Summary of Provisions of The Companies (Amendment) Ordinance 2018
S. No Chapter/ Section Section The Companies Act 2013 The Companies (Amendment) Remarks
number/ Ordinance 2018
Subsection(s) in
the Companies
Act, 2013
1. Chapter I- Short 2 (41) Financial year, in relation to For the first proviso the following Instead of Tribunal, the
Title, Financial year any company or body shall be substituted: application for following a
Commencement corporate, means the period different financial year is
and Definitions ending on the 31st day of "Provided that where a company to be submitted to
March every year, and where or body corporate, which is a Central Government.
it has been incorporated on holding company or a subsidiary
or after the 1st day of or associate company of a For pending applications,
January of a year, the period company incorporated outside disposal shall be made by
ending on the 31st day of India and is required to follow a the Tribunal as per the
March of the following year, different financial year for existing provisions
in respect whereof financial consolidation of its accounts
statement of the company or outside India, the Central
body corporate is made up: Government may, on an
application made by that
Provided that on an company or body corporate in
application made by a such form and manner as may be
company or body corporate, prescribed, allow any period as
which is a holding company its financial year, whether or not
or a subsidiary or associate that period is a year:
company of a company
incorporated outside India Provided further that any
and is required to follow a application pending before the
different financial year for Tribunal as on the date of
consolidation of its accounts commencement of the
1
outside India, the Tribunal Companies (Amendment)
may, if it is satisfied, allow Ordinance, 2018, shall be
any period as its financial disposed of by the Tribunal in
year, whether or not that accordance with the provisions
period is a year: applicable to it before such
commencement.";
Provided further that a
company or body corporate, (b) in the second proviso, for
existing on the the words "Provided further that",
commencement of this Act, the words "Provided also that"
shall, within a period of two shall be substituted.
years from such
commencement, align its
financial year as per the
provisions of this clause;
2. CHAPTER II Insertion of new New insertion After section 10 of the principal This Section has been
Incorporation Of section 10(A) Act, the following section shall be inserted as a new Section
Company And inserted, namely:-- after certain
Matters Incidental (Commencemen modifications in Section
Thereto t of Business (1) A company incorporated after 11 which was omitted by
etc) the commencement of the Companies (Amendment)
Companies (Amendment) Act 2015.
Ordinance, 2018 and having a
share capital shall not commence Declaration by the
any business or exercise any directors to ROC for
borrowing powers unless-- payment of value of
shares by the subscribers
(a) a declaration is filed by a to the memorandum is
director within a period of required to be filed for
one hundred and eighty days any amount of share
of the date of incorporation capital within 180 days.
of the company in such form
2
and verified in such manner In case declaration has
as may be prescribed, with not been filed and ROC
the Registrar that every has reasons to believe
subscriber to the that no business has
memorandum has paid the been transacted, the
value of the shares agreed process of removal of the
to be taken by him on the company u/s 248 of the
date of making of such Act can be initiated.
declaration; and
(b) the company has filed with Consequential
the Registrar a verification of amendment has been
its registered office as made u/s 248 of the Act.
provided in sub¬ section (2)
of section 12.
(2) If any default is made in
complying with the requirements
of this section, the company shall
be liable to a penalty of fifty
thousand rupees and every
officer who is in default shall be
liable to a penalty of one
thousand rupees for each day
during which such default
continues but not exceeding an
amount of one lakh rupees.
(3) Where no declaration has
been filed with the Registrar
under clause (a) of sub-section
(1) within a period of one
hundred and eighty days of the
3
date of incorporation of the
company and the Registrar has
reasonable cause to believe that
the company is not carrying on
any business or operations, he
may, without prejudice to the
provisions of sub-section (2),
initiate action for the removal of
the name of the company from
the register of companies under
Chapter XVIII.
3. CHAPTER II Insertion of new New insertion In section 12 of the principal Act, In case the Registrar has
Incorporation Of sub-section (9) after sub-section (8), the reasons to believe that
Company And after Section 12 following sub-section shall be the company is not
Matters Incidental sub section 8 inserted, namely:-- carrying on any business,
Thereto physical verification may
"(9) If the Registrar has be made to verify.
reasonable cause to believe that
the company is not carrying on In case of default, even
any business or operations, he removal of name of the
may cause a physical verification company may be
of the registered office of the initiated.
company in such manner as may
be prescribed and if any default is
found to be made in complying
with the requirements of sub-
section (1), he may without
prejudice to the provisions of
sub-section (8), initiate action for
the removal of the name of the
company from the register of
companies under Chapter XVIII.".
4
4. CHAPTER II Section 14(1) (1) Subject to the provisions (i) in sub-section (1), for the Instead of Tribunal, the
Incorporation Of and (2) of this Act and the conditions second proviso, the following application for conversion
Company And - Alteration of contained in its proviso shall be substituted, of public company to
Matters Incidental articles memorandum, if any, a namely:-- private company and
Thereto company may, by a special vice-versa is to be
resolution, alter its articles "Provided further that any submitted to Central
including alterations having alteration having the effect of Government.
the effect of conversion of-- conversion of a public company
(a) a private company into a into a private company shall not For pending applications,
public company; or be valid unless it is approved by disposal shall be made by
(b) a public company into a an order of the Central the Tribunal as per the
private company: Government on an application existing provisions
Provided that where a made in such form and manner
company being a private as may be prescribed:
company alters its articles in
such a manner that they no Provided also that any application
longer include the restrictions pending before the Tribunal, as
and limitations which are on the date of commencement of
required to be included in the the Companies (Amendment)
articles of a private company Ordinance, 2018, shall be
under this Act, the company disposed of by the Tribunal in
shall, as from the date of accordance with the provisions
such alteration, cease to be a applicable to it before such
private company: commencement.";
Provided further that any (ii) in sub-section (2), for the
alteration having the effect of word "Tribunal", the words
conversion of a public "Central Government" shall be
company into a private substituted.
company shall not take effect
except with the approval of
5
the Tribunal which shall make
such order as it may deem
fit.
(2) Every alteration of the
articles under this section
and a copy of the order of
the Tribunal approving the
alteration as per sub-section
(1) shall be filed with the
Registrar, together with a
printed copy of the altered
articles, within a period of
fifteen days in such manner
as may be prescribed, who
shall register the same.
5. CHAPTER IV Section 53(3) (3) Where a company In section 53 of the principal Act,Penalty has been linked
Share Capital And - Prohibition contravenes the provisions of for sub-section (3), the following with amount raised
Debentures on issue of this section, the company sub-section shall be substituted, through the issue of
shares at shall be punishable with fine namely:-- shares at a discount or a
discount which shall not be less than penalty of Rs. 5 lakhs
one lakh rupees but which "(3) Where any company fails to whichever is less.
may extend to five lakh comply with the provisions of this
rupees and every officer who section, such company and every Further, in case of
is in default shall be officer who is in default shall be default, the company is
punishable with liable to a penalty which may required to refund the
imprisonment for a term extend to an amount equal to the amount alongwith 12%
which may extend to six amount raised through the issue interest per annum.
months or with fine which of shares at a discount or five
shall not be less than one lakh rupees, whichever is less,
lakh rupees but which may and the company shall also be
extend to five lakh rupees, or liable to refund all monies
with both. received with interest at the rate
6
of twelve per cent. per annum
from the date of issue of such
shares to the persons to whom
such shares have been issued.".
6. CHAPTER IV Section 64(2) 2) If a company and any In section 64 of the principal Act, Minimum penalty has
Share Capital And -Notice to be officer of the company who is for sub-section (2), the following been raised to Rs 1000
Debentures given to in default contravenes the sub-section shall be substituted, for each day.
Registrar for provisions of sub-section (1), namely:--
alteration of it or he shall be punishable
share capital with fine which may extend "(2) Where any company fails to
to one thousand rupees for comply with the provisions of
each day during which such sub-section (1), such company
default continues, or five lakh and every officer who is in
rupees, whichever is less. default shall be liable to a penalty
of one thousand rupees for each
day during which such default
continues, or five lakh rupees
whichever is less.".
7. CHAPTER VI Section 77(1) --(1) It shall be the duty of In section 77 of the principal Act, The Registrar may not
Registration Of -Duty to every company creating a in sub-section (1), for the first allow to register charge
Charges register charge within or outside and second provisos, the after 60 days.
charges, etc.-- India, on its property or following provisos shall be
assets or any of its substituted, namely:-- Earlier the Registrar may
undertakings, whether allow to register within a
tangible or otherwise, and "Provided that the Registrar may, period of 300 days.
situated in or outside India, on an application by the
to register the particulars of company, allow such registration Further period of 60 days
the charge signed by the to be made-- is allowed to register
company and the charge- charge. Earlier there was
holder together with the (a) in case of charges created no specific time limit.
instruments, if any, creating before the commencement of the
such charge in such form, on Companies (Amendment)
7
payment of such fees and in Ordinance, 2018, within a period
such manner as may be of three hundred days of such
prescribed, with the Registrar creation; or
within thirty days of its
creation: (b) in case of charges created
on or after the commencement of
Provided that the Registrar the Companies (Amendment)
may, on an application by the Ordinance, 2018, within a period
company, allow such of sixty days of such creation, on
registration to be made payment of such additional fees
within a period of three as may be prescribed:
hundred days of such
creation on payment of such Provided further that if the
additional fees as may be registration is not made within
prescribed: the period specified--
(a) in clause (a) to the first
Provided further that if proviso, the registration of the
registration is not made charge shall be made within six
within a period of three months from the date of
hundred days of such commencement of the
creation, the company shall Companies (Amendment)
seek extension of time in Ordinance, 2018, on payment of
accordance with section 87: such additional fees as may be
prescribed and different fees may
be prescribed for different
classes of companies;
(b) in clause (b) to the first
proviso, the Registrar may, on an
application, allow such
registration to be made within a
further period of sixty days after
payment of such advalorem fees
8
as may be prescribed.".
8. CHAPTER VI Section 86- If any company contravenes Section 86 of the principal Act New Subsection inserted
Registration Of Punishment any provision of this Chapter, shall be numbered as subsection to provide for wilful
Charges for the company shall be (1) thereof and after sub-section default.
contravention punishable with fine which (1) as so numbered, the following
New insertion ofshall not be less than one sub-section shall be inserted, In case of wilful default,
sub section (1) lakh rupees but which may namely:-- a person shall be liable
and (2) extend to ten lakh rupees under section 447 of the
and every officer of the "(2) If any person wilfully Act.
company who is in default furnishes any false or incorrect
shall be punishable with information or knowingly
imprisonment for a term suppresses any material
which may extend to six information, required to be
months or with fine which registered in accordance with the
shall not be less than twenty- provisions of section 77, he shall
five thousand rupees but be liable for action under section
which may extend to one 447."
lakh rupees, or with both.
9. CHAPTER VI Section 87 (1) The Central Government For section 87 of the principal Rectification is allowed
Registration Of - Rectification on being satisfied that-- Act, the following section shall beonly in case of accidental
Charges by Central (i) (a) the omission to file substituted, namely:-- or due to inadvertence or
Government with the Registrar the "87. The Central Government on some other sufficient
in register of particulars of any charge being satisfied that -- cause or it is not of a
charges created by a company or any nature to prejudice the
charge subject to which any (a) the omission to give position of creditors or
property has been acquired intimation to the Registrar of the shareholders of the
by a company or any payment or satisfaction of a company.
modification of such charge; charge, within the time required
or under this Chapter; or
(b) the omission to register
9
any charge within the time (b) the omission or
required under this Chapter misstatement of any particulars
or the omission to give with respect to any such charge
intimation to the Registrar of or modification or with respect to
the payment or the any memorandum of satisfaction
satisfaction of a charge, or other entry made in pursuance
within the time required of section 82 or section 83, was
under this Chapter; or accidental or due to inadvertence
(c) the omission or mis- or some other sufficient cause or
statement of any particular it is not of a nature to prejudice
with respect to any such the position of creditors or
charge or modification or shareholders of the company, it
with respect to any may, on the application of the
memorandum of satisfaction company or any person
or other entry made in interested and on such terms and
pursuance of section 82 or conditions as the Central
section 83, Government deems just and
was accidental or due to expedient, direct that the time for
inadvertence or some other the giving of intimation of
sufficient cause or it is not of payment or satisfaction shall be
a nature to prejudice the extended or, as the case may
position of creditors or require, that the omission or
shareholders of the company; misstatement shall be rectified"
or
(ii) on any other grounds, it
is just and equitable to grant
relief, it may on the
application of the company or
any person interested and on
such terms and conditions as
it may seem to the Central
Government just and
10
expedient, direct that the
time for the filing of the 63
particulars or for the
registration of the charge or
for the giving of intimation of
payment or satisfaction shall
be extended or, as the case
may require, that the
omission or mis-statement
shall be rectified.
10. CHAPTER VII Section 90 (9) (9) The company or the For section 90 of the principal Time period of 1 year has
Management and and (10) person aggrieved by the Act, the following sub-section been provided for making
Administration -Register of order of the Tribunal may shall be substituted, namely:-- application to the
significant make an application to the Tribunal for relaxation of
beneficial Tribunal for relaxation or "(9) The company or the person restrictions.
owners in a lifting of the restrictions aggrieved by the order of the
Company. placed under Tribunal may make an application Also, if no application has
sub-section (8). to the Tribunal for relaxation or been filed shares shall be
(10) If any person fails to lifting of the restrictions placed transferred to IEPF.
make a declaration as under sub-section (8), within a
required under sub-section period of one year from the date The penalty has been
(1) he shall be punishable of such order. extended to include
with fine which shall not be Imprisonment alongwith
less than one lakh rupees but Provided that if no such fine.
which may extend to ten lakh application has been filed within
rupees and where the failure a period of one year from the
is a continuing one, with a date of the order under sub-
further fine which may section (8), such shares shall be
extend to one thousand transferred to the authority
rupees for every day after constituted under sub-section (5)
the first during which the of section 125, in such manner as
failure continues. may be prescribed;
11
(ii) in sub-section (10),--
(a) after the word
"punishable", the words "with
imprisonment for a term which
may extend to one year or" shall
be inserted;
(b) after the words "ten lakh
rupees", the words "or with both"
shall be inserted.
11. CHAPTER VII Section 92(5) (5) If a company fails to file For section 92 of the principal For non filing of Annual
Management and - Annual its annual return under sub- Act, the following section shall be Return in time, monetary
Administration return. section (4), before the expiry substituted, namely:-- penalty has been levied.
of the period specified
therein, the company shall be "(5) If any company fails to file Imprisonment
punishable with fine which its annual return under sub- punishment has been
shall not be less than fifty section (4), before the expiry of withdrawn.
thousand rupees but which the period specified therein, such
may extend to five lakhs company and its every officer Penalty for continuing
rupees and every officer of who is in default shall be liable to default has been
the company who is in a penalty of fifty thousand rupees inserted.
default shall be punishable and in case of continuing failure,
with imprisonment for a term with further penalty of one
which may extend to six hundred rupees for each day
months or with fine which during which such failure
shall not be less than fifty continues, subject to a maximum
thousand rupees but which of five lakh rupees.".
may extend to five lakh
rupees, or with both.
12. CHAPTER VII Section 102 (5) (5) If any default is made in 13. In section 102 of the Minimum Penalty has
Management and -Statement to complying with the provisions principal Act, for sub-section (5), been fixed to Rs 50000.
Administration be annexed to of this section, every the following sub-section shall be
12
notice. promoter, director, manager substituted, namely:--
or other key managerial
personnel who is in default "(5) Without prejudice to the
shall be punishable with fine provisions of sub-section (4), if
which may extend to fifty any default is made in complying
thousand rupees or five times with the provisions of this
the amount of benefit section, every promoter, director,
accruing to the promoter, manager or other key managerial
director, manager or other personnel of the company who is
key managerial personnel or in default shall be liable to a
any of his relatives, penalty of fifty thousand rupees
whichever is more. or five times the amount of
benefit accruing to the promoter,
director, manager or other key
managerial personnel or any of
his relatives, whichever is
higher.".
13. CHAPTER VII Section 105 (3) (3) If default is made in In section 105 of the principal Penalty has been fixed to
Management and -Proxies complying with sub-section Act, in sub-section (3), for the Rs 5000.
Administration (2), every officer of the words "punishable with fine
company who is in default which may extend to five
shall be punishable with fine thousand rupees", the words
which may extend to five "liable to a penalty of five
thousand rupees. thousand rupees" shall be
substituted
14. CHAPTER VII Section 117 (2) (2) If a company fails to file 15. In section 117 of the Penalty has been made
Management and - Resolutions the resolution or the principal Act, for sub-section (2), harsher.
Administration and agreement under sub-section the following sub-section shall be
agreements to (1) before the expiry of the substituted, namely:-- In case of default, per
be filed period specified therein, the day penalty has been
company shall be punishable "(2) If any company fails to file introduced.
with fine which shall not be the resolution or the agreement
13
less than one lakh rupees but under sub-section (1) before the Penalty for continuing
which may extend to twenty- expiry of the period specified default has been
five lakh rupees and every therein, such company shall be inserted.
officer of the company who is liable to a penalty of one lakh
in default, including liquidator rupees and in case of continuing
of the company, if any, shall failure, with further penalty of
be punishable with fine which five hundred rupees for each day
shall not be less than fifty after the first during which such
thousand rupees but which failure continues, subject to a
may extend to five lakh maximum of twenty-five lakh
rupees. rupees and every officer of the
company who is in default
including liquidator of the
company, if any, shall be liable to
a penalty of fifty thousand rupees
and in case of continuing failure,
with further penalty of five
hundred rupees for each day
after the first during which such
failure continues, subject to a
maximum of five lakh rupees.".
15. CHAPTER VII Section 121 (3) (3) If the company fails to file In section 121 of the principal In case of default, per
Management and - Report on the report under sub-section Act, for sub-section (3), day penalty has been
Administration annual (2) before the expiry of the Amendment of the following sub- introduced.
general period specified therein, the section shall be substituted,
meeting company shall be punishable namely:-- section 121. Penalty for continuing
with fine which shall not be default has been
less than one lakh rupees but "(3) If the company fails to file inserted.
which may extend to five the report under sub¬section (2)
lakh rupees and every officer before the expiry of the period For Company
of the company who is in specified therein, such company
default shall be punishable shall be liable to a penalty of one Minimum- Rs 1 lakh
14
with fine which shall not be lakh rupees and in case of
less than twenty-five continuing failure, with further Further Penalty
thousand rupees but which penalty of five hundred rupees
may extend to one lakh for each day after the first during Per Day Rs 500
rupees which such failure continues,
subject to a maximum of five lakh Subject to Rs 5 lakh
rupees and every officer of the
company who is in default shall For Officer
be liable to a penalty which shall
not be less than twenty-five Minimum- Rs 0.25 lakh
thousand rupees and in case of
continuing failure, with further Further Penalty
penalty of five hundred rupees
for each day after the first during Per Day Rs 500
which such failure continues,
subject to a maximum of one Subject to Rs 1 lakh
lakh rupees."
16. CHAPTER IX Section 137 (3) (3) If a company fails to file In section 137 of the principal For non filing of Financial
Account of - Copy of the copy of the financial Act, in sub-section (3),-- Statements in time,
Companies financial statements under sub-section Amendment of section 137. monetary penalty has
statement to (1) or sub-section (2), as the been levied.
be filed with case may be, before the (a) for the words "punishable Penalty for continuing
Registrar expiry of the period specified with fine", the words "liable to a default has been
therein, the company shall be penalty" shall be substituted; inserted.
punishable with fine of one (b) for the words "punishable
thousand rupees for every with imprisonment for a term In case of default, per
day during which the failure which may extend to six months day penalty has been
continues but which shall not or with fine which shall not be introduced.
be more than ten lakh less than one lakh rupees but
rupees, and the managing which may extend to five lakh Imprisonment
director and the Chief rupees or with both", the words punishment has been
Financial Officer of the "shall be liable to a penalty of withdrawn.
15
company, if any, and, in the one lakh rupees and in case of
absence of the managing continuing failure, with further
director and the Chief penalty of one hundred rupees
Financial Officer, any other for each day after the first during
director who is charged by which such failure continues,
the Board with the subject to a maximum of five lakh
responsibility of complying rupees" shall be substituted.
with the provisions of this
section, and, in the absence
of any such director, all the
directors of the company,
shall be punishable with
imprisonment for a term
which may extend to six
months or with fine which
shall not be less than one
lakh rupees but which may
extend to five lakh rupees, or
with both.
17. CHAPTER X Section 140 (3) (3) If the auditor does not In section 140 of the principal For non compliance by
Audit And Auditors Removal, comply with sub-section (2), Act, for sub-section (3), the the auditor of the
resignation of he or it shall be punishable following sub-section shall be provisions of removal,
auditor and with fine which shall not be substituted, namely:-- resignation, penalty for
giving of less than fifty thousand "(3) If the auditor does not continuing default has
special notice. rupees or the remuneration comply with the provisions of been inserted.
of the auditor, whichever is sub-section (2), he or it shall be
less, but which may extend liable to a penalty of fifty
to five lakh rupees. thousand rupees or an amount
equal to the remuneration of the
auditor, whichever is less, and in
case of continuing failure, with
further penalty of five hundred
16
rupees for each day after the first
during which such failure
continues, subject to a maximum
of five lakh rupees"
18. CHAPTER XI Section 157 (2) (2) If a company fails to In section 157 of the principal Penalty for continuing
Appointment And - Company to furnish Director Identification Act, for sub-section (2), the default has been
Qualifications Of inform Number under sub-section following sub-section shall be inserted.
Directors Director (1), the company shall be substituted, namely:--
Identification punishable with fine which In case of default, per
Number to shall not be less than twenty- "(2) If any company fails to day penalty has been
Registrar five thousand rupees but furnish the Director Identification introduced.
which may extend to one Number under sub-section (1),
lakh rupees and every officer such company shall be liable to a
of the company who is in penalty of twenty-five thousand
default shall be punishable rupees and in case of continuing
with fine which shall not be failure, with further penalty of
less than twenty-five one hundred rupees for each day
thousand rupees but which after the first during which such
may extend to one lakh failure continues, subject to a
rupees maximum of one lakh rupees,
and every officer of the company
who is in default shall be liable to
a penalty of not less than twenty-
five thousand rupees and in case
of continuing failure, with further
penalty of one hundred rupees
for each day after the first during
which such failure continues,
subject to a maximum of one
lakh rupees.".
19. CHAPTER XI Section 159 Punishment for For section 159 of the principal Imprisonment
Appointment And contravention.-- Act, the following section shall be punishment has been
17
Qualifications Of Substitution If any individual or director of substituted, namely:-- withdrawn.
Directors of new section a company, contravenes any
for section of the provisions of section "159. If any individual or director
159. 152, section 155 and section of a company makes any default
Penalty for 156, such individual or in complying with any of the
default of director of the company shall provisions of section 152, section
certain be punishable with 155 and section 156, such
provisions imprisonment for a term individual or director of the
. which may extend to six company shall be liable to a
months or with fine which penalty which may extend to fifty
may extend to fifty thousand thousand rupees and where the
rupees and where the default is a continuing one, with
contravention is a continuing a further penalty which may
one, with a further fine which extend to five hundred rupees for
may extend to five hundred each day after the first during
rupees for every day after which such default continues.".
the first during which the
contravention continues
20. CHAPTER XI Section 164(1) (1) A person shall not be In section 164 of the principal A director is disqualified
Appointment And - eligible for appointment as a Act, in sub-section (1), after if he is holding
Qualifications Of Disqualificatio director of a company, if clause (h), the following clause directorship in more than
Directors ns for (a) he is of unsound mind shall be inserted, namely:-- 20 companies including
appointment and stands so declared by a alternate directorship.
of director competent court; "(i) he has not complied with the
(b) he is an undischarged provisions of sub-section (1) of
insolvent; section 165.".
(c) he has applied to be
adjudicated as an insolvent
and his application is
pending;
(d) he has been convicted by
a court of any offence,
18
whether involving moral
turpitude or otherwise, and
sentenced in respect thereof
to imprisonment for not less
than six months and a period
of five years has not elapsed
from the date of expiry of the
sentence:
Provided that if a person has
been convicted of any
offence and sentenced in
respect thereof to
imprisonment for a period of
seven years or more, he shall
not be eligible to be
appointed as a director in any
company;
(e) an order disqualifying him
for appointment as a director
has been passed by a court
or Tribunal and the order is
in force;
(f) he has not paid any calls
in respect of any shares of
the company held by him,
whether alone or jointly with
others, and six months have
elapsed from the last day
fixed for the payment of the
call;
19
(g) he has been convicted of
the offence dealing with
related party transactions
under section 188 at any
time during the last
preceding five years; or
(h) he has not complied with
sub-section (3) of section
152.
21. CHAPTER XI Section 165 (6) (6) If a person accepts an In section 165 of the principal Maximum capping for
Appointment And - Number of appointment as a director in Act, in sub-section (6), for the penalty has been
Qualifications Of directorships contravention of sub-section portion beginning with removed.
Directors (1), he shall be punishable "punishable with fine" and ending
with fine which shall not be with "contravention continues",
less than five thousand the words "liable to a penalty of
rupees but which may extend five thousand rupees for each
to twenty-five thousand day after the first during which
rupees for every day after such contravention continues"
the first during which the shall be substituted.
contravention continues.
22. CHAPTER XII Section 191 (5) (5) If a director of the In section 191 of the principal In case of default,
Meeting of Board - Payment to company contravenes the Act, for sub-section (5), the director shall be liable for
and its Powers director for provisions of this section, following sub-section shall be a penalty of Rs 1 lakh.
loss of office, such director shall be substituted, namely:
etc., in punishable with fine which "(5) If a director of the company Penalty has been fixed.
connection shall not be less than twenty- makes any default in complying
with transfer five thousand rupees but with the provisions of this
of which may extend to one section, such director shall be
undertaking, lakh rupees. liable to a penalty of one lakh
property or rupees."
shares.
20
23. CHAPTER XIII Section 197 (7) (7) Notwithstanding anything In section 197 of the principal Sub Section (7)
Appointment And and (15) contained in any other Act,-- prohibited an
Remuneration Of -Overall provision of this Act but (a) sub-section (7) shall be Independent Director to
Managerial maximum subject to the provisions of omitted; take Stock Option.
Personnel managerial this section, an independent (b) for sub-section (15), the
remuneration director shall not be entitled following sub-section shall be With the omission of the
and to any stock option and may substituted, namely:-- said sub-section, an
managerial receive remuneration by way "(15) If any person makes any independent director
remuneration of fees provided under sub- default in complying with the shall be entitled to any
in case of section (5), reimbursement of provisions of this section, he shall stock option.
absence or expenses for participation in be liable to a penalty of one lakh
inadequacy of the Board and other rupees and where any default Further, an
profits. meetings and profit related has been made by a company, independent director is
commission as may be the company shall be liable to a entitled to receive
approved by the members. penalty of five lakh rupees.". remuneration by way of
fees, reimbursement of
(15) If any person expenses for participation
contravenes the provisions of in the Board and other
this section, he shall be meetings and profit
punishable with fine which related commission
shall not be less than one without approval by the
lakh rupees but which may members.
extend to five lakh rupees.
Penalty has been fixed.
In case of default,
director shall be liable for
a penalty of Rs 1 lakh.
In case of default,
company shall be liable
for a penalty of Rs 5
21
lakh.
24. CHAPTER XIII Section 203 (5) (5) If a company contravenes In section 203 of the principal Penalty has been fixed.
Appointment And - Appointment the provisions of this section, Act, for sub-section (5), the
Remuneration Of of key the company shall be following sub-section shall be In case of default,
Managerial managerial punishable with fine which substituted, namely:-- director shall be liable for
Personnel personnel shall not be less than one "(5) If any company makes any a penalty of Rs 1 lakh.
lakh rupees but which may default in complying with the
extend to five lakh rupees provisions of this section, such In case of default,
and every director and key company shall be liable to a company shall be liable
managerial personnel of the penalty of five lakh rupees and for a penalty of Rs 5
company who is in default every director and key lakh.
shall be punishable with fine managerial personnel of the
which may 128 company who is in default shall
extend to fifty thousand be liable to a penalty of fifty
rupees and where the thousand rupees and where the
contravention is a continuing default is a continuing one, with
one, with a further fine which a further penalty of one thousand
may extend to one thousand rupees for each day after the first
rupees for every day after during which such default
the first during which the continues but not exceeding five
contravention continues. lakh rupees.".
25. CHAPTER XV Section 238 (3) (3) The director who issues a In section 238 of the principal Penalty has been fixed.
Compromises, - Registration circular which has not been Act, in sub-section (3), for the
Arrangements And of offer of presented for registration and words "punishable with fine In case of default,
Amalgamations schemes registered under clause (c) of which shall not be less than director shall be liable for
involving sub-section (1), shall be twenty-five thousand rupees but a penalty of Rs 1 lakh.
transfer of punishable with fine which which may extend to five lakh
shares shall not be less than twenty- rupees", the words "liable to a
five thousand rupees but penalty of one lakh rupees" shall
which may extend to five be substituted.
lakh rupees.
22
26. CHAPTER XVIII Section 248 (1) (1) Where the Registrar has In section 248 of the principal Effect of insertion of
Removal Of Names - Power of reasonable cause to believe Act, in sub-section (1), (a) in Section 10A
Of Companies Registrar to that-- clause (c), for the word and
From The Register remove name (a) a company has failed to figures "section 455,", the words Name of the company
Of Companies of company commence its business within and figures "section 455; or" shall may be removed in case
from register one year of its incorporation; be substituted; subscribers to the
of companies 1[or] memorandum have not
(b)* * * * * (b) after clause (c) and paid the subscription
(c) a company is not carrying before the long line, the following which they had
on any business or operation clauses shall be inserted, undertaken to pay at the
for a period of two namely:-- time of incorporation of a
immediately preceding "(d) the subscribers to the company and a
financial years and has not memorandum have not paid the declaration to this effect
made any application within subscription which they had has not been filed within
such period for obtaining the undertaken to pay at the time of one hundred and eighty
status of a dormant company incorporation of a company and a days of its incorporation.
under section 455, he shall declaration to this effect has not
send a notice to the company been filed within one hundred
and all the directors of the and eighty days of its
company, of his intention to incorporation under sub-section
remove the name of the (1) of section 10A; or
company from the register of
companies and requesting
them to send their
representations along with
copies of the relevant
documents, if any, within a
period of thirty days from the
date of the notice.
23
27. CHAPTER XXVIII Section 441 (1) (1) Notwithstanding anything In section 441 of the principal Penalty has been made
Special Courts and (6) contained in the Code of Act,-- harsher, raised from Rs 5
- Criminal Procedure, 1973 (2 (a) in sub-section (1), in lakh to Rs 25 lakh.
Compounding of 1974), any offence clause (b), for the words "does
of certain punishable under this Act not exceed five lakh rupees", the Any offence which is
offences (whether committed by a words "does not exceed twenty- punishable under this Act
company or any officer five lakh rupees" shall be with imprisonment only
thereof) not being an offence substituted; or with imprisonment and
punishable with (b) for sub-section (6), the also with fine shall not be
imprisonment only, or following sub-section shall be compoundable.
punishable with substituted, namely:--
imprisonment and also with "(6) Notwithstanding anything Earlier the same could in
fine, may, either before or contained in the Code of Criminal certain cases.
after the institution of any Procedure, 1973, any offence
prosecution, be compounded which is punishable under this
by-- Act with imprisonment only or
(a) the Tribunal; or with imprisonment and also with
(b) where the maximum fine shall not be compoundable."
amount of fine which may be
imposed for such offence
does not exceed five lakh
rupees, by the Regional
Director or any officer
authorised by the Central
Government, on payment or
credit, by the company or, as
the case may be, the officer,
to the Central Government of
such sum as that Tribunal or
the Regional Director or any
officer authorised by the
Central Government, as the
24
case may be, may specify:
28. CHAPTER XXVIII Section 446 B Notwithstanding anything In section 446B of the principal Penalties for One Person
Special Courts - Lesser contained in this Act, if a One Act, for the portion beginning Companies and Small
penalties for Person Company or a small with "punishable with fine" and companies have been
One Person company fails to comply with ending with "specified in such linked with the respective
Companies or the provisions of sub-section sections", the words "liable to a section.
small (5) of section 92, sub-section penalty which shall not be more
companies. (2) of section 117 or sub- than one half of the penalty
section (3) of section 137, specified in such sections" shall
such company and officer in be substituted.
default of such company shall
be punishable with fine or
imprisonment or fine and
imprisonment, as the case
may be, which shall not be
more than one-half of the
fine or imprisonment or fine
and imprisonment, as the
case may be, of the minimum
or maximum fine or
imprisonment or fine and
imprisonment, as the case
may be, specified in such
sections.".
29. CHAPTER XXIX Section 447 (3) Without prejudice to any In section 447 of the principal Penalty for Fraud has
Miscellaneous - Punishment liability including repayment Act, in the second proviso, for the been raised from Rs 25
for fraud of any debt under this Act or words "twenty lakh rupees", the lakh to Rs 50 lakh.
any other law for the time words "fifty lakh rupees" shall be
being in force, any person substituted
who is found to be guilty of
fraud, involving an amount of
25
at least ten lakh rupees or
one per cent of the turnover
of the company, whichever is
lower shall be punishable
with imprisonment for a term
which shall not be less than
six months but which may
extend to ten years and shall
also be liable to fine which
shall not be less than the
amount involved in the fraud,
but which may extend to
three times the amount
involved in the fraud:
Provided that where the
fraud in question involves
public interest, the term of
imprisonment shall not be
less than three years.
"Provided further that 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, any person
guilty of such fraud shall be
punishable with
imprisonment for a term
which may extend to five
years or with fine which may
26
extend to twenty lakh rupees
or with both."
30. CHAPTER XXIX Section 454 (3) (3) The adjudicating officer 31. In section 454 of the Rectification of default
Miscellaneous - Adjudication may, by an order impose the principal Act, -- has been introduced.
of penalties penalty on the company and (i) for sub-section (3), the
the officer who is in default following sub-section shall be Subsection 8 rephrased
stating any non-compliance substituted, namely: -- by including non
or default under the relevant "(3) The adjudicating officer may, compliance with the
provision of the Act. by an order-- Order.
(a) impose the penalty on the
company, the officer who is in
default, or any other person, as
the case may be, stating therein
any non-compliance or default
under the relevant provisions of
this Act; and
(b) direct such company, or
officer who is in default, or any
other person, as the case may
be, to rectify the default,
wherever he considers fit.";
(ii) in sub-section (8), --
(a) in clause (i), for the words
"does not pay the penalty
imposed by the adjudicating
officer or the Regional Director",
the words, brackets and figures.
fails to comply with the order
made under sub-section (3) or
sub-section (7), as the case may
27
be," shall be substituted;
(b) in clause (ii), for the words
"does not pay the penalty", the
words, brackets and figures "fails
to comply with the order made
under sub-section (3) or sub-
section (7), as the case may be,"
shall be substituted.
31. CHAPTER XXIX Insertion of a New Insertion After section 454 of the principal New Section inserted for
Miscellaneous new section Act, the following section shall be Repeated defaults.
454A. inserted, namely:--
Penalty for In case of repeated
repeated "454A. Where a company or an default an amount equal
default. officer of a company or any other to twice the amount of
person having already been penalty provided for such
subjected to penalty for default default under the
under any provisions of this Act, relevant provisions of this
again commits such default Act.
within a period of three years
from the date of order imposing
such penalty passed by the
adjudicating officer or the
Regional Director, as the case
may be, it or he shall be liable for
the second or subsequent
defaults for an amount equal to
twice the amount of penalty
provided for such default under
the relevant provisions of this
Act.".
28
|
