MCA prescribes new rules in respect of indemnity bond to be furnished by certain Government companies for removal of name from register of companies

On June 29, 2020, the Ministry of Corporate Affairs issued the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2020 (“Amendment Rules”) to amend the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (“Rules”). The Amendment Rules amend rule 4(3) of the Rules that require every application for removal of the name of a company to be accompanied by an indemnity bond duly notarised by every director in Form STK 3. The Amendment Rules introduce a proviso to rule 4(3) of the Rules that provides that in the case of the following companies, a duly notarised indemnity bond in Form STK-3A shall be given by an authorised representative, not below the rank of Under Secretary or its equivalent, in the administrative Ministry or Department of the Government of India or the State Government, as the case may be, on behalf of the company a Government company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments; and a subsidiary of a Government company, referred to in clause (a), in which the entire paid up share capital is held by that Government company. Read notification here. This update has been contributed by Adity Chaudhury (Partner) and Deeya Ray (Associate).