Analysis of Companies (appointment and managerial personnel) Amendment Rules 2020

Analysis of Companies (appointment and managerial personnel) Amendment Rules 2020 

Ministry of Corporate Affairs (MCA), Government of India (GOI) wide notification dated 03^rd January, 2020 amended the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

These rules may be called the “Companies (appointment and managerial personnel) Amendment Rules 2020”.

Applicability:

Applicable in respect of financial years commencing on or after 1^st April, 2020.

Powers exercised by Central Government to amend the rules is given under section 203(1) of the Companies Act, 2013 read with section 469 of the Companies, Act 2013.

In the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (herein after referred to as said rules),

1)    for rule 8A, the following shall be substituted as under:-

Before Amendment Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2O14	After Amendment Companies (appointment and managerial personnel) Amendment Rules 2020
A company other than a company covered under rule 8 which has a paid up share capital of five crore rupees or more shall have a whole-time company secretary.	"Every private company which has a paid up share capital of ten crore rupees or more shall have a whole -time company secretary."

2)    for rule 9, the following shall be substituted as under:-

Before Amendment Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2O14	After Amendment Companies (appointment and managerial personnel) Amendment Rules 2020
(b) Every public company having a turnover of two hundred fifty crore rupees or more	(b) Every public company having a turnover of two hundred fifty crore rupees or more or (the word or added)
	New Clause added: c) Every company having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.".

3)    the following explanation shall be inserted under clause 2 of Rule 9, namely:-

Rule 9 (2) The format of the Secretarial Audit Report shall be in Form No. MR.3.

"Explanation :-

For the purposes of this sub-rule, it is hereby clarified that the paid up share capital, turnover, or outstanding loans or borrowings as the case may be, existing on the last date of latest audited financial statement shall be taken into account.".

Link of the Notification:

http://www.mca.gov.in/Ministry/pdf/AmdtRules_06012020.pdf