Ministry of Finance explains how companies benefit from amendment to Companies (Incorporation) Rules

The Ministry of Finance said on December 23, 2023, that the amendment to the Companies (Incorporation) Rules, 2014, provides certain relaxations to companies under specific conditions. The amendment, outlined in a Ministry of Corporate Affairs (MCA) notification dated October 20, 2023, aims to streamline processes and enhance ease of doing business for companies operating in India.

Companies (Incorporation) rules 2014, amendment provides certain relaxations to companies if certain conditions have been fulfilled.#ViksitBharat #FinMinReview2023#MCAReview2023 pic.twitter.com/DRJuQ0asjs

— Ministry of Finance (@FinMinIndia) December 23, 2023

Removal of imposition of cost for shifting registered office

The key highlight of the amendment is the removal of the imposition of cost at the time of processing applications filed for shifting the registered office. Prior to this amendment, the Regional Director had the authority to impose costs while disposing of applications for shifting the registered office from one state to another. This change is expected to simplify the procedural aspects for companies undertaking such transitions.

Shifting registered office under new management

A notable inclusion in the amendment is the provision allowing the shifting of the registered office when the management of the company is taken over by new management under a resolution plan approved under section 31 of the Insolvency Bankruptcy Code, 2016 (31 of 2016). This allowance comes with the condition that no appeal against the resolution plan is pending in any Court or Tribunal, and no inquiry, inspection, or investigation is pending or initiated after the approval of the said resolution plan.