Revision of additional fee by MCA

Ministry of Corporate Affairs has revised the additional fees (except Form 5) payable under section 611 (2) of the Companies Act, 1956 with effect from 05.12.2010. Following are the details of revised additional fees.

Period of delay	Revised Additional Fee
Up to 30 days	Two times of normal fee
More than 30 days and upto 60 days	Four times of normal fee
More than 60 days and up to 90 days	Six times of normal fee
More than 90 days	Nine times of normal fee

Provisions relating to sweat equity shares

Section 79A of the Companies Act, 1956 and Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003 provide for issue of sweat equity shares by an unlisted company to its employees or directors at a discounted rate or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or other value additions by whatever name called.

Rule 6 bars a company from issuing sweat equity shares of more than 15% of total paid up equity share capital in a year or shares in excess of the value of Rs. 5 crore, whichever is higher. In the event the ceiling is to be exceeded, prior approval of the central government would be required.

The Companies Act also stipulates a pre-condition that at least 1 year should have elapsed from the day of commencement of business by the company on the date of issuance of sweat equity. In addition, the Companies Act, 1956 stipulates that sweat equity shares should be of the same class as already issued by the company and such an issuance is required to be authorized by a special resolution passed in the general meeting.

This special resolution must specify, inter alia, the number of shares, current market price, and class or classes of directors or employees to whom these equity shares are to be issued. Rule 4 of the aforesaid Sweat Equity Rules requires an explanatory statement to be annexed to the notice for the said general meeting, which includes the reasons/justification for the issue, the number of shares, consideration and the person's relationship with the company.

Furthermore, a separate resolution for approval of shareholders in the general meeting would be necessary if the sweat equity stake is equal to or more than 1% of the issued capital on the date of such issuance.

Disclosure of information relating to loan processing fees & charges - RBI Notification

The Reserve Bank of India issued a notification on November 12, 2010, where it has advised all scheduled commercial Banks and Financial Institutions to transparently disclose all the information about Fee/charges payable for processing/sanctioning the loan application, amount of fees refundable in case of rejection of loan application, pre-payment charges, conversion charges etc.  Such informations should also display in the websites of the Banks for all categories of loans.

The Banks should disclose “all in cost” including all charges involved in processing/sanction of loan application in a transparent manner to enable the customer to compare the fees/rates charged with other sources of finance.

Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT – RBI Notification

The Reserve Bank has doubled the threshold limit for electronic fund transfers using the Real Time Gross Settlement (RTGS) system to Rs 2 lakh with effect from November 15.

For electronic transactions valued between Rs 1-2 lakh, the RBI has created a new value band in its 'near real-time' National Electronic Fund Transfer (NEFT) system to cater to retail bank customers.

The RBI has revised the service charges for fund transfers through the NEFT mode. Fund transfers up to Rs 1 lakh will continue to attract a service charge of Rs 5.

For fund transfers valued between above Rs 1 lakh and Rs 2 lakh, the RBI has revised the customer charges downward to Rs 15 from Rs 25 earlier. The fee for fund transfers worth more than Rs 2 lakh remains unchanged at Rs 25.