 of the Doha WTO Ministerial Decision (see details under WTO decisions).

This Article has been shared by Ketan Sardana. He can be reached at ketanhsardana@gmail.com

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CREATION, MODIFICATION AND SATISFACTION OF CHARGE UNDER THE COMPANIES ACT

All the companies borrow money for the purpose of its business. When they borrow money the lender normally insists for securities. The lender may be a Bank or a Company registered under the Companies Act 1956 or a Foreign Company or a Body Corporate.

Whenever any security is given for the purpose of obtaining loan a charge is created in favour of the lender. The loan may be borrowed by one charge holder or it may be from two charge holders or more as in case of consortium. Whenever any loan is taken on consortium, the Banks normally insists creation of charge separately in respect of all charge holders.

In accordance to Section 125 when a charge in respect of security on the company’s property or undertaking if not created is void against the liquidator. In view of this the charge holder is to ensure registration of charge of the property provided as security for the loan given. In case if it is not done the charge holder looses his right to claim the sale proceeds of the property in case of default by the borrower. In other words, the charge holder who has given the money later but his charge is registered first will have priority over the other charge holders in case of settlement of loan by sale of property.

CHARGES TO BE REGISTERED UNDER SECTION 125(4) OF COMPANIES ACT 1956:

As per section 125(4) of the Companies Act 1956, the following charges are required to be filed with the Registrar of Companies (ROC).

1.       a charge for the purpose of securing any issue of debentures;

2.       a charge on uncalled share capital of the company;

3.       a charge on any immovable property, wherever situate, or any interest therein;

4.       a charge on any book debts of the company;

5.       a charge, not being a pledge, on any movable property of the company

6.       a floating charge on the undertaking or any property of the company including stock in trade

7.       a charge on calls made but not paid;

8.       a charge on a ship or any share in a ship;

9.       a charge on goodwill, on a patent or a license under a patent, on a trade mark, or on a copyright or a license under a copyright.

MODIFICATION OF CHARGE:

A modification of the loan amounts to charge. And particulars of modification are required to be filed with Registrar of Companies (ROC) in Form 8. Once a new charge is registered charge id will be created. The same can be viewed through index of charges option in the MCA website.

The Form 8 has to be filed within 30 days from the date of creation of charge or modification of charge. Another 30 days is given as a grace period for the filing of Form 8 with additional fees. In other words, form 8 has to be filed within 60 days from the date of creation of Charge or modification of charge failing which application for Condonation of delay has to be made to the concerned Regional Director, department of company affairs.

FORM 8 AND ROC FILING:

The steps for filing form 8 is given below

1.       To fill up the CIN no or Foreign Company Registration no (FCRN) and click prefill option

2.       To select whether creation of charge or modification of charge.

3.       In case of modification, fill up the charge id

4.       To fill up whether the charge is in favour of Asset Reconstruction Company or whether the charge is assigned based on an assigned agreement.

5.       To click the type of charge

a. Uncalled Share Capital                             g. Floating Charge

b. Immovable property                                 h. Calls made but not paid

c. Any interest in immovable property         i. Ship

d. Book debts                                                j. Good will

e. Movable property not being a pledge       k. Patent, license under patent

f. Trademark                                                 l. Copyright or license under copyright

                                                                      m. Others

6.       If the type of charge is others, the nature of charge has to be mentioned

7.       Whether Consortium of charge is involved

8.       Whether joint charge is created

In case of item no. 7 the particulars of other charge holder and in case of item no. 8 the particulars of joint charge holder/s should be given by way of attachment in Form 8

9.       The charge holder’s detail has to be given. The charge holders name can be selected from the prescribed list. If the name of the charge holder is not given in the prescribed list ‘others’ can be selected.

10.   If ‘others’ is selected enter CIN no if the charge holder is an Indian Company and click prefill button. The name, register offices address and email id of the charge holder will be prefilled by the system. If the charge holder is not an Indian Company the name, address and the email id of the charge holder can be typed and the CIN no is not mandatory.

11.   The charge creation is based on the instruments. The nature of instrument like loan agreement, deed of hypothecation, deed of equitable mortgage, promissory note are to be mentioned

12.   Date of instrument creation or modification of charge has to be mentioned

13.   The details of amount secured have to be given in figures. It will be automatically prefilled in words. In case the amount secured is in foreign currency enter the rupee equivalent and the details of the foreign currency.

14.   The rate of interest, terms of repayment, margin, extent and operation of charge has to be mentioned.

15.   In case of acquisition of property is subject to charge, the date of acquisition, amount of charge, nature of agreement and particulars of property charged are to be given.

16.    Short particulars of assets or property charged including complete address and the location of the property.

17.   Whether any of the property or interest therein under reference is not registered in the name of the company. If yes is selected, in whose name it is registered to be mentioned.

18.   Date of last modification prior to present modification to be mentioned

19.   Particulars of present modification to be mentioned. Whatever particulars are given the same will be reflected in the certificate of the charge given by the registrar of companies (ROC).

20.   Attachments to form 8 are

a. Instruments of creation or modification of charge,

b. Particulars of all joint charge holders or Consortium holders,

c. Optional attachments if any

SATISFACTION OF CHARGE:

In accordance with section 138 of Companies Act 1956, the company shall file particulars regarding satisfaction of charge in Form 17. For this purpose a letter has to be obtained from the bank stating that the loan is satisfied and the letter will be attached as evidence of satisfaction.

UPLOADING OF FORM 8 AND FORM 17:

1. Form 8 or Form 17 has to be digitally signed by the director of the Company, by the charge holder and the practicing professional like, Practicing Company Secretary or Practicing Chartered Accountant or Practicing Cost Accountant.

2. The form 8 or Form 17 filing is under Straight through Process method. Therefore one has to be very careful before uploading the form as Form 8 filed once cannot be rectified easily and it may require another form 8 for modification.

3. Once the form is approved the registration of charge certificate will be generated and available and the approval email will go to the charge holder’s, Company’s and practicing profession’s email id.

4. The roll check for the banker’s digital signature is also mandatory. Some times while uploading the remarks will come that the banker’s digital signature is revoked. In that case it is to be ensure that the banker’s digital signature is roll checked or the uploading may be tried after some time as at times the website may not be working.

OTHER POINTS RELATING TO CHARGES:

1. In case of pledge Form 8 is not required to be filed. Fore example Car loan from bank. However, if the company is availing car loan from a bank, the bank may be interested to file Form 8 in view of the loan amount. This can be done at the instance of the company or of any interested person by filing Form 8 with prescribed fees.

2. In case of any security is given by the public limited company to a private limited company in which a director of a public limited company is a director or a member in a private limited company sec. 295 of the companies act is attracted. Hence, care should be taken not to give security by a limited company to a private limited company.

3. Whenever loan is granted and agreements are entered the bank or lender is interested to file Form 8 even without the company’s knowledge also the bank may file form 8 after taking the digital signature of the director. In case of satisfaction of loan the bank is least bothered to file Form 17 and it is only the company’s duty to follow up and file Form 17.

4. In many cases there are number of redundant charges are appearing on the index of charges of the company. The company is required to obtain satisfaction letter from the bank and file Form 17 and remove the unnecessary charges from the MCA website.

5. A company wants to exist under Section 560 of the Companies Act, has to ensure that no charge is pending in the index of charges of MCA website.

6. The form 8 and Form 17 has to be signed by the Director, Company Secretary or Managing Director or the Manager of the Company or authorised representative in case of foreign company.

7. In case any charge is created or modified in favour of chargeholder by issue of debentures then Form 10 has to be filed with Registrar of Companies (ROC) in accordance with Section 125(4)(a) of the Companies Act 1956. In case repayment of loan and satisfaction of charges Form 17 has to be filed with ROC.

8. In case of paripasu charge, Form 8 has to be filed in respect of all the chargeholders. 

9. In case of the Charge is created outside India, comprising solely property situated outside India, Form 8 shall be filed within 30 days from the date of receipt of the instrument creating or evidencing the charge by post.

10. When the charge is created in India, but comprises property situated outside India, the instrument creating the charge verified in the prescribed manner has to be filed with ROC.

11. The bank or chargeholder normally requires search report to find out what are the charges the company has created. The search report has to be prepared based on Charge ID and forms relating to charge filed which is available in MCA website. The registered charge certificates are also available in the MCA website. But, in certain circumstances the Charge ID in MCA website may not contain all the charges. Hence, wherever the search report is relating to charges prior to the year 2006 then it is advisable to make physical inspection of documents at ROC and give the search report.

LATE FILING OF FORM 8, FORM 10 AND FORM 17 AND CONDONATION OF DELAY:

1. If there is a delay in filing Form 8 or Form 10 and Form 17 even if it is one day or one year a petition for Condonation of delay has to be filed with concerned Regional Director, Ministry of Corporate affairs. The due dates for filing the above forms are as follows:

a. Form 8 for creation or modification of charge - within 30 days from the date of creation or modification of charge. Another 30 days is given as a grace period for the filing of Form 8 with additional fees.

b. Form 10 for creation or modification of charge of issue of debentures - within 30 days from the date of creation or modification of charge. Another 30 days is given as a grace period for the filing of Form 10 with additional fees.

c. Form 17 for satisfaction of charge – within 30 days from the date of satisfaction of loan.

2. In case of delayed filing beyond the due date, 60 days from the date of creation of charge or 30 days from the date of satisfaction of charge the forms can be filed with one time payment of fees. However, a remark will appear in the challan that a delay of filing is of so many days and condonation of delay is required. 

 3. For condonation of delay petition has to be prepared containing the reasons for the delay and Form 61 has to be filed with ROC prescribed filing fees (Rs. 1000)

4. Form 24AAA has to be filed with Regional Director (RD) containing the petition and affidavits with the filing fees (Rs. 1000)

5. After the petitions are filed with RD the order will be issued condoning the delay and in the order the amount of fees to be paid will also be mentioned (as may be decided by RD)

6. The order issued by RD has to be filed with ROC in Form 21 with prescribed filing fees.

7. Once the form 21 is filed the ROC will approve Form 8 or Form 10 or Form 17.

To conclude delay in filing of particulars of charges will attract cumbersome procedure for filing petition which will further delay the process; it is advisable to file the ROC forms in time.

This Article has been shared by Ketan Sardana. He can be reached at ketanhsardana@gmail.com

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Winding up of Company

Unregistered Companies : (583)

In simple words, an unregistered company, is a company which is not registered or covered under provisions of companies Act. 1956 ( 582)

• An unregistered company, cannot be wound up voluntarily, or, subject to super vision of court.
• However, the circumstances, in which unregistered company may be wound up, are as follows :
1. If the company, is dissolved, or has ceased to carry on business, or is carrying on business only for the purposes of winding up, it's affairs,
2. If the company is unable to pay it's debt
3. If the court is of opinion, that it is just and equitable, that the company, should be wound up.

A creditor, contributory, or company itself by filing a petition, or any person authorized by central government may institute winding up proceedings.

In respect to other aspects, the same provisions and procedure shall follow, as in winding up of registered company.

A foreign company, carrying on business in India, which has been dissolved , may be wound up, as unregistered company.

This Article has been shared by Ketan Sardana. He can be reached at ketanhsardana@gmail.com

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What is a PPF account?

What is a PPF account?

Public Provident Fund (PPF) is the scheme floated under the PPF Act 1968 by central government. PPF is one of the safest investment product backed by Government of India and also gives tax benefit under section 80(c) of the Income tax act.

Features of Public Provident Fund

a. PPF account can be opened with minimum Rs. 100 in a post office, any SBI branch and other authorized offices like ICICI bank and Union bank of India. You can now open an online ppf account with ICICI.

b. Minimum investment in a financial year is Rs. 500 and maximum is Rs. 1,00,000. This investment up to 1,00,000 is eligible for rebate under section 80 C of the IT Act. Deposit in PPF account can be made in either one go or in installments. But you can not deposit more than 12 times in a year.

c. If you forget to contribute the minimum amount in any year then the account will be deactivated. To activate you need to pay Rs.50 as penalty for each inactive year also you need to pay Rs.500 for each inactive year’s contribution.

d. Maximum tenure for PPF account is 15 years. Post 15 years you can extend your account in block of 5 years.

e. Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011. Loans could be taken from the third year onwards till the sixth year. Up to a maximum of 25 per cent of the balance at the end of the 2nd immediately preceding year would be allowed as loan. Such withdrawals are to be repaid within 24 months.

f. Withdrawal permitted from 7th financial year. You can withdraw only once a year and such amount should not exceed 50% of the balance at the end of 4th year or 50% at the end of immediately preceding year, whichever is lower. Premature closure of PPF account is possible in case of death of the individual.

g. Interest is paid on lowest amount between 5th and 30th of each month, so you should try to deposit in PPF between these 1st and 5th of the month. Interest is compounded annually and credited on March 31 each year.

PPF Interest Rate

Reserve Bank of India from time to time specifies the rate applicable to the PPF account. Rate of interest w.e.f. 01.04.2013 is 8.7% p.a. You can check the latest notifications by RBI about changes in PPF interest rates here.

Comparison between historical PPF interest rate and Fixed Deposit interest rates:

		Bank Deposit (avg.)
Year/Rate	PPF	Before Tax	After Tax
2000	12.0%	10.0%	7.0%
2001	11.0%	9.0%	6.3%
2002	9.5%	8.0%	5.6%
2003	9.0%	7.0%	4.9%
2011	8.0%	8.8%	6.1%
2012	8.6%	9.0%	6.3%
2013	8.7%	9.0%	6.3%

It is clearly evident that PPF account gives considerably higher return than bank deposit rates

When should you open a PPF account?

a. You should open a PPF account as early as possible. Even when you are a student, you should open a PPF account with min. Rs. 500 deposit. This is helpful as you can see that withdrawal is allowed only 7th year onwards and if you open an account early, you will be able to pass the block period in initial years only.

b. You should also consider your future cash requirement before blocking large sums in PPF account as withdrawals have restrictions.

How to open PPF Account

a. To open PPF account, first you need to open a saving bank account in the designated branch of SBI or other approved banks.

b. Following documents are required to open PPF Account:

i. Account opening form duly filled (this can be taken from the designated bank branch)

ii. ID proof – PAN Card, Passport, Driving license (as per bank KYC norms)

iii. Address proof – utility bills

iv. Two recent photographs

v. All documents should be self attested

c. It is preferable to open a PPF account with a bank then post office as with banks you can deposit money in your PPF account online. This is really helpful if you have relocated from the city of your home branch.

How to open PPF Account Online?

a. First condition is same in this case as well. You will need to open a saving banks account.

b. Then you need to login to your saving bank account online panel and apply from there. Below is a online application form for ICICI bank:

This article has been shared by Ketan Sardana.

Tags: PPF, Public Provident Fund, Income Tax,

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