Highlights of Companies (Amendment) Ordinance 2019

 

Insertion of new Section 10A

Company having sharing capital shall not commence any business or exercise any borrowing powers unless ;

  • Declaration is filed by the director within 180 days from date of incorporation that every subscriber to the memorandum has paid the value of shares agreed to be taken by him and,
  • The company has filed with the registrar a verification of its registered office.

Penalty for non-compliance

  • ₹ 1000 per day (max up-to 1 lac) on every officer who is in default and
  • ₹ 50000 on company
  • Registrar may initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.

Amendment of Section 12

The ROC may cause a physical verification of the registered office of the company and in case of any default (if the address is bogus or improper), Registrar may initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.

Amendment of Section 14

Central Government approval made mandatory for any alteration of articles for conversion of Public company into a Private company

Amendment of Section 53

Company cannot issue shares at discount, – heavy penalty imposed on violation. 

Amendment of Section 64

Alteration of Authorised Capital to be intimated to Registrar within 30 days,

In case of default – penalty 1000 every day or 5 Lac whichever is less.

Amendment of Section 77

Creation of charge filing with ROC- time limit reduced from 300 days to 60 days. 

Amendment of Section 86

Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and Jail

Amendment of Section 92

Penalty in case of failure to file Annual Returns by the company ;

  • ₹50000 penalty on the company and every responsible officer
  • ₹100 penalty for per day till the default continues subject to a maximum of ₹5 lakh.

Amendment of Section 102

Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law.

If no detail/short detail/misleading – penalty for every promoter, director, manager, KMP of the company – ₹ 50000/-

Amendment of Section 105

In Section 105(3) for the word “punishable with fine which may extend to five thousand rupees”, the words “Liable to a penalty of five thousand rupees” shall be substituted.

Amendment of Section 117

Increase in penalty for Delay in filing of Resolutions and agreements by the company ;

  • ₹ 1 lakh penalty on company and
  • ₹ 500 per day (max ₹ 25 lakhs) till default continues
  • ₹ 50000/- on every officer/liquidator of the company.

Amendment of Section 121

Penalty for Failure to file Report on annual general meeting ;

  • ₹ 1 lakh penalty on company and
  • ₹ 500 per day (max ₹ 5 lakhs) till default continues
  • Min ₹ 25000/- on every officer in default

Amendment of Section 137

Penalty for failure to file Copy of financial statement to be filed with Registrar ;

  • ₹ 1 lakh penalty and
  • ₹ 100 per day (max ₹ 5 lakhs) till default continues

Amendment of Section 140

Penalty on auditor for failure to file Resignation within 30 days to the Registrar:

  • ₹ 50000/- or amount equal to auditor remuneration (whichever is less)
  • ₹ 500/- per day till default continues. 

Amendment of Section 157

Penalty for failure to furnish Director Identification Number to Registrar ;

  • ₹ 25000/- penalty on company and
  • ₹ 100 per day (max ₹ 1 lakhs) on company till default continues and
  • Min ₹ 25000/- on every officer in default
  • ₹ 100 per day (max ₹ 1 lakhs) on every officer till default continues

Amendment of Section 159

Penalty for contravention of

Sec- 155 (Appointment of directors),

Sec- 155 (Prohibition to obtain more than one DIN) and

Sec- 156 (Intimation of DIN to company)

Individual or director in default shall be liable to a penalty of ;

  • Upto ₹ 50000/- and
  • ₹ 500/- per day till the default continues.

Amendment of Section 164

Disqualification of director in case he holds directorship or any alternate directorship in more than twenty Companies.

Amendment of Section 165

Penalty If a person accepts an appointment as a director in more than 20 companies;

  • ₹ 5000/- per day till the default continues

Amendment of Section 191

Penalty on director if  receives Payment for loss of office, etc., in connection with transfer of undertaking, property or shares in contravention of Section 191 ;

  • ₹ 1 lakh penalty

Amendment of Section 197

Penalty for contravention of section 197 (Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits)

  • ₹ 1 lakh penalty on any person in default and
  • ₹ 5 lakh penalty on company

Amendment of Section 203

Penalty for contravention of Section 203 (Appointment of key managerial personnel)

  • ₹ 5 lakh- penalty on company and
  • ₹ 50000/- on every Director/KMP in default
  • ₹ 1000 per day (max ₹ 5 lakhs) on every Director/KMP till default continues

Amendment of Section 238

Penalty for default in Registration of offer of schemes involving transfer of shares with the registrar;

  • ₹ 1 lakh penalty on the director in default and

Amendment of Section 248

Power of Registrar to remove name of company from register of companies;

  • If subscribers have not paid initial share capital of a Company within 180 days of incorporation, or
  • If company not carrying any business or operations as revealed after physical verification by the registrar.

Amendment of Section 441

  • Now, for offence punishable under this Act (whether committed by a company or any officer thereof) with fine only, where the maximum amount of fine which may be imposed for such offence does not exceed twenty- five lakh rupees, can be compounded by the Regional Director or any officer authorised by the Central Government, the Regional Director or any officer authorised by the Central Government, can compound
  • No compounding for offences which is punishable under this Act with imprisonment only or with imprisonment and also with fine.

Amendment of Section 447

Penalty for fraud has been increased to ₹ 50 lakhs from ₹ 20 lakhs.

Where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, and does not involve public interest.

Source: http://mca.gov.in/Ministry/pdf/NotificationCAO2019_15012019.pdf

Note: Companies (Amendment) Ordinance 2019 applicable w.e.f 2nd day of November 2018

Mandatory Declaration for commencement of Business by New Companies

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *