letter head compliance

 Section 12(3)(c) of the Companies Act, 2013 specifies that every company shall get its name, address of its registered office and corporate identity number along with telephone number, fax number, if any, e-mail and website address, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications. 

In a case before the Registrar of Companies, Gwalior, one company viz. Indore Manpower Solutions Private Limited did not comply with this provision. A reply submitted by the company to the ROC was not on the letter head of the company containing all these particulars as enumerated above. 

With the result, the matter came up for adjudication and the company and its two directors were levied a penalty of Rs.100,000 each, total Rs.300,000/-.

Letter head compliance is necessary in today's environment in India. Its not a major compliance hurdle, all that the company had to do was to print letter head (on its computer, if not actual) with all the requisite particulars and use these for official communications. 

IPOs- revised timelines UPI in ASBA

SEBI has vide its circular dated 2nd June, 2021 revised its timelines for implementation of UPI in ASBA in respect of IPOs. This is after the stakeholders approached SEBI seeking additional time for implementation of system changes especially in view of the covid pandemic. Salient features are as follows:

1. SEBI vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021 (hereinafter referred to as “the circular”), which came into effect from May 01, 2021 had put in place measures to have a uniform policy to further streamline the processing of ASBA applications through UPI process among intermediaries/SCSBs and also provided a mechanism of compensation to investors. 

2. The stakeholders have approached SEBI seeking additional time for implementing the system changes given the prevailing uncertainty due to the Covid-19 pandemic. 

3. In view of the representations received from stakeholders, the implementation timelines for the provisions of “the circular” shall be as under: 

3.1SMS Alerts: Para 9 of “the circular” prescribed the details to be sent by SCSB’s in SMS alerts. While SCSB’s shall continue to send SMS alerts during the actual block/debit/unblock of UPI mandate in the prescribed format, the details of total number of shares applied/allotted/non-allotted etc shall be included in SMS for Public Issues opening on/after January 01, 2022. 

3.2Web Portal for CUG: For ease of doing business, Para 10 of “the circular” prescribed a web portal to be hosted by Sponsor Banks for closed user group (hereinafter referred to as “CUG”) entities. In view of the representations received from the stakeholders, it has been decided that: 

3.2.1 The automated web portal shall be live and operational after due testing and mock trials with the CUG entities for Public Issues opening on or after October 01, 2021. The requisite information on this automated portal shall be updated periodically in intervals not exceeding two hours. 

3.2.2 In the interim, for the Public Issues opening from the date of this circular and till the automated web portal is live and operational, the Sponsor Banks shall send the details prescribed in Para 10 of “the circular” to the e-mail address of CUG entities periodically in intervals not exceeding three hours. In case of exceptional events viz., technical issues with UPI handles/PSPs/TPAPS/SCSB’s etc, the same shall be intimated immediately to the CUG entities so as to facilitate the flow of information in the Public Issue process. 

3.2.3 The Stock Exchanges and Lead Managers shall facilitate providing the requisite data of CUG entities to Sponsor Bank for the development of automated web portal. Such information shall be provided to the Sponsor Bank before opening of the Public Issue. 

3.3Completion of Unblocks by T+4: Para 13 of “the circular” prescribed the process and timeline for ensuring the completion of unblocks pertaining to UPI mandates on T+4 (T: Issue Closing Date). while the process of unblocking shall be completed by T+4, in view of the representations received from stakeholders, the following shall be the revised timelines: 

3.3.1 The Registrar to the Issue shall provide the allotment/ revoke files to the Sponsor Bank by 8:00 PM on T+3 i.e, the day when the Basis of Allotment (BOA) has to be finalized. 

3 3.3.2 The Sponsor Bank shall execute the online mandate revoke file for Non-Allottees/ Partial Allottees and provide pending applications for unblock, if any, to the Registrar to the Issue, not later than 5:00 PM on BOA+1. 

3.3.3 Subsequent to the receipt of the pending applications for unblock from the Sponsor Bank, the Registrar to the Issue shall submit the bank-wise pending UPI applications for unblock to the SCSBs, not later than 6:30 PM on BOA+1. 

3.3.4 To ensure that the unblocking is completed on T+4, the Lead Managers, on a continuous basis and before the opening of the public issue shall take up the matter with the SCSB’s at appropriate level. 

4. This circular comes into force with immediate effect. 

5. The contents of the circular shall be mentioned in the DRHP and RHP filed on or after the date of this circular. 

foreign portfolio investors

 SEBI circular dated 1st June, 2021 allowing a one off, "off-market" transfer of securities by foreign portfolio investors for transferring to IFSC at Gift City, Ahmedabad, which gives substantial tax benefits as per the Finance Act, 2021. Gist of circular follows:

1. The Finance Act, 2021 provides tax incentives for relocating foreign funds to International Financial Services Centre (IFSC) in order to make the IFSC in GIFT City a global financial hub. 

2. In view of the above objective and to further facilitate such ‘relocation’, it has been decided that a FPI (‘original fund’ or its wholly owned special purpose vehicle) may approach its DDP for approval of a one-time ‘off-market’ transfer of its securities to the ‘resultant fund’. The terms ‘original fund’, ‘relocation’ and ‘resultant fund’ will have the same meaning as assigned to them under the Finance Act, 2021. 

3. The DDP after appropriate due diligence may accord its approval for a one-time ‘offmarket’ transfer of securities for such relocation. 

4. Relocation request will imply that the FPI has deemed to have applied for surrender of its registration and the DDP may be guided by the guidelines pertaining to surrender of FPI registration. 

5. The ‘off-market’ transfer shall be allowed without prejudice to any provisions of tax laws and FEMA. 6. Para 3, Part C of SEBI Circular No. IMD/FPI&C/CIR/P/2019/124 dated November 05, 2019 stands modified to the extent of para 2 above. 

https://www.sebi.gov.in/legal/circulars/jun-2021/-off-market-transfer-of-securities-by-fpi_50380.html

relief to taxpayers for late filings - GST

update from GST portal

The Government, vide Notification No. 19/2021, dated 1st June, 2021, inter alia, has waived the late fee payable, in excess of amount as specified in the Tables, as given below:

(Note: Please refer to respective State/UT Notifications for waiver of State/UT tax).

1. For the registered persons who have failed to furnish the return in FORM GSTR-3B, for the months /quarter of July, 2017 to April, 2021, by the due date:

   Sl.No	Return in FORM GSTR-3B for the month/ quarter of	Amount of Central & State/UT tax payablein the return	If Return furnished between	Late fee payable waived in excess of (Rs)
   1	July, 2017 to April, 2021	NIL	1st June, 2021 and 31st August,2021	500
   2	July, 2017 to April, 2021	Not NIL	1st June, 2021 and 31st August,2021	1000

2. For the tax period of June, 2021 onwards or quarter ending June, 2021 onwards:

   Sl.No	Class of registered persons	Late fee payable waived in excess of (Rs)
   1	Registered persons whose total amount of Central Tax & State/UT tax payable in the said return is Nil	500
   2	Registered persons having an aggregate turnover of up to rupees 1.5 crores in the preceding financial year, other than those covered under S. No. 1	2,000
   3	Taxpayers having an aggregate turnover of more than rupees 1.5 crores and up to rupees 5 crores in the preceding financial year, other than those covered under S. No. 1	5,000

application form for AIFs

IFSCA has vide its circular dated 2nd June, 2021 introduced an application form for Alternative Investment Funds (AIFs) to register in the International Financial Service Centre, IFSC, GIFT City, Ahmedabad. 

The details of the same are given in this circular here

MSME covid relief - RBI

 RBI has vide its circular dated 4th June, 2021 enhanced the covid relief to the MSME sector by increasing the aggregate credit exposure from Rs.25 crores to Rs.50 crores. Under the resolution framework for Covid stress, banks can now consider giving higher reliefs to the MSME sector. This is a welcome move. Read on 

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12105&Mode=0

A reference is invited to the circular DOR.STR.REC.12/21.04.048/2021-22 on “Resolution Framework 2.0 – Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs)” dated May 5, 2021.

2. Clause 2 of the above circular specifies the eligibility conditions for MSME accounts to be considered for restructuring under the framework, which inter alia include sub-clause (iii) which states that the aggregate exposure, including non-fund based facilities, of all lending institutions to the MSME borrower should not exceed ₹25 crore as on March 31, 2021.

3. Based on a review, it has been decided to enhance the above limit from ₹25 crore to ₹50 crore.

4. Consequently, clause 2(v) would stand modified as under:

“(v) The borrower’s account was not restructured in terms of the circulars DOR.No.BP.BC/4/21.04.048/2020-21 dated August 6, 2020; DOR.No.BP.BC.34/21.04.048/2019-20 dated February 11, 2020; or DBR.No.BP.BC.18/21.04.048/2018-19 dated January 1, 2019 (collectively referred to as MSME restructuring circulars) or the circular DOR.No.BP.BC/3/21.04.048/2020-21 dated August 6, 2020 on “Resolution Framework for COVID-19-related Stress.”

individuals & small businesses - RBI relief

 https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12104&Mode=0

RBI has given relief to individuals and small borrowers having credit exposure upto Rs.25 crores to be given covid relief. The limit has been enhanced to Rs.50 crores. Whatever resolution has to be done by the banks for them has to be as per the earlier RBI circular dated 5th May, 2021. Read on. 

A reference is invited to circular DOR.STR.REC.11/21.04.048/2021-22 on “Resolution Framework – 2.0: Resolution of Covid-19 related stress of Individuals and Small Businesses” dated May 5, 2021.

2. Clause 5 of the above circular specifies the eligible borrowers who may be considered for resolution under the framework and includes the following sub-clauses:

(b) Individuals who have availed of loans and advances for business purposes and to whom the lending institutions have aggregate exposure of not more than ₹25 crore as on March 31, 2021.

(c) Small businesses, including those engaged in retail and wholesale trade, other than those classified as MSME as on March 31, 2021, and to whom the lending institutions have aggregate exposure of not more than ₹25 crore as on March 31, 2021.

3. Based on a review, it has been decided to enhance the above limits from ₹25 crore to ₹50 crore.