2008 Bill 2009 Bill Bill referred to•Introduced in Lok •2008 bill modified Standing Sabha on 23.10.08 •Re-introduced in Committee for•To replace the 2009 on 3.8.09 review Companies Act, 1956 Report tabled in Lok Sabha on• Lapsed due to August 31, 2010 dissolution of Parliament 2011 Bill 2011 Bill •Introduced in Lok • Passed by Lok Sabha on Was shelved for taking Sabha on December 14, 2011 up the same in winter December 18, session of Parliament 2012 as the on December 22, 2011 Companies Bill 2012December 2012
THE ACT OF 1956 & THE ACT ASPROPOSED TO BE....Details Companies Act, 1956 Companies Bill, 2012Parts/ Chapter 13 29Sections 658 470Schedules 15 7No. of clauses in 67 95Section 2(Definitions)
DEFINITIONSDetails Companies Bill, 2012New Definitions – as Some of the new definitions as introduced are of Accountingintroduced Standards, Auditing Standards, Associate Company, Chief(Clause 2) Executive Officer, Chief Financial Officer, Control, Deposit, Employee Stock Option, Financial Statement, Global Depository Receipt, Indian Depository Receipt, Independent Director, Interested Director, Key Managerial Personnel, Promoter, One Person Company, Small Company, Turnover, Voting Right etc..Details Companies Act, 1956 vis-à-vis Companies Bill, 2012Definitions – • Incase of Private Limited Company [Section 3 & Cl. 2(68) –Modified/ other Maximum number of members proposed to be increasedimportant terms from 50 to 200 • Private company which is a subsidiary of a public company shall be deemed to be a public company. • Key Managerial Person (KMP) – Cl. 2(51) states that KMP includes the Chief Executive Officer or the managing director or the manager; the company secretary; the Chief Financial Officer if the Board of Directors appoints him; and such other officer as may be prescribed;
DEFINITIONSDetails Companies Act, 1956 vis-à-vis Companies Bill, 2012Definitions – • Scope of the term “officer who is in default” enlarged – The term wasModified/ other defined in Section 5 of the Act. Its scope has now been enlarged. Itimportant terms now states includes as under: (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified; (iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; (vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer.
DEFINITIONSDetails Companies Act, 1956 vis-à-vis Companies Bill, 2012Definitions – • Definition of the term “Subsidiary Company” modified – The term isModified/ other defined in Section 4 of the Act. Its scope has now been modified toimportant terms mean a Company in which the holding Company – (i) Controls the composition of the Board of Directors; or (ii) Exercises or controls more than one half of the total share capital (instead of equity share capital as prescribed under the 1956 Act) either at its own or together with one or more of its subsidiary companies. Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Concept of One It means a Company which has only one person as aPerson Company member;(OPC) – Cl. 2(62)Concept of Small means a company, other than a public company — with paid-upCompanies – Cl. 2(85) share capital not exceeding fifty lakh rupees or such amount as may be prescribed, not to be more than five crore rupees; or turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees. This will include a holding company or a subsidiary company; a company formed with charitable objects; or a company or body corporate governed by any special Act;Term ‘Promoter’ (i) Promoter is one who has been named as such in a prospectusdefined – Cl. 2(69) or is identified by the company in the annual return, or (ii) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (iii) in accordance with whose advice, directions or instructions the Board of Directors is accustomed to act. Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Directors • Duties of the directors towards a company prescribed (not provided in the Companies Act, 1956). • Maximum there can be15 directors. This number can go up on the passing of special resolution. • In certain prescribed companies atleast one woman director should be appointed • Every company to have one resident director, i.e. a director who has stayed in India for minimum 182 days in the previous calendar year. • Every company belonging to such class or description of companies as may be prescribed shall have Managing Director (MD) or Chief Executive • Director (CEO) or Manager and in their absence, a Whole time Director (WTD) TD and a Company Secretary. • Individual not to be the Chairman of the company as well as the MD or CEO of the company at the same time (AoA can provide for this); • Every whole time KMP to be appointed by a resolution at BOD meeting; • A WTKMP not to hold office in more than one company at the same time. • Any vacancy in the office of any KMP to be filled up by the BOD within 6 months. • Provisions relating to separation of office of Chairman and Managing Director (MD) modified to allow, in certain cases, a class of •companies having multiple business and separate divisional MDs to appoint same person as ‘Chairman as well as MD’
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Concept of All listed companies shall have at least one-third of the Board asIndependent independent directors.Directors – Cl. 149(5) • Such other class or classes of public companies as may be prescribed by the Central Government shall also be required to appoint independent directors. • The independent director has been clearly defined in the Bill. • Nominee director nominated by any financial institution, or in pursuance of any agreement, or appointed by any government to represent its shareholding shall not be deemed to be an independent director. • An independent director shall not be entitled to any remuneration other than sitting fee, reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members. • An Independent director shall not be entitled to any stock option. •Only an independent director can be appointed as alternate director to an independent director. [clause 161(2)].
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Duties of Directors – • To act in accordance with the articles of the company.Cl. 166 • To act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. • To exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. • Not to involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. • Not to achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company. • Not to assign his office and any assignment so made shall be void.Resignation of • A Director may resign from his office by giving a notice in writingDirector [Cl. 168] and the Board shall, on receipt of such notice take note of the same and the company shall intimate the Registrar and place such resignation in the subsequent general meeting of the company. The director shall also forward copy of resignation with reasons to Registrar. The clause further provides for the date on which the notice of resignation shall take effect. The director shall be liable for the offences occurred during his tenure.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Cross Border Mergers • The Bill provides for Cross Border Mergers which means that a foreign Company may with due prior approval of the Reserve Bank of India, merge or amalgamate in to a Company registered under this Act or vice-versa. • Payment of consideration to the shareholders of the merged Company in cash, or in Depository Receipts (DRs) or partly by cash and DRs.Account Books/ Audit/ • Company can maintain Books of Account in electronic modeAuditors • The Bill provides for conduct of internal audit of prescribed class or classes of companies. • 5 Year Tenure for Auditors: - Audit firm or an individual including an LLP to be appointed for 5 yrs, i.e. to hold office upto the date of the sixth AGM. - Appointment of auditors for five years shall be subject to ratification by members at every Annual General Meeting.Uniform Financial Company or body corporate to adopt uniform financial year i.e.Year 1st April to 31st March every year except in certain exceptional cases. Existing Companies not adopting 1st April to 31st March as financial year for the purposes of Companies Act to align themselves with this within two years of commencement of the Companies Act, 2012.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Serious Fraud • This is a new clause and seeks to provide that the CentralInvestigating Office Government shall constitute Serious Fraud Investigation Office(SFIO) (SFIO).[Cl. 211] • The SFIO will be headed by a director and will consist of experts from various disciplines. • The Central Government shall also appoint a Director in the SFIO not below the rank of Joint Secretary and may also appoint such experts and other officers as it considers necessary for efficient discharge of functions.Corporate Social • Every company having specified net worth or turnover or netResponsibility profit during any FY shall constitute the Corporate Social[Cl. 135] Responsibility Committee of the Board. The composition of the committee shall be included in the Boards Report. • The Board shall disclose the content of policy in its report and place on website, if any of the Company. • The Board shall endeavour to ensure that atleast two per cent of average net profits of the Company made during three immediately preceding financial years shall be spent on such policy every year. If the company fails to spend such amount the Board shall give in its report the reasons for not spending.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012E-governance • Maintenance and allowing inspection of documents by companies in electronic form being allowed for the first timeAuditor’s • Rotation of auditors and audit firms being provided for.Accountability/ NFRA • Stricter and more accountable role for auditor being retained. Provisions relating to prohibiting auditor from performing non- audit services revised to ensure independence and accountability of auditor. • Subject to the maximum prescribed number of companies, the members of a company may resolve that the auditor or audit firm of such company shall not become auditor in companies beyond the number as may be specified in such resolution. • National Advisory Committee on Accounting and Auditing Standards (NACAAS) proposed to be renamed as National Financial Reporting Authority (NFRA) with a mandate to ensure monitoring and compliance of accounting and auditing standards and to oversee quality of service of professionals associated with compliance. • Authority to consider the International Financial Reporting Standards and other internationally accepted accounting and auditing policies and standards. Contd...
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012 … contd. • The Authority is also proposed to be empowered with quasi judicial powers to ensure independent oversight over professionals. • Cost Audit: Cost records to be mandated for companies engaged in production of such goods or rendering of such services as may be prescribed. The concept of "cost auditing standards" being mandated. • Secretariat Audit: Prescribed class of companies would need to attach with the Boards Report, a Secretarial Audit Report given by a company secretary in practice.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Managerial • Provisions relating to limits on remuneration provided in theRemuneration existing Act (11% of net profits) included. • For companies with no profits or inadequate profits remuneration shall be payable in accordance with new Schedule of Remuneration annexed to the Bill and in case a company is not able to comply with such Schedule, approval of Central Government would be necessary. • Individual limits for remuneration enhanced in the Bill vis-a- vis the existing limits. • Concept of payment of periodic fees which shall include sitting fees to directors being included in the Bill. • Independent Directors (IDs) not to get stock option: IDs not to get stock option but may get payment of fees and profit linked commission subject to limits specified in the Bill/rules. • Central Government may prescribe amount of fees under the rules.Mediation and • It is proposed to create and maintain as "Mediation andConciliation Panel Conciliation Panel" for facilitating mediation and conciliation between parties during any proceeding under the proposed Legislation before the Central Government or Tribunal.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Protection for • Exit option to shareholders in case of dissent to change inMinority object for which public issue was made.Shareholders • Specific disclosure regarding effect of merger on creditors, key managerial personnel, promoters and non-promoter shareholders is being provided. The Tribunal is being empowered to provide for exit offer to dissenting shareholders in case of compromise or arrangement. • The Board may have a director representing small shareholders who may be elected in such manner as may be prescribed by rules.Investor Protection • Acceptance of deposits from public subject to a more stringent regime. • Central Government to have power to prescribe class or classes of companies which shall not be permitted to allow use of proxies. The Bill also to have provisions to provide that a person shall have proxies for such number of members /such shares as may be prescribed. • Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included.
NEW CONCEPTS/ TERMSDetails Companies Bill, 2012Insider Trading • This is a new clause and seeks to prohibit directors or key[Cl. 195] managerial person of the company to deal in securities of a company, or counsel, procure or communicate, directly or indirectly, about any non-public price-sensitive information to any person. • This clause further provided for penal provision in case of contravention.Investor Protection • Acceptance of deposits from public subject to a more stringent regime. • Central Government to have power to prescribe class or classes of companies which shall not be permitted to allow use of proxies. The Bill also to have provisions to provide that a person shall have proxies for such number of members /such shares as may be prescribed. • Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included.
HOLDING COMPANY AND SUBSIDIARYDetails Companies Act, 1956 Companies Bill, 2012Meaning/ No restriction Class or classes of holdingRestrictions in Companies as may beregard to Subsidiary prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed [Cl. 2(87)]
SHARES - TRANSFER[S. 111 OF THE 1956 ACT AND CL. 58 OF THE BILL]Details Companies Act, 1956 Companies Bill, 2012Transfer of Shares – Securities or other interest of Freely transferable,Public Company any member freely transferable. however there needs to be a contract/agreement with [sub-sections (1) and (2) of regard to the transfer of section 111] securities which can be made enforceable as a contract. [Cl. 58]SECURITIES – BUY-BACK Details Companies Act, 1956 Companies Bill, 2012 Restriction – further Where buyback is by Board (10 No offer of buy-back shall offer of Buy-back per cent of the total paid up be made within equity capital and free a period of one year reserves), no further offer of reckoned from the date of buyback is permissible within the closure of the one year from the date of last preceding offer of offer of buyback. [S. 77A] buy-back, if any. [Cl. 68]
ACCEPTANCE OF DEPOSITS BY COMPANIESDetails Companies Act, 1956 Companies Bill, 2012 [Cl. 73]Eligibility – for Public Companies are No Company except Bankingacceptance from permitted to accept deposits Company and such otherpublic and from public and shareholders Company as may be specifiedshareholders in accordance to Companies in this behalf shall invite, (Acceptance of Deposit) accept or renew deposits Rules. from the subject to [Section 58A) fulfillment of certain conditions. A Company may, subject to the passing of a resolution in general meeting and prescribed rules accept deposits from its members on such terms and conditions as may be agreed upon between the Company and its members, subject to the conditions prescribed:
ACCEPTANCE OF DEPOSITS BY COMPANIESDetails Companies Act, 1956 Companies Bill, 2012Eligibility – for - … contd.acceptancefrom public and The conditions are:shareholders - statement showing the financial position of the company, the credit rating obtained, the total number of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company - depositing such sum which shall not be less than 15 per cent of the amount of its deposits maturing during a FY and the FY next following, and kept in a separate bank account in a scheduled bank to be called as deposit repayment reserve account;
ACCEPTANCE OF DEPOSITS BY COMPANIESDetails Companies Act, Companies Bill, 2012 1956Eligibility – for - … contd.acceptance - providing deposit insurance in thefrom public manner and extent prescribedand - certifying that the Company has notshareholders defaulted in the repayment of deposits or payment of interest - providing security, if any for the due repayment of the amount of deposit or the interest thereon including the creation of such charge on the property or assets of the company. However, where a Company does not secure the deposits or secures such deposits partially, then, the deposits shall be termed as unsecured deposits and shall be so quoted in every circular, form, advertisement or in any document related to invitation or acceptance of deposits.
ACCEPTANCE OF DEPOSITSDetails Companies Act, Companies Bill, 2012 1956Eligibility – for - … contd.acceptance frompublic and The deposit repayment reserve accountshareholders referred to in clause (c) of sub-section (2) shall not be used by the company for any purpose other than repayment of deposits. No Company except Banking Company and such other Company as may be specified in this behalf shall invite, accept or renew deposits from the public except in the manner provided. A Company may, subject to the passing of a resolution in general meeting and prescribed rules accept deposits from its members on such terms and conditions as may be agreed upon between the Company and its members, subject to the conditions prescribed:
DIVIDEND – DECLARATION & PAYMENTDetails Companies Act, 1956 Companies Bill, 2012 [Section 205]Declaration of No dividend to be declared or paid A voluntary transfer by Company to beDividend - by a Company for any FY out of the made, as considered appropriate beforeTransfer of profits of the Company for that year declaration of any dividend. [Cl. 123]Reserves arrived at after providing for depreciation except after the transfer to the reserves of the Company of such percentage of its profits for that year, not exceeding ten per cent.Declaration in the Dividend to be declared in Dividend to be declared out of theevent of accordance to Companies accumulated profits transferred to reservesinadequate profits (Declaration of dividend out of in accordance to applicable rules Reserves) Rules, 1975 with a maximum rate prescribed as 10 per centDeclaration of No restrictions Interim declaration may be declared out ofinterim dividend the surplus in P&L Account as well as– Any restrictions profits of the FY in which dividend is sought to be declared. Failure in compliance will bar the Company to declare dividend during the period of non compliance
BOOKS OF ACCOUNTDetails Companies Act, 1956 Companies Bill, 2012 [Cl. 129]Consolidated No Provisions The financial statement shall be laid inStatements the AGM of that FY. In case of subsidiary companies, the company shall prepare a consolidated financial statement of the Company and all subsidiaries and lay before the AGM. The Central Government shall have the power to exempt a class or classes of companies from any of the requirement of this section. The clause also provide the penalty where company contravenes the provision of this section. For the purpose of above, "subsidiary" shall include associate company and joint venture
LOAN AND INVESTMENT BY COMPANYDetails Companies Act, 1956 Companies Bill, 2012Exemptions [Section 372A] [Cl. 186] Any loan made, any guarantee given or - Loan made, guarantee given or any security provided or any investment security provided by a banking made by - company or an insurance Banking company, or an insurance company or a housing finance company, or a housing finance company in Company in the ordinary course the ordinary course of its business, or a of its business or a company company established with the object of engaged in the business of financing industrial enterprises, or of financing of companies or of providing infrastructural facilities; providing infrastructural Company whose principal business is the facilities; acquisition of shares, stock, debentures or - To any acquisition (i) made by a other securities; non-banking financial company A private company, unless it is a subsidiary of a public company; whose principal business is To investment made in shares allotted in acquisition of securities. pursuance of clause (a) of sub-section (1) of - Exemption to NBFC shall be in section 81; respect of its investment and To any loan made by a holding company to lending activities; its wholly owned subsidiary; - Acquisition made by a company To any guarantee given or any security whose principal business is the provided by a holding company in respect acquisition of securities; of loan made to its wholly owned - Acquisition of shares allotted in subsidiary; or pursuance to further issue of To acquisition by a holding company, by capital way of subscription, purchases or otherwise, the securities of its wholly owned subsidiary.
RELATED PARTY TRANSACTIONSDetails Companies Act, 1956 Companies Bill, 2012Provisions/ scope thereof [Section 297] [Cl. 188] A company is debarred from entering A Company is debarred from into: entering into: - Contracts relating to sale, purchase or -Contracts relating to: sale, supply of any goods or materials and purchase or supply of any goods services; or materials; buying/selling -Contracts relating to underwriting /disposing otherwise any subscriptions of shares, debentures of a property; leasing of any company. property; availing/ rendering of Contracts cover the following specified any services; appointment of persons:-- Director/Relative of Director any agents for purchase or sale of a Company; Firm where such of goods, materials, services or Director/Relative is a partner; Any property; such related partys other partner of such firm as above; appointment to any office or Private company where such Director is place of profit in the company, Director or member its subsidiary or associate Such transactions are subject to prior company; underwriting approval by resolution passed by the subscription of any securities/ Board of Directors in a Board Meeting. derivatives of the company. In case of paid up capital of Company Contracts cover specified exceeds one crore, prior approval of the persons under Section 2 clause Regional Director is required. 76 of the Bill defining the term Related Party.
RELATED PARTY TRANSACTIONS… CONTD.Details Companies Act, 1956 Companies Bill, 2012 Exemptions are provided in the Such transactions are case of: subject to prior approval 1.Purchase/ Sale of goods and by resolution passed by materials: the Board of Directors in (a) for cash at current Market a Board Meeting. In case price the paid up capital of the (b) Also services, the cost of Company/transaction which does not exceed Rs. 5000 exceeds prescribed limit, in any year during tenure of prior approval of the Contract shareholders is required. 2.Transactions by Banking / Exemptions are provided Insurance Companies in the in the case of transactions ordinary course of Business. in ordinary course of business, other than those which are not an arms length basis
COMPROMISES, ARRANGEMENTS ANDAMALGAMATIONSDetails Companies Act, 1956 Companies Bill, 2012How this can be To be approved by Majority Voting by Postal Ballotapproved representing 3/4th in value of added the creditors or members or Approval of High Court class thereof present and voting (NCLT) or by proxy. [Clause 230] Approval of High Court (NCLT)About the Valuation Valuation report not to be given It now needs to be givenReport to shareholders/ creditors alongwith notice convening meetingObjections against Objection can be made by any Objection to be made onlythe purpose shareholder or creditor. Such by: objection can be made • persons holding more irrespective of their than 10% shareholding; or shareholding/ debt outstanding • having outstanding debt of more than 5% of total outstanding debt as per the last audited balance sheet
COMPROMISE, ARRANGEMENT ANDAMALGAMATIONDetails Companies Act, 1956 Companies Bill, 2012Buy back of The scheme can include It can form part of it as perSecurities any buyback of securities the provisions of buyback.On the Takeover Scheme cannot include a As per the manneroffer Take over offer prescribed. In the case of listed Companies such offer has to be as per SEBI RegulationsTransfer – Listed No specific requirement to Notice needs to be served onCompany with serve notice on Income tax IT department, RBI, SEBI,Unlisted Company department and other the Stock Exchanges, CCI, regulatory body Sectoral regulators/ authorities
COMPROMISE, ARRANGEMENT ANDAMALGAMATIONDetails Companies Act, 1956 Companies Bill, 2012Merger – Indian No Yes, with prior approval ofCompanies with RBIForeign CompanyTakeover offer Scheme cannot include a It may include in a prescribed Take over offer manner . In the case of listed Companies such offer has to be as per SEBI RegulationsOffer to sell No May sell at the price(Minority determined in accordance toShareholders to applicable rulesMajorityshareholder)
COMPROMISE, ARRANGEMENT ANDAMALGAMATIONDetails Companies Act, Companies Bill, 2012 1956Purchase – No specific provision •Acquirer and/ or PAC or person/Minority group of persons holding 90 pershareholding by cent or more of the issued equityMajority capital of the Company by virtue ofshareholder amalgamation, share exchange, conversion of securities or for any other reasons, can purchase the remaining equity shares of the Company from minority shareholders at a price determined by registered valuer •Minority shareholders may also offer to the majority shareholders to purchase their equity shareholding in the Company at the price determined by registered valuer.
LOAN TO DIRECTORSDetails Companies Act, Companies Bill, 2012 1956 [S. 295] [Cl. 185]Provisions • Provisions are •Provisions are applicable only to both application only to Public and Private Companies subject Public Companies to the following exceptions: subject to the following • Managing or whole-time conditions of exceptions: - Banking service extended by company director, Companies; Holdings to as part of to all its employees or in subsidiary Company ; furtherance to any scheme approved by Private Company; a special resolution of its members. • Prior approval of the • Company which in the ordinary course CG is mandatory before of business provides loans ,gives any Public Company guarantees or securities for the due directly/indirectly repayment subject to the condition that makes loan, gives rate of interest is not less than the guarantee or provides bank rate declared by the Reserve Bank security to its Directors of India. or other specified persons.
REGISTERED VALUERDetails Companies Act, 1956 Companies Bill, 20112 [New Provision – Cl. 247]Provision relating to No provisions prescribed Where valuation is to beRegistered Valuer made under the Act, in respect of any property, stocks, shares, debentures, ,securities or goodwill or other assets or net worth of a Company or its liabilities, such valuation shall be done by a registered valuer.
REMOVAL OF NAMES OF COMPANIESFROM THE REGISTER OF COMPANIESDetails Companies Act, Companies Bill, 2012 1956Grounds [Section 560] [Cl. 248] A Company may be Reasons for Strike off: struck off by ROC if • subscribers to the memorandum it has reasonable have not paid the subscription cause to believe that money with 180 days from the date a Company is not of incorporation carrying on business • Company has failed to commence or operations its business within one year of its incorporation • Company is not carrying on any business or operation for two immediately preceding financial year and has within such period applied for status of a dormant Company
WINDING-UPDetails Companies Act, Companies Bill, 2012 1956 [Ss. 433 & 434]Grounds • By Special [Cl. 271] resolution • Requirement of minimum • If Company is number of member removed unable to pay its • Following additional grounds debt. added: • Business not i. Management of company commenced within affairs in fraudulent manner one year of its ii. Formation of Company for incorporation or fraudulent and unlawful suspends its purpose business for the iii. Persons involved/ concerned whole year in the formation of Company • Minimum number guilty of fraud, misfeasance or of member goes misconduct in connection below than as therewith. prescribed i.e. 2 and 7 incase of Pvt. and Public limited Company