TRAINING REPORT ON

CORPORATE EXISTING

Submitted to

GAUHATI UNIVERSITY, GUWAHATI

Submitted by Name: ANAND CHOUDHARY Regn. No. Roll No.

INTERNATIONAL INSTITUTION OF MANAGEMENT (ELC CODE: )

F 1/5, OKHLA PHASE-1, NEW DELHI 110020

STUDENTS DECLARATION

I hereby declare that the Training Report conducted at SMART BRAIN, NEW DELHI

Under the guidance of (Mrs. Vinita Sharma)

Submitted in Partial fulfillment of the requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION (Industry Integrated)

TO

GAUAHATI UNIVERSITY, GUWAHATI

Is my original work and the same has not been submitted for the award of any other Degree/diploma/fellowship or other similar titles or prizes.

Place: Delhi Date: 11th June 2011

Anand Choudhary

CERTIFICATE This is to certify that Anand Choudhary, a student of the Gauhati university, Guwahati as prepared his Training Report entitled Registration of Company at SMART BRAIN., under my guidance. He has fulfilled all requirements leading to award of the degree of MBA (industry integrated). This report is the record of bonafide training undertaken by him and no part of it has been submitted to any other University or Educational institution for award of any other degree or similar titles or prizes.

I wish him all success in life.

Mrs. Vinita Sharma

INTRODUCTION OF MINISTRY OF CORPORATE AFFAIRS

The Ministry is primarily concerned with administration of the Companies Act, 1956, other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law. The Ministry is also responsible for administering the Competition Act, 2002 which will eventually replace the Monopolies and Restrictive Trade Practices Act, 1969 under which the Monopolies and Restrictive Trade Practices Commission (MRTPC) is functioning. Besides, it exercises supervision over the three professional bodies, namely, Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and the Institute of Cost and Works Accountants of India (ICWAI) which are constituted under three separate Acts of the Parliament for proper and orderly growth of the professions concerned. The Ministry also has the responsibility of carrying out the functions of the Central Government relating to administration of Partnership Act, 1932, the Companies (Donations to National Funds) Act, 1951 and Societies Registration Act, 1980

INDUSTRY PROFILE A. Origin And Development Of The Industry: In order to save trees and environment by cutting down the consumption of costly paper habits, the Ministry of Corporate Affairs has taken a Green Initiative in the Corporate Governance by allowing paperless compliances by the companies under the provisions of the Companies Act, 1956. Giving details of the initiatives to the media persons here today Shri Avinash Kumar Shrivastav, Joint Secretary in the Ministry of Corporate Affairs expressed the hope that these initiatives will save the time as well as the environment for a better future. Some of the important initiatives are as under: (i) Allowing service of Documents including Balance Sheets and Auditors report etc through e-mail addresses: In order to reduce cost of posting and speedy delivery of documents, service of documents through electronic mode has been permitted under section 53 of the Companies Act, 1956 in place of service of document under certificate of posting. Similarly, to reduce the consumption of papers and speedy secure delivery, service of copies of Balance Sheets and Auditors Report etc., to the members of the company as required under section 219 of the Companies Act, 1956 has been allowed to be served through electronic mode by capturing their e-mail addresses available with the depositories or by obtaining directly from the shareholders. (ii) Participation by Directors and shareholders in meetings through video conferencing: to provide larger participation and for curbing the cost borne by the Company, Directors, and shareholders to attend various meetings under the provisions of the Companies Act, 1956, participation through video conferencing has been permitted subject to certain compliances. (iii) Voting in General Meeting of Companies through electronic mode: In order to have secured electronic platform for capturing accurate electronic processes, Central Depository Services (India) Ltd (CDSL) and National Securities Depositories Limited (NSDL) are being given approval by the Ministry of Corporate Affairs to provide their electronic platform for capturing accurate electronic voting in General meetings of the company. (iv) Issue of Digital Certificates by Registrar of Companies: The Registrar of Companies has to issue a number of certificates to the companies and other stakeholders as required under the provisions of the

Companies Act, 1956. In order to cut timelines and an another step towards Green Initiative it has been decided that all certificates and standard letters issued by the Registrar of Companies will now be issued electronically under the Digital Signatures of the Registrar of Companies. B. Improvements in process in MCA21 to help stakeholders / corporates 1. Introduction of Refund Process: Earlier there was no process in MCA21 for refund of fees wrongly paid by the stakeholder while availing various services at MCA 21. Now the Ministry has introduced process of refund of statutory fees paid for certain services. The refund of MCA21 fees is available in the following cases: a) Multiple Payments; b) Incorrect Payments & c) Excess Payment Refund process is not applicable for certain services/ eForms like Public Inspection of documents, Request for Certified Copies, Payment for transfer deeds, Stamp duty fee (D series SRN), IEPF Payment, STP Forms, DIN eForm, etc. The refund form is to be filed within the stipulated time period. Also, there shall be deduction in the amount to be refunded based on time period within which refund eForm is filed. The following is the time slab for filing refund form and the corresponding deduction in refund amount:

Time within which refund application is made 0-90 days 91-180 days 181- 270 days 271-365 days

Default deduction 2.5% 5% 7.5% 10%

value

for

>365 day

25%

Filing of refund form shall not be allowed after expiry of 1095 days of filing of the original request. For all earlier cases, (i.e. cases filed before introduction of refund process), the time limit shall be considered from the date on which the refund process is introduced i.e. from 01/05/2011.

2. Removal of Prioritizing by MCA officers Earlier while processing a eforms by the MCA , there was a facility available to officers to mark a work item as urgent to bypass the First in First Out (FIFO) processing. However, in order to bring in more transparency, this functionality has been stopped. The work items will be processed in the order of their filings only.

3. Automatic approval for Form 2, Form 3 regarding return of allotment of shares, Form 18 for change of registered office and for 32 for change in directors details to be processed under STP mode (Straight through processing) (a) Form 2 and Form 3 have been made as STP (Straight Through Process) form and are not required to be processed by RoC. (b) Form 18 filed for existing company for change in registered office where there is no change in State or RoC has been made as STP form and is not required to be processed by RoC user. (c) Similarly Form 32 filed by an existing company for change in directors has also been made as a STP form. Now the form is process and taken on record without intervention of ROC it will save time for approving the form and immediately available for public inspection. 4. Mandating stamping for the state of Jammu and Kashmir With effect from 1st May, 2011, facility has been introduced to pay stamp duty fee of eForm 1, AOA, MOA and Form 44 for the state of Jammu and Kashmir mandatorily in electronic manner through MCA21 system. Now 30 States and UTs are covered by estamps leaving only 2 States and 2 UTs (Nagaland, Goa, UTs Daman & Diu and Dadar & Nagar Heveli.

5. Delegation of power to issue section 25 license to a company from RD to RoC Presently, any

company seeking approval for issue of license u/s 25, makes an application to regional director in eForm 24A. The application is processed and approval/ rejection order is passed by the concerned regional director. Now the power to issue license under section 25 companies has been delegated to Registrar of Companies by amendment in the relevant notification. In view of this, all applications for issue of license u/s 25 in e Form 24A shall be henceforth processed by the concerned office of Registrar of Companies. It will reduce the time taken in incorporation of section 25 companies (Companies not for profit).

B. Growth And Present Status Of The Industry: MCA21 project is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act, 1956. This will help the business community to meet their statutory obligations. The major components involved in this comprehensive e-Governance project are Front Office and Back Office. From the customer perspective, the Front Office operations assume significance, which would be administered through the Front Office portal. The entire Back Office operations of the MCA would be automated so as to achieve the objective of a user-friendly computerized environment. MCA portal is the single point of contact for all MCA related services, which can be easily accessed over the Internet by all users. The project also envisages a costeffective integrated software solution for computerizing various in-house functions like Human Resources Management, Payroll, Accounting and Finance for internal users (employees) of MCA.

Adopting international best practices, MCA21 application adds immense value to the stakeholders. The following points highlight the projects invaluable importance: Enable the business community to register a company and file statutory documents quickly and easily. Public will get easy access to relevant records and get their grievances redressed effectively. Professionals will be able to offer efficient services to their client companies.

 Financial institutions will find registration and verification of charges easy. MCA will ensure proactive and effective compliance with relevant laws and corporate governance. Employees will be enabled to deliver best of breed services.

The re-engineered electronic forms, also called eForms, are capable of helping the citizens in the process of filling the information electronically. Lifecycle of e-Forms, the key interface to most MCA transactions, is automated from submission to the delivery of services requested therein. It covers dissemination of e-Forms in a reliable manner, efficient filling of information by eliminating re-entering data submitted in the past, electronic payment for and delivery of services as requested in the e-Forms. The business community can also track the status of their e-filing online. The capability to automate the e-Form processing has also been extended to the Back Offices to meet the service levels committed to the business community. The e-

Forms and attached documents, all in electronic format, are automatically assigned to the MCA staff and the progress tracked until the service is delivered to the citizens. Besides e-Form service delivery to the business community, the MCA system includes tools for the analysis of corporate data for proactive surveillance and prosecution resulting in efficient investor protection.

Present Status Of The Company 8,21,212 companies limited by shares were at work in the country as on 31.12.2009. These comprised 8,19,580 Non-Government companies and 1,632 Government companies. Out of 8,21,212 companies limited by shares at work, 83,010 companies were public limited and 7,38,202 were private limited companies. State wise distribution of companies limited by shares at work as on 31st December. a) New Registration 46,093 companies limited by shares with authorized capital of Rs. 23,474.19 crore were registered under the Companies Act, 1956 during the period from 1st April, 2009 to 31st December, 2009. Out of these, 50 were Government companies with authorized capital of Rs. 4690.75 crore and 46,043 were Non-Government companies with authorized capital of Rs. 18783.44 crore. The Government companies limited by shares which were registered during the period from 1st April, 2009 to 31st December,2009 comprised 38 public limited companies and 12 private limited companies with authorized capital of Rs.4608.70 crore and Rs. 82.05 crore respectively. The Non-Government companies limited by shares which were registered during the period from 1st April, 2009 to 31st December, 2009 comprised 1,347 public limited companies and 44,696 private limited companies with authorized capital of Rs. 9392.17 crore and Rs. 9391.27 crore respectively.

b) Liquidation During the period from 1st April, 2009 to 31st December, 2009, a total of 6,486 Non-Government companies limited by shares were reported to have gone into liquidation or to have been struck off under Section 560 (5) of the Companies Act, 1956

c) Foreign Companies 2,903 foreign companies, as defined under Section 591 of the Companies Act, 1956 were in the country as on 31.03.2009. During the period from 1st April, 2009 to 31st December, 2009 another 208 foreign companies established their place of business in India and 6 foreign companies have ceased to have their principal place of business in India. Thus there were 3,105 foreign companies in India as on 31.12. 2009.