Following our analysis of structural changes in Part I, this second part focuses on amendments in Sections 206 and above of the Companies Act, 2013, proposed in the Corporate Laws (Amendment) Bill, 2026. Key highlights include the centralisation of merger jurisdictions, mandatory dormant status for inactive entities, and a revamped adjudication machinery featuring Recovery Officers and Settlement Authorities. We also examine the widened eligibility for voluntary strike-off and the transfer of restoration powers to the Regional Director, aimed at streamlining administrative exits and protecting external stakeholders. The significant amendments introduced in this Part are as follows:

I. Mergers and Amalgamations (Sections 230, 233)

• Section 230: Where multiple companies are involved in a scheme, the application shall be filed only before the NCLT bench having jurisdiction over the Transferee Company, eliminating multiple applications.
• Section 233 (Fast-track Merger):
  • Creditor Consent: The threshold for creditor approval is lowered from 9/10ths to 75% in value, aligning it with the requirements of Section 230.
  • Present and Voting: Clarification that the 75% majority is calculated based on creditors/members “present and voting” (in person or by proxy/postal ballot), rather than the total value/number.

II. Strike-Off (Sections 248, 252)

• Section 248 (Strike-Off Conditions): A company cannot be struck off if it has carried out any Significant Accounting Transaction during the current or previous financial year.
• A company is now ineligible for strike-off (either suo moto by ROC or voluntary under 248(2)) if it has performed a Significant Accounting Transaction in the current financial year.
• Pursuant to the omission of the reference to sub-section (1) from sub-section (2) of section 248, the grounds for voluntary strike-off are no longer restricted to the specific technical defaults listed for the Registrar’s suo motu action
• Section 252 (Restoration): Powers to restore a struck-off company are transferred from the NCLT to the Regional Director (RD) to expedite administrative relief, if the application of restoration made within 3 years of struck off.

III. Special Entities (Sections 366, 378P, 378Y)

• Section 366 (Conversion): Provisions expanded to allow the registration of Non-Trading Companies registered with state governments into section 8 companies under this Part, facilitating a smoother transition for existing entities into the Companies Act framework.
• Producer Companies:
  • Section 378P: The directors can be appointed in any General meeting, earlier restricted to Annual General Meeting
  • Section 378Y: Quorum of General meeting related provision modified to allow producer company to have a quorum of at least one-fourth of the total members or 100, whichever is less.

IV. Adjudication and Recovery (Sections 454, 454B, 454C)

Section 454 (Adjudication): 

• Authority: Designation of Assistant Registrar of Companies (AROC) as an Adjudicating Officer to handle adjudication proceedings
• Application: Introduction of a prescribed form for companies to suo moto apply for adjudication of a default.
• Section 454B (Recovery): Appointment of a Recovery Officer with powers to attach/sell movable and immovable property and, in extreme cases, arrest and detention of the defaulter in case of failure to pay penalty under this Act.
• Section 454C (Settlement): Enables settlement of defaults before an adjudication order is passed. Settlement is restricted to civil defaults and generally excludes “Serious Fraud” or non-compoundable offences.

V. Penalties and Compounding (Sections 403, 441, 446B, 447)

• Section 403 (Additional Fee): Empowers CG to make rules under first proviso to section 403(1) instead of minimum additional fee for delayed filing set at ₹100 per day. Furthermore, CG can prescribe certain classes of companies, for which maximum cap is prescribed for additional fees to Rs. 2 lakhs
• Section 441 (Compounding): RD’s power to compound offences increased to cases where the fine is up to ₹1 Crore from 25 lakh.
• Section 446B (Lesser Penalties): The “Lesser Penalty” benefit for Small Companies/Startups is redefined including a fixed percentage (e.g., 50%) of the standard penalty.
• Section 447 (Fraud Threshold): The monetary threshold for “Serious Fraud” (attracting mandatory imprisonment) is increased from ₹10 Lakh to ₹25 Lakh.

VI. Miscellaneous Provisions (Sections 455, 466A)

• Section 455 (Dormant Company): The phrase “may apply” is replaced with “shall apply”, making the transition to dormant status as a mandatory instead of a matter of choice for the company. Thereby preventing misrepresentation of active status and ensuring transparency for external stakeholders.
  • In defining “Inactive Company,” the word “and” is replaced with “or”, making the criteria cumulative (no filing of financial statements or annual return) aligned with section 164 of the Companies Act, 2013
• Section 466A (Administrative Power): Section empowering the Central Government to issue Directions, Guidelines, and Circulars to provide clarity on procedural ambiguities without amending the Rules if CG is of the opinion that it is necessary in the public interest. Further it is clarified that in case of any conflict, the rule shall prevail.

The Corporate Laws (Amendment) Bill, 2026, was introduced in the Lok Sabha on March 23, 2026, and has been referred to a Joint Parliamentary Committee (JPC) for detailed scrutiny. These provisions remain proposals and will carry statutory force only once approved by Parliament and formally enacted through notification in the Official Gazette

The post Key Highlights of the Companies (Amendment) Bill, 2026: Part II first appeared on MMJC.

The Corporate Laws (Amendment) Bill, 2026, introduced in the Lok Sabha on Monday 23 March, 2026, proposes extensive amendments to the Companies Act, 2013, and the Limited Liability Partnership Act, 2008. Driven by recommendations from the Company Law Committee (2022) and the High Level Committee on Non-Financial Regulatory Reforms, the Bill seeks to foster “Ease of Doing Business” while simultaneously strengthening corporate governance frameworks.

Measures for Ease of Doing Business:

• Small Company Threshold [Sec. 2(85)]: Paid-up capital limit increased from ₹10 crore to ₹20 crore; turnover limit increased from ₹100 to ₹200 crore.
• Electronic Service [Sec. 20]: Service of prescribed documents to members permitted exclusively through electronic mode for certain classes of companies.
• Share-Linked Schemes [Sec. 62]: Formal recognition of Restricted Stock Units (RSUs) and Stock Appreciation Rights (SARs).
• Buy-back Frequency [Sec. 68]: Allows two buy-back offers per year with a six-month gap between closures in case of certain classes of companies.
• Charge Registration [Sec. 77]: Timeline for registration of charges for prescribed companies increased from 120 days to 180 days
• Virtual/Hybrid Meetings [Sec. 96 & 100]: AGMs and EGMs permitted via video conferencing or audio-visual means. However, companies must conduct a physical annual general meeting at least once every three years.
• Meeting Notice [Sec. 101]: Notice period for VC-only EGMs reduced to seven days.
• CSR Threshold [Sec. 135]: Applicability based on net profit -The Central Government is empowered to fix and modify the specific net profit applicability criteria
• Auditor Exemption [Sec. 139]: Prescribed classes of companies may be exempted from appointing auditors.
• Board Meetings [Sec. 173(5)]: OPC, Small, and Dormant companies require only one meeting per calendar year.
• Disclosure of Interest [Sec. 184]: Disclosure required only upon a change in interest, not every financial year.
• Investment Loans [Sec. 186]: Contraventions of sub-sections (9) and (10) moved from non-compoundable to adjudicatable offence.

Corporate Governance Related Provisions:

• Mandatory Digital Infrastructure [Sec. 12A]: Prescribed classes of companies must maintain a website and e-mail address, with a statutory requirement to intimate these details and any subsequent changes to the Registrar.
• Enhanced Audit Committee Transparency [Sec. 134]: Board reports must now include the committee’s composition and specific reasons if the Board rejects any committee recommendation.
• Explanation on Auditor Remarks [Sec. 134]: The Board must provide detailed explanations or comments on every adverse observation, qualification, or reservation made by auditors in their report.
• Independence in Group Entities [Sec. 149]: Cooling-off restrictions for Independent Directors (IDs) now explicitly extend to the holding, subsidiary, or associate companies.
• Standardized Auditor Qualifications [Sec. 141, 148 & 204]:
  • Majority Qualification Requirement: A firm may be appointed as a statutory, cost, or secretarial auditor only if the majority of its partners practicing in India are professionally qualified for such appointment (Chartered Accountants, Cost Accountants, or Company Secretaries in practice, respectively)
  • Mandatory Registration of All Partners: Every partner of the firm, regardless of their specific area of practice within a multi-disciplinary setup, must be a person registered with a statutory institute or body established under an Indian law having powers of such registration.
• Restrictions on Non-Audit Services [Sec. 144]: Prescribed classes of auditors are prohibited from providing non-audit services to the company, its holding, or subsidiary for three years post-tenure
• Director Fit and Proper Mandate [Sec. 164]: Boards are now required to assess and ensure that every director meets prescribed “fit and proper” criteria as may be prescribed.
• Related Party Default Disqualification [Sec. 164]: Directorship eligibility is lost if a person is subjected to a penalty for defaults in related party transactions under Section 188.
• Resignation of Non-Director KMPs [Sec. 203A]: Establishes a formal, transparent process for the resignation of whole-time Key Managerial Personnel who are not directors. This framework is similar to that of directors under section 168.

Director Amendments (Appointment/Qualification/Vacation/DIN):

• Additional Directors [Sec. 161]: Tenure limited to next general meeting or three months, whichever is earlier.(Aligned with LODR Regulations)
• Casual Vacancy [Sec. 161]: Appointment limited to next general meeting or three months, whichever is earlier. (Aligned with LODR Regulations)
• DIN Verification [Sec. 154]: Mandatory periodic submission of information for verification of particulars.
• DIN Validity [Sec. 152]: Director shall not function if DIN is deactivated or cancelled.
• Disqualification [Sec. 164(2)]: Triggered by non-filing of returns for two financial years.
• Immediate Vacation [Sec. 167]: Office becomes vacant in all companies (including the defaulting one) after six months from trigger of disqualification.
• LLP Inclusion (Section 185 (Loans to Directors)): Prohibitions on loans, guarantees, and securities extended to limited liability partnerships.

Decriminalization (Fine to Penalty):

• Name Reservation [Sec. 4]: Penalty of ₹50,000 for furnishing incorrect information.
• Prospectus [Sec. 26]: Fixed penalty of ₹2 lakh for contravention.
• Share Variation [Sec. 40]: Penalty of ₹25 lakh for company and ₹2 lakh for officers in default.
• Buy-back [Sec. 68]: Penalty of ₹25 lakh for listed companies and ₹2 lakh for others.
• AGM Default [Sec. 99]: Penalty of ₹1 lakh plus ₹5,000 per day for continuing default.
• Accounts [Sec. 128]: Penalty of ₹5 lakh for listed and ₹50,000 for other companies.
• Audit Sections [Sec. 147]: Contraventions of Sec. 139, 140, 141, 142, and 146

The post Key Highlights of the Companies (Amendment) Bill, 2026 first appeared on MMJC.

The Ministry of Corporate Affairs (MCA), through its circular dated 26^th February 2026, has introduced the Companies Compliance Facilitation Scheme 2026 (CCFS 2026), for enabling the companies to complete their long pending annual filing at a discounted late fee. We shall try to understand the nuances of this scheme by looking at some Frequently Asked Questions (FAQs).

Q1. What is meant by the Companies Compliance Facilitation Scheme, 2026?

Ans: The CCFS-2026 refers to one-time opportunity provided by the Ministry of Corporate Affairs to allow companies to complete their pending annual filings or to opt for dormancy or closure with significantly reduced fees

The scheme aims at improving compliance levels and ensure that corporate registry has accurate, up-to-date information

Q2. What is the purpose of introducing the CCFS 2026?

Ans:  As per the circular, the Ministry had received representations stating that it is being difficult for the companies to file the annual filing forms pending since years, due to the exorbitant late fee charged on such delayed filings.

Hence the MCA has introduced this scheme, so that the companies can file the forms and make good their long pending non-compliance without having to pay heavy late fees. The scheme is desirous of facilitating compliances by MSMEs and small companies who may face cash crunch due to such heavy late fee.

Q3. What is the duration of the CCFS 2026?

Ans: The scheme comes into force on April 15, 2026, and shall remain effective till 15^th July 2026. The companies will have a window of 3 months for filing the pending annual filing forms with reduced late fee.

Q4. What are the eligibility criteria for the companies to take advantage of this CCFS 2026?

Ans: The scheme does not specify any eligibility criteria, instead it prescribes a negative list of companies who cannot take advantage of this scheme. That means, all the companies except those listed billow, can take advantage of this scheme.

The negative list includes the following companies.

• Companies already facing final notice for being “struck off” by the Registrar
• Companies that have already filed for strike-off or dormant status before the scheme began
• Companies already dissolved through amalgamation
• “Vanishing companies”

Q5. Are Limited Liability Partnerships (LLPs) eligible to take advantage of this scheme?

Ans:No. if we refer to the language of the CCFS 2026, it specifically refers to companies and does not have any mention about LLPs. Also, the list of forms which can be filed under CCFS 2026 does not include the names of LLP forms. Hence it can be said that the scheme does not apply to LLPs.

Q6. In the year 2019, companies were required to file an e-form INC-22A. if this form was not filed, the company was tagged as active non-compliant in MCA records, and as a result, company was not able to file certain forms like SH-7, PAS-3 etc. If any company has not filed this form INC-22A, then can it take benefit of this scheme?

Ans: Rule 25A of Companies (Incorporation) Rules 2014, provides for list of forms that cannot be filed if company has not filed form INC-22A. This list does not include annual filing forms. That means, even if the company has not filed form INC-22A, it can still file annual filing forms under CCFS 2026.

In fact, proviso to rule 25A states that form INC-22A cannot be filed unless pending annual filing is completed. Also, the form INC-22A requires mentioning of SRN of latest filed forms AOC-4 and MGT-7. Therefore, the company will have to first complete its pending annual filing under CCFS 2026 and only then it can file form INC-22A if not yet filed.

Q7. Which all forms can be filed with discounted late fee under CCFS 2026?

Ans: Since, the scheme aims at completing pending annual filing, it pre-dominantly allows filing of the annual filing related forms at a discounted late fee. Following is the list of forms which can be filed under this scheme:

-MGT-7 / MGT-7A – Annual Return

-AOC-4 / AOC-4 CFS / AOC-4 (XBRL)/ AOC-4 NBFC (Ind-AS) / AOC-4 CFS NBFC (Ind-AS)

-ADT-1

-FC-3

-FC-4 and

-Their corresponding forms under Companies Act 1956, like Form 20B, 21A, and 23AC) etc.

Other than this, companies desirous of obtaining dormant status or striking off their names from register of companies, can also file forms MSC-1 or STK-2 with discounted fees under this scheme.

Q8. How cost effective is filing of forms under this CCFS 2026?

Ans: Under this scheme, companies only need to pay the normal filing fee plus 10% of the total additional fees that would otherwise be due for the delay. This is a significant reduction from the standard additional fee of Rs. 100 per day of delay. For example, if form MGT-7 is being filed with a delay of 100 days, then filing fee will be RS. 600 and late fee will be RS. 10,000 (RS. 100*100 days)) that means, fee under normal circumstances will be RS. 10600. But, under this scheme, late fee is reduced to 10% of actual late fee, that is, 10% of 10000 which comes to 1000. Hence amount payable under scheme will be RS. 1,600 instead of RS. 10,600.

Q9. If any company is desirous of discontinuing its business operations, then does the scheme provide for any option to such companies? Ans: Inactive companies or such companies who do not wish to continue business, have two cost-effective options:

• they can Apply for “dormant company” status (by filing Form MSC-1 by paying only half of the normal filing fee

• also, they can Apply to be “struck off” by filing Form STK-2 by paying only 25% of the applicable filing fees

However, the scheme provides concession only in case of filing fees. The companies have to follow the complete procedure prescribed in the Companies Act in both these cases, which includes completion of pending annual filing and obtaining necessary approvals.

Q10. Is there any legal immunity granted to participating companies?

Ans: If filings are made under the scheme, no penalty under section 92 (Annual Return) or section 137 (Financial Statements) for delayed filing of forms, will be leviable Similar Immunity is also granted against prospective penal actions for delayed filings of other forms like ADT-1 or FC-3 etc.

Q11. Does the scheme prescribe any conditions for receiving this immunity?

Ans: Yes. The scheme clarifies that, For immunity from penal action WRT annual returns and financial statements, the filing must be made either before a notice is issued by an adjudicating officer or within 30 days of such a notice being issued

The scheme further clarifies that; immunity is not granted if a prosecution has already been filed or if adjudication proceedings began before the filing was made under the scheme.

Q12. Is the company required to undertake any extra filing for availing the above-mentioned immunity?

Ans: the similar amnesty scheme launched by MCA required the companies to file a separate form called CFSS-2020 after completing all pending filings. On filing of this form, a certificate was generated and after showing the same the immunities could be availed.

However, if we refer to CCFS 2026, it does not provide for filing of any extra form or generation/submission of any such certificate. Since not specifically mentioned, it can be concluded that, no additional compliances are required for availing the legal immunities.

Q13. If the company has not done annual filing for more than 3 years and as a result, the directors of the company have been disqualified under section 164(2) of the Companies Act 2013, in such circumstances, if the company does annual filing under this scheme, then will the disqualification of directors be removed post filing?

Ans: if the company has not filed financial statements or annual returns for more than 3 years, then the directors are disqualified under section 164(2) by act of law.

As per Para 65 and 66 of judgment in the matter of Mukut Pathak & Ors. Vs. Union of India and Anr. Delivered by Delhi High Court, it is clarified that, the disqualification takes place as per conditions specified in the Act and not by order of any authority. Also, this disqualification aims at highlighting the fiduciary duties of directors.

Therefore, the director ones disqualified, will remain disqualified for period of 5 years even if the company completes its annual filing post disqualification.

Additionally, the scheme talks about providing financial relief to the companies by relaxing the late fees. It does not specifically mention any thing about removal of director disqualification.

Q14. Since year 2019, some documents like statutory audit report or secretarial audit report filed along with financial statements, require mention of UDIN generated by ICAI/ICSI on the date of signing that document. Can the professionals sign the audit reports for previous years along with the UDIN generated as on current date.

Ans: The requirement of mentioning the UDIN became applicable from year 2019. Therefore, in case of the reports bearing dates prior to year 2019, there is no requirement of generating or mentioning UDIN on the documents.

With respect to documents to be certified by company secretaries in practice post 1^st October 2019, ICSI has introduced an amnesty scheme under which the company secretaries in practice (PCS)shall be able to generate UDIN for documents signed after 1^st October 2019. Hence the PCS can generate UDIN for documents (MGT-8, MR-3 etc.) relating to financial statements post 2019 under ICSI amnesty scheme 2026 from 1^st April 2026 to 15^th April 2026. (that is, before the CCFS becomes effective)

Q15. As proposed by the scheme, the financial statements and annual returns for earlier years shall be filed by the companies on and after 15th April 2026. However, in between the time to which financial statements relate, and time when they are filed, the applicable legal provisions and formats may have undergone changes. In such circumstances, the companies should prepare the financial statements as per earlier provisions or the current provisions?

Ans: The format for preparation of financial statements shall depend on the date of their approval and signing by the directors. If the financial statements were prepared, approved and signed by the directors during the relevant earlier year but only filing was pending, then they must have been prepared as per formats applicable at that time, which shall be acceptable.

However, if the statements are being prepared and signed today (March 2026), then they will have to be prepared as per currant formats.

For example, format of financial statements prescribed under schedule III of Companies Act 2013 and format of statutory auditor report were amended from FY 2021-22, So if the financial statements for year 2017-18 were prepared and approved in the year 2018 and are being filed in 2026 under CCFS 2026, then old formats are acceptable. But if financial statements for FY 2017-18 were not prepared at that time and are being prepared and approved by board now (March 2026) then the new formats will have to be used.

Q16. Form filing requirements for small and normal companies are different with respect to applicable e-forms and certification requirements. The definition of small company underwent a change in the month of December 2025. If a company is desirous of filing forms for year 2022-23, and it was not a small company as per the definition at that time, but it is one as per new definition. Then whether it should undertake filing as small company or normal company?

Ans: The MCA V3 portal on the website of Ministry of Corporate Affairs is tuned to except filing as per new definition. Therefore, ones the turnover or paid-up capital of the company is entered, the system will prompt to file e-form MGT-7A and will not ask for certification of professional in form AOC-4. Therefore, it will have to undertake filing as a small company only.

Q17. The annual filing related e-forms like MGT-7, AOC-4 and ADT-1 etc. have migrated to MCA V3 portal in July 2025. Now if the companies are desirous of filing forms for earlier years under CCFS 2026, then the companies will have to do filing on V3 portal or V2 portal will be enabled for this purpose?

Ans: Since the V2 portal is now disabled and as on date forms can be filed only through V3 portal, the companies will have to file new forms available on V3 portal only.

Q18. During the period when the scheme is in force, if a company is filing the forms for financial year 2025-26, will it be subject to discounted filing fee?

Ans: The scheme states that it aims at, helping the companies to clear its pending annual filing for earlier years, and provides concession on payment of late fee and not on normal filing fee.

Say if the AGM of the company for FY 2025-26 is held in April 2026, and the due date for filing AOC-4 is in May 2026 and for MGT-7 is in June 2026. Now if the company files both the forms till June 2026, then it will not be subject to late fee and hence will not get any benefit of the scheme.

However, if it does file in July, then late fees will be charged, and it will also be able to avail discount under CCFS 2026.

Q19. If annual filing by any company is pending for financial year 2024-25, then will it be able to take advantage of this scheme?

Ans: the normal time available for filing annual filing forms for FY 2024-25 has already passed and now if any company is filing the forms for said financial year, then it will have to be done by paying late fees. Since the scheme provides for discount on late fees if forms are filed under the scheme, the company can take advantage of the scheme for filing forms for FY 2024-25.

Q20. If any company has filed form AOC-4 for any particular year, but has not filed form MGT-7, then will the company be able to take advantage of the scheme for filing only one out of 2 annual filing forms?

Ans: the scheme provides discount on late fees payable on each form. It does not provide any such condition that a particular group of forms has to be filed. Therefore, even if any company is desirous of filing any one out of 2 annual filing forms, it can very well do so.

Q21. If company is filing the annual filing forms for earlier years, then what would be the date of AGM for approval of financial statements to be mentioned in form?

Ans: if the company has conducted AGM for relevant earlier year and has got the financial statements approved, then such date can be entered. However, if AGM was not conducted, company may now conduct the AGM, get the financial statements approved and then file the same in the form.

Q22. If the company had not conducted AGM in the relevant financial year and not approved financial statements, and the company now conducts the AGM and files the approved financial statements under CCFS 2026, then will the company be relieved from non-compliance of not/delayed conduct of AGM?

Ans: Non-conduct of AGM is altogether a separate non-compliance with section 96 of Companies Act 2013, which is not covered under CCFS 2026. Non-compliance of section 96 is a compoundable offence for which the company has to file an application before NCLT and get the same compounded separately.

Q23. Does this scheme apply to form CSR-2 as well?

Ans: Form CSR-2 relates to annual CSR spending by companies and is connected to form AOC-4. Till financial year 2023-24, CSR-2 was to be filed as a separate form in which SRN of form AOC-4 was to be entered. Therefore, if any company had not filed AOC-4 for any year till 2023-24, it was technically not able to file CSR-2.

Post migration to the MCA V3 portal, Form CSR-2 has been integrated into Form AOC-4. Accordingly, where pending AOC-4 forms relating to earlier financial years are required to be filed on the V3 portal, the corresponding CSR-2 details can be filed as part of AOC-4 itself, and no separate fee would be applicable for CSR-2.

Q24. Does CCFS 2026 applies to cost audit related forms like CRA-2, CRA-4 etc.?

Ans: The list of forms specified in the scheme document for which benefits are available does not include cost audit–related forms. In the absence of any express inclusion, it may be inferred that the scheme does not extend to such forms.

Q25. If the company is desirous of refiling any annual filing form with some changes, then will it be able to take advantage of this scheme?

Ans: In the case of Form MGT-7, where the company intends to make any changes, there is no requirement to cancel the SRN; the originally filed form can be modified. Accordingly, the question of availing any benefit under the scheme does not arise.

However, for Form AOC-4, any modification necessitates cancellation of the original SRN and filing of a fresh form. Such fresh filing attracts applicable normal fees and additional (late) fees. Therefore, where a revised AOC-4 is filed under CCFS 2026, the benefit of fee concession under the scheme may be availed.

Q26. As discussed in question 4, companies already facing final notice for being “struck off” by the Registrar cannot take advantage of this scheme. What is meant by ‘final notice for being struck off’ in this case?

Ans: In this context, the final notice refers to the notice issued by the ROC in Form STK-7, signifying that the striking off process has been completed and the company’s name has been removed from the register of companies. Consequently, once such final striking off has taken effect, the company is no longer eligible to avail the benefit of the scheme.

The post FAQs on CCFS 2026 first appeared on MMJC.

Introduction
When a company is unable to meet its preference share redemption deadline, the immediate instinct is to approach the Tribunal under Section 55(3) of the Companies Act, 2013. In practice, this route is often treated as the response to non-redemption.

However, this instinct overlooks a more fundamental question:  Does the proposed corporate action constitute a reissuance of capital or merely a modification of existing terms?

The answer to this question is critical, as it determines the appropriate statutory pathway and whether recourse to the Tribunal is warranted at all.

Where the Confusion Lies

A common misconception in practice is to equate inability to redeem preference shares with automatic applicability of Section 55(3). This approach assumes that any deviation from original redemption terms necessarily requires Tribunal intervention.

However, this overlooks the distinction between restructuring the capital itself and modifying the terms attached to existing shares. The failure to identify this distinction often leads to mischaracterization of transactions, resulting in unnecessary petitions under Section 55(3).

The distinction between a “Variation of Rights” under Section 48 and a “Reissuance” under Section 55(3) is governed by the statutory parameters of the instrument. Under Section 55(2), preference shares are subject to a mandatory redemption period typically 20 years, or 30 years for specified infrastructure projects.

The appropriate legal pathway is determined by the following criteria:

• Modification within Statutory Limits: Where a company proposes to extend the redemption timeline while remaining within the twenty or thirty-year limit, the action constitutes a “variation of rights” attached to the existing shares. Such modifications fall within the ambit of Section 48.
• Substitution and Reissuance: Conversely, where a company is unable to redeem the shares as per the original terms of issue, or where the proposed extension exceeds the statutory timeframe, Section 55(3) is triggered. This necessitates the issuance of fresh redeemable preference shares in substitution for the unredeemed shares.

Understanding the Distinction: Section 48 vs Section 55(3)

Judicial Clarification: EDAC Engineering Case
This distinction was examined by the NCLT, Chennai in EDAC Engineering Limited v. Registrar of Companies (order dated 21^st November 2025)[1]

The Tribunal considered whether extension of the redemption period of existing preference shares would amount to reissuance under Section 55(3) or a variation of rights under Section 48. Although the petition was framed as one seeking approval for reissuance, the company clarified that it was only seeking extension of the repayment timeline.

The Tribunal held that such extension alters the rights attached to the shares and therefore falls within Section 48. It further noted that the redemption period could be extended within the statutory limit of twenty years from the date of issue under Section 55(2). Accordingly, it concluded that Section 55(3) was not attracted as the extension sought was within the timeframe of twenty years and dismissed the petition.

Conclusion
The ruling reinforces that not every delay in redemption of preference shares requires recourse to Section 55(3). Where the company merely modifies the terms of existing preference shares, the matter may be addressed under Section 48, subject to the safeguards available to dissenting shareholders.

The manner in which the transaction is characterized determines the compliance route, and an incorrect approach may lead to unnecessary Tribunal proceedings. Where applicable, Section 48 avoids the time and effort of approaching the Tribunal.

[1] EDAC Engineering Ltd. v. Registrar of Companies, NCLT-Chennai-order dated 21-11-25

This article is published on the TaxGuru link below

https://taxguru.in/company-law/preference-share-extension-not-reissuance-statutory-limit-nclt.html

The post The classification of a transaction as either a variation of rights or a re-issuance of shares determines whether it falls within the ambit of Section 48 or Section 55(3) of the Companies Act, 2013 first appeared on MMJC.

Introduction

Those were the days when company secretaries [whether in practice or employment] used to remember amendments by dates, those were the days when amendments used to require approval of parliament and wrongdoer required trial via long-drawn court process to get convicted.

 Cut two, in last 10 years [‘2015-2025’] we have seen 212 amendments in Companies act, 2013 (including act and rules), 38 amendments in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), regulations, 2015 [‘SEBI LODR’] regulations and 13 amendments in PIT regulations. We have seen 3761 number of orders getting passed by MCA and 300 plus and 450 plus orders passed by SEBI under adjudication process under SEBI LODR and Securities and Exchange Board of India (Prohibition of Insider Trading) regulation 2015 [‘SEBI PIT’] respectively. Pie chart depicting same is specified below:

Evolving expectations and priorities for a knowledge professional

When I started my career 25 years ago, reading and awareness about commentary written by great stalwarts was considered as knowledge and there was a good amount of literature available in commentary format. In the last 10 years so much has changed and law has become so dynamic that the shelf life of any commentary has significantly diminished due to continuous changes in law and therefore focus of professionals should shift from knowing the provisions of law to ability to interpret. However, law kept changing very fast and now interpretation is also not adequate. A professional in the corporate secretarial domain needs to imbibe many more aspects like effective policies, processes, technology, project management, technology etc. to be effective. Practicing company secretary has role to play to help company secretaries in employment to cope with this aspect. A lot of the CS’s energy in corporate goes in stakeholder management and therefore there is opportunity for a Practicing Company Secretary [‘PCS’] to assist his fellow friend working in corporate.

Areas for collaboration – PCS and CS in employment

There are 5 broad areas where PCS can support corporates [apart from audit, attestation, and outsourcing services] –

• Helping in framing, drafting policies, and assessing its impact
• Designing, documenting, reviewing processes
• Helping in getting alignment of internal stakeholders for compliances
• Enabling technological interventions
• Representing and replying to inquiries and scrutiny

Policies and procedures

Under SEBI LODR, 13 policies are required to be adopted by the board of directors of a listed entity. Below chart provides number of policies required to be framed under SEBI LODR, companies act and PIT:

Generally secretarial departments in corporates frame these policies. This is a great opportunity for company secretary to move from just a compliance officer to policy maker and truly occupy the post of one level below board of directors as envisaged under regulation 6 of SEBI LODR. Most of the times these policies lack careful drafting. If thought over well, this is clearly an opportunity to stand out. Good policy framework not only helps to call out understanding of some key terms in corporate laws [where there are multiple meanings eg. What is UPSI or what is start date of UPSI, what is purpose and effect under RPT], it also gives opportunity for board members to clearly reflect what they stand for. For example, in code of conduct for dealing in securities of listed entities by designated persons and their immediate relatives framed under regulation 9(1) of PIT Regulations some companies had mentioned about clear ban on dealing in F & O corresponding to scrips of listed entity. In policy for identification of material subsidiary framed under regulation 16(1)(c) of SEBI LODR some companies had gone beyond statutory requirement of 10 or 20% of consolidated turnover and had covered even balance sheet items for identification of material subsidiary. Dividend distribution policies of some companies framed under regulation 43A of SEBI LODR clearly give a picture to the investor about philosophy of company to distribute surplus amongst shareholders.

 Policies clearly differentiate between a Man and a boy. Policies clearly reflect on depth of secretarial department and even upon board of directors of that company.

Policies also act as defence when it comes to any allegation made by whistle blower or regulator, because the policies are very well thought and within framework of law. In grey areas of interpretation, policies and processes also give reasoning to the decisions made by board and management and thereby charges of arbitrariness or acting in interest of stakeholders get eliminated.

Consistent policies also give freedom, assurance, and protection to management.

A practising company secretary can help corporates in studying data about industry and various companies about Policies. PCS can help corporates to choose appropriate objective/ goal, assess changing outside world v/s internal culture – structure strength of organisation and then accordingly frame policies to achieve objectives. Since these policies can be available to public, these policies will help attract right investors, talent and help alignment of stakeholders faster and longer while mitigating lot of risks.

Processes and Technology

Corporate law [both companies act and SEBI LODR] has become so complex that intention and policies alone cannot get you there. For that we need robust processes and at next level technologically advanced processes. For effective implementation of compliances like related party transactions [RPT] require multiple robust processes. For example – process of identification of related parties, mapping transactions with related parties (directly or indirectly),  processes to identify transactions where a Related Party (‘RP’) can be indirectly benefited,  framework for onboarding RPs, processes about ascertaining best interest for company, processes for data collation, processes of reporting, processes of frequent audits, processes of whistle blowers about RPT and many more. These processes collectively become comprehensive compliance management system.

There are quite a few corporates who seek help of professionals in streamlining these processes which are appropriate for them and meeting the expectations of regulators and law makers. PCS has a great opportunity to develop mastery in streamlining these processes and take corporate secretarial functions to various process related accreditations like ISO. Secretarial department doing ISO for it’s quality processes and for data protection can give lot of comfort to various stakeholders. In case of any enquiries from regulators about any probable violation of RPT or PIT or CSR or Code of Conducts or Policies, these processes can prove bona fide intention of fiduciaries and can act as ring fence at many times.

Processes, particularly those enhanced by technology, can also bring a lot of ease and comfort about compliances not only to secretarial team but also to board of directors. Imagine that using technology if related party is identified via disclosures from all concerned parties, a dashboard presented to audit committee about this, how reassuring that would be! If via vendor, distributor, employee onboarding processes are tagged, and no vendor/ distributor/ employee can be onboarded if he/ she is RP! Such a comfort giving thing to every fiduciary!! PCS can help in streamlining this and even anchoring this, further being a custodian of these processes. This can bring lot of credibility to profession and great utility to industry. RPT, PIT, CSR, Whistleblower, board, and committee meeting processes are very demanding, and PCS can bring lot of ease to it.

Stakeholder Engagement

No longer secretarial field can work in isolation. Be it RPT, PIT, SAST, Reg. 30, ESOP, CSR, Meetings, stakeholder engagement – alignment – and responsibility sharing has become a key for performance of company secretary. PCS can help corporates in conducting trainings, communication strategies, KPI framing to take care of these compliances, and propagation of its importance to senior management – executive directors and overall board of directors. Story telling techniques – engaging presentations – communication collaterals – learning management techniques – new generation engaging tools like gamifications / animations / bots can bring lot of acceptability to these efforts and PCS is equipped to help in this as important player.

My experience tells me that with these efforts, perception of senior management towards company secretary profession can change dramatically.

Conclusion:

It is a high time PCS must move beyond certification/ attestation/ outsourcing services. PCS should become partner of his fellow in corporate. This partnership between corporate and PCS will bring lot of sustainability in practices, help corporates position well, protect well, attract good investors, bring ease in compliance, and win credibility.

The post Partnering of PCS with corporates – beyond certifications and outsourcing first appeared on MMJC.

Through a notification dated 23^rd October 2025, Ministry of Corporate Affairs (MCA)has modified the jurisdiction of existing Registrars of Companies (ROCs) and has also designated some new ROCs. As a result, companies who were earlier governed by one ROC, may now be governed by another ROC. Earlier this was effective from 1^st January 2026, however the effective date has been postponed to 16^th February 2026 vide MCA notification dated 30^th December 2025.

In this write up, we shall try to understand, companies located in which areas will come under the jurisdiction of which ROC as per new modified jurisdiction. This discussion shall primarily revolve around districts of Mumbai, Thane, Raigad and Palghar.

Modified jurisdictions of ROCs:

Earlier, the ROC Mumbai covered almost the whole state of Maharashtra, barring some districts which fell under the jurisdiction of the ROC Pune. As per the modified status, the jurisdiction of ROC Pune remains unchanged. However, the area falling in the jurisdiction of ROC Mumbai is split into 3 different ROCs being, ROC Mumbai, ROC Navi Mumbai and ROC Nagpur.

Amongst these, the areas falling under the jurisdiction of ROC Nagpur are adequately clear and are not analysed in this write-up. The only point to be noted is that if we geographically look at the map of Maharashtra, then the companies located till the districts of Jalgaon and Chatrapati Sambhaji Nagar (erstwhile Aurangabad) will be covered in the jurisdiction of ROC Navi Mumbai and all further districts eastwards shall be governed by ROC Nagpur in place of ROC Mumbai from 16^th February 2026 onwards and shifting of registered office geographically from these western districts to eastern districts of Maharashtra will need extra compliance as explained at the end of this write-up. However, the areas covered under jurisdiction of ROC Mumbai and ROC Navi Mumbai need careful deliberation as they fall in close vicinity and clear understanding is required with respect to which areas fall in jurisdiction of which ROC.

Analysis of jurisdiction of ROC Mumbai and Navi Mumbai.

As per the MCA notification, the ROC Mumbai has jurisdiction over areas of Mumbai city and Mumbai suburban. Whereas ROC Navi Mumbai has jurisdiction over districts of Thane, Raigad, Palghar and others. Since districts of Mumbai, Thane, Raigad and Palghar share boundaries with each other, it is important to understand, boundaries of which districts extend till where and which area comes under jurisdiction of which ROC.

For this purpose, help can be taken from PIN code-based divisions made by the Indian Post services. As per this division, following is the area wise distribution amongst ROCs.

As per this distribution, if we try to analyse the suburban areas around Mumbai, then areas till Dahisar in western suburbs of Mumbai, areas till Mulund in Eastern suburbs of Mumbai and areas till Mankhurd in Harbour side of Mumbai come under jurisdiction of ROC Mumbai. Whereas areas beyond these limits fall under ROC Navi Mumbai.

Similar situations exist in cases of ROC Delhi, ROC Uttar Pradesh and ROC Kolkata, who have been newly designated. Therefore, now the companies, before undertaking any corporate action, need to find out, under which ROC, the registered office of their company is located and act accordingly.

Caution with respect to shifting of Registered Office.

As per the provisions of the Companies Act 2013[2], when company shifts its registered office out side the local limits but within the same State and within the jurisdiction of same ROC, in addition to the approval of Board of Directors, it is additionally required to seek approval of shareholders through pass a special resolution (i.e., votes cast in favour of resolution to be not less than three times the number of votes, if any, cast against the resolution), and it can proceed with shifting. However, if office is being shifted from jurisdiction of one ROC to jurisdiction of other ROC, then approval from Regional Director (RD) is also required.

Given this scenario, earlier if company’s registered office was being shifted from Mulund to Thane, then it was shifting outside local limits and only shareholders’ approval by special resolution was sufficient. But now since this shifting will be from jurisdiction of ROC Mumbai to jurisdiction of ROC Navi Mumbai, approval of RD will also required in this case.

Therefore, companies need to be careful while shifting its registered offices outside local limits. The district where the registered office will be shifted need to be evaluated and jurisdictional limits of ROC should be carefully considered before undertaking such shifting.

Conclusion.

In view of the revised ROC jurisdictions, companies must clearly identify and be aware of the ROC governing their registered office with reference to the modified territorial limits. This is particularly important for companies located in adjoining districts, where jurisdictional shifts may have practical compliance implications. Any corporate action, especially shifting of registered office, should now be undertaken only after carefully examining whether it results in a change of ROC jurisdiction, to ensure timely and correct regulatory approvals.

[1] MCA notification No. S.O. 4850(E). dated 23^rd October 2025

[2] Section 12(5)

(5) Except on the authority of a special resolution passed by a company, the registered office of the company shall not be changed,—

(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act or where it may be situated later by virtue of a special resolution passed by the company; and

(b) in the case of any other company, outside the local limits of any city, town or village where such office is first situated or where it may be situated later by virtue of a special resolution passed by the company:

Provided that no company shall change the place of its registered office from the jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State unless such change is confirmed by the Regional Director on an application made in this behalf by the company in the prescribed manner.]

The post ROC Jurisdiction Re-alignment: What Companies Need to Know first appeared on MMJC.