Introduction To MCA-21 and Filing in XBRL – Company Law Important Questions

Introduction To MCA-21 and Filing in XBRL – Company Law Important Questions

Question 1.
Write a short note on Digital Signature Certificate. (December 2010) (4 marks)
Or
Who are all the persons required to obtain “Digital Signature Certificates” (DSCs)? (June 2019) (3 marks)
Answer:
1. A digital signature is the electronic signature duly issued by a certifying authority that shows the authority of the person signing the same. It is an electronic equivalent of a written signature.

2. Every user who is required to sign an e-form for submission with MCA is required to obtain a Digital Signature Certificate.

3. For MCA-21, the following four types of users are identified as users of Digital Signatures and are required to obtain digital signature certificate:

• MCA (Government) Employees.
• Professionals (Company Secretaries, Chartered Accountants, Cost Accountants and Lawyers) who interact with MCA and companies in the context of Companies Act
• Authorized signatories of the Company including Managing Director, Directors, Manager or Secretary.
• Representatives of Banks and Financial Institutions.

Question 2.
Distinguish between: Pre-scrutiny and Check Form. (June 2013) (4 marks)
Answer:
Pre-scrutiny:

1. Pre-scrutiny is a functionality that is used for checking whether certain core aspects are properly filled in the e-Form.
2. The user has to make the necessary attachments in PDF format before submitting the e-Form for pre-scrutiny. Pre-scrutiny is done after this affix digital signature.
   Check Form:
3. By clicking “Check Form”, the user will be in a position to find out whether the mandatory fields in an e-Form are duly held in.
   For example, if the user enters alphabets in the “Date of Appointment of Director” field, he/she will be asked to correct the entered information.
4. If the size of the e-Form including attachment is of bigger size then the attachment may be filed through an addendum.

Question 3.
Distinguish between informational services and approval services register of the company for categories of e-forms. (June 2016) (4 marks)
Answer:

Basis of Distinction	Informational Services	Approval Services
Meaning	Informational Services cover those forms which are to be filed with ROC for information purposes, in compliance with the provisions of the Companies Act.	Ministry of Corporate Affairs, Regional Directors & Registrar of Companies are empowered to accord approval or to give any direction in relation to certain matters. Such services are known as approval services.
Example	Forms relating to the following informational services are required to be filed: Consent and withdrawal of consent of persons charged as officers in default. Voluntary Reporting of Corporate Social Responsibility (CSR) Resolutions and agreements Notice of address of the place where books of account are kept. Information in relation to any offer of scheme or contract involving the transfer of shares or any class of shares in the transferor company to the transferee company. Order received from Court or Tribunal.	ROC Approval is required in the following cases: Extension of the time period for holding AGM. Holding AGM at a place other than registered address. Declaring of Company as defunct Extension of the period of annual accounts. The amalgamation of Companies. Compounding of offenses.

Question 4.
Distinguish between XBRL tags and XBRL taxonomy. (June 2018) (4 marks)
Answer:
1. XBRL Tagging is the process by which any financial data is tagged with the most appropriate element in an accounting taxonomy (a dictionary of accounting terms) that best represents the data in addition to tags that facilitate identification/classification (such as enterprise, reporting period, reporting currency, unit of measurement, etc.).

2. All XBRL reports use the same taxonomy, numbers associated with the same element are comparable irrespective of how they are described by those releasing the financial statements. XBRL taxonomy is a dictionary of widely accepted accounting terms that conform to a GAAP (US GAAP, UK GAAP, IFRS, etc.).

Question 5.
Discuss the following:
1. Front Office represents the interface of the corporate and public users with the MCA 21 system.
Answer:
Front Office:

• The major components involved in this comprehensive e-governance project are the front office and back office.
• Front Office represents the interface of the corporate and public users with the MCA-21 system. This comprises of Virtual Front Office and Registrar’s Front Office.

2. For MCA-21, four types of users are identified as users of digital signature. (IIT) SMART Governance. (December 2008) (4 + 3 + 3 = 10 marks)
Answer:
Four types of users are identified as users of digital signature:
1. For MCA-21, the following four types of users are identified as users of Digital Signatures and are required to obtain a digital signature certificate:

• MCA (Government) Employees.
• Professionals (Company Secretaries, Chartered Accountants, Cost Accountants, and Lawyers) who interact with MCA and companies in the context of the Companies Act.
• Authorized signatories of the Company including Managing Director, Directors, Manager, or Secretary.
• Representatives of Banks and Financial Institutions.

3. SMART Governance:
1. Electronic Governance is the application of Information Technology to the Government’s functioning in order to bring about Simple, Moral, Accountable, Responsive, and Transparent (SMART) Governance.

2. E-governance is a highly complex process requiring the provision of hardware, software, networking, and reengineering of the procedures for better delivery of services.

3. MCA project was launched as a flagship initiative of the Ministry of Corporate Affairs (MCA). MCA-21 has resulted in improved proce¬dures for better delivery of services by the Ministry of Corporate Affairs.

4. MCA-21 is an ambitious e-governance initiative of the Government of India that builds on the Government’s vision of National e-gover¬nance in the country.

Question 6.
Briefly explain the following terms used under e-filing:
1. Pre-fill.
Answer:
Pre-fill:
Pre-fill is functionality in an e-Form that is used for filling automatically, the requisite data from the system without repeatedly entering the same.

For example, by entering the CIN of the company, the name and registered office address of the company shall automatically be pre-filled by the system without any fresh entry.

2. Attachment
Answer:
Attachment:

• An attachment refers to a document that is sent as an enclosure with an e-Form by means of an attached file.
• The objective of the attachment is to provide details relevant to the e-Form for processing. While some attachments are optional, some are mandatory in nature.
• The attachments to an e-Form have to be in Adobe PDF format only and My MCA portal has a facility to convert any document format to PDF format. My MCA portal does not accept big attach¬ments and the users are advised to keep the attachment size to a minimum.

3. Check Form
Answer:
Check Form:

• By clicking “Check Form”, the user will be in a position to find out whether the mandatory fields in an e-Form are duly held in. For example, if the user enters alphabets in the “Date of Appointment of Director” field, he/she will be asked to correct the entered infor¬mation.
• If the size of the e-Form including attachment is of bigger size then the attachment may be filed through an addendum.

4. Pre-scrutiny (June 2009) (2 × 4= 8 marks)
Answer:
Pre-scrutiny:

• Pre-scrutiny is a functionality that is used for checking whether certain core aspects are properly filled in the e-Form.
• The user has to make the necessary attachments in PDF format before submitting the e-Form for pre-scrutiny.
• After this affix digital signature.

Question 7.
What is the general structure of the e-filing process under MCA-21? (June 2011) (4 marks)
Or
What is the general structure of the e-filing process under MCA 21? (June 2013) (4 Marks)
Answer:
The basic pre-requisite structure requirement for e-Filing:
1. Digital Signature Certificate (DSC) of either Class 2 or Class 3 signing certificate category issued by a licensed Certifying Authority (CA) needs to be obtained for e-Filing on the MCA Portal.

2. Digital Signatures are legally admissible in a Court of Law, as provided under the provisions of IT Act, 2000. The Certifying Authorities are au¬thorized to issue a Digital Signature Certificate with a validity of one or two years.

3. The minimum system requirements for e-filing on MCA-21 are as under:

• Any computer or laptop
• An efficient operating system
• Latest Browser
• Adobe Reader from version 9.4 to version 10.1.4
• Scanner (above 300-600 DPI) for converting the attachments in the PDF format; and
• Java Runtime Environment (JRE) updated version.

Question 8.
Filing financial statements in XBRL mode and by using XBRL taxonomy is mandatory for certain companies. Discuss referring to the provi¬sions of the Companies Act, 2013. Comment (December 2018) (3 marks)
Answer:
1. Filing of financial statements with the registrar in XBRL Format (Rule 3 of the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015):

The following class of companies has to file their Balance Sheet, Profit & Loss A/C and other documents with the registrar using the Extensible Business Reporting Language (XBRL) namely:

1. All Companies having listed with any Stock Exchange in India and their Indian Subsidiaries.
2. All Companies having paid-up capital of rupees 5 crores or above.
3. All companies having a turnover of rupees 100 crores or above.
4. All Companies are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015.

2. The companies which have filed their financial statements shall continue to file their financial statements and other documents though they may not fall under the class of companies specified therein succeeding years.

3. The Companies in Banking, Insurance, Power Sectors, and Non-Banking Financial Companies are exempted for Extensible Business Reporting Language (XBRL) filing.

Thus, Prudent General Insurance Company Ltd. being an insurance company is not required to file their Balance Sheet and Profit & Loss Account in XBRL.

CS Executive Company Law Questions and Answers