Knowledge Bank -- Changes in Companies Act.1956
Knowledge Bank -- Changes in Companies Act.1956
Knowledge Bank --
Changes in Companies Act.1956 1 An Overview of Ministry of
Corporate Affairs 21
1.1 Background Keeping in tune with the eGovernance initiatives the world over, Ministry of Corporate Affairs (MCA), Government of India, has initiated the MCA21 project, to enable an easy and secure access to MCA services in a manner that best suits the corporate entities and professionals besides the public.
MCA21 is intended to achieve all the objectives of a versatile eGovernance project. The project is named as MCA21 as it aims at repositioning MCA as an organisation capable of fulfilling the aspirations of its stakeholders in the 21st century. Rather than compelling the business community to physically travel to MCA offices, MCA services are available at the place of their choice, be it their homes or offices.
The major components involved in this comprehensive eGovernance project are Front Office and Back Office. The 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. 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 cost-effective integrated software solution for computerizing various in-house functions like Human Resources Management, Payroll, Accounting and Finance for internal users (employees) of MCA. Permanent documents of existing companies like memorandum of association, articles of association, current charge documents were maintained in paper form across Various Registrar of Companies (RoC) offices. These documents have now been converted into electronic format.
The scope of MCA21 project covers only the offices of RoCs, Regional Directors and the Headquarter at New Delhi. It does not include other offices of MCA like Official Liquidators, Company Law Board / Tribunal and Courts. The success of the service-oriented approach, the most fundamental ingredient of this project, will depend greatly on analyzing and responding to the needs of all stakeholders. To that extent, the project will develop a mechanism to constantly develop and improve the MCA21 system. It will be made possible by analyzing usage patterns and error/status messages as well as feedback from the customers comprising the corporates, professionals and the public.
1.2 Key Benefits of MCA21 Project MCA21 seeks to fulfill the requirements of the various stakeholders including the corporates, professionals, public, financial institutions and banks, Government and the MCA employees. The key benefits of MCA21 project are as follows:
(a) On-line incorporation of companies
(b) Simplified and easy mode of filing of Forms/ Returns
(c) Registration as well as verification of charges anytime and from anywhere
(d) Inspection of public documents of companies anytime from anywhere
(e) Corporate-centric approach
(f) Building up a centralized database repository of corporates operating in India
(g) Enhanced service level fulfillment and customer relationship building
(h) Total transparency through eGovernance
(i) Timely redressal of investor grievances
(j) Availability of more time for MCA employees for qualitative analysis of corporate
information
1.3 An Overview of MCA set up The MCA mainly administers the Companies Act, 1956 and The Monopolies and Restrictive Trade Practices Act 1969. Besides, it also administers the following Acts :
(a) The Competition Act, 2002
(b) The Chartered Accountants Act, 1949
(c) The Costs and Works Accounts Act, 1959
(d) The Company Secretaries Act, 1980
(e) The Partnership Act, 1932
(f) The Societies Registration Act, 1860
(g) The Companies (Donation to National Fund) Act, 1951
The MCA, which functions under overall direction and supervision of the Ministry of Corporate Affairs, has a three tier organizational set-up for administration of the Act, namely, the Headquarter at New Delhi, the Regional Directors at Mumbai, Kolkata, Chennai and Noida and the RoCs in States and Union Territories.
The Official Liquidators who are attached to various High Courts functioning in the country are also under the overall administrative control of the Ministry. The Company Law Board, a quasi-judicial body, has its Principal Bench at Delhi, an additional Principal Bench for Southern States at Chennai and four Regional Benches located at Delhi, Mumbai, Kolkata and Chennai.
The four Regional Directors are in-charge of the respective regions, each region comprising a number of States and Union Territories. They supervise the working of the offices of the RoCs and the Official Liquidators working in their regions. They also maintain liaison with the respective State Governments and the Central Government in matters relating to the administration of the Companies Act.
Certain powers of the Central Government under the Act have been delegated to the Regional Directors. There is also an inspection unit attached to the office of every Regional Director for carrying out the inspection of the books of accounts of Companies under Section 209A of the Companies Act.
RoCs appointed under Section 609 of the Companies Act and covering the various States and Union Territories are vested with the primary duty of registering companies in the respective States and the Union Territories and ensuring that such companies comply with statutory requirements under the Act.
These offices function as registry of records, relating to the companies registered with them, which are available for inspection by members of public on payment of the prescribed fee. The Central Government exercises administrative control over these offices through the respective Regional Directors.
1.4 Services Available Under MCA21 Project The following services are available under the MCA21 Project:
1.5 Organization of RoC Office under MCA The RoC office working from its present address has virtually become the Back Office of the Ministry. Keeping in mind that a number of companies/ entities may find it difficult to switch over to eFiling at the initial stage, Facilitation Centres known as Registrar's Front Offices (RFOs) have been set-up at 52 locations throughout the country to provide requisite comfort for eFiling to such companies.
1.5.1 Front Office (FO) The Front Office represents the interface of the corporate and public user with the MCA21 system. This comprises of Virtual Front Office and Registrar's Front Office. Virtual Front Office merely represents a computer facility for filing of digitally signed eForms by accessing the MCA portal through Internet. It also pre-supposes availability of related facilities to convert documents into PDF format through scanning of documents wherever required. When a company or user does not have these computer facilities, it can avail of these facilities at the designated facilitation centres, known as the Registrar's Front Offices.
1.5.2 Virtual Front Office (VFO) Virtual Front Office implies availing services offered under the MCA21 project online by the user through Internet from his/ her home or office. Virtual Front Office facilitates anywhere, anytime services for filing of eForms. The system automatically does pre scrutiny of the eForms filed and indicates error messages in case of incomplete or invalid particulars. Upon successful submission, a Service Request Number (SRN) is generated by the system for the user, which can be be used for future correspondence with MCA.