In a significant development, the Ministry of Corporate Affairs (MCA) has introduced new rules to amend the Companies (Management and Administration) Rules, 2014. The key highlight of these amendments is the disclosure of beneficial interest in shares of a company. Under the revised rules, the following points shall be noted:
- Designated Person: Every company is now mandated to designate a person responsible for furnishing and extending cooperation in providing information to the Registrar (RoC) or any authorised officer regarding beneficial interest in the company’s shares.
- Designation Options: The company may designate one of the following as the responsible person:
- A company secretary if required under the Act and relevant rules
- Key managerial personnel, other than the company secretary
- Director if there is no company secretary or key managerial personnel
- Default Designated Persons: Until a specific person is designated under the new rules, the following individuals will be considered as the designated person:
- Company secretary, if required under the Act
- Every Managing Director or Manager if no company secretary is appointed
- Every director if there is no company secretary or a Managing Director or Manager
- Annual Disclosure: It is now also mandatory for every company to include details of the designated person in its annual return.
- Change of Designated Person: If a company decides to change its designated person at any time, it must inform the RoC by filing necessary forms.
These changes are expected to have a substantial impact on corporate governance and transparency in India’s business landscape. Companies are urged to familiarise themselves with the new requirements and take the necessary steps to ensure compliance with the revised rules. These amendments aim to enhance transparency and accountability in the corporate sector by ensuring that information related to beneficial interest in shares is readily available to regulatory authorities.
You may find the notification at the link: https://drive.google.com/file/d/12tamBLvny5CrlH6FsPpfl0vWuxRh9yBm/view
[Note: This news alert is based on a Ministry of Corporate Affairs notification dated 27th October, 2023.]