Understanding MCA Circulars March 2011

A note on the circulars issued in March, 2011 by MCA

S.No	Reference	Title	Brief Contents of Circular
1	General Circular - dated 09.03.2011	Payment of MCA fees –electronic mode-regarding	a.       Payment confirmation is found to be a major bottleneck in delivery of services in respect of offline payment made by physical challans. b.      Delay in confirmation of payments by physical challans, as banks have been given a reporting time of ‘T’+3 days c.       This leads to delay in creation of work item for disposal of an application/e-form, leading to inconvenience of stakeholders. d.      If the fees is paid online, the work item is created faster and thereby speedy approvals by banks as banks are following’ T’+1 for reporting online payments.
	Decision taken		a.       To accept payments of value upto Rs.50,000, for MCA 21 services ,only in electronic mode w.e.f 27th March, 2011. b.      For the payments of value above Rs. 50,000, stakeholders would have the option to either make the payment in electronic mode, or paper challan. However such payments would also be made in electronic mode w.e.f .1st October’2011.
2	General Circular No:6/2011 - dated 08.03.2011	Process of incorporation of Companies (Form-1) and establishment of principal place of business in India by Foreign Companies (Form-44) – Procedure simplified.	REGISTRATION OF FORM-1 AND FORM-44 Below mentioned procedure has been recommended to speed up and simplify the process of incorporation of Companies and establishment of principal place of business in india by foreign companies: 1.      Only Form-1 shall be approved by the RoC Office. Form 18 and 32 shall be processed by the system online. 2.      There shall be one more category, i.e., Incorporation Forms ( Form 1A, Form 37, 39, 44 and 68) which will have the highest priority for approval. 3.      Average time taken for incorporation of company reduced to one (1) day only
3	General Circular No:4/2011 - dated 04.03.2011	Payment of Commission to Non-Whole Time Directors of the Company under Section 309(4)(b) of the Companies Act, 1956	Companies are making applications to the Central Government for payment of remuneration in the form of commission to their Non whole Time Director(s) even when the total commission to be paid to all the Non Whole Time Director(s) taken together falls within the limit of ; a.       1% of net profit of the company, if the company has WTD/MD b.      3% of net profit of the company, in any other case under Section 198 of the Act in addition to sitting fees.
	Decision taken		A company shall not require CG Approval for making payment of remuneration by way of commission to its Non WTD in addition to sitting fees if the total commission to be paid to all Non WTD does not exceed the limits of 1% or 3% mentioned above.
4	General Circular No:5/2011 - dated 04.03.2011	Simplification of DIN rules	Re-examination of the process of allotment of Directors Identification Number (DIN) to be obtained u/s 266B of the companies Act, 1956 In order to speed up and simplify the process to obtain a DIN, the below mentioned procedure have been recommended: 1.      Application for DIN will be made on eForm ; No physical submission of documents shall be accepted and for this purpose Scanned documents along with verification by the applicant will be attached with the eForm. Only online fee payment will be allowed i.e. No challan payment 2.      The application can also be submitted online by the applicant himself using his DSC. 3.      DIN 1 eForm can be digitally signed by the professional who shall also confirm that he has verified the particulars of the Applicant given in the application. 4.      Where the DIN 1 is verified by the professional, the DIN will be approved by the system immediately online. 5.      In other cases the DIN cell will examine the application and same shall be disposed of within one or two days. 6.      Companies (Directors Identification Number) Rules, 2006 are being amended on the above lines. 7.      Penal action against the applicant and professional certifying the DIN application in case of false information / certification as per provisions of section 628 of the Act will be taken in addition to action for professional misconduct and revocation of DIN, allotted on false information 8.      The above procedure is expected to enable allotment of DIN on the same day. 9.      The above procedure applies to filing of DIN 4 intimating changes in particulars of Directors.