Receive Daily Updates by Email (Free Subscription)

MCA Clarification - Meaning Of 'Joint Venture' - Exemption Under Rule 4 Of Companies (Appointment & Qualification Of Directors) Rules, 2014

Corporate Law (Country: India)

Ministry of Corporate Affairs vide General Circular no. 09/2017 dated 5th September, 2017, has issued a clarification with regard to the meaning of joint venture for the purposes of availing exemption under Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The contents of the said circular is reproduced below:

"1. This Ministry, vide notification number G.S.R. 839(E) dated 5th July, 2017 issued the Companies (Appointment and Qualification of Directors) Amendment Rules, 2017 inter-alia amending rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The said amended Rule 4 inter-alia provides that an unlisted public company which is a joint venture, a wholly owned subsidiary or a dormant company will not be required to appoint Independent Directors. Stakeholders have sought clarifications with regard to the meaning of joint venture for the purposes of availing exemption under Rule 4 of the aforesaid Rules as such a term is not defined in the Companies Act, 2013.

2. The matter has been examined and it is hereby clarified that a "joint venture" would mean a joint arrangement, entered into in writing, whereby the parties that have joint control of the arrangement, have rights to the net assets of the arrangement. The usage of the term is similar to that under the Accounting Standards.


3. This issues with the approval of Competent Authority."

No comments:

Post a Comment

Share your valuable opinion or your query here.