273 / 2022
Quote of the day
February, 2022 saw the loss of two big ‘Influencers’ from the music world – Lata Mangeshkar, the colossus with a nectar-like voice, who defined and shall continue to define what melodious singing is and Bappi Lahiri, the over-the-top music director who created new trends through his foot-tapping music. Both were ‘mega market influencers’ in today’s social media lingo – especially Lata Didi who will continue to influence the nation in several ways (not just music) for generations to come. A true legend indeed in whose times the concept of ‘Influencer’ and working towards becoming one didn’t exist at all. She simply did what she liked best, what she was best at and what best she could do. Rest of us were ‘influenced’ so to say !
Let me share a real-life anecdote of similar ‘unintended influencers’ who inspired Hitha, a young 16 year old girl from Bangalore to dedicate this beautiful, simple poem and sing it to them as well at a closed-group talent show, that I attended recently.
~ Hitha, Class XI
The teenager chose Commerce over Science, deeply influenced by the sheer dedication, discipline and diligence of the ‘Jignyasu’ group of Company Secretaries (CS) that meets every single day from 5.15 to 6.15 am to read, analyse, interpret and understand the various corporate laws that are changing by the day ! Jyothi, her CS mother, is part of this early-morning-riser-study-group for the past 3 years. Unknown to them, the group consisting of professionals from across the country have left an indelible mark in the young mind of Hitha. She says I didn’t need anyone to advise me on my career options. I just watched my mom and her friends enjoy learning the laws day after day and lo, it was clear it had to be Commerce and nothing else ! It was indeed a moving tribute to the efforts of this motley group started by CS Pracheta from Mysore. The credit for this free of cost, innovative, knowledge-sharing initiative must of course go to its ‘moola-karthru’ (original creator), my good friend CS Karthick Varadarajan from Bangalore who first started an evening study group called ‘Let’s Learn’ way back in 2017. Much before the pandemic struck and online meetings became the order of the day, a bunch of professionals would huddle together every evening via zoom to pursue their ‘sadhana’ (practice) of deeper understanding of the laws. Neither he nor Pracheta nor anyone in the group ever intended to become a trend setter or influencer or preacher of any sort. It’s the consistency, commitment and perseverance that has influenced a curious Hitha who must have been watching her mother silently. I could see the surprise and joy writ large on Jyothi’s face who just walked the path while the daughter watched. Neither had she to talk nor walk the talk ! It is rightly said “Listen to what people Do, not to what they Say” !!
While wishing the learning groups more power, greater tenacity and deeper learning for many more years to come, let me draw your attention to the highlights of this 273rd issue of ‘Samhita’ – analysis of the Union Budget, 2022, article on the barrage of changes in LLP laws (MCA could have actually done well to rewrite the law for LLP instead of borrowing a few provisions from Companies Act and making it applicable to LLPs clumsily) and another one on Direct Selling under the Consumer Protection Rules. The regular updates from the various ministries during February, 2022 of course find a place as also some tips for improving our English language skills.
For any previous issues of Samhita and the readers’ feedback, please visit https://sharadasc.com/resource-center/.
Analysis of the recent amendments – LLPs
Many significant changes have been made to the LLP Act, 2008 and LLP Rules along with a few sections of Companies Act, 2013 made applicable to LLPs.
CS Rajeswari J Pai and Ms. Krithika Murali M have summarised the amendments made relating to LLPs vide provisions of the LLP (Amendment) Act, 2021, LLP (Amendment) Rules, 2022 and applicability of certain sections of Companies Act, 2013 (CA, 2013) to LLPs in an article titled “Analysis of the recent amendments – LLPs”.
6 minutes is all it takes to read the entire article!
LLP Amendment Act, 2021 - notified
Vide notification dated 11.02.2022, sections 1 to 29 of the Limited Liability Partnership (Amendment) Act, 2021 have been notified to take effect from 01.04.2022.
LLP (Amendment) Rules, 2022
MCA notifies the Limited Liability Partnership (Amendment) Rules, 2022 (“the Rules”) which shall come into force on 01.04.2022. Highlights of the Rules are as follows:
A Company or proprietor owning a registered Trademark which too nearly resembles the name of an existing LLP or new LLP incorporated subsequently, may apply to the Regional Director in Form No. 23 to give direction to the LLP to change its name.
If the LLP fails to change its name within a period of 3 months from the issue of the order the letters “ORNDC” i.e. Order of Regional Director (RD) Not Complied will be added below the name of the LLP and will have to be used in all official communications and publications.
Reduced filing fee for Small LLPs have been detailed.
Certain sections of CA2013 made applicable to LLPs
MCA has notified that following sections of CA, 2013 shall become applicable to LLPs with effect from 11.02.2022:
The applicability of sec 164(2) which disqualifies directors who have not complied with annual filings for a period of 3 years and sec 90 requiring LLPs to disclose beneficial ownership, are noteworthy amendments.
The intention to extend applicability of sections of CA, 2013 seems to be to increase compliance mechanisms and to better regulate LLPs and Designated Partners.
Report on Corporate Social Responsibility in Form CSR-2
Vide notification dated 11.02.2022, MCA has notified the Companies (Accounts) Amendment Rules, 2022 (“Amendment Rules”), which has amended the Companies (Accounts) Rules, 2014. Vide the Amendment Rules, Form CSR-2 for filing Report on Corporate Social Responsibility has been introduced.
The Form should be filed as an addendum to the Form AOC-4 / AOC-4 XBRL / AOC-4 (NBFC) (Ind AS) (filing of Financial Statements) for FYs 2020-21 onwards. It is also clarified that for the FY 2020-21, Form CSR-2 is to be filed separately on or before 31st March, 2022 after filing of the financial statements with the Registrar of Companies.
In a bid to collect data from all CSR implementing Corporates, the Government has almost converted the entire CSR Rules introduced in January, 2021 into Form CSR-2, requiring humongous data at a granular level to be furnished by corporates. CSR calls for full time resources not only to meet the obligation but also to maintain and keep furnishing data and records.
Open Notification No. G.S.R. 107(E) dtd. 11.02.2022
Relaxation on levy of additional fee for annual filing
MCA vide Circular dated 14.02.2022 has relaxed the levy of additional fee for filing of Form AOC-4/AOC-4 XBRL / AOC-4 (CFS) (filing of financial statements) till 15.03.2022 and for Form MGT-7 / MGT-7A (Annual Return) till 31.03.2022, respectively.
Extended time for Udyam Registration
The Ministry of MSMEs vide Notification dated 16.06.2021 notified that all existing Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAMs) registrations obtained till 30.06.2020 shall remain valid till 31.12.2021.
A further extension has been granted till 31.03.2022.
Union Budget 2022
Highlights of Union Budget 2022
Our Associate R. Krishnamurthy, Chartered Accountant has summarised the highlights of Income Tax and GST updates of the Union Budget 2022 in the attached article titled “Highlights of Union Budget 2022”.
Read the article to familiarise yourself with GST and Income Tax changes from Union Budget 2022 in less than 13 minutes!
IBBI (IRP for Corporate Persons) (Amendment) Regulations, 2022
IBBI has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2022 vide notification dated 09.02.2022. The amendments made are as follows:
Regulation 18 – Meeting of Committee of Creditors:
Sub-regulation 3 added - Resolution Professional may place a proposal received from members of the committee in a meeting, if he considers it necessary and shall place the proposal if the same is made by members of the committee representing at least 33% of the voting rights.
Regulation 39A - Preservation of records
The Regulation has been substituted to include a list of documents that need to be preserved. The Resolution Professional or Interim Resolution Professional shall preserve copies of all such records which are required to give a complete account of the Corporate Insolvency Resolution Process (“CIRP”).
Electronic records of documents are to be preserved for a minimum period 8 years and physical copies for a minimum of 3 years from the date of completion of CIRP or conclusion of any proceedings relating to CIRP before NCLT, NCLAT or court, whichever is later.
Consumer Protection Rules
Overview of Direct Selling Business and Recent Regulatory changes
In the 271st issue of Samhita, we had highlighted about the recognition given to Company Secretaries under the Direct Selling Entities segment vide the Consumer Protection (Direct Selling) Rules, 2021.
Click below to read the article by CS Rajeswari J Pai titled “Overview of Direct Selling Business and Recent Regulatory changes” explaining details regarding the direct selling entities model of business which has evolved over the years.
10 minutes is all it takes to read the entire article!