NCLT-Amendment-Rules-2020

NCLT Amendment Rules 2020

NCLT Amendment Rules 2020

The NCLT (Amendment) Rules, 2020 has been created to amend the existing NCLT Rules, 2016. This was notified by the Ministry of Corporate Affairs on the 3rd of February 2020 and will be effective from 6th of February 2020. These amended rules furnish about the new facility for application for takeover offer of companies.

NCLT

National Company Law Tribunal (NCLT) is a quasi-judicial body set to rule over the registered companies in India. It has been formed after dissolving the Company Law Board. NCLT plays a major role in regulating companies. It is vested with so many powers on it. Some of the powers are such that, it can de-register a company, it can freeze the assets and securities of the company, and it can convert a public limited company into a private limited company.

Applicability of the Amended Rules

The arrangement or compromise in a company includes reorganising the capital share of a company. This takes place by consolidating the shares of different classes or by dividing the shares into different classes. The compromise or arrangements include the takeover offer of companies other than listed companies. The takeover offer shall be as per the regulation set by the Securities and Exchange Board. If any party finds it injustice about the takeover offer, they can appeal to the Tribunal. The applicant can file the application in Form NCLT-1. The applicant can be either be a creditor or a member of a company.

Payment of Fees

The creditor or the member applying for the cases of the takeover offer of the companies must comply with paying an amount of Rs.5,000.

Required Details for Form NCLT-1

The required for filling and submitting the Form NCLT-1 are as follows:

  • The particulars of the original application, rejoinder, reply or interlocutory application
  • A declaration stating that the matters of the petition are within the jurisdiction of the Bench
  • If applicable the limitation of the petition
  • The facts of the issue in a chronological order
  • The relief sought by the applicant for the petition
  • The details of the bank draft. This is to verify payment of the fees by the applicant

The Form NCLT-1 is below for reference:

$FORM-NO-NCLT-1

Documents Required

The following are the documents required to be enclosed along with the Form NCLT-1:

  • An affidavit which verifies the petition
  • A memorandum of appearance. This should be accompanied with a copy of the executed vakalatnama or the Board’s Resolution.
  • The documents which support the grievances against the takeover.

Other Purposes of Form NCLT-1

The Form NCLT-1 is applicable to apply for several other purposes. The Form NCLT-1 is applicable for any petition or reference. The following are the purposes:

  • For the changes in the financial year
  • To the Tribunal if the incorporation of the company has taken place by furnishing false or incorrect information or by any fraudulent action
  • For converting a public company into a private company
  • For issuing further redeemable preference shares
  • An appeal against the refusal of registration of shares
  • An appeal to rectify the register of a member
  • To the Tribunal for consolidating and dividing the share capital
  • Deposition for the repayment of deposits or the interest
  • To call for the Annual General Meeting (AGM)
  • To call for any other general meetings
  • For a voluntary revision of the financial statement on the Board’s report
  • For petition against the removal of the auditor
  • Apply for a petition against the removal of directors
  • For Investigating the company’s affairs
  • For relief from the oppression cases
  • Apply to opt-out of the proceedings at any time

The notification of the NCLT Amendment Rules, 2020 is below for reference:

Rules3_04022020

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