ALL ABOUT XBRL

ALL ABOUT XBRL

Contributed by Mr. Parth Sharma

è What is XBRL

v  eXtensible Business Reporting Language (XBRL) 

v  A more advanced form of XML. (XML reporting is already being used by the Income-tax Department in India.)

v  It is a revolutionary format for financial reporting process for both preparers and consumers.

è Mandate of ministry of corporate affairs on XBRL

q  Companies whose Balance Sheet date is 31.03.2011 or onwards, need to file their financial statements in XBRL provided they qualify the criteria laid as per Ministry of Corporate Affairs (MCA) vide its General Circular 37/2011 dated 07.06.2011

q  The following class of companies have to file the Financial Statements in XBRL Form w.e.f FY 2010 - 2011:-

                    i.          All companies listed in India and their subsidiaries;

                  ii.          All companies having a paid up capital of Rs. 5 Crore and above;

                iii.          Turnover of Rs. 100 Crore or above.

Exempted category

The following classes of companies are not required to file financial statements in XBRL format:

q   Banking Companies

q   Insurance Companies

q   Power Companies

q   Non – Banking Financial Companies (NBFCs)

q   Other Companies having Paid-up capital below Rs. 5 Crore or Turnover below Rs. 100 Crore

Note:

FOR MCA CIRCULARS ON XBRL CLICK ON THE LINK GIVEN BELOW

http://www.mca.gov.in/XBRL/Notifications_Circulars.html

è  XBRL Filing Process

Step 1: Mapping of financial statement & Non- Financial disclosures to corresponding element in “Taxonomy”

Step 2: Create instance document

Step 3: Review and verify the instance document

Step 4: Download XBRL validation tool from MCA Portal

Step 5: Use the tool to validate the instance document

Step 6: Pre-scrutiny of validated instance document through the tool

Step 7: Use In - built Viewer

Step 8: Attach instance document to the Form AOC-4 XBRL

Step 9: Upload Form AOC-4 XBRL on the MCA portal

Step 10: View Balance Sheet and Profit & Loss submitted in XBRL form on MCA portal

Recent Notification by the MCA on XBRL

Link: http://www.mca.gov.in/Ministry/pdf/Rules_09092015.pdf

Fast Track Exit- Procedures under Companies Act

Fast Track Exit- Procedures under Companies Act

contributed by Mr.Parth Sharma

 

Introduction

The Fast Track Exit (FTE) mode is introduced by the Ministry of Corporate Affairs (MCA) vide General Circular No. 36/2011 dated 7^th June, 2011 (the Circular) and made effective from 3^rd July 2011 as a Fast Track opportunity for Defunct Companies i.e. Companies not carrying any business, to Strike off their names from Register of Companies under Section 560 of the Companies Act, 1956 (the Act) (corresponding to Section 248 of the Companies Act, 2013 which is not yet notified).

Conditions for FTE

·         The defunct company should have “Nil” Assets & Liabilities and

·                has not commenced any business activity or operation since incorporation; or

·                is not carrying over any business activity or operation for last one year before making application under FTE

·         A Company which has “Active” status or identified as “Dormant” by the MCA

Companies not eligible for FTE

·         Listed Companies

·         De-listed Companies

·         Section 8 Company (corresponding to Section 25 Company under the  Companies Act, 1956)

·         Vanishing Companies

·         Companies under Inspection/Investigation pending in any Court

·         Companies where order under Section 234 of the Companies Act, 1956 has been issued and reply thereto or prosecution, if any, is pending in the court

·         Companies against which prosecution for a non-compoundable offence is pending in court

·         Companies which have accepted public deposits and has made defaults in repayment of the same

·         Companies having secured loans

·         Companies having management disputes

·         Companies whose filing of documents has been stayed by Court or Company Law Board (CLB) or Central Government or any other Competent Authority

·         Companies having dues to income tax, sales tax, central excise, banks and financial institutions or Central Government or State Government or any local authorities

How to apply for FTE?

The application shall be made in Form FTE accompanied by filing fees of ` 5,000/-.

Attachments to Form FTE

1.      Affidavit (as per “Annexure A” to the Circular) to be given individually or collectively by all Directors;

2.      Indemnity Bond (as per “Annexure B” to the Circular) to be given individually or collectively by all Directors;

3.      Statement of Accounts (as per “Annexure C” to the Circular) duly certified by Practicing Chartered Accountant or Statutory Auditor of the Company as the case may be;

4.      Board Resolution stating to Strike off the name of the Company under FTE Mode;

5.      Board Resolution for closure of Bank Accounts;

6.      Confirmation letter duly signed by the concerned Banks Official that the Bank Account of the Company is closed;

7.      The company shall disclose pending litigations, if any, involving the company while applying under FTE;

8.      Form FTE shall be certified by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant.

Note: In case, the applicants name are not available in database of directors maintained by the MCA, a certificate from Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant along with membership number certifying that the applicants are present Directors of the Company. In such cases the applicants will not be required to file Form DIR-12 (earlier Form 32) and Form DIR-3 (earlier           Form DIN 3).

Procedure adopted by the Registrar of Companies (ROC)

The Registrar on receipt of application shall examine the same and if application found in order, it shall intimate the Company by issuing a notice under Section 560 (3) of the Act giving 30 days time, stating that unless cause is shown to the contrary, the name of Company be struck off from the register and the lead to dissolution of the Company.

The Registrar on being satisfied shall strike off the name of the Company from its Register and send notice under Section 560 (5) of the Act for publication in the Official Gazette and the Company stands dissolved from date of publication of the notice in the Official Gazette.

Note: A Company dissolved under Section 560 of the Act can be restored before          expiry of 20 years from the date of publication of notice in the Official Gazette by order of the Court. The application for restoration can be made only by the Company, member or creditor. It must be shown that on the date of dissolution of the Company, the Petitioner was a member or creditor. The procedure for application for restoration should be as per provisions of Section 560 (6) of the Act.

Contributed by:

Parth Sharma

Sharma Financial Services

Procedure for Registering Section 8 Company

Procedure for Registering Section 8 Company

Written by

Parth Sharma

Introduction

Section 8 Company is a Company licensed under Section 8 of the Companies Act, 2013              (the Act), erstwhile known as Section 25 Company under the Companies Act, 1956, which has main object;

·         For promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object,

·         provided the profits, if any, or other income is applied for promoting only the objects of the company and

·         No dividend is paid to its members.

Therefore, Section 8 Company is a company registered for charitable or not-for-profit purposes.

Section 8 Company is similar to a Trust or Society; exception is that a Section 8 Company is registered under the Central Government's “Ministry of Corporate Affairs (MCA)”whereas the Trusts and Societies are registered under State Government regulations.

Section 8 Company has various advantages when compared to Trust or Society. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.

Further, the key feature of a Section 8 Company is that name of the Company can be incorporated without using the word “Limited” or “Private Limited” as the case may be.

(Note: Requirement of minimum capital under the Act shall not apply to Section 8 Company vide Notification of June 5, 2015).

Procedure for Registration of Section 8 Company

·         Minimum two people required for registration of Section 8 Company

·         Obtaining Digital Signature Certificate (DSC) for proposed Directors not having Directors Identification Number (DIN)

·         Obtaining DIN from Ministry of Corporate Affairs by filing Form DIR-3, if not having DIN

·         Filing of Form INC-1 for Reservation of Name

·         Post approval of name from the concerned Registrar of Companies, file Form INC-12 {pursuant to Section 8 (1) of the Act and Rule 19 of Company (Incorporation) Rules, 2014} (the Rules)

            Attachments to Form INC-12

ü   Draft Memorandum f Association of the proposed company in Form INC-13

ü   Draft Articles of Association of the proposed company

ü   Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14

ü   Declaration from each person making application in Form INC-15

ü   Estimated Income and Expenditure for next 3 years

(Note: Form INC-12 is in physical mode and the e-form is not yet available on MCA21 Portal. Thus, the same needs to be filed in Form RD-1 with prescribed fees).

Attachments to Form RD-1

ü   Form INC-12

ü   Draft Memorandum of Association of the proposed company in Form INC-13

ü   Draft Articles of Association of the proposed company

ü   Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14

ü   Declaration from each person making application in Form INC-15

ü   Estimated Income and Expenditure for next 3 years

·         The Central Government after examining grants the license in Form INC-16

·         After obtaining the license, following forms need to be submitted with prescribed attachments

ü  Form INC-7

ü  Form INC-22

ü  Form DIR-12

·         Post Scrutiny of the submitted forms and documents the Corporate Identification Number (CIN) will be issued by the concerned Registrar of Companies.

List of documents required:

ü  Identity Proof: Copy of Permanent Account Number (PAN) of all Directors/Promoters (Mandatory)

ü  Address Proof: Copy of valid Passport/Driving Licence/Aadhar/Telephone Bill/Electricity Bill (not older than 2 months)

ü  Latest passport size photographs of all Directors/Promoters

ü  Rent Agreement or Leave & Licence Agreement, if registered office premise is taken on rent

ü  Utility Bills of proposed registered office

ü  Consent to act as Director in Form DIR-2

ü  Directors Directorship details in other Companies/LLPs, if any.

(Note: A Company incorporated will be active as long as the annual compliances under the Act and the Rules made thereunder are complied with. In case annual compliances are not complied with, the company will be a Dormant Company and maybe struck off from the register.)

Parth Sharma

Sharma Financial Services