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Compliance under Section 187C (Corporate Law)

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( Author )
28 October 2010

Respected Sirs,

In connection with the abovesited subject, i would like to draw the attention of the experts on one of the query of mine:

I am engaged in incorporation of a Private Limited Company which is going to be a wholly owned subsidiary of a Company incorporated outside India. The details of the share capital subscribed are as below:

1.xyz, Inc. through its authorised representative Mr. x - 9,999 Equity Shares
2.Mr. Y, a nominee shareholder - 1 Equity Share

Now the i've been asked to check the applicability and compliance under Section 187C. However, i am referring the Companies (Declaration of Beneficial Interest in Shares) Rules, 1975 wherein it has been categorically stated in the beginning itself as a note that, "the provisions of Section 187C have become redundant on and after the commencement of the Companies (Amendment) Act, 2000" (which has been made effective from 13/12/2000).

Also the rules states that "in exercise of the powers confrrred u/s 187C read with Sec 642(1) (a) the Central Government makes the following rules-----------------------

(2) They shall come into force on the date of their publication in OG."

Now my question is do we need to make the complinace under Section 187C although inspite of the fact that they have been made redundant?

Also if the If we take the plea that the Central Government has vide powers u/s 642(1)(a) made the rules and mandated the compliance then what is the effective date when the said rules have been amneded and notified in the OG?

Is it the case that the provisions of the rules will prevail vis-a-vis the provisions of the Companies Act, 1956?

And lastly, do we need to make the compliances to fulfill the requirements and to aviod the penal consequences?

Learned members are requested to consider this matter and solicit their views on the same.

Thanks in anticipation.

Regards,
Mitesh Darji
9664759868


Mitesh Mehta

( Expert )
28 October 2010

Yes you have to comply with the provisions of Section 187C


Mitesh Darji

( Author )
28 October 2010

Dear Mitesh,

can you please let me know on what basis should i comply with. since the rules clearly says the provsions of Section 187C have become redundant.
If i go as per the rules then what is the effective date of amendment and notification of the said rules?

My questions are still the same.can you please throw some light on my questions.

Regards,
Mitesh Darji


Mitesh Mehta

( Expert )
29 October 2010

In ‘The Companies (Declaration of Beneficial Interest in Shares) Rules, 1975, there is a note given that Provisions of section 187C have become redundant on and after the commencement of the Companies (Amendment) Act, 2000. i.e w.e.f 13/12/2000

However, amendment made to section 187C by the Companies (Amendment) Act, 2000, says only about trustees.

Thus if a shareholder is only a nominee shareholder, made just with an intention of complying with the minimum membership requirements, then it is still mandatory to receive declaration from such members. The company required to file form 22B.

Recently i have filed Form 22B with ROC.


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