TO UPDATE MASTER DATA OF COMPANY/CORPORATE DEBTOR UNDERGOING CIRP (AFTER APPROVAL OF RESOLUTION PLAN BY HON’BLE NCLT)

Pursuant to the Section 30 of The Insolvency and Bankruptcy Code, 2016 (IBC Code, 2016) Resolution Applicant can submit a Resolution Plan for revival of Company (Corporate Debtor) undergoing the Corporate Insolvency Resolution Process (“CIRP”) to NCLT (“The National Company Law Tribunal”).

Once the Resolution plan has been approved by the Hon’ble NCLT pursuant to section 31 of IBC Code, 2016 then new management i.e. Resolution Applicant is in charge of control of the corporate debtor from the date of approval of the Resolution Plan. The Erstwhile Resolution Professional (RP) will file the e-form INC-28 of the Corporate Debtor enclosed with NCLT Order and take exit with the approval of E-form INC-28 by the Registrar of Companies (RoC).

In order to meet the requirement of Hon’ble NCLT order and IBC Code, 2016 and to implement the resolution plan there are various compliances/changes required to be made in the company’s master data at MCA Portal out of which some of the compliances/changes are mentioned below:-

• Change the status of the company from CIRP to Active
• Reconstitution of the Board of Directors of the Corporate Debtor by appointment of new Board of Directors, as nominated by the resolution applicant and removal of all the previous Board of Directors of the company.
• Restructure of capital base of the Corporate Debtor by extinguishment of erstwhile paid-up share capital from existing Shareholders and to update with the new paid up share capital as per the approved resolution plan to the new shareholders as inducted by the Resolution applicant.
• Filling of pending Annual Returns and Balance sheets of the company if any.

CHANGE THE STATUS OF THE COMPANY FROM CIRP TO ACTIVE

?In terms of MCA General Circular No. 08/2020 dated 06.03.2020, an Application is to be submitted by Resolution applicant with office of Insolvency and Bankruptcy Board of India (IBBI) along with the copy of approved NCLT order and Resolution Plan. After submission of application by Resolution applicant the concerned person of IBBI further submits the same to the Head quarter of Ministry of Corporate Affairs and if application is in order then status of company/Corporate Debtor become active on master data of MCA Portal. The process will take 3-4 working days.

?RECONSTITUTION OF THE BOARD OF DIRECTORS OF THE CORPORATE DEBTOR BY APPOINTMENT OF NEW BOARD OF DIRECTORS, AS NOMINATED BY THE RESOLUTION APPLICANT AND REMOVAL OF ALL THE PREVIOUS BOARD OF DIRECTORS OF THE COMPANY.

?Previous Board of directors has ceased to be directors of the Corporate Debtor after the admission of the case by the Hon’ble Tribunal NCLT with the initiation of Corporate Insolvency Resolution Process.

?After approval of Resolution plan by Hon’ble tribunal NCLT Resolution Applicant have taken over the management of the Company in compliance of the NCLT order. Resolution applicant move an application to Registrar of Companies (RoC) for appointment of new Directors from the backend to implement its Resolution plan.

PROCEDURE FOR APPOINTMENT OF DIRECTORS FROM BACKEND OF THE MCA PORTAL BY REGISTRAR OF COMPANIES

Step 1 Resolution Applicant Decide upon at least two persons in case of private Company and three persons in case of public Company who shall act as proposed Directors of the Company and obtain their consent, DIR-8 and MBP-1.

Step 2 Convene a meeting of the members of resolution Applicant to pass resolution for appointment of Directors.

Step 3 File the application with the ROC along with the following documentations: -

• Application signed by the proposed directors of the Company/Corporate Debtor inducted by Resolution Applicant explaining the facts and requesting for insertion of at least one director through the backend of the MCA portal;
• Copy of Resolutions duly certified
• Copy of DIR-12 duly digitally signed
• Original Consent in Form DIR-2 from proposed directors along with PAN Card, Aadhaar Card, MBP-1 and DIR-8
• Copy of Certified NCLT order
• Copy of Certified Resolution Plan
• Copy of Documents submitted by Resolution Professional in virtue of NCLT Order
• Copy of INC-28 duly certified along with challan
• Affidavit of proposed directors and professional i.e. Practicing Company Secretary or Practicing Chartered Accountants etc.

Step 4. The office of the Registrar of Companies shall forward a report to the Regional Director and upon scrutiny, they shall add one Director on the Board of the Company and the same shall be reflected on the MCA portal of the Company. The process will take generally 2-3 months.

After appointment of one director from the backend of MCA Portal by RoC, that one director can appoint another directors by filing of DIR-12 and also remove earlier directors by filing of DIR-12 enclosed with the copy of NCLT Order.

RESTRUCTURE OF CAPITAL BASE OF THE CORPORATE DEBTOR BY EXTINGUISHMENT OF ERSTWHILE PAID-UP SHARE CAPITAL FROM EXISTING SHAREHOLDERS AND TO UPDATE WITH THE NEW PAID UP SHARE CAPITAL AS PER THE APPROVED RESOLUTION PLAN TO THE NEW SHAREHOLDERS AS INDUCTED BY THE RESOLUTION APPLICANT.

The erstwhile paid-up share capital becomes zero once the resolution plan is approved. Resolution applicant needs to induct new paid up share capital as per the approved resolution plan as mentioned below: -

Step-1 File an Application to RoC for extinguishment of erstwhile Paid-Up Share Capital From Existing Shareholders along with the copy of NCLT Order and approved Resolution Plan.

Step-2 If the application and documents are in order Registrar will update the current paid up capital to Zero from the backend.

Step-3 file e-form PAS-3 for allotment of new paid up share capital as inducted by the resolution applicant.

?FILLING OF PENDING ANNUAL RETURNS AND BALANCE SHEETS OF THE COMPANY IF ANY.

In terms of MCA General Circular No. 04/2020 dated 17.02.2020 and MCA Circular 08/2020 dated 06.03.2020 The Insolvency Resolution Professional (IRP)/ Resolution Professional (RP)/ Liquidator would have to first file the NCLT order approving him as the IRP/ RP/ Liquidator in Form INC-28 by selecting the drop down box in field 5(a)(iii) by selecting the appropriate section of IBC 2O16. After filling in the form, the IRP/ RP/Liquidator while affixing his DSC, shall choose his designation as "CEO' in the declaration box for the purpose of filing only and choose "Others" from the Drop down Menu.

The IRP/ RP/ Liquidator shall be responsible for filing all the eforms in the MCA portal and sign the form in the capacity of CEO in order to meet filing protocol in the existing forms architecture. However, this shall in no way affect his legal status as IRP/ RP/ Liquidator. All filings of e-forms including AOC-4 and MGT-7 shall be filed through e-form GNL-2 by way of attachments till the company is under CIRP. In the existing field no. 3 of form no.GNL-2, IRP/ RP/ Liquidator will choose radio button "Filings under IBC".

It is further clarified by the circular that in respect of companies which are marked under CIRP in the Registry, Annual Return (e-form No.MGT-7) and Financial Statement (e-form AOC-4) and other documents under the provisions of the Companies Act, 2013, in accordance with directions issued by the NCLT/ NCLAT/Courts, shall be filed as attachments with e-form GNL-2 against the payment of one time normal fee only, till such time the company remains under CIRP. Separate GNL-2 forms shall be filed for each such document, by the IRP/RP.

However nowadays the resolution applicant is facing problem with the corporate debtor that annual filing is not completed by the RP till the date of NCLT order due to various genuine reasons stated by them. And the biggest challenge is Resolution applicant can not run the company unless all the filings are done as most of these types of companies are marked as Active non-compliant due to non-filing of INC-22 Active form for Geo tagging for updating of registered office details of the company.?We can not file the e-form INC-22 Active If balance sheet and Annual Returns for F.Y 2017-2018 are not filed.

For this problem in my opinion we have following two options are available: -

Option-1

Step-1 Hold the Annual general Meeting at the current date

Step-2 File balance sheet in E-form AOC-4 with normal fee

Step -3 file Annual Return E-form MGT-7 by late penalty fees which is Rs. 100 per day

Step-4 File the application for compounding of Annual General meeting

?Option-2

Step-1 File an application to Registrar of Companies for extension of Annual Meeting at current date explaining the facts and valid reasons stated therein.?

Step-2 The office of the Registrar of Companies upon scrutiny can provide the extension for holding of AGM on current date and also can reject the same.

Step 3 If application is approved then file the forms without penalty and compounding

Step-4 If application is rejected the we can follow option 1 and we also can file the application for extension of AGM to Hon’ble tribunal NCLT.

?Important: Pursuant to the Section 32A of the IBC Code 2016, liability of a corporate debtor for an offence committed prior to the commencement of the corporate insolvency resolution process shall cease, and the corporate debtor shall not be prosecuted for such an offence from the date the resolution plan has been approved by the Adjudicating Authority under section 31, if the resolution plan results in the change in the management or control of the corporate debtor to a person who was not—

(a) a promoter or in the management or control of the corporate debtor or a related party of such a person; or

(b) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court

Disclaimer: The entire contents of this article have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although utmost care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a piece of professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.

{The author i.e., Ms. Chinki Singhal is a Company Secretary in Practice at M/s Chinki Singhal and Associates and can be reached at (M) +91-9050320565 and (E) [email protected] and [email protected] }