CS Divesh Goyal
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SHORT SUMMARY
In this article, the author shall discuss the latest amendment made by the Ministry of Corporate Affairs (MCA) in respect to the Incorporation of Company with a person/ company belong to a country sharing land border with India like China, Pakistan, Bhutan, Myanmar, Nepal and Bangladesh.
MCA has amended Companies (Incorporation) Second Amendment Rules, 2022 w.e.f. May 20, 2022.
These amendments have been made by:
- Form 9 in Companies (Incorporation) Second Amendment Rules, 2022 has been substituted with new formats
- Amendment has been made in DIR-2 (Consent of Directors).
A. AMENDMENT IN FORMAT OF INC-9
Declaration by First Subscriber
W.e.f. June 01, 2022 if you are incorporating any Company in India you are required to use the "New INC-9" form. In the new form following clauses has been added:
- I am required to obtain the Government Approval under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 prior to subscription of shares and the same has been obtained and is enclosed herewith; Or
- I am not required to obtain the Government Approval under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 prior to subscription of shares
B. AMENDMENT IN FORMAT OF DIR-2
Declaration by First Director
W.e.f. June 01, 2022 if you are incorporating any Company in India you are required to use the "New DIR-2" form. In the new form following clauses has been added:
I further declare that,
- I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director; or
- I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached.
C. AMENDMENT IN FORMAT OF DIR-3: If Applying for DIN
Declaration While Applying DIN
- I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number; or
- I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India under sub-rule (1) of rule 10 before applying for director identification number and the same has been obtained and is attached.
FAQ :
The Ministry of Corporate Affairs (MCA) has amended the Companies (Incorporation) Second Amendment Rules, 2022, introducing new formats for INC-9 and DIR-2 forms. These changes are particularly relevant for companies from countries sharing a land border with India.
The amendments to the Companies (Incorporation) Second Amendment Rules, 2022, were made effective from May 20, 2022, with new formats for INC-9 and DIR-2 applicable from June 01, 2022.
These amendments primarily affect companies or individuals belonging to countries that share a land border with India, such as China, Pakistan, Bhutan, Myanmar, Nepal, and Bangladesh.
The new INC-9 form requires subscribers to declare whether they have obtained, or are not required to obtain, government approval under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, prior to subscribing to shares.
The updated DIR-2 form requires the first director to declare whether they are required to obtain, or have obtained, security clearance from the Ministry of Home Affairs before their appointment.
Yes, if applying for a Director Identification Number (DIN), the DIR-3 form now includes a declaration regarding the requirement to obtain security clearance from the Ministry of Home Affairs under sub-rule (1) of rule 10.
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