COMPANY COMPLIANCES EVENT BASED

Event-Based Compliances for Private Limited Company

Event-Based Compliances for Private Limited Company

Besides the annual filings, there are various other compliances that need to be compiled with on occurrence of any event in the company.

Here are specific instances of such events:
·   Change in the authorized capital or the paid-up capital of the company.
·   Allotment of new shares or transfer new shares
·   giving loans to other companies
·   giving loans to directors
·   Appointment of managing or whole-time Director and their payment
·   when a bank account is opened or closed, or there is a change in the signatories of a bank account.
·   if there is an appointment or change of the statutory auditors of the company
It is necessary to file different forms with the registrar for all such events within a specific period. In case of missing out on this, additional fees or penalties might be levied. Hence, it is necessary to meet such compliances on time.
Non-Registrar compliance
These regulatory obligations do not directly involve the ROC but are essential for lawful business operations. They may be governed by various other regulatory bodies and laws, depending on the nature of the business, its size, and the industry it operates in. These include:
·   Payment of Periodic Tax Due: Regular payment of Goods and Services Tax (GST) liability, Tax Deducted at Source (TDS), Tax Collected at Source (TCS), Advance Tax, and Professional Tax (PTax).
·   Filing of Periodic Returns:
·   Monthly/Quarterly/Annual GST Returns
·   Quarterly TDS Returns
·   Filing of Income Tax Returns
·   Filing of Tax Audit Report
·   Filing of half-yearly Employees' State Insurance Corporation (ESIC) returns
·   Filing of Provident Fund (PF) returns
·   Filing of professional tax (PTax) returns
·   Regulatory Assessment and Reporting: Compliance with various regulatory assessments and reporting requirements under different acts of law, such as the Environment Protection Act, Competition Act, and Factory Act.
Non-compliance Penalty
Non-compliance with the rules and regulations of the Companies Act in India can result in penalties for the company and its defaulting members. Penalties typically involve fines imposed for the duration of the non-compliance. Additionally, delays in annual filings may incur additional fees. Therefore, companies should fulfil their compliance obligations promptly to avoid penalties and financial repercussions.
Streamline Company Compliance with GO LEGAL FILING
With GO LEGAL FILING, entrepreneurs can seamlessly complete their company compliance requirements. Here's how we can help:
Secretarial Services
Companies are required to conduct a minimum of four board meetings, an annual general meeting, Directors Report and Annual Report each financial year. Our Compliance Manager will help you prepare minutes of board meetings and create all secretarial reports.
MCA Annual Return Filing
Annual General Meeting should be held by a company within 6 months from the end of that financial year. And MCA annual return must be filed on or before September 30th. Our Compliance Manager will prepare all the documents and file your company’s MCA annual return.
Income Tax Return Filing
Income tax return of a company must be filed irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year. Our Compliance Manager will prepare all the documents and file your company’s income tax return.
Ready to streamline compliance effortlessly? Let GO LEGAL FILING be your trusted partner. Get started today and experience hassle-free compliance management.

ADD DIRECTORS

Addition of New Directors

In a Private Limited Company, directors are pivotal to the business's seamless operation and strategic direction, managing daily activities and making crucial decisions that affect the company's future, particularly concerning shareholder investments. As businesses evolve and expand, a need may arise to appoint additional directors to meet the growing demands of the company or to satisfy shareholder expectations. This process must be carried out strictly to the regulations outlined in the Companies Act of 2013 to ensure the company remains compliant and maintains proper governance.

Go Legal Filing/ JKITR provides expert assistance in navigating the complexities of director appointments, ensuring that your company meets its strategic needs and remains compliant with all legal requirements. Our professional guidance is invaluable for companies looking to expand their board of directors while ensuring adherence to the statutory framework

Who Is a Director in a Company?

A director in a company serves as a key figure appointed by shareholders to oversee the company's operations, in alignment with the guidelines set out in the Memorandum of Association (MOA) and Articles of Association (AOA). Since a company is a legal entity and cannot act independently, it operates through natural persons, namely the directors. These directors form the Board of Directors, entrusted with the company's overall management.

Directors are particularly crucial in a Private Limited Company, where they are responsible for daily decision-making and managing the company's affairs. Shareholders entrust directors with the significant task of managing their investments efficiently, and the shareholders' needs and demands often drive the directors' appointment.

Types of Directors of a Company

Directors within a company are differentiated into several categories, reflecting their distinct functions and duties. The principal types are:

Executive Directors

These individuals are deeply engaged in the company's routine operations and management. They typically occupy specific executive positions like Chief Executive Officer (CEO), Chief Financial Officer (CFO), or Chief Operating Officer (COO), playing a pivotal role in the strategic and operational decisions of the company.

Non-Executive Directors

In contrast to executive directors, non-executive directors do not partake in the company's day-to-day management. Their role is more about providing objective oversight, contributing to the board's decision-making processes, and bringing in external perspectives and expertise.

Independent Directors

Falling under the broader category of non-executive directors, independent directors are distinguished by their lack of material or pecuniary relationships with the company or its management, ensuring their ability to make unbiased judgments. Their fundamental duty is to protect the interests of the shareholders, ensuring transparency and fairness in the company's governance practices.

Appointing Directors in a Private Limited Company

In a Private Limited Company, the law mandates a minimum of two directors and permits up to fifteen. Should the company require more than this cap, it can appoint extra directors by passing a special resolution, which requires the approval of more than 75% of voting shareholders. Sometimes, a company may need to augment its board of directors to cater to evolving business requirements or to address shareholder expectations. Nonetheless, every appointment must be conducted following the stipulations of the Companies Act 2013 to maintain legal compliance.

Key Sections of the Companies Act, 2013 for Director Appointment

The Companies Act of 2013 encompasses essential regulations concerning appointing, supplementing, and modifying a company's directors. Notable sections include:

• Section 149: Outlines the Board of Directors' composition requirements, such as the minimum and maximum number of directors, the necessity of having at least one female director, and the inclusion of a resident director.
• Section 152: Governs the appointment procedure for directors, which is usually carried out during the company's general meeting, and emphasises the need for a Director Identification Number (DIN).
• Section 161: Offers directives on the appointment of additional, alternate, and nominee directors by the Board.
• Section 164: Enumerates the conditions that disqualify an individual from serving as a director.

Reasons for Adding or Changing Directors in a Company

Companies may find several compelling reasons to modify their board composition or introduce new directors:

• Incorporating Fresh Expertise: With growth, a company may need to infuse new skills and perspectives into its board to navigate the challenges and opportunities accompanying expansion.
• Maintaining Strategic Control: By adding more directors, shareholders can distribute operational tasks more broadly, enabling them to focus on strategic oversight without diluting their ownership stakes.
• Revitalizing Board Performance: When current directors cannot perform optimally due to personal circumstances such as health issues or retirement, introducing new directors can help sustain the board's effectiveness.
• Legal Compliance: To adhere to the mandates of the Companies Act 2013, companies must ensure they have the requisite number of directors. Due to unforeseen circumstances, new appointments become necessary to meet these statutory obligations if the board's size falls below the mandated minimum.

Qualifications for Director in a Company

For an individual to qualify as a director in a company, they must fulfil certain conditions:

• Age Requirement: The candidate must be 18 or older since minors are legally excluded from serving as directors.
• Compliance with the Companies Act: The individual must not be disqualified by any of the conditions outlined in the Companies Act 2013.
• Consensual Agreement: The appointment must be a collective decision, receiving approval from the Board of Directors, the shareholders, and the individual being proposed for the directorial role.

Documents Required for Director Appointment

The appointment of a director necessitates the submission of specific documents:

• PAN Card: The director's Permanent Account Number card is mandatory.
• Proof of Identity: Acceptable identification includes Voter ID, Driving License, Aadhaar Card, and similar documents.
• Residential Proof: Documentation confirming the director's residence, like utility bills or rental agreements.
• Recent Passport-Sized Photo: A current passport-sized photograph of the prospective director.
• Digital Signature Certificate (DSC): Required for the electronic signing of documents.

Procedure for Director Appointment or Addition in a Company

The procedure for appointing or adding a director to a company involves several steps:

Step 1: Reviewing the Articles of Association (AOA)

Start by examining the company's AOA to verify if a clause allows for the appointment or addition of directors. If such a clause is missing, the AOA must be amended to include it.

Step 2: Resolution at a General Meeting

• Annual General Meeting (AGM): Typically, director appointments are made during the AGM. If an appointment is needed at another time, it necessitates an Extraordinary General Meeting (EGM).
• Convening an EGM: To call an EGM, the board first needs to meet and pass a resolution for the EGM. At the EGM, another resolution is passed to appoint the new director. This resolution must be filed with the Registrar of Companies on Form MGT-14 within 30 days of passing.

Step 3: Application for DIN and DSC

The individual chosen for directorship must obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) if they don't already have them. The nominee must then furnish the DIN to the company along with a declaration stating they are not disqualified from being a director under the Companies Act, 2013.

Step 4: Obtaining Director's Consent (Form DIR-2)

The proposed director must officially agree to their appointment by providing their consent through Form DIR-2. This form serves as a formal acknowledgement of their willingness to take on directorial responsibilities.

Step 5: Issuing the Letter of Appointment

Upon completing all regulatory requirements, the company issues a formal Letter of Appointment to the new director. This document outlines the director's responsibilities, role, and terms of compensation, among other relevant details.

Step 6: Regulatory Filings with the ROC

Post the director's appointment, the company must file the director's consent (Form DIR-2) and the particulars of the appointment (Form DIR-12) with the Registrar of Companies (ROC). This filing should occur within 30 days of the director's appointment to ensure regulatory compliance.

Step 7: Updating the Register of Directors

The company needs to update its Register of Directors and Key Managerial Personnel with the new director's details, keeping an accurate and current record of its board members.

Step 8: Updating Regulatory and Tax Records

The final step involves updating the director's details with the GST Network and other relevant tax authorities. This step is crucial for maintaining compliance with tax regulations and ensuring that all company records are accurate and up-to-date.

Each of these steps requires careful attention to detail and adherence to the legal requirements set forth by the Companies Act 2013 to ensure that the appointment of a director is valid and compliant with all regulatory obligations.

REMOVE DIRECTOR

Removal of Director from a Company

Company Directors oversees the management and operations of a business, while shareholders own the company. Situations may arise where shareholders opt to remove a director due to inadequate performance or other concerns, or a director may choose to resign. Removing a director is a significant corporate action that requires careful deliberation and strict compliance with the legal framework provided by the Companies Act 2013 or applicable local laws. Whether initiated by an ordinary resolution, board resolution, or judicial order, the process must be conducted fairly, transparently, and in the company's best interest.

Go Legal Filing / JKITR specializes in navigating the intricacies of the director removal or resignation process, ensuring full compliance with legal standards and meticulous attention to detail. Let our experts assist you in navigating this critical corporate transition smoothly and effectively. Contact us today to get started.

Reasons for Director Removal

Under The Companies Act 2013, it's mandatory for a private limited company to appoint at least two directors to commence its operations.

Shareholders have the authority to dismiss a director during the General Meeting, barring instances of government-appointed directors. A director may be subject to removal under several conditions, including:

• Being disqualified as per the criteria set out in the Companies Act.
• Not attending board meetings for more than a year.
• Violating the terms of Section 184 of the Companies Act by engaging in prohibited transactions.
• Being prohibited from participating due to a court or Tribunal order.
• Conviction by a court for a criminal offence with a sentence of at least six months.
• Non-compliance with the regulations and requirements of the Companies Act, 2013.
• Choosing to resign voluntarily from the board.

Methods for Director Removal from a Company

There are three primary methods to remove a director from a company:

• Resignation by Directors: This method involves directors resigning voluntarily from their positions.
• Director Absence from Board Meetings: This approach is used when a director fails to attend board meetings for 12 months, triggering their removal.
• Shareholder-initiated Removal: This method is employed when the shareholders of a company vote to remove a director from their position.

Law Governing the Director Removal

Removing a director is governed by the Companies Act, 2013, under Section 169.

• Section 169: This part explains how a company can legally remove a director, detailing the steps and rules that need to be followed.
• Section 115: While this section mainly talks about how to add new directors, knowing it helps to fully understand the rules about directors, including how they might be removed.
• Section 163: This section deals with choosing directors so everyone gets a fair representation. It's essential for removing directors because it affects how decisions are made in the company.
• Rule 23 of the Companies (Management and Administration) Rules, 2014: This rule gives specific guidelines on how a company should be run, including how to remove directors properly.

Essential Requirements for Director Removal

To lawfully remove a director, specific critical steps must be followed:

• Issuance of Special Notice: According to Section 115 of the Companies Act 2013, a special notice must be issued to initiate the removal process.
• Notice Period to Director: This special notice must be sent to the director in question at least 14 days before the resolution for their removal is voted on, ensuring they have adequate time to prepare a response.
• Right to be Heard: The director facing removal must be allowed to present their side of the story. They should be allowed to make a written representation, which could be circulated to members or read at the meeting.
• Restriction on Reappointment: Once removed, the director in question is not eligible for reappointment to the board.

Filing of Form DIR-12

Form DIR-12, mandated by the Companies Act 2013, must be filled out and submitted to document the official removal of a director. This form is a crucial part of the legal procedure for removing a director from their office.

Procedure for Director Removal

The procedure for removing a director from a company involves several steps, which are outlined below:

Director's Voluntary Resignation

Essential Obligations:

A director's resignation becomes effective on the date the company receives the notice or on a later date specified by the director in the notice, whichever comes later.

Even after stepping down, a resigned director remains accountable for any offences committed during their term.

A director can step down from their position by submitting a written resignation to the company. Upon receiving this resignation, the Board is required to acknowledge it formally. The company must notify the Registrar of Companies about the resignation and include this information in the directors' report presented at the next General Meeting, as stipulated by Section 168 of the Companies Act, 2013.

Mandatory Requirements

The effective date of a director's resignation is either the date the company receives the notice or a later date specified by the director within that notice, depending on which comes last. Additionally, a director who resigns remains responsible for any legal infractions during their time in office.

The following Procedure is to be followed.

• Schedule a Board of Directors Meeting: Following Section 173 and Secretarial Standard-1 (SS-1), a board meeting should be arranged.
• Notification of Board Meeting: After receiving a resignation letter, the company must send out a board meeting notice to all directors at their registered addresses no later than 7 days before the meeting. In urgent situations, a shorter notice period is permissible.
• Preparation of Meeting Documents: The meeting notice should accompany the agenda, explanatory notes, and a draft resolution.
• Conduct the Board Meeting: The board should convene to acknowledge the resignation letter submitted by the director.
• Delegation for ROC Filings: Assign the Company Secretary, CFO, or director to submit the necessary forms and documentation to the Registrar of Companies.
• Disclosure Requirements for Listed Companies: Public companies must report the resignation to the stock exchange promptly, adhering to specific timelines based on the nature and origin of the event or information, as mandated by Regulation 30 & 46(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• Distribution of Draft Minutes: Within 15 days following the board meeting, draft minutes should be sent to all directors via hand delivery, speed post, registered post, courier, or email for their review, per the established procedures for minute preparation and approval.

Submission of Form DIR-12 to the Registrar of Companies (ROC):

Within 30 days following the receipt of the director's resignation notice, the company must inform the ROC by submitting Form DIR-12, accompanied by the following documents:

• A certified true copy of the Board Resolution.
• The resignation notice from the director.
• Proof of the director's cessation from the board.

Submission of Form DIR-11 by the Resigning Director:

The director who has resigned can send a copy of their resignation to the Registrar of Companies (ROC) using Form DIR-11 within 30 days from the date of their resignation. This submission should include:

The resignation notice that was submitted to the company.

• Evidence of the notice being dispatched.
• An acknowledgement from the company confirming receipt of the resignation.

Updating the Register of Directors:

The company must update the Register of Directors and Key Managerial Personnel to reflect the resignation and any other necessary changes.

Director Absence from Board Meetings for 12 Months

When a director fails to attend any board meetings for twelve months, even without formally requesting a leave of absence, they are considered to have vacated their position according to Section 167. The following steps outline the procedure for such situations:

• Acknowledgement of Vacancy: Recognize that the director's position is deemed vacated under the applicable corporate governance laws, such as Section 167, which addresses the automatic vacation of a director's office due to non-attendance.
• Filing of Form DIR-12: The company must then file Form DIR-12 with the Registrar of Companies (ROC). This form serves as a notification of the director's resignation or removal, including cases where the position is vacated due to absence from meetings.
• Update on MCA Database: After the necessary formalities are completed, including the filing of Form DIR-12, the director's name will be officially removed from the Ministry of Corporate Affairs (MCA) database, reflecting the vacancy of their position.

It's essential for companies to adhere to these steps to ensure compliance with corporate governance requirements and maintain accurate records with the MCA.

Director Removal by Shareholders

To remove a director through shareholder resolution, typically an Ordinary Resolution unless specified otherwise in the company's articles or applicable laws, the company should follow these steps:

• Board Meeting Notice: Begin by scheduling a Board Meeting, providing a minimum of seven days' notice to all directors. This notice should include the agenda item for the proposed removal of the director.
• Resolution to Convene an EGM: At the Board Meeting, pass a resolution to hold an Extraordinary General Meeting (EGM). Also, propose a resolution for removing the director, subject to shareholder approval at the EGM.
• Issuing EGM Notice: Send out notices for the EGM to all shareholders, ensuring a precise notice period of 21 days, which excludes the day the notice is sent and the day of the meeting.
• Voting at EGM: During the EGM, present the resolution for the director's removal to the shareholders for a vote. If the majority supports the resolution, it is passed.
• Director's Right to be Heard: Before the resolution is passed, the director should present their case or explanation to the meeting attendees.
• Filing Forms DIR-11 and DIR-12: After the resolution is passed, complete and submit Form DIR-11 (by the outgoing director, if applicable) and Form DIR-12 (by the company) to the Registrar of Companies (ROC), along with the necessary attachments including the resolutions passed.
• Update with MCA: Once the forms are successfully submitted and all procedural formalities are completed, the removed director's details will be officially removed from the Ministry of Corporate Affairs (MCA) database.

Adhering to these steps carefully and ensuring legal compliance, as mandated by the Companies Act, is essential when removing a director via an Ordinary Resolution.

Go Legal Filing/ JKITR experts can assist in this process to ensure a smooth and compliant director removal.

Penalties for Delayed Submission of Form DIR-12

If a company fails to file Form DIR-12 within the stipulated 30-day period following a director's resignation, it faces escalating penalties based on the extent of the delay:

• 30 to 60 days delay: The penalty incurred will be double the standard government fees.
• 60 to 90 days delay: The penalty increases to four times the government fees.
• Beyond 90 days delay: A significant penalty of ten times the government fees is applied.
• Exceeding 180 days delay: The penalty reaches twelve times the government fees, and the company might also face legal actions for compounding offences.

It's crucial for companies to adhere to the filing deadlines to avoid these penalties and ensure compliance with regulatory requirements.

Impacts and Considerations of Director Removal

The removal of a director from a company carries several consequential impacts for both the individual director and the organization:

• End of Directorial Responsibilities: The immediate effect of a director's removal is the cessation of involvement in the company's management and decision-making processes.
• Revocation of Authority: With their removal, the director forfeits any power to act in the company's name or represent its interests in any capacity.
• Potential Legal Ramifications: Failure to adhere to the prescribed legal protocols during removal can lead to legal challenges and possible claims directed at the company.
• Impact on Company Reputation: Removing a director can adversely affect the company's public image, particularly if the circumstances surrounding the removal become widely known. The company must manage the process discreetly and with due consideration for all parties involved.

Filing Amendments under Various Acts:

Following the director's resignation, the company may need to file amendment applications under several acts to update the official records. These acts may include:

• Goods and Services Tax Act
• Shops and Establishment Act
• Factories Act
• Foreign Exchange Management Act
• Inter-State Migrant Workmen Act
• Private Security Agencies Act
• Employee Provident Fund (EPF)
• Employee's State Insurance (ESI)
• Other relevant labour laws
• Industry-specific regulations

These updates ensure compliance with regulatory requirements and reflect the company's current governance structure.

Why choose Go Legal Filing/ JKITR for Director removal?

Choosing Go Legal Filing/ JKITR for director removal offers several advantages:

• Expertise and Experience: Go Legal Filing/ JKITR has a team of professionals who are well-versed in corporate law and the specific procedures outlined in the Companies Act 2013 for director removal.
• Compliance Assurance: With a deep understanding of legal requirements, IndiaFilings experts ensure that every step of the director removal process complies with statutory regulations, thereby minimizing the risk of legal complications.
• End-to-End Support: From the initial consultation to the final submission of necessary forms like DIR-12, IndiaFilings provides comprehensive support, guiding companies through each process phase.
• Customized Solutions: Understanding that each company's situation is unique, Go Legal Filing/ JKITR offers tailored advice and solutions that best fit the specific circumstances and objectives of the company.

By choosing Go Legal Filing/ JKITR, companies can ensure that the director removal process is conducted smoothly, compliantly, and with a professional touch that respects the interests of all parties involved.

SHARE TRANSFER

Private Limited Company Share Transfer

The Share Transfer Procedure in a Private Limited Company is a structured process that facilitates sharing ownership from one individual to another. Shares represent portions of ownership within a company, and they hold the potential to be purchased, sold, or transferred. In India, the transfer of shares within a private limited company is regulated by the Companies Act 2013, along with the associated rules and guidelines set forth by the Ministry of Corporate Affairs (MCA).

At Go Legal Filing/ JKITR, our team of experts stands prepared to facilitate the Share Transfer process for Private Limited Companies, ensuring that every step is executed following the prevailing legal standards and regulatory requirements, thereby guaranteeing a seamless transition and compliance integrity.

Meaning of Share Transfer

Share transfer refers to the process where a company shareholder voluntarily transfers their ownership rights, and potential obligations associated with a share of the company. This transaction occurs when a shareholder decides to relinquish their membership in the company and passes on their share to another individual who desires to become a member.

Therefore, shares in a company can be transferred much like any movable asset, unless there are specific limitations imposed by the company's articles of association.

Key Regulations for Transfer of Shares in Private Companies

The transfer of shares within a private company is governed by specific legal provisions to ensure compliance with corporate governance standards and to maintain the company's private status. Section 56(1) & (3) of the Companies Act, 2013, alongside Rule 11(1) (2) (3) of the Companies (Share Capital and Debentures) Rules, 2014, lay down the framework for these transfers.

Share Transfer Rules in Private Limited Companies

In Private Limited Companies, share transfer is governed by the Articles of Association (AOA), which must be consulted before initiating any transfer. Share Transfer Constraints for Shareholders:

• Pre-emptive Rights: Shareholders wishing to sell their shares must offer them first to the company's existing members at a price set by the Company's Directors or Auditor. The valuation method for shares should be outlined in the Articles of Association. Should there be no interest from current shareholders, the shares can be transferred to someone outside the company.
• Directorial Discretion on Share Transfers: The Articles of Association may empower a director to decline a share transfer to another individual. This grants directors significant authority over share transfer decisions in a Private Limited Company.

Key Participants in Share Transfer Process

The process involves several key parties, including

• Initial subscribers to the company's memorandum.
• A legal representative, in the event of a shareholder's death.
• The transferor is the current shareholder wishing to transfer shares.
• The transferee is the recipient of the shares.

The company involved in the transfer, regardless of whether it is publicly traded or privately held.

Documents Required for Share Transfer in a Private Limited Company

For a share transfer in a Private Limited Company, the necessary documents include

• Share Transfer Deed: This crucial document, needing signatures from both the seller and buyer of the shares, facilitates the transfer.
• Share Certificate: The seller must provide the original share certificate when submitting the share transfer deed.
• PAN Card: A photocopy of the buyer's PAN Card is essential for the share transfer process.
• Board Resolution: The company's Board of Directors needs to endorse the share transfer through a formal resolution.
• No Objection Certificate: An NOC from the seller may be requested to confirm their consent to the share transfer.
• Indemnity Bond: The seller might need to provide an indemnity bond to safeguard the company from potential transfer-related losses.
• Stamp Duty Payment: The share transfer deed requires the payment of stamp duty, which varies by state.

Share Transfer Process in a Private Limited Company

Transferring shares in a private limited company involves a structured procedure that adheres to the company's Articles of Association (AOA) and relevant legal guidelines.

Initiation of Share Transfer Procedure

• Review the AOA: Examine the AOA for any transfer restrictions or conditions that must be met.
• Notification to Director: The shareholder intending to transfer shares must formally notify the company's director of their intention.
• Price Determination: Establish the share price according to the AOA, typically set by the directors or the company auditor. This price is the initial offer made to existing shareholders.
• Notifying Shareholders: The company must inform all shareholders about the available shares, including details like the offer price and the deadline for expressing interest.
• Share Allocation: If any current shareholders are interested, they should be allocated first. If no interest is shown, or there are remaining shares, they can be offered to external parties.

Executing the Share Transfer

• Share Transfer Deed: The next step in transferring shares involves acquiring the official transfer deed, designated as Form SH-4, which a recognized authority must endorse. This form serves as the primary document for executing share transfers. In certain situations, the transfer of shares might not adhere to the standard Form SH-4 requirement. These exceptions include

• Transfers executed by directors or nominees on behalf of another corporate entity as outlined in section 187 of the Companies Act, 2013.
• Share transfers from directors or nominees for a government-owned or controlled corporation.
• Shares are pledged as security for loan repayment to institutions like the State Bank of India, scheduled banks, other banking companies, financial institutions, or government entities.
• Transfers involving debentures, where a standardized transfer format is acceptable.

• Deed Execution: The transferor (seller) and the transferee (buyer) must sign the share transfer deed.
• Stamp Duty: The deed must be stamped by the Indian Stamp Act and the applicable stamp duty rates in the state.
• Witness Verification: A witness must sign the deed, providing their signature, name, and address for additional validation.
• Document Submission: Attach the share certificate or allotment letter to the completed transfer deed and submit these documents to the company.
• Share Certificate Issuance: Upon verifying and accepting the transfer documents, the company will issue a new share certificate to the transferee, officially recognizing them as the new shareholders.

Go Legal Filing/ JKITR: Your Trusted Partner in Simplifying Share Transfers

The team of experts at Go Legal Filing/ JKITR is equipped to provide comprehensive assistance with the share transfer process. Our expert knowledge and experience in navigating the complexities of corporate regulations can ensure a smooth and compliant transfer of shares in any private limited company. From reviewing the Articles of Association to ensuring the proper execution and stamping of share transfer deeds, Go Legal Filing/ JKITR professionals can guide you through each step.

DIR 3 KYC

DIN eKYC Filing (Form DIR-3 KYC for Directors)

A director identification number (DIN) is a unique identifying number assigned to a person who wishes to become a director or is already a director of a corporation. DIN is obtained by submitting an application in eForm DIR-3, which was originally intended to be a one-time process for anyone wishing to become a director of one or more companies.

However, as a result of an amendment to MCA’s register, all directors with DIN are now required to submit their KYC details in e-Form DIR 3 KYC every year.

Purpose of the Form DIR-3 KYC

As mentioned above, Every director shall inform all the companies in which he/ she is a director, of the DIN allotted to him/her in Form DIR-3B within 30 days of the receipt of intimation of approval of DIN. Similarly, the Secretary and Manager of a company shall inform the company of their Income-tax Permanent Account Number (PAN). The company needs to further information about the DIN of the directors to the Registrar in Form DIR-3C within 15 days of receiving the intimation.

Who is required to submit Form DIR 3 KYC?

Directors are required to submit their KYC details to the MCA if they meet the following conditions, according to recent MCA announcements:

• Their Director Identification Number (DIN) was assigned to them by or on March 31, 2018
• DIN is in approved status

Note that KYC is also required of disqualified directors.

eForm DIR 3 KYC at a Glance

Any DIN holder who is filing his KYC details for the first time with MCA must file all KYC details only through eForm DIR-3 KYC. There is no option for such a person to access the web service for his KYC.

Further, any DIN holder who wants to update any information of his KYC details must update the same through the filing of eForm DIR-3 KYC only.

Form DIR-3 KYC Web

Any DIN holder who has already submitted eForm DIR-3 KYC in any of the previous financial years and who does not require an update in any of his KYC details as submitted may perform his annual KYC by accessing the DIR-3 KYC web service.

• Form DIR-3 KYC WEB is simply to verify the data filled by the DIN holder in his previous year’s eForm DIR-3 KYC.

Applicable Fee for form DIR-3 KYC

If Form DIR-3 KYC, is filed within the due date of the respective financial year, no fee is payable. However, if filed after the due date, for DIN status ‘Deactivated due to non-filing of DIR-3 KYC a Fee of Rs.5000 becomes payable.

Due Date for Filing DIR 3 KYC Form

Documents Required to File DIR 3 KYC form

The documents required to file reform DIR 3 KYC is as follows:

• Details of Nationality
• Details of citizenship like gender, date of birth, etc.
• Permanent Account Number (PAN)
• Passport (compulsory when DIN holder is of foreign nationality)
• Driving License
• Aadhaar card
• Personal Mobile and Email ID
• Proof of Residential address.
• Voters Identity card

Aside from the aforementioned documents, directors must additionally have the following items on hand:

• To file the form, he used his digital signature.
• CA, CS, or Cost Accountants who are currently practicing the professional attestation of the above-mentioned documents. In the event of foreign nationals, an attestation by a defined authorized person is required.
• A declaration signed by them (applicant/director) and attested by CA, CS, or Cost Accountants in good standing.

The process to file DIR 3 KYC Form

Step 1- Download the form

• The first and most important step is to obtain a copy of the DIR-3 KYC form from the MCA’s website.

The DIR 3 KYC form is attached for your reference.

Step 2- Fill in the DIN details

• The DIN must be filled in on the KYC form if the status is ‘Approved.’
• Directors who have had their DIN deactivated due to non-submission of the KYC Form can reactivate their DIN by filling out the form after the statutory due date and paying late filing fees.

Step 3- Fill out the DIR- 3 KYC Form with the required information

Name and relevant credentials

The applicant must enter his own first and last name, as well as his father’s first and last name. There are a few things to keep in mind:

• The director must give his name as it appears on his PAN card.
• The address provided in the form will be verified against the PAN database.
• Acronyms, single alphabets, and short forms are not permitted.

Nationality

• A director needs to declare his nationality
• Directors with foreign nationality must declare the nationality mentioned in their passport

Age Declaration

A director’s date of birth (DOB) must be entered in the DD/MM/YYYY Because anyone under the age of 18 is ineligible to file this application, an age declaration is required.

Address

A director’s permanent residential address must be entered and proof of permanent address must be attached. When the current residential address differs from the permanent residential address, the current residential address must be provided.

Note: A foreign pin code can be furnished only when the state selected is “NA”.

Step 4- PAN verification

Verification of the Permanent Account Number (PAN) is required. A director must first input his PAN, after which he must click the ‘Verify income-tax PAN’ button. The system next checks the director’s information using the PAN card number.

Note: For successful authentication, the PAN provided in the form must match the PAN indicated in the DSC. When foreign nationals do not have a PAN, the name on the form must match the name on the DSC in order for authentication to be successful.

Step 5- Update contact details and verify OTP

• A director must update his contact information by providing his phone number and e-mail address, both of which must be validated using an OTP.
• When a director inputs these contact details, he must verify them using an OTP by selecting the ‘Generate OTP’ button once they have been submitted. OTPs are issued to both the mobile number and the email address separately.
• Only directors who are not Indian citizens are permitted to use country codes other than +91/91/0.
• It should be remembered that an OTP can be issued to the telephone number and email address up to 10 times per day and twice every 30 minutes against one form.

Attested Attachments to be made

An applicant must attest and upload the documents listed above. Any additional attachments must be signed digitally by the applicant.

Step 6- Authentication of e-Form

The e-Form must be validated, which means it must be digitally signed by a Chartered Accountant/Cost Accountant or a Company Secretary who is licensed to practice their profession. The provision of the practicing professional’s information, as well as their digital signature, is a critical responsibility that cannot be overlooked.

After thorough proofreading, click the ‘Submit’ button.

Step 7- SRN Generation

When the e-Form DIR-3 KYC is successfully submitted, an SRN is produced and assigned to the user for future MCA correspondence.

Step 8- Email communication

On his personal email ID, the applicant will receive an email acknowledging receipt of the form. Once the email of approval is received, filing eForm DIR-3 KYC is complete.

Things to keep in mind while filing e-Form DIR-3 KYC

• When filling out this e-form, the director must provide their phone number and email address. A One-Time-Password will be used to verify this information (OTP)
• This e-Form will require directors to utilize their digital signatures.
• Directors must ensure that the e-Form is certified by a practicing Chartered Accountant, Cost Accountant, or Company Secretary.

• Procedure to File Form DIR-3 KYC WEB

  The procedure to File Form DIR-3 KYC Web is explained in detail below:

  • The applicant needs to log in to the MCA portal with valid credentials. After login, click on the MCA service option and then select DIN services. From the list of services, select the DIR-3 KYC Web option.
  • On the new page, Provide the DIN details, mobile number, and email ID that are preloaded will display on the page.
  • By clicking on the Send OTP option, an OTP will be redirected to the applicant’s mobile number and Mail ID. Furnish the OTP to verify.
  • Pre-loaded details of the DIN Holder will display, check all the details, and click on submit button.
  • A zero rupee challan and SRN will be generated if the form is filed on or before 30th September.

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