" Companies Bill 2009 - Critical Analysis
" Companies Bill,2009 - What is New?"
2008
Bill Introduced in LokSabha on 23rd Oct. 2008
2009
Bill INTRODUCED IN LOK SABHA ON 3rd AUGUST 2009
The
Bill proposes to have 426 Clauses and 28 CHAPTERS (against 658 section in the
Companies Act,1956)
No.
of welcome changes
Several
New Concepts/Ideas Introduced
It will
replace the Companies Act,1956
All
Powers of High Court Transferred to Proposed NCLT
Penalties
and Punishments are huge
Major Changes
1. All restrictions on Managerial remuneration removed
2. Related Party Disclosure - Disclosure Only . No need for Government approval.
3. OPC (One Person Company) introduced
4. Company prohibited to accept Deposits. However, the Company can accept deposit
from the Members.
5. Concept of Key Management Personnel (KMP) Introduced
6. Company should have a Chief Financial Officer ( CFO)
7. Registered Valuers
8. Secretarial Standards
9. Auditing Standards
10. Duties of directors
11. Auditor cannot undertake certain services
12. Dormant Company
13. Independent Directors
14. Board meeting and Notices
15. Importance of Annual return
16. Revival and rehabilitation of sick companies
17. Special Courts
18. Adjudication of Penalties
Few Important Definitions
Financial Year – 1st April to 31st March
“Chief Financial Officer” means a person appointed as the Chief
Financial Officer of a company
“relative” with reference to any individual means the spouse,
brother, sister and all lineal ascendants and descendants of such individual related
to him either by marriage or adoption;
“small company” means a company, other than a public company,—
(i) whose paid-up share capital does not exceed such
amount as may be prescribed and the prescribed amount shall not be more than
five crore rupees; or
(ii) whose turnover as per its last profit and loss account
does not exceed such amount as may be prescribed and the prescribed amount shall
not be more than twenty crore rupees:
“key managerial personnel”, in relation to a company, means
—
(i) the Managing Director, the Chief Executive Officer or the Manager and where
there is no Managing Director or Manager, a whole-time director or directors;
(ii) the Company Secretary; and
(iii) the Chief Financial Officer;
CHAPTER II
INCORPORATION OF COMPANIES
(Clause 3 to 21)
1. One person company (OPC) - Clause 3
It has only one member. Memorandum of a One Person Company shall indicate the
name of the person who shall, in the event of the subscriber’s death, disability
or otherwise, become the member of the company.
It shall be the duty of the member of a One Person Company to intimate the Registrar
the change, if any, in the name of the person.
It will have name of OPC Ltd at the end.
It gives corporate status for the single promoter
Once the Bill is enacted, the existing sole proprietor firms can convert themselves
to OPCs with the benefits of limited liability and minimal compliance.
Separate corporate entity that recognizes a promoter to do the business in a big
way.
Single entrepreneur can manage his business on his own. So, the key difference
between OPC and sole proprietorship is the way liabilities are treated. For instance,
in an OPC the promoter’s liability is limited in the event of a default or legal
issues. On the other hand, in sole proprietorships, the liability has not been
restricted and extends to the individual and his or her entire assets.
Decision
One person can take a decision without waiting for other director’s consent and
can be avoided wasting time and energy convincing other directors.
So many other countries already having this kind of one Person Company.
This is one of the welcome changes proposed in the bill.
2. Incorporation of companies.
All monies payable by any member to the company under the memorandum or articles
(By subscribing MOA &AOA at the time of incorporation) shall be a debt due from
him to the company.
Subscribers of the MOA have to make the money within 180 days unless Registrar
got the power to remove the company from the register.
Any person furnishes any false or incorrect particulars of any information or
suppresses any material information, of which he is aware in any of the documents
filed with the Registrar in relation to the registration of a company, he shall
be punishable with imprisonment for a term which may extend to one year or
with fine which shall not be less than five thousand rupees but which may extend
to one lakh rupees, or with both.
Even after incorporation, the company has been got incorporated by furnishing
any false or incorrect information or representation or by suppressing any material
fact or information in any of the documents or declaration filed or made for incorporating
such company, or by any fraudulent action, the promoters, the persons named as
first directors of the company, the persons making declaration shall each
be punishable with imprisonment for a term which may extend to one year and
with fine which shall not be less than twenty-five thousand rupees but which may
extend to one lakh rupees.
3. Commencement of business - clause 10
No need to obtain Certificate of Commencement of Business. Declaration has to
be filed with in 180 days. Registrar may remove the name of the company
from the register if the company is not carrying on business or operations and
has not filed the declaration.
The company shall furnish to the Registrar verification of its registered office
within fifteen days of its incorporation in such manner as may be prescribed.
4. Alteration of memorandum -clause 12
Change of registered office from one State to another State only requires Central
Government's approval.
5. Alteration of articles - clause 13
Conversion
(a) a private company into a public company or
a One Person Company, or
(b) a public company into a private company
or a One Person Company, or
(c) a One Person Company into a public company
or a private company:
any alteration having the effect of conversion
of a public company into a private company or a One Person Company shall not take
effect except with the approval of the Tribunal which shall make such order as
it may deem fit.
CHAPTER III
PROSPECTUS AND ALLOTMENT OF SECURITIES
( Clause 22 to 36)
6. Action to be taken by affected persons - clause 32
Class action is possible in case of misstatement in the prospectus.
A suit may be filed or any other action may be taken by any person, group of persons
or any association of persons affected by any misleading statement or the inclusion
or omission of any matter in the prospectus.
Penalties and punishments are huge in case of misstatement in the prospectus.
Civil and criminal liabilities for the promoters.
7. Global Depository Receipt (GDR) - clause 36
A company may, after passing a special resolution in its general meeting, issue
depository receipts to be dealt with in depository mode in any foreign country
in such manner, and subject to such conditions, as may be prescribed.
Private company need not file return of allotment – 34(5)
CHAPTER IV
SHARE CAPITAL AND DEBENTURES
Clause 37 to 65)
8. Kinds of share capital - clause 37
Only Two kinds of Capital i.e Equity and Preference.
There is no equity shares with differential rights or non-voting equity shares
allowed under section 86 of the companies Act,1956.
9. Prohibition on issue of shares at a discount - clause 47
A company shall not issue shares at a discount.
Any share issued by a company at a discounted price shall be void. However, Sweat
Equity shares can be issued at a discount subject to the rules.
10. Issue and redemption of preference shares - clause 49
This clause authorizes infrastructural projects to issue preference shares redeemable
after a period exceeding 20 years.
11. Debentures - clause 64
The clause provides that a company shall not issue prospectus to more than
500 persons without appointing a debenture trustee.
CHAPTER V
ACCEPTANCE OF DEPOSITS BY COMPANIES
(Clause 66 to 68)
12. Prohibition on acceptance of public deposits - clause 66
Company prohibited accepting Deposits from the Public. However, the Company can
accept deposit from the Members.
There is no restriction to invite and accept debentures including unsecured debetures.
Existing deposits shall be repaid within one year from the date commencement of
this act or from the date on which such payments are due, whichever is earlier.
Default
In addition to the payment of the amount of deposit or part thereof and the interest
due, be punishable with fine which shall not be less than one crore rupees
but which may extend to ten crore rupees and every officer of the company
who is in default shall be punishable with imprisonment which may extend to
seven years or with fine which shall not be less than twenty-five lakh rupees
but which may extend to two crore rupees, or with both.
CHAPTER VI
REGISTRATION OF CHARGES
(Clause 69 to 77)
13. Registration of Charges -clause 69 &70
Charge should be filed with in 30 days. It can be filed with in 300 days from
the date of creation with an additional fee.
If the company fails to register the charge within the period , charge holder
may apply to the Registrar for registration of the charge along with the instrument
created for the charge, in such form and manner as may be prescribed and the Registrar
may, on such application, within fourteen days after giving notice to the company,
allow such registration on payment of such fee and additional fee as may be prescribed:
Provided that where registration is effected on application of the person in whose
favour the charge is created, that person shall be entitled to recover from the
company the amount of any fee or additional fee paid by him to the Registrar for
the purpose of registration of charge.
CHAPTER VII
MANAGEMENT AND ADMINISTRATION
( Clause 78 – 109)
14. Annual return – Clause 82
Scope of Annual return widened.
It includes meetings of members or Board and its various committees along with
attendance details; remuneration of directors and key managerial personnel; penalties
or punishment imposed on the company, its directors or officers and details of
compounding of offences; matters related to certification of compliances, disclosures;
and such other matters as may be prescribed.
It should be signed both by a director and the
Company Secretary, or where there is no Company Secretary, by a Company Secretary
in whole-time practice:
If the company having such paid-up capital and
turnover as may be prescribed, or a company whose shares are listed on a recognised
stock exchange, shall also be signed by a Company Secretary in whole-time practice
.
One Person Company and small company, the annual
return shall be signed by the Company Secretary, or where there is no Company
Secretary, by one director of the company.
An extract of the annual return in such form as
may be prescribed shall form part of the Board’s Report.
Where a Company Secretary in whole-time practice
certifies the annual return otherwise than in conformity with the requirements
of this section or the rules made thereunder, such Company Secretary shall be
punishable with fine which shall not be less than fifty thousand rupees but which
may extend to five lakh rupees.
15. Annual General Meeting - Clause 85
OPC need not hold an annual general meeting.
First AGM Should be within 9 months from the close of financial year and subsequent
AGM should be within 6 months from the close of financial year.
AGM cannot be held on National Holiday. ( Public Holiday in 1956 Act)
Notice of meeting 21 clear days
Notice should be given to the director also
Explanatory statement required for all special business
No Statutory meeting and statutory report required
16. Voting through electronic means - clause 97
Unless the articles provide otherwise, a member may exercise his vote at a general
meeting by electronic means subject to rules.
17. Postal ballot - clause 99
Presently, postal ballot procedures only for listed company and specified purpose.
Now, it has been proposed to be extended under the Bill to every company for businesses
as may be notified by the Central Government to be transacted only by postal ballot.
18. Report on Annual General Meeting - clause 109
Every Listed companies are required to prepare and file a report on convening,
holding and conducting annual general meeting every year within 30 days of its
conclusion.
CHAPTER VIII
DECLARATION AND PAYMENT OF DIVIDEND
Clause 110-115)
19 Declaration of Dividend
Dividend can be declared only from the current year profits
Inadequacy or absence of profits in any financial year, the company proposes to
declare dividend out of the accumulated profits earned by it in the previous financial
year or years and transferred by it to the reserves, such declaration shall be
made by a resolution passed at a meeting of the Board with the consent of all
the directors and the approval of the financial institutions whose term loans
are subsisting, and thereafter in accordance with a special resolution passed
by the shareholders at an annual general meeting.
Unpaid dividend can be claimed any time from the IEPF
CHAPTER IX
ACCOUNTS OF COMPANIES
(Clauses 116 to 122)
20. Books of account, etc, to be kept by company - Clause 116
Keeping books of account in electronic mode is authorized. The persons responsible
are the CEO/ CFO/ Whole-time director in charge of finance, or any other officer
charged by the Board to see to the keeping of the said books. Preservation of
such books is 8 years.
21. Annual report - Clause 120
Annual reports including Board's report and its contents have been enlarged. The
Board's report should contain following new items like
1. Annual return
2. number of board's meetings held
3. Declaration by independent directors
4. Particulars of inter-corporate loans and investments made
5. Particulars of related party transactions etc
CHAPTER X
AUDIT AND AUDITORS
Clauses 123 to 131
22. Appointments of Auditors - 123
First Auditor should appointed by the Board with one month from the date of incorporation
Company unless shareholders have appoint. The company shall inform the auditor
concerned of his appointment, and also file a notice of such appointment with
the Registrar within fifteen days of the meeting in which the auditor is appointed.
Where at any annual general meeting, no auditor is appointed or re-appointed,
the existing auditor shall continue to be the auditor of the company.
23. Auditors - Remuneration to be fixed in the AGM
Every auditor shall comply with the Auditing Standards to be notified by the Central
Government. In the meanwhile until such notification, standards specified by ICAI
shall be deemed to be the Auditing Standards to be complied with.
24. Disqualifications of auditors – 124(3)
None of the following persons shall be eligible for appointment as an auditor
of a company, namely:—
(a) a body corporate;
(b) an officer or employee of the company;
(c) a person who is a partner, or who is in the employment, of an officer or employee
of the company;
(d) a person who, or his relative or partner—
(i) is holding any security of the company or its subsidiary, or of its holding
or associate company or a subsidiary of such holding company, of value in terms
of such percentage as may be prescribed;
(ii) is indebted to the company, or its subsidiary, or its holding or associate
company or a subsidiary of such holding company; or
(iii) has given a guarantee or provided any security in connection with the indebtedness
of any third person to the company, or its subsidiary, or its holding or associate
company or a subsidiary of such holding company, for such amount as may be prescribed;
(e) a person or a firm who has business relationship with the company, or its
subsidiary, or its holding or associate company or subsidiary of such holding
company or associate company of such nature as may be prescribed;
(f) a person whose relative is in the employment of the company as a director
or key managerial personnel;
(g) a person who is in employment elsewhere or a person or firm who holds appointment
as an auditor in companies exceeding such number as may be prescribed on the date
of his appointment.
25. Auditor not to render certain services - clause 127
• accounting and book-keeping services;
• internal audit;
• designing and implementation of any financial information system;
• actuarial services;
• investment advisory services;
• investment banking services;
• rendering of outsourced financial services; and
• management services.
If the auditor renders any of the above services, he shall be punishable with
fine which shall not be less than twenty-five thousand rupees but which may extend
to five lakh rupees:
Provided that where it is proved that an auditor has knowingly or wilfully
contravened any of the provisions of the aforesaid sections, he shall be punishable
with imprisonment for a term which may extend to one year or with fine which shall
not be less than one lakh rupees but which may extend to twenty-five lakh rupees,
or with both.
CHAPTER 11
APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Clauses 132 to 153
26. Company to have Board of directors· clause 132
Every company shall have a Board of directors. Only individuals can become directors
At least one of the directors should be a person ordinarily resident in India,
that is, one who stayed in India for a total of 182 days in a calendar year.
27. Independent director - clause 132
Every listed public company having such amount of paid-up share capital as may
be prescribed shall have at the least one-third of the total number of directors
as independent directors. The Central Government may prescribe the minimum
number of independent directors in case of other public companies and subsidiaries
of any public company.
28. Duties of Directors - clause147
New provision in the Bill
1. A director of a company shall act in accordance with the articles.
2. He shall act in good faith in order to promote the objects of the company for
the benefit of members as a whole ,and in best interests of the company
3. He shall exercise his duties with due and reasonable care, skill and diligence.
4. He shall not involve in a situation in which he may be have a direct or indirect
interest that conflicts, or possibly may conflict, with the interest of the company.
5. He shall not achieve or attempt to achieve any undue gain or advantage either
to himself or his relatives ,partners or associates
6. He shall not assign his office and any assignment so made shall be void.
Still it can be clearly specified.
Government is also thinking to introduce knowledge test for the directors like
KRA, KPA
29. Resignation of director - clause 149
As compared to the existing companies act, this is absolutely makes clarity.
A director may resign from his office by giving a notice in writing to the
company and the Board shall on receipt of such notice take note of the same and
intimate the Registrar in such manner and in such form as may be prescribed and
shall also place the fact of such resignation in the subsequent general meeting
held by the company:
Provided that a director may also forward a copy of his resignation to the Registrar
in the manner as may be prescribed.
The resignation of a director shall take effect from the date on which the notice
is received by the company or the date, if any, specified by the director in the
notice, whichever is later.
CHAPTER 12I
MEETINGS OF BOARD AND ITS POWERS
(Clauses 154 to 173)
30. Board Meetings - clause 154
After the Incorporation, every company shall hold its first Board meeting
within 30 days.
In year 4 Board meetings and time cap between two board meetings should not exceed
120 days.
Participation through video-conferencing or such other electronic means, is
possible subject to rules.
Every Board meeting requires a 7 day notice in writing or by electronic means.
To transact urgent business, a Board meeting may be called
at shorter notice subject to the condition that at least one independent director,
if any, is present at the meeting.
If such an independent director is absent, the decisions taken at such a Board
meeting become effective only on their circulation to all the directors and ratification
by at least one independent director.
Circular resolutions passed should be noted at a subsequent Board meeting and
thus made part of the minutes of such a meeting.
31. Restrictions on Board’s Power - clause 160
The restrictions contained in section 293 of the Companies Act1956 retained. But
the consent of general meeting required is by special resolution and not ordinary
resolution. It is for all the Companies.
32. Loan to directors -clause 163
Exempted for MD/ WD
Subject to applicability of all employees or Scheme approved by the members by
passing special resolution.
Need some more restrictions.
33. Related party transactions - clause 166
Surely, this one of the welcome step. Shareholders are authorized to decide
related party transactions.
The contracts and arrangements with the related party:
- sale, purchase or supply of any goods and services
- selling or otherwise disposing of or buying property of any kind
- leasing property of any kind
- availing or rendering of any services
- appointment of any agents for purchase or sale of goods, materials or
services or property
- appointment to any office or place of profit in the company or its subsidiary
underwriting the subscription of any securities or derivatives thereof of the
company.
companies having the prescribed paid up capital should obtain prior members'
approval by a special resolution.
This clause will not apply if the transaction made on arms’ length basis.
34. Prohibition of insider trading of securities by the directors or KMP
- 172
CHAPTER 13
APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL
Clauses 174 to 178)
Appointment of managing director, whole-time director or manager
No company shall appoint or continue the employment of any person as its key managerial
personnel who is below the age of twenty-one years or has attained the age of
seventy years:
Provided that appointment of a person who has attained the age of seventy years
may be made by passing a special resolution;
Board can appoint MD with the consent of all the directors present tat the meeting
subject the approval of the members at the ensuing general meeting
35. Remuneration of managerial personnel – Clause 175
There is no restriction for Remuneration. Shareholders should approve the remuneration
recommended by the Board of directors.
A managing or whole-time director or a manager of a company may be paid remuneration
either by way of a monthly payment or at a specified percentage of the net profits
of the company or partly by monthly payment and partly by the percentage of net
profits.
Shareholders can decide the remuneration. Government will not interfere in this
matter.
This is also one of the welcome changes proposed in the bill.
Clause 176
A director who is neither a whole-time director
nor a managing director of a company may be paid remuneration in the form of —
(a) fee for attending meetings of the Board or
committees thereof in accordance with the articles; and
(b) profit-related commission with the prior approval of members by a special
resolution
36. Appointment of key managerial personnel - Clause 178
Every company belonging to such class or description
of companies as may be prescribed shall have whole-time key managerial personnel.
“key managerial personnel”, in relation to
a company, means —
(i) the Managing Director, the Chief Executive
Officer or the Manager and where there is no Managing Director or Manager, a whole-time
director or directors;
(ii) the Company Secretary; and
(iii) the Chief Financial Officer;
A Company Secretary is a KMP along with the Managing Director, the Chief Executive
Officer and the Chief Financial Officer.
Whole-time key managerial personnel shall not hold office in more than
one company at the same time
37. Application to Tribunal of relief in cases of the oppression and mismanagement
- clause 212
Section 397 of 1956 Act has been retained in the Bill.
CHAPTER XV
COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS
Clauses 201 to 211)
38. Merger or amalgamation of certain companies. – 204
Merger or Amalgamation of Two Small Companies or between a holding company and
its wholly-owned subsidiary company is made easier.
-
Scheme to be prepared
-
Notice for any objections
-
Scheme should be approved by the members by a special resolution
-
Scheme should be approved by three-fourths in value of the creditors
-
transferee company shall file a copy of the scheme with the Registrar
and the Official Liquidator.
-
if the Registrar or the Official Liquidator has no objections or
comments to the scheme, the Registrar shall register the same and issue a confirmation
thereof to the companies.
-
If the Official Liquidator has any objections or comments, he may
communicate the same in writing to the Registrar within a period of thirty day
-
If scheme is not in public interest or in interest of the creditors
or any objections received, registrar may file an application before
the Tribunal.
-
Tribunal Order and order shall be communicated to the Registrar
A foreign company may merge or amalgamate into a company registered under this
Act or vice versa
39. Class Action - clause 216
According to this clause, one or more members or class of members
or creditors may file an application before the Tribunal on behalf of the whole
of their class alleging that the affairs of a company are being conducted in a
manner prejudicial to its interests or the interests of the members or creditors,
and to seek necessary remedies
CHAPTER 17I
REGISTERED VALUERS
Clause 218 to 223)
40. Registered valuers
New clauses in the Bill and also new opportunity for the professional.
Valuation is required to be made in respect of any property, stocks, shares, debentures,
securities or goodwill or net worth of a company or its assets, it shall be valued
by a person registered as a valuer under this chapter.
Any Chartered Accountant, Cost and Works Accountant,
Company Secretary or other persons possessing such qualifications as may be prescribed
may apply to the Central Government in the prescribed form for being registered
as a valuer under this section
Provided that no company or body corporate shall
be eligible to apply.
CHAPTER 18
REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER
Clauses 224 to 228)
41. Power of Registrar to remove name of a company from register.
-
If the company has failed to commence
its business within one year of its incorporation
-
If the subscribers have not paid money with in 180 days or if the
company has not filed declaration within 180 days
-
If the company is not carrying on any business or operation for
a period of one year and has not made any application within such period for obtaining
the status of a dormant company
Registrar will send the notice to all the directors of his intention to remove
the name of the company from the register.
Company can voluntarily by passing a special resolution or consent of seventy-five
per cent of the members in terms of share capital may also file an application
Registrar for removing the name of the company from the register.
However, application cannot be made certain circumstances like
in the previous three months, the company—
(a) has changed its name;
(b) has traded or otherwise carried on business;
(c) has made a disposal of any properties
(d) has engaged in any other activity
(e) has made an application to the Tribunal for the sanctioning of a compromise
or arrangement
CHAPTER 19
REVIVAL AND REHABILITATION OF SICK COMPANIES
(Clauses 229 to 244)
42. Revival and rehabilitation of sick companies - clause 229
1. Application to Tribunal to declare as Sick Company
Where on a demand by the secured creditors of a
company representing fifty per cent. or more of its outstanding amount of debt,
the company has failed to pay the debt within thirty days of the service of the
notice of demand or to secure or compound it to the reasonable satisfaction of
the creditors, any secured creditor may file an application to the Tribunal in
the prescribed manner along with the relevant evidence for such default, non-repayment
or failure to offer security or compound it, for a determination that the company
be declared as a sick company..
2. Tribunal Decision
Within 60 days of filing such an application, the Tribunal is bound to determine
whether the company is sick or not. The Tribunal's order against the said application
of the creditors will hold good for 120 days.
3. Application for revival and rehabilitation
Upon determination of sick company , any secured creditor of the company may file
a third application before the Tribunal for company's revival and rehabilitation
measures.
4. Appointment of interim administrator
Thereupon follow the appointment of interim Company Administrator / Company Administrator
from the panel kept by the Central Government for preparation of a scheme of revival
and rehabilitation of the company for Tribunal's sanction.
5. Committee of Creditors
The interim administrator shall appoint a committee of creditors with such number
of members as he may determine, but not exceeding seven, and as far as possible
a representative each of every class of creditors should be represented in that
committee
6. Order of Tribunal.
If the Tribunal sanctions the scheme, it will be implemented or if it is not approved
the company is ordered to be wound up.
CHAPTER 20
WINDING UP
( Clauses 245 to 340)
43. Company liquidators and their appointments - clause 250
The provisional liquidator or the Company Liquidator,
as the case may be, shall be appointed from a panel maintained by the Central
Government consisting of the names of chartered accountants, advocates, company
secretaries, cost and works accountants or firms or bodies corporate having such
chartered accountants, advocates, company secretaries, cost and works accountants
and such other professionals as may be notified by the Central Government or from
a firm or a body corporate of persons having a combination of such professionals
as may be prescribed and having at least ten years’ experience in company matters
and such other qualifications as may be prescribed.
44. Appointment of Official Liquidator – Clause
– 334
Winding up of companies by the Tribunal, the Central
Government may appoint as many Official Liquidators as it may consider necessary
and may also appoint Joint, Deputy orAssistant Official Liquidators to assist
him in discharge of his functions.
CHAPTER 27
45. Special Courts - clause 396
All offences under this Act shall be triable only by the special court .
For the purpose of providing speedy trial of offences under this Act, by notification,
establish as many special courts as may be necessary by the Central Government.
A special court shall consist of a single judge who shall be appointed by
the Central Government with the concurrence of the Chief Justice of the High Court
46. Punishment in case of repeated default -Clause 410
In case of repeated defaults , fine will be twice but prison term remains same.
47 . Adjudication of penalties – 413
The Central Government will appoint adjudicating officers for adjudging penalty
under the provisions of this Act.
Registrar may be authorized or some person can be appointed not below the rank
of registrar as adjudicating officers
The Adjudicating Officer may, by an order impose the penalty on the company and
the officer who is in default stating any non-compliance or any default under
the relevant provision of the Act.
The Adjudicating Officer shall, before imposing any penalty, give a reasonable
opportunity of being heard to such company and the officer who is in default
Any person aggrieved by an order made by the adjudicating officer may prefer an
appeal to the Regional Director.
Appeal shall be filed within sixty days from the date on which the copy of the
order made by the adjudicating officer is received by the aggrieved person.
48. Dormant company – clause 414
New provision in the Bill
If there is No significant accounting transaction
or an inactive company may make an application to the Registrar to obtain the
status of Dormant Company.
The Registrar shall maintain a register of dormant
companies
In case of a company which has not filed financial
statements or annual returns for two financial years consecutively, the Registrar
shall issue a notice to that company and enter the name of such company in the
register maintained for dormant companies.
A dormant company shall have such minimum number
of directors, file such documents and pay such annual fee as may be prescribed
to the Registrar to retain its dormant status in the register and may become an
active company on an application made in this behalf
The Registrar shall strike off the name of a dormant
company from the register of dormant companies, which has failed to comply with
the requirements of this section
Conclusion
As compared to the existing companies act, positively there are some new concepts
have been proposed. Central government’s intentions to strengthen shareholder
democracy are welcome step. Need some corrections.
By
CS.P.Eswaramoorthy, B.sc., Acs.,
Company Secretary in Practice,
7/25, Sri Sakthi Complex,
Nanjundapuram Road,
Ramanathapuram,'
Coimbatore - 641045
91 422 4216903
91 9443419246
91 99655 19246
E.Mail: eswaracs@gmail.com
eswaracs@airtelmail.in
CAclubindia
