Compliance Requirements under the Act

1. Register of Members and Other Security Holders (Section 88 read with Rules 3, 4, 5, 6, 7 & 30 of the Companies (Management and Administration) Rules, 2014)

Registers to be Maintained

• • Every company shall keep and maintain the following registers along with Index:
    • Register of Members (Form MGT-1)
    • Register of Debenture-holders (Form MGT-2)
    • Register of Other Security Holders (Form MGT-2)
  • The register must indicate separately for each class of equity and preference shares held by each member residing in or outside India.
  • Every company limited by shares must maintain its Register of Members in Form MGT-1 from the date of registration.
  • The register and index of beneficial owners maintained by a depository shall be deemed to be the corresponding register for the company.
  • Maintenance of index is not necessary where the number of members is less than fifty.

Time Limit for Entries

• • Entries in the Register of Members shall be made within seven days after the Board of Directors or its committee approves the allotment or transfer of shares, debentures, or other securities.

Place of Maintenance

• • The register shall be maintained at the registered office of the company.
  • However, it may be kept at any other place in India in which more than one-tenth of the total members entered in the register of members reside, if approved by a special resolution passed at a general meeting.

Note – Dematerialisation Impact

• • With mandatory dematerialisation of shares by Private Companies (non-small), including wholly owned subsidiaries and Section 8 companies with share capital, the requirement of maintenance of Register of Members is effectively complied with through the Registrar and Transfer Agent (RTA).

2. Authentication of Registers (Section 88 read with Rule 8 of the Companies (Management and Administration) Rules, 2014)

• • Entries made in registers under Section 88 shall be authenticated by the Company Secretary or by any other person authorised by the Board.
  • The date of the Board resolution authorising such person shall be mentioned.
  • Entries in the foreign register shall be authenticated by the Company Secretary or authorised person by appending his signature to each entry.

3. Foreign Register – Maintenance and Transmission (Section 88 read with Rule 7 of the Companies (Management and Administration) Rules, 2014)

A company may, if authorised by its Articles, maintain a “foreign register” outside India containing particulars of members, debenture-holders, other security holders or beneficial owners residing outside India.

Transmission Requirement

• • The company shall:
    • Transmit to its registered office in India a copy of every entry in any foreign register within fifteen days after the entry is made; and
    • Maintain at the registered office a duplicate register of every foreign register, duly updated from time to time.
  • Such duplicate register shall be deemed to be part of the principal register for all purposes of the Act.
  • If a foreign register is discontinued, all entries shall be transferred to another foreign register or to the principal register.

4. Notice of Situation of Office – Foreign Register (Section 88 read with Rule 7 of the Companies (Management and Administration) Rules, 2014)

The company shall:

• • File Form MGT-3 with the Registrar within thirty days of opening any foreign register, specifying the location where such register is kept.
  • In case of change in location or discontinuance, file Form MGT-3 within thirty days of such change or discontinuance.

5. Place of Keeping, Inspection and Preservation of Registers (Section 94 read with Rules 14, 15 & 16 of the Companies (Management and Administration) Rules, 2014)

Preservation

• • Register of Members and index – To be preserved permanently.
  • Register of Debenture-holders and other security holders along with index – To be preserved for eight years from the date of redemption.
  • Copies of annual return along with annexures – To be preserved for eight years from the date of filing with the Registrar.
  • Foreign Register of Members – To be preserved permanently unless discontinued and entries transferred.
  • Foreign Register of Debenture-holders or other security holders – To be preserved for eight years from the date of redemption.

Inspection Rights

Registers shall be open for inspection during business hours for at least two hours on every working day as decided by the Board:

• • Members, debenture holders, security holders, or beneficial owners – Without fee
  • Any other person – On payment of fee not exceeding ₹50 per inspection

Copies may be obtained on payment of fee not exceeding ₹10 per page and must be supplied within seven days of payment.

6. Register of Contracts or Arrangements in which Directors are Interested (Section 189 read with Rule 16 of the Companies (Meetings of Board and its Powers) Rules, 2014)

• • Every company shall maintain a register containing particulars of contracts or arrangements to which Section 184(2) or Section 188 applies.
  • After entering particulars, the register shall be placed before the next Board Meeting and signed by all Directors present.

Applicability

• • Applicable to all companies.
  • In case of Section 8 companies, applicable only where the value of contract or arrangement exceeds ₹1 lakh.

Director Disclosure Requirement

Every Director or Key Managerial Personnel shall, within thirty days of appointment or relinquishment, disclose his concern or interest in other associations as specified under Section 184(1).

Exemptions

This section shall not apply to:

• • Contracts for sale, purchase, or supply of goods/materials/services not exceeding ₹5 lakh in aggregate in any year;
  • Banking company transactions for collection of bills in the ordinary course of business.

7. Register of Directors and Key Managerial Personnel (Section 170 read with Rule 17 of the Companies (Appointment and Qualifications of Directors) Rules, 2014)

Every company shall keep at its registered office a register containing prescribed particulars of its Directors and Key Managerial Personnel, including details of securities held by them in:

• • The company
  • Its holding company
  • Subsidiary company
  • Subsidiary of holding company
  • Associate company

8. Register of Loans, Guarantees, Security and Investments (Section 186(9) read with Rule 12 of the Companies (Meetings of Board and its Powers) Rules, 2014)

• • Every company giving loan, guarantee, security, or making acquisition under this section shall maintain a register in Form MBP-2 at its registered office.
  • The register shall be open for inspection by members, and extracts/copies may be furnished on payment of prescribed fees.

Exemptions

This section shall not apply to:

• • Loans, guarantees or security provided by banking companies, insurance companies, housing finance companies, financing companies or infrastructure financing companies in the ordinary course of business;
  • Investments made by:
    • Investment companies;
    • Shares allotted under Section 62(1)(a) or rights issue;
    • NBFCs registered under Chapter III-B of the RBI Act, 1934 whose principal business is acquisition of securities.