Companies (Specification of Definition details) Amendment Rules 2021

The Ministry of Corporate Affairs (MCA) on February 01, 2021, has issued the Companies (Specification of Definitions Details) Amendment Rules, 2021. The definition under the Companies Act, 2013 for Small Companies has now been revised by increasing their thresholds for Paid-up capital and Turnover. The paid-up capital and turnover of the small company shall not exceed Rupees 2 Crores and Rupees 20 Crores respectively. This new rule shall come into force on April 01, 2021. The current article briefs the Companies (Specification of Definition details) Amendment Rules 2021.

Synopsis of MCA Notification

The following amendment has been made in the Companies (Specification of Definition details) Amendment Rules

• A new clause 2(1)(t) has been inserted in Rule 2 which specify the Definitions of Small Companies.
• The definition under the Companies Act, 2013 for Small Companies has now been revised by increasing their thresholds for Paid-up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and Turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”

The official notification about the Companies (Specification of Definition details) Amendment Rules 2021 is as follows:

Companies (Specification of definitions details) Rules, 2014

Other Definitions provided under the Companies (Specification of definitions details) Rules, 2014 is as follows:

Certifying Authority – A person who has been granted a licence to issue a Digital Signature Certificate under section 24 of the Information Technology Act, 2000 and the Certified Filing Center (CFC) under the Companies Act

Director Identification Number (DIN) – An identification number allotted by the Central Government to any individual, intending to be appointed as director or to any existing director of a company, for his identification as a director of a company

• The Director Identification Number (DIN) obtained by the individuals before the notification of these rules shall be the DIN for the Companies Act, 2013
• Director Identification Number (DIN) includes the Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008

E-Form – A form in the electronic form as prescribed under the Companies Act or the rules made thereunder and notified by the Central Government

Electronic Mail – The message sent, received or forwarded in digital form using any electronic communication mechanism that the message so sent, received or forwarded is storable and retrievable

Electronic mode means carrying out electronically based, whether the main server is installed in India or not including the following:

• Business to business and business to consumer transactions, data interchange and other digital supply transactions
• Offering to accept deposits or inviting deposits or accepting deposits or subscriptions in securities, in India or from citizens of India
• Financial settlements, web-based marketing, advisory and transactional services, database services and products, supply chain management
• Online services such as telemarketing, telecommuting, telemedicine, education and information research
• All related data communication services

Electronic record means the electronic record as defined under clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000

Electronic Registry means an electronic repository or storage system of the Central Government in which the information or documents are received, stored, protected and preserved in electronic form

Related Party

A director or key managerial personnel of the holding company or his relative concerning a company shall be deemed to be a related part

List of Relatives

A person shall be deemed to be the relative of another if he or she is related to another in the following manner:

• Father: Father includes step-father
• Mother: Mother includes the step-mother
• Son: Son includes the step-son
• Son’s wife
• Daughter
• Daughter’s husband
• Brother: Brother includes the step-brother
• Sister: Sister includes the step-sister