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The document discusses the evolution of the Companies Act in India through various amendments over time. Some key points: - The Companies Act, 2013 was passed in 2013 and has since undergone 5 major amendments, including the Companies (Amendment) Acts of 2015 and 2017 which aimed to enhance efficiency and ease of doing business. - Significant changes introduced by amendments include decriminalization of certain offenses, changes to the definition of a listed company, and provisions allowing public companies to list securities abroad. - Upcoming changes will include the rollout of new e-forms on the MCA21 portal in two phases on January 9th and 23rd, 2023. This aims to further improve online services for companies.

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RECENT AMENDMENTS IN COMPANIES ACT, 2013
INTRODUCTION TO COMPANIES ACT, 2013 The Companies Bill was passed by the Lok Sabha (the Lower House of the Parliament of India) on 18 December 2012 and in the Rajya Sabha (the Upper House of the Parliament of India) on 8 August 2013. It received Presidential Assent on 29th August 2013 thereby creating the Companies Act 2013. The new Companies Act is a positive step towards modernising India’s company law and aligning it to global standards. It has given increased decision making powers to the company, and introduced provisions giving minority shareholders additional rights and protections. The introduction of one person companies and small companies should alleviate some of the administrative burdens that small businesses have to bear, but larger companies should prepare themselves for further administrative burdens as a result of changes in the appointment of auditors and directors.
EVOLUTION OF THE COMPANIES ACT, 2013 • The Companies Act, 2013 has undergone five major amendments so far. The Companies (Amendment) Act of 2015 and 2017 aimed at enhancing the efficiency and promote ease of doing business. The Companies Act, 2013 was also amended by The Insolvency and Bankruptcy Code of 2016 and Finance Act of 2017. The Insolvency and Bankruptcy Code, 2016 omitted various sections in the Act 2013 like Section 253 to Section 269, Section 289, Section 304 to Section 323 and Section 325. The Finance Act 2017 amended Section 182 which provides for the prohibitions and restrictions regarding political donations. The most recent amendment was done by the Finance Act 2020 which aimed to ease the listing of Indian companies in foreign recognized stock exchanges.
JOURNEY OF THE COMPANIES ACT SO FAR Companies Act, 1956 Companies Act, 2013 Companies (Amendment) Act, 2015 Companies (Amendment) Act, 2017 Companies (Amendment) Ordinance, 2018 Companies (Amendment) Act, 2019 Companies (Amendment) Act, 2020
HIGHLIGHTS OF COMPANIES ACT, 2013 AS COMPARED TO COMPANIES ACT, 1956 • Concept of Woman Director, Corporate Social Responsibility (CSR), Key Managerial Personnel (KMP), Class Action Suits, Entrenchment clause in Articles of Association are new concepts introduced by the Companies Act, 2013. It also introduced new types of companies i.e., OPC, Small Company, Associate Company. New concept of ‘Dormant Company’ has also been introduced in the Companies Act, 2013. Provision of vigil mechanism has been added by this Act. Term ‘Promoter’ has been there in the earlier Act, but this Act defined it. The Companies Act, 2013 has also defined the term ‘Fraud’ in explanation attached to Sec. 447. The Companies Act, 2013 has undergone amendments in 2015, 2017, 2019 and by Amendment Act, 2020.
SIGNIFICANT AMENDMENTS MADE BY THE COMPANIES AMENDMENT ACT, 2020 1. Decriminalization of offences: The Amendment Act has decriminalized certain offences under the Companies Act. In case of defaults which lack any element of fraud or do not involve large public interest, instead of imprisonment and/or fine, penalty will be imposed under departmental adjudication proceedings. 2. Definition of Listed Company: A proviso has been inserted to Sec. 2(52) of Companies Act, 2013 excluding certain class of companies from the definition of listed company (mainly for removing companies which are listed only for debt securities). 3. Issue of securities of public company for listing in foreign jurisdictions: Provision has been made to enable public companies to list their securities in foreign jurisdiction. 4. Reduction in timeline for rights issue
5. Insertion of provisions relating to ‘Producer Company in the 2013 Act: Chapter XXIA (containing Secs. 378A to 378ZU) has been inserted in Companies Act, 2013. 6. Lesser penalty for start-up company, small company, producer company, OPC: Lesser monetary penalty will be imposed on a start-up company, Producer Company, One Person Company, or small company on failure to comply with provisions of the Companies Act, 2013 which attracts monetary penalties.
AMENDMENTS MADE BY THE COMPANIES (AMENDMENT) ACT, 2019  It added Sec. 10A requiring the Company having a share capital to make certain declarations;  Reduced the burden of NCLT by transferring certain approvals, to the Central Government e.g., conversion of Public Company into Private, changing financial year of a company;  It also substituted ‘liable to penalty’ in place of ‘fine’ in several provisions, thereby further easing the mounting work pressure on NCLT. The Registrar of Companies (RoC) and Regional Director (RD) can impose penalties directly after issuing show cause notice (SCN) in place of going to judiciary for imposing fines under several provisions.
SIGNIFICANT AMENDMENTS MADE BY THE COMPANIES AMENDMENT ACT, 2017  Revision in concept of KMP: It now includes such other officer, not more than one level below the directors who is in whole time employment and designated as KMP by the Board and also such other officers as may be prescribed;  For defining Associate Company, Holding and Subsidiary Company Relationship words ‘total share capital’ were substituted by ‘total voting power’;  Section 3A was inserted which relates to liability of continuing members in case of reduction in number of members below statutory minimum;  New section related to ‘private placement’ was substituted using the term ‘identified persons’;  Amendment related to ‘issue of shares at a discount’ inserted that a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme as per directions of RBI;
 Amendment introducing the concept of ‘Significant Beneficial Owner’ making a declaration to the company in the manner as prescribed for was one of the significant amendments as it adds to transparency;  The matters which are required to be transacted by means of ‘Postal Ballot’ may be transacted by ‘E-voting’, where it is applicable to company;  ‘CSR Committee’ of a Company which is not required to have ‘independent director’ shall have two or more directors in its CSR Committee.
HIGHLIGHTS OF COMPANIES (AMENDMENT) ACT, 2015 • Some of the important amendments made by the Companies (Amendment) Act, 2015 are: • Common Seal has been made optional. • No company shall declare dividend without setting off carried over previous year or years losses and depreciation against profits for the current year. • Reporting of fraud by the Auditor to Central Government in case amount exceeds prescribed amount (presently Rs. 1 crore or more). Thus, the principle of materiality has been introduced by specifying the amount. Frauds involving lower amounts shall be intimated to Audit Committee, wherever company is required to have one or the Board of Directors in other cases.
SOME MAJOR DEVELOPMENTS HAVING A BEARING ON THE COMPANIES ACT, 2013 1. The Insolvency and Bankruptcy Code, 2016 (IBC) became operational with effect from November, 2016. The Insolvency and Bankruptcy Code, 2016 is the new bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. Secs. 304 to 323 (related to voluntary winding-up) of the Companies Act, 2013 have been omitted by the Insolvency and Bankruptcy Code, 2016 w.e.f. 15.11.2016. 2. National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have become operational. The powers which were earlier entrusted to the Company Law Board or Court in relation to companies are now with NCLT. Appeal against the order of NCLT can be made to NCLAT. 3. Serious Fraud Investigation Office (SFIO) has been given Statutory Recognition through Sec.211. SFIO is vested with requisite legal authority to conduct investigation.
4. Secretarial Standards (SS) have been statutorily recognised. The revised SS-1 and SS- 2 became effective from Oct. 1, 2017. 5. The Finance Act, 2017 amended Sec. 182 related to Political Contribution and abolished limit on amount of political contribution by company. 6. Constitution of National Financial Reporting Authority (NFRA): Constitution of NFRA has been notified on 1st October, 2018. NFRA has been bestowed with significant powers in issuing authoritative pronouncements and also in regulating audit profession. 7. On-line Compliance Monitoring and e-adjudication launched: Ministry of Corporate Affairs (MCA) launched Compliance Monitoring System on November 6th, 2019. It works on artificial intelligence. It automatically detects the non-compliance by company and digitally sends Show Cause Notice to the defaulter company. The defaulting company is required to submit its reply within 15 days digitally via MCA CMS portal (https://mcacms.gov.in/#/). In case of non-reply, the Registrar of Companies would initiate the penal action against the company/director as mentioned in the Show Cause Notice.
8. Test for Independent Directors: According to Companies (Creation and Maintenance of data bank of Independent Directors) Rules, 2019, independent directors must qualify online proficiency self- assessment test conducted by the Indian Institute of Corporate Affairs (IICA), Manesar. The new rules are effective from December 1st, 2019. 9. Amendments in Schedule VII: Schedule VII prescribing list of activities on which money can be spent by the companies to which Sec. 135 relating to Corporate Social Responsibility (CSR) is applicable has been amended. By notification dated 26/05/2020 in item (VIII) of Schedule VII of the Companies Act, 2013 after the words “Prime Minister’s National Relief Fund” the words “Prime Minister’s Citizen Assistance and Relief in Emergency Situation Fund” (PM CARES FUND) have been inserted. 10. Measures taken in the light of COVID-19 and resultant lockdown: Due to COVID-19 and resultant lockdown, compliance timeline has been extended and certain exemptions also given. Conduct of Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) through Video Conferencing and Other Audio-Visual Means (OAVMs) is also allowed. It needs to be noted that these are temporary measures to deal with problems created by pandemic.
LATEST UPDATE UNDER MCA FOR COMPANIES  The Ministry of Corporate Affairs department is launching a new set of 56 company forms in two separate lots on the MCA21 V3 portal in a continuous effort to serve you better. On 09th January 2023, 10 out of 56 forms were launched at 12:00 AM and 46 will be launched from 23rd January 2023.  Company Incorporation forms (Spice + Part A, Part B & RUN) were available for filing in V2 until Friday, January 6 at 12:00 p.m. Incorporated companies will be able to file these forms on the V3 Portal from 09th January 2023.  There are 45 forms remaining in V2 that could be filed until 06th January 11:59 PM. On 23rd January 2023, these forms will be available on the V3 portal.
LIST OF 10 COMPANY FORMS TO BE ROLLED OUT ON 9th Jan 2023 1. SPICe+ PART A Application for reservation of name for new company incorporation 2. RUN Application for change of name of existing company 3. SPIce+ PART B Integrated Company Incorporation Application 4. AGILE PRO S Application for Goods and services tax Identification number , employees state Insurance corporation registration pLus Employees provident fund organisation registration, Profession tax Registration, Opening of bank account and Shops and Establishment Registration 5. e-AOA[INC-34] Articles of Association 6. e-MOA[INC-13] Memorandum of Association 7. e-MOA[INC-31] Articles of Association 8. e-MOA[INC-33] Memorandum of Association 9. INC-9 Declaration by Subscribers and First Directors 10. URC-1 Application by a company for registration under section 366
RELEASE PLAN OF 45 COMPANY E-FORMS IN MCA 21 VERSION 3.0-REG. (GENERAL CIRCULAR NO. 01/2023) DATED - 09/01/2023  Ministry is in the process of introducing certain company e-Forms in MCA21 Version 3.0 and thus these e- Forms will not be available in MCA21 Version-2 from 07.01.2023 to 22.01.2023.  It has been decided by the Competent Authority to allow additional time of 15 days, without levying additional fees, to the stakeholders, in cases where the due dates for filing of these 45 e-Forms fall during the period between 07.01.2023 and 22.01.2023.  SR. NO. FORM NO. FORM NAME 1. DIR-12 Particulars of appointment of directors and the key managerial personnel and the changes among them 2. DIR-11 Notice of resignation of a director to the Registrar 3. DIR-3 Application for allotment of Director Identification Number
4. DIR-3C Intimation of Director Identification Number by the company to the Registrar DIN services 5. DIR-5 Application for surrender of Director Identification Number 6. DIR-6 Intimation of change in particulars of Director to be given to the Central Government 7. INC-12 Application for grant of License to an existing company under section 8 8. INC-18 Application to Regional Director for conversion of section 8 company into any other kind of company 9. INC-20 Intimation to Registrar of revocation of license issued under section 8 10. INC-20A Declaration for commencement of business 11. INC-22 Notice of situation or change of situation of registered office 12. INC-23 Application to the Regional Director for approval to shift the Registered Office from one State to another state or from jurisdiction of one Registrar to another Registrar within the State 13. INC-24 Application for approval of Central Government for change of name 14. INC-27 Conversion of public company into private company or private company into public company or Conversion of Unlimited Liability Company into Limited Liability Company
15. INC-28 Notice of Order of the Court or any other competent authority 16. INC-4 One Person Company - Change in Member/ Nominee 17. INC-6 One Person Company - Conversion form 18. MGT-14 Filing of Resolutions and agreements to the Registrar under section 117 19. MR-1 Return of appointment of managing director or whole time director or manager 20. MR-2 Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing director or whole time director or manager and commission or remuneration to directors 21. NDH-4 Form for filing application for declaration as Nidhi Company or updation of status by Nidhis. 22. SH-7 Notice to Registrar of any alteration of share capital 23. SH-11 Return in respect of buy-back of securities 24. SH-8 Letter of Offer 25. SH-9 Declaration of Solvency 26. NDH-1 Return of Statutory Compliances 27. NDH-2 Application for extension of time 28. NDH-3 Return of Nidhi Company for the half year ended
29. GNL-3 Particulars of person(s) charged for the purpose of sub-clause (iii) or (iv) of clause 60 of section 2 30. PAS-6 Reconciliation of Share Capital Audit Report (Half-yearly) 31. MGT-3 Notice of situation or change of situation or discontinuation of situation, of place where foreign register shall be kept 32. PAS-2 Information Memorandum 33. DIR-9 Report by the company to Registrar for disqualification of Directors 34. DIR-10 Application for removal of Disqualification of Directors 35. AOC-5 Notice of address at which bool<s of account are maintained 36. FC-1 Information to be filed by foreign company 37. FC-2 Return of alteration in the documents filed for registration by foreign company 38. FC-3 Annual accounts along with the list of all principal places of business in India established by foreign company 39. FC-4 Annual Return of a Foreign company 40. GNL-2 Form for submission of documents with the Registrar 41. GNL-4 Addendum to form 42. MSC-1 Application to ROC for obtaining the status of dormant company
43. MSC-3 Return of dormant companies 44. MSC-4 Application for seeking status of active company 45. RD-1 Form for filing application to Regional Director 46. PAS-3 Return of Allotment
FILING OF FORMS GNL-2 AND MGT-14 (GENERAL CIRCULAR NO. 02/2023) DATED - 09/01/2023  Filing of Forms GNL-2 (filing of prospectus related documents) and MGT-14 (filing of Resolutions relating to prospectus related documents) due to migration from V2 Version to V3 Version in MCA 21 Portal from 7 th January, 2023 to 22nd January, 2023  The companies intending to file (i) Form GNL-2 (filing of prospectus related documents) and (ii) MGT-14 (filing of Resolutions relating to prospectus related documents) during 7th January, 2023 to 22nd January, 2023 on the MCA-21 Portal may file such Form in physical mode duly signed by the persons concerned as per requirements of the relevant forms, along with a copy thereof in electronic media, with the concerned Registrar without payment of fee and take acknowledgement thereof.  Such filing will be accompanied by an undertaking from the company that once the filing of such Form is enabled on the portal, the company shall file the relevant Form in electronic form on MCA-21 Portal along with fees payable as per Companies (Registration Offices and Fees) Rules, 2014.  No additional fees will be levied for the period during which the filing was disabled.
COMPANIES(INCORPORATION) THIRD AMENDMENT RULES, 2022 • New Rule 25B under Section 12 of the Companies Act – Physical Verification of Registered Office of the Company • The Companies (Incorporation) Third Amendment Rules, 2022 were established by the government to ensure a clear procedure for the physical verification of registered addresses. • The MCA has added a new regulation 25B (Physical verification of the company’s registered office) after rule 25A. • Under the new guideline, ROC will physically inspect a company’s registered office in the presence of impartial witnesses . • During the physical verification, the Registrar will also need to take a photo of the registered office of the firm. • ROC will validate the Office’s existence by comparing it to copies of the supporting documents collected during the physical proof, which have been officially validated from the owner of the building. • A thorough report with detailed information, such as location details and pictures, will be prepared after completion of the verification. • If the Registered Office is determined to be incapable of accepting all notices, ROC will notify the Company and all Directors.
MCA HAS ISSUED A NOTIFICATION TO NOTIFY THE COMPANIES (ACCOUNTS) THIRD AMENDMENT RULES, 2022  Through this notification, MCA has once again extended the due date of filing Form CSR-2 for the financial year 2020- 2021 to June 30, 2022. Earlier this date was extended up to May 31, 2022 from March 31, 2022.  All companies which are eligible for CSR are required to file Form CSR-2 and shall ensure to file it separately for the preceding financial year i.e., 2020-2021, on or before May 31, 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as is applicable.  Further, it is notified that for the financial year 2021-2022 also, Form CSR-2 shall be filed separately on or before March 31, 2023 after filing Form AOC-4 or AOC-4 XBRL or AOC- NBFC (Ind AS), as the case may be.
MCA HAS ISSUED A NOTIFICATION TO NOTIFY THE COMPANIES (COMPROMISES, ARRANGEMENTS, AND AMALGAMATIONS) AMENDMENT RULES, 2022 • Through this amendment, MCA has added a new sub-rule 4 in Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to provide that in case of a compromise or an arrangement or merger or demerger between an Indian company and a company or body corporate which has been incorporated in a country which shares a land border with India, a declaration in Form No. CAA-16 shall be required at the stage of submission of an application under Section 230 of the Act. Accordingly, a new Form CAA – 16 is also notified which is to be signed by the authorised representative of the companies involved and a declaration to be provided that whether the company/body corporate is not required to obtain prior approval under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 or not. A copy of the approval is also required to be attached with the Form CAA-16.
MCA HAS ISSUED A CLARIFICATION W.R.T MICRO-FINANCE/MICRO CREDIT AS AN OBJECT IN THE OBJECT CLAUSE OF MOA OF SECTION 8 COMPANIES REGISTERED UNDER THE COMPANIES ACT, 2013.  MCA has been observed that various Section 8 companies are altering their object clause for carrying out micro-finance activities by way of passing Special Resolution, changing Activity code and subsequently filing of e-form MGT-14 with the concerned ROCs, even though at initial incorporation, the ROC (CRC) is not allowing Section 8 companies to get incorporated with the objects of microfinance activities in view of Ministry’s direction letter no. No. 05/33/2017-CL.V dated 10.02.2020 and letter dated 31.8.2020.  It is clarified that immediate action on the part of RoCs is required as per law, including changing their objects to prevent such companies from carrying out micro-finance activities.  Further, the Office of DGCoA shall ensure strict compliance by all the ROCs with the instructions contained in the letters issued earlier by the Ministry on this subject.  Further, the ROCs shall also circulate these directions to all the officers/officials to ensure examination in accordance with the law, while processing e-forms relating to Incorporation of Companies and Change in Objects of the MOA of Section 8 companies registered under the Companies Act, 2013.
MCA HAS ISSUED A NOTIFICATION TO NOTIFY THE COMPANIES (APPOINTMENT AND QUALIFICATION OF DIRECTORS) AMENDMENT RULES, 2022  MCA has tightened the norms for the appointment of any person, as director in an Indian Company, who is a national of a country that shares a land border with India.  Accordingly, in case the person seeking appointment is a national of a country that shares a land border with India, necessary security clearance from the Ministry of Home Affairs, the Government of India shall also be attached along with the consent.  Further, no application number shall be generated in case of the person applying for the Director Identification Number is a national of a country that shares a land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with an application for Director Identification Number.
MCA HAS NOTIFIED THE COMPANIES (APPOINTMENT AND QUALIFICATION OF DIRECTORS) SECOND AMENDMENT, RULES,2022  The amendment is brought under Rule 6 which deals with compliances required by a person eligible and willing to restore his name in the independent director databank.  Accordingly, any individual whose name has been removed from the databank may apply for restoration of his name on payment of fees of one thousand rupees and the institute shall allow such restoration subject to the conditions, that his name shall be shown in a separate restored category for a period of one year from the date of restoration within which, he shall be required to pass the online proficiency self-assessment test and thereafter his name shall be included in the databank, only, if he passes the said online proficiency self- assessment test and in such case, the fees paid by him at the time of initial registration shall continue to be valid for the period for which the same was initially paid; and in case he fails to pass the online proficiency self-assessment test within one year from the date of restoration, his name shall be removed from the data bank and he shall be required to apply afresh for inclusion of his name in the databank.
MCA HAS NOTIFIED THE COMPANIES (REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES) AMENDMENT RULES, 2022  The amendment brought the revisions to the procedure for striking off a company. Accordingly, where the Registrar, on examining the application made in Form STK-2, finds that it is necessary to call for further information or finds such application or any document annexed therewith is defective or incomplete in any respect, he shall inform the applicant to remove the defects and re-submit the complete Form within fifteen days from the date of such information, failing which the Registrar shall treat the Form as invalid in the electronic record, and shall inform the applicant.  After the re-submission of the Form or document, if the Registrar finds that the Form or document is defective or incomplete in any respect, he shall give the further time of fifteen days to remove such defects or complete the Form, failing which the Registrar shall treat the Form as invalid in the electronic record and shall inform the applicant, accordingly. Any re-submission of the application in Form STK-2 made prior to the commencement of the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022 shall not be counted for the purposes of reckoning the maximum number of re- submissions of such Form.
MCA HAS NOTIFIED THE NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA) AMENDMENT RULES 2022  According to the National Financial Reporting Authority (NFRA) amendment rules 2022, Rule 13 is amended to provide the revised penalty provision for non-compliance or contravention with any of the provisions.  It is provided that any non-compliance or contravention with any of the provisions will attract a penalty of Rs 5,000/- and where the contravention is a continuing one, a further fine of Rs 500/- for every day during the period of contravention.  This applies to offenses for which the penalty is not specified elsewhere in the law. The rule has been amended to drop a reference to Section 450 of the Companies Act which specifies a cap of Rs 200,000/- in the case of a company and Rs 50,000/- for an officer in default or any other person for offenses that persist.
AMENDMENTS IN SCHEDULE III • The Ministry of Corporate Affairs, Government of India, issued notifications dated 24th March, 2021 to amend Schedule III to the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Companies (Audit and Auditors) Rule, 2014 to enhance the disclosures required to be made by the Company in its:- a. Financial Statements b. Board Report c. Audit Report • By these amendments MCA is increasing stringency in compliance and adding numerous additional disclosures in Financial Statement, Directors Report and Audit Report.
Shareholders holding more than 5% shares The companies shall disclose the shareholding of those shareholders including promotors who hold more than 5% shares in the company during the particular financial year. Promotors holding The companies shall disclose the shareholding of the promotors irrespective of their holdings in the company. Rounding Off Earlier companies had to round off the figures appearing in the financial statements based on “turnover”; however, based on the latest amendment rounding off will be based on the “total income” of the given company. Total Income Rounding Off Less than 100 Crore Rupees To the nearest hundreds, thousands, lakhs or millions or decimals thereof 100 Crore Rupees or more To the nearest lakhs, millions or crores, or decimals thereof
TRADE PAYABLE AGEING SCHEDULE
TRADE RECEIVABLES AGEING SCHEDULE
LOANS & ADVANCES TO DIRECTORS/ KMP/ RELATED PARTIES • Details of Loans & advances to Directors/KMP/Related Parties either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment
DETAILS OF BENAMI PROPERTY (IF ANY) • Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following:- (a) Details of such property, including year of acquisition, (b) Amount thereof, (c) Details of Beneficiaries, (d) If property is in the books, then reference to the item in the Balance Sheet, (e) If property is not in the books, then the fact shall be stated with reasons, (f) Where there are proceedings against the company under this law as an abettor of the transaction or as the transferor then the details shall be provided, (g) Nature of proceedings, status of same and company‘s view on same.
TITLE DEEDS OF IMMOVABLE PROPERTY NOT HELD IN THE NAME OF THE COMPANY • Details of immovable property not held in company name (other than lease where company is lessee)
Ratios to be Disclosed Current Ratio, Debt-Equity Ratio, Debt Service Coverage Ratio, Return on Equity Ratio, Inventory turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio, Net Capital Turnover Ratio, Net Profit Ratio, Return on Capital Employed, Return on Investment. Borrowings From Banks & FI 1. Where the company has borrowed funds from banks/FI (being current assets as collateral security), the company needs to disclose whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts and if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed. 2. Where the company has not used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date, the company shall disclose the details of where they have been used
FOREIGN EXCHANGE EARNINGS Earnings in foreign exchange shall be classified under the following heads, namely:— a. Export of goods calculated on FOB basis b. Royalty, know-how, professional and consultation fees, c. Interest and dividend d. Other income, indicating the nature thereof.
UNDISCLOSED INCOME The Company shall give details of any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), unless there is immunity for disclosure under any scheme and also shall state whether the previously unrecorded income and related assets have been properly recorded in the books of account during the year.
REVALUATION OF PLANT, PROPERTY AND EQUIPMENT Where the Plant, Property or Equipment has been revalued, the details of the same needs to be mentioned in the Auditor’s report. Also whether the same has been done from a registered valuer or not.
WILFUL DEFAULTER Wilful Defaulter: Where a company is a declared wilful defaulter by any bank or financial Institution or other lender, following details shall be given: a. Date of declaration as wilful defaulter b. Details of defaults (amount and nature of defaults) c. “Wilful Defaulter” here means a person or an issuer who or which is categorized as a willful defaulter by any bank or financial institution (as defined under the Act) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India
TRANSACTIONS WITH STRUCK OFF COMPANIES • Relationship with Struck off Companies: Where the company has any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, the Company shall disclose the following details: Name of struck off Company Nature of transactions with struck-off Company Balance outstanding Relationship with the Struck off company, if any, to be disclosed Investments in securities Receivables Payables Shares held by stuck off company Other outstanding balances (to be specified)
SCHEME OF ARRANGEMENT In case a scheme of arrangement has been approved, relevant disclosure has to be made, such as: The effect of such arrangement on the books of accounts of the company. If there is any deviation from the accounting standards while giving effect to the scheme, the reasons for such deviation have to be explained
BRIEF SUMMARY OF AMENDMENTS IN SCHEDULE III Before Amendment After Amendment Round off to be computed On Turnover Round off to be computed On Total Income Non–Current Assets: to include Fixed Assets with sub-leading i) Tangible Assets and ii) Intangible Assets Non–Current Assets: to include Property, Plant and Equipment and Intangible Assets with sub- leading i) Property, Plant and Equipment and ii) Intangible Assets Securities premium Reserve Reserve word has been deleted and therefore its only called Securities Premium Under the heading Other Current Liabilities the amounts classified as Current maturities of long term debts Current Maturities of long term borrowings shall be disclosed separately under Short Borrowings Securities Deposits were under Long Term Loans and Advances Securities Deposits are under other Non current Assets
Before Amendment After Amendment Under classification of property, plant and equipment A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. Under classification of property, plant and equipment A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment) and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately Under Classification of intangible assets A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. Under Classification of intangible assets A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation if change is 10% or more in the aggregate of the net carrying value of each class of Intangible assets and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately
AMENDMENTS IN SCHEDULE III - IN ACCORDANCE WITH IND AS General Amendments • Amendment brought to include the format and general instructions for preparation of balance sheet by a Company to which Ind AS applies • Revised Schedule III does not permit companies to avail of the option of presenting assets and liabilities in the order of liquidity, as provided by Ind AS 1, Presentation of Financial Statements • Companies to apply revised Schedule III from the transition date.
Balance Sheet – Amendments Following line items to be shown under equity on the face of the balance sheet: i) Equity share capital, and ii) other equity Word “Property, Plant and Equipment” to be used instead of “Tangible Assets”. Provision word to be used . However the Short Term Provisions/ Long Term Provisions will still be shown in Current/ Non Current Liabilities. Following to be shown separately on the face of the balance sheet : 1. Goodwill 2. Investment Property 3. Intangible assets under development 4. Biological Assets other than bearer plants 5. Financial Assets( Bifurcated into (i) Investments, (ii) Trade receivables, (iii) Loans, (iv) Others ) 6. Financial Liabilities ( Bifurcated into (i) Borrowings, (ii) Trade payable, (iii) Other financial liabilities ).
Statement of Profit & Loss A/C - Amendments Other Comprehensive income details to be added in the statement of profit and loss as follows: A (i) Items that will not be reclassified to profit or loss (ii) Income tax relating to items that will not be reclassified to profit or loss B (i) Items that will be reclassified to profit or loss (ii) Income tax relating to items that will be reclassified to profit or loss Total Comprehensive Income for the period to be shown.
STATEMENT OF CHANGES IN EQUITY
Notes to Accounts - Amendments 1. Classification of PPE in the notes: • Land • Buildings • Plant and Equipment • Furniture and Fixtures • Vehicles • Office equipment • Bearer Plants • Others (specify nature) 2. Reconciliation of Changes in Investment Property, goodwill and Biological Assets other than bearer plant to be given separately. 3. Bank deposits with more than 12 months maturity shall be disclosed under 'Other financial assets 4. Materiality limit increased to 1% of turnover or Rs. 10 Lacs whichever is higher.
FEW IMPORTANT PROVISIONS OF COMPANIES ACT, 2013 AMENDED FROM TIME TO TIME
SECTION 2(6) ASSOCIATE COMPANY • “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. • Explanation.—For the purposes of this clause, ―significant influence means control of at least twenty percent. of total share capital, or of business decisions under an agreement; • The expression “joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. • Shares held in fiduciary capacity shall not be counted for the purpose of determining the relationship of associate company.(General Circular No. 20/2013 dated 27/12/2013) • Examples – 1) B Ltd is a subsidiary of A Ltd 2) A Ltd Holds 40% shares in B Ltd 3) All directors of A Ltd are on Board of B Ltd 4) C Ltd is a joint venture Company of A Ltd and B Ltd 5) A Ltd is holding shares in B Ltd in Fiduciary Capacity. • Which all are Associate company from the above?
• “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: • Provided that where a company or body corporate, which is a holding company or a subsidiary or associate company of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Central Government may, on an application made by that company or body corporate in such form and manner as may be prescribed, allow any period as its financial year, whether or not that period is a year: Provided further that any application pending before the Tribunal as on the date of commencement of the Companies (Amendment) Ordinance, 2019, shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement • Provided also that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause SECTION 2(41) FINANCIAL YEAR
SECTION 2(51) KEY MANAGERIAL PERSONNEL • "key managerial personnel in relation to a company, means- (i) the Chief Executive Officer or the managing director or the manager, (ii) the company secretary, (iii) the whole-time director; (iv) the Chief Financial Officer, (v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and (vi) such other officer as may be prescribed; FAQ Mr. J is the HR head of the Company who is being appointed in the Board Meeting of the Company. Whether he will be considered as a Key Managerial Personnel ("KMP’’)? As per above clause (v) of the definition, the Board can designate any senior whole time employee of the Company other than CEO, MD, Manager, CS, WTD and CFO as the KMP. Therefore, it can be inferred that Mr. J. HR head of the Company, who is being appointed in the Board Meeting of the Company can be a KMP only if he is in whole-time employment working on one level be- low the Directors and if he is designated as KMP by the Board.
SECTION 2(57) NET WORTH • net worth means the aggregate value of the paid-up share capital and all reserves created out of the profits ", securities premium account and debit or credit balance of profit and loss ac count,Jafter deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation; • FAQ While calculating the Net Worth of the Company, whether Capital Reserve or Free Reserve or both are made part of Reserves? Since, Capital Reserve is generally created from revaluation of assets, therefore it shall not be in- cluded while calculating Net Worth of the Company. Only free reserves shall be taken into con- sideration for purpose of Reserves.
SECTION 2(68) PRIVATE COMPANY • private company means a company having a minimum paid-up share capital as may be prescribed, and which by its articles.- (i) restricts the right to transfer its shares (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that- (A) persons who are in the employment of the company; and (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company.
• What is the minimum paid up capital required for a Private/Public Company? There is no requirement of minimum paid up capital for a private company / public company p suant to Companies (Amendment) Act, 2015 vide Notification No. E No. 1/6/2015-CL..V. dated 29th May, 2015 • Ashiana Pvt. Ltd. is a wholly owned subsidiary of Bada Ashiana Ltd., whether Ashiana Pvt.Ltd. is allowed to avail exemptions provided to a Private Companies? Whether its states will change if Bada Ashiana Ltd. holds only 5% shares in Ashiana Pvt. Ltd.? As per proviso to Section 2(71) a private company which is a subsidiary of a public company will be deemed to be a public company. As in this case, Ashiana Pvt. Ltd. is subsidiary of Bada Ashiana Ltd., which is a public company, therefore, Ashiana Pvt. Ltd. will be deemed to be a public company and will not be allowed to avail exemptions provided to a private company. Where Bada Ashiana Ltd. holds only 5% shares in Ashiana Pvt. Ltd., Ashiana Pvt. Ltd. will be able to avail exemptions provided to a private company. • If a Private Company becomes a subsidiary of a Public Company, whether such Private Company is required to increase its directors to a minimum of 3 directors and its members to a minimum of 7 members? As per the proviso to Section 2(71), a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles. As per Section 3(1), a company may be formed for any lawful purpose by seven or more persons , where the company to be formed is to be a public company. As per Section 149 (1), every company shall have a Board of Directors consisting of individuals as directors and shall have a minimum number of three directors in the case of a public company. Therefore, if a private company becomes subsidiary of a public company, then it will have to comply with all the provisions of the Act as if it were a public company (including compliance with the requirement of having minimum 3 directors and minimum 7 members). Further, it may be inferred that it will not be necessary for such private company to change its articles or convert it self to a public company.
SECTION 2(71) PUBLIC COMPANY • "public company" means a company which- (a) is not a private company; and (b) has a minimum paid-up share capital, as may be prescribed : Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles;
SECTION 2(85) SMALL COMPANY • “small company‘‘ means a company, other than a public company,— (i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than Ten crore rupees; and (ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed Two crore rupees or such higher amount as may be prescribed which shall not be more than One Hundred crore rupees: • Provided that nothing in this clause shall apply to— • (A) a holding company or a subsidiary company; • (B) a company registered under section 8; or • (C) a company or body corporate governed by any special Act
SECTION 2(87) SUBSIDIARY COMPANY “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means 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 voting power 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. • Explanation.-For the purposes of this clause,- (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub- clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company's Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression "company" includes any body corporate; (d) "layer" in relation to a holding company means its subsidiary or subsidiaries;
RESERVATION OF COMPANY NAME • Reserve Unique Name (RUN) is a web service used for reserving a name for a new company or for changing its existing name. The web service helps you verify whether the name you’ve chosen for your company is unique. Before the RUN web-form was introduced, all applications concerning company names were to be made in the Form INC-1. • The names were to be accompanied with a minimum of 2 Director Identification Number and 1 Digital Signature. Today with the introduction of the RUN web-form, a company name can be reserved easily without the requirement of a digital signature. • The validity of the reserved Company names The Central Registration Centre (CRC) may on the basis of information and documents provided, reserve the name for a period of: • 20 days from the date of approval if in case the name is being reserved for a new company. • 60 days from the date of approval if in case of it includes a change in the name of an existing company.
COMPANIES ( INCORPORATION ) RULES, 2014 • Insertion of New Rule 9A and its impact MCA inserted new rule 9A and through this new rule MCA provided the opportunity for reserving name beyond 20 days, if required, subject to condition and payment of fees. Case Number Extension beyond 20 days in days Total Days for name reservation after extension Amount to be paid in addition of Rs. 1000 When to apply 1 20 Days 40 (20 days+20 days) Rupees One Thousand Before the expiry of 20 days from date of approval 2 40 Days 60 (20 days+20 days + 20 days) Rupees Two Thousand Before the expiry of 40 days from date of approval 3 40 Days 60 (20 days +40 days) Three Thousand Before the expiry of 20 days from date of approval
SECTION 10A COMMENCEMENT OF BUSINESS, ETC • 10A.(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless • (a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and • (b) the company has filed with the Registrar a verification of its registered office as provided in subsection (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 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.
SECTION 16 RECTIFICATION OF NAME OF COMPANY • (1) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,-(a) in the opinion of the "[Central Government), is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose; • (b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999 (47 of 1999), made to the Central Government within three years of incorporation or registration or change of name of the company, whether un- der this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose. 2) Where a company changes its name or obtains a new name under sub-section (1), it shall within a period of fifteen days from the date of such change, give notice of the change to the Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and the memorandum. (3) If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be pre- scribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter : Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of section 13.
• Substitution of new section for section 42. For section 42 of the principal Act, the following section shall be substituted, namely:— Issue of shares on private placement basis. ’42. • (1) A company may, subject to the provisions of this section, make a private placement of securities. • (2) A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as “identified persons”), whose number shall not exceed fifty or such higher number as may be prescribed [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62, in a financial year subject to such conditions as may be prescribed. • (3) A company making private placement shall issue private placement offer and application in such form and manner as may be prescribed to identified persons, whose names and addresses are recorded by the company in such manner as may be prescribed: Provided that the private placement offer and application shall not carry any right of renunciation. • (4) Every identified person willing to subscribe to the private placement issue shall apply in the private placement and application issued to such person along with subscription money paid either by cheque or demand draft or other banking channel and not by cash: Provided that a company shall not utilise monies raised through private placement unless allotment is made and the return of allotment is filed with the Registrar in accordance with sub-section (8). • (5) No fresh offer or invitation under this section shall be made unless the allotments with respect to any offer or invitation made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company: Provided that, subject to the maximum number of identified persons under sub-section (2), a company may, at any time, make more than one issue of securities to such class of identified persons as may be prescribed.
• . (6) A company making an offer or invitation under this section shall allot its securities within sixty days from the date of receipt of the application money for such securities and if the company is not able to allot the securities within that period, it shall repay the application money to the subscribers within fifteen days from the expiry of sixty days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of twelve per cent. per annum from the expiry of the sixtieth day: Provided that monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than— (a) for adjustment against allotment of securities; or (b) for the repayment of monies where the company is unable to allot securities. • (7) No company issuing securities under this section shall release any public advertisements or utilise any media, marketing or distribution channels or agents to inform the public at large about such an issue. • (8) A company making any allotment of securities under this section, shall file with the Registrar a return of allotment within fifteen days from the date of the allotment in such manner as may be prescribed, including a complete list of all allottees, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed. • (9) If a company defaults in filing the return of allotment within the period prescribed under sub-section (8), the company, its promoters and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakh rupees. • (10) Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. • (11) Notwithstanding anything contained in sub-section (9) and sub-section (10), any private placement issue not made in compliance of the provisions of sub- section (2) shall be deemed to be a public offer and all the provisions of this Act and the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992 shall be applicable
SECTION 78- APPLICATION FOR REGISTRATION OF CHARGE • Application for registration of charge.—Where a company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, 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 fees or additional fees paid by him to the Registrar for the purpose of registration of charge.
SECTION 82 – COMPANY TO REPORT SATISFACTION OF CHARGE • (1) A company shall give intimation to the Registrar in the prescribed form, of the payment or satisfaction in full of any charge registered under this Chapter within a period of thirty days from the date of such payment or satisfaction. Provided that in case of a Specified IFSC public company, the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed. Provided that in case of a Specified IFSC private company, the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed. Provided that the Registrar may, on an application by the company or the charge holder, al- low such intimation of payment or satisfaction to be made within a period of three hundred days of such payment or satisfaction on payment of such additional fees as may be prescribed (2) The Registrar shall, on receipt of intimation under sub-section (1), cause a notice to be sent to the holder of the charge calling upon him to show cause within such time not exceeding four- teen days, as may be specified in such notice, as to why payment or satisfaction in full should not be recorded as intimated to the Registrar, and if no cause is shown, by such holder of the charge, the Registrar shall order that a memorandum of satisfaction shall be entered in the register of charges kept by him under section 81 and shall inform the company that he has done so: Provided that the notice referred to in this sub-section shall not be required to be sent, in case the intimation to the Registrar in this regard is in the specified form and signed by the holder of charge. (3) If any cause is shown, the Registrar shall record a note to that effect in the register of charges and shall inform the company. (4) Nothing in this section shall be deemed to affect the powers of the Registrar to make an entry in the register of charges under section 83 or otherwise than on receipt of an intimation from the company.
SECTION 87 – RECTIFICATION BY CENTRAL GOVERNMENT IN REGISTER OF CHARGES • Rectification by Central Government in Register of charges. The Central Government on being satisfied that - (a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter; or (b) the omission or misstatement of any particulars, in any filing previously made to the Registrar with respect to any charge or modification thereof or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83, was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company, it may, on the application of the company or any person interested and on such terms and conditions as it deems just and expedient, direct that the time for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or misstatement shall be rectified.
SECTION 100 – CALLING OF EXTRAORDINARY GENERAL MEETING 1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company. Provided that in case of a Specified IFSC public company, the Board may subject to the con- sent of all the shareholders, convene its extraordinary general meeting at any place within or outside India. Provided that in case of a Specified IFSC private company, the Board may subject to the consent of all the shareholders, convene its extraordinary general meeting at any place within or outside India. Provided that an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India. (2) The Board shall, at the requisition made by,- (a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting: (b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in sub-section (4). (3) The requisition made under sub-section (2) shall set out the matters for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company. (4) If the Board does not, within twenty-one days from the date of receipt of a valid requisiotion in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitionists themselves within a period of three months from the date of the requisition. (5) A meeting under sub-section (4) by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board. (6) Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.
SECTION 101 – NOTICE OF MEETING • A general meeting of a company may be called by giving not less than clear twenty-one days‘ notice either in writing or through electronic mode in such manner as may be prescribed: “Provided that a general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto— (i) in the case of an annual general meeting, by not less than ninty-five per cent. of the members entitled to vote thereat; and (ii) in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or (b) having, if the company has no share capital, not less than ninty-five per cent. of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub-section in respect of the former resolution or resolutions and not in respect of the latter 2) Every notice of a meeting shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting. (3) The notice of every meeting of the company shall be given to- (a) every member of the company, legal representative of any deceased member of assignee of an insolvent member; (b) the auditor or auditors of the company; and (c) every director of the company. (4) Any accidental omission to give notice to, or the non-receipt of such notice by, any member or other person who is entitled to such notice for any meeting shall not invalidate the proceedings of the meeting.
SECTION 135 – CORPORATE SOCIAL RESPONSIBILITY • (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during "the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors • (2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee. • (3) The Corporate Social Responsibility Committee shall,- (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company in areas or subject, specified in Schedule VII): (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (0), and (c) monitor the Corporate Social Responsibility Policy of the company from time to time. • (4) The Board of every company referred to in sub-section (1) shall,- (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years for where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years), in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities Provided further that if the company fails to spend such amount, the Board shall, in its re made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending amount and, unless the unspent amount relates to any ongoing project referred to sub-section (6), transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year. Provided also that if the company spends an amount in excess of the requirements pro ed under this sub-section, such company may set off such excess amount against the requirement to spend under this sub-section for such number of succeeding financial years and in s manner, as may be prescribed. Explanation.-For the purposes of this section profit" shall not include such sums o may be prescribed, and shall be calculated in accordance with the provisions of section 198)
(6) Any amount remaining unspent under sub-section (5), pursuant to any ongoing project fulfilling such conditions as may be prescribed, undertaken by a company in pursuance d Corporate Social Responsibility Policy, shall be transferred by the company within a period thirty days from the end of the financial year to a special account to be opened by the comp in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the company in pursuance its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a fund specified in Schedule VII, within a period of thirty days from the date of completion of the thing financial year. (7) If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to b transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Un spent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less (8) The Central Government may give such general or special directions to a company or class of companies as it considers necessary to ensure compliance of provisions of this section and such company or class of companies shall comply with such directions 9) Where the amount to be spent by a company under sub-section (5) does not exceed fif- lakh rupees, the requirement under sub- section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company
SECTION 153 – APPLICATION FOR ALLOTMENT OF DIRECTOR IDENTIFICATION NUMBER • Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. • “Provided that the Central Government may prescribe any identification number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed.”.
SECTION 160 – RIGHT OF PERSONS OTHER THAN RETIRING DIRECTORS TO STAND FOR DIRECTORSHIP • (1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty- five per cent. of total valid votes cast either on show of hands or on poll on such resolution. ‘‘Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the Nomination and Remuneration Committee, if any, constituted under sub-section (1) of section 178 or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee.”. • (2) The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in such manner as may be prescribed.
SECTION 164 – DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR • (1) A person shall not be eligible for appointment as a director of a company, if (a) he is of unsound mind and stands so declared by a competent court, (b) he is an undischarged insolvent; (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, 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 com 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 the payment of the call; (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. (i) he has not complied with the provisions of sub-section (1) of section 165
• (2) No person who is or has been a director of a company which- (a) has not filed financial statements or annual returns for any continuous period of three financial years; or (b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment. • (3) A private company may by its articles provide for any disqualifications for appointment asa director in addition to those specified in sub-sections (1) and (2):Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification
Sr.N o Date of Order Name of persons/entities to whom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 1. 29.08.2022 Centella Solutions Private Limited Section 137- Copy of Financial statement to be filed to Registrar 553 days Company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, any other director who is charge by the Board shall be subject to a penalty, of ten 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 fifty thousand rupees. Rs. 65,300 on the company and Rs, 1,95,900 on officer in default 2. 20.07.2022 TR Infrastructure & Developers Private Limited Section 92(4)-Non- filing of Annual Return & Section 137- Copy of Financial statement to be filed by Registrar 957 days in case of section 92 and 987 days in case of Section 137 In case of Section 92: Company not less than Rs. 50,000 to Rs. 5 lakhs and every officer default- imprisonment upto 6 months or fine Rs. 50,000 upto Rs. 5 lakhs or both In case of Section 137: Company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, any other director who is charge by the Board shall be subject to a penalty, of ten 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 fifty thousand rupees. In case of Section 92(4): On company Rs. 1,45,700 and Rs. 1,45,700 on each director In case of Section 137: Rs. 9,67,000 on company and Rs. 1,98,700 on each director. ILLUSTRATIVE ADJUDICATON ORDERS PASSED BY ADJUDICATING OFFICER
Sr.No Date of Order Name of persons/entities to whom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 3. 17.03.202 2 Tablespace Technologies Private Limited Section 88 of Companies Act, 2013- Non- maintenance of Register of Members - Rs. 3 Lakhs on the company and Rs. 50 thousand on every officer who is in default Rs. 3,50,000 on the Company and on every officer in default as per their term of holding of office during the default. 4. 21.10.202 1 Gears Mobility Systems Private Limited Section 117(2) of Companies Act,2013- Resolutions and Agreements to be filed 32 Days Rs. 1 Lakh and in case of continuing failure further penalty of Rs. 500 for each day after the first during which the failure continues and every officer in default Rs. 50,000 and in case of continuing default , further penalty of Rs. 500 for each day after the first during which the failure continues subject to a penalty of Rs. 5 Lakh Rs. 3,14,000 on the Company and on every officer in default as per their term of holding of office during the default.
Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 5. 12.05.202 1 M/s Baba Resorts Private Limited Mr.Kripal Singh Mr. Vikram Sharma Mr. Dharam Pal Singh Mr, Navneet Singh Section 12(1)- Non maintenance of registered office 32 days Rs.1000 per day for Company and every officer of the Company who is in default Rs. 32000 each on the Company and every officer who is in default 6. 20.04.202 1 Orind Steels Limited Mr. Kashi Jhunjhunwala Mr. Kanhaiya Lal Murarka Mr. Sanjay Kumar Murarka Mr. Ashok Kumar Murarka Mr.Bhaskar Chandra Sethi Mr. Gaurav Kumar Das Section 203(1)- Non appointment of KMP and Company Secretary KMP- 02.011.2019 to 31.10.2019 CS- 02.11.2018 TO 30.09.2019 and again from1.06.2020 to 23.03.2021 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 10 lakhs on the Company and on every officer in default as per their term of holding of office during the default.
Sr.No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 7. 07.04.2021 Avanotr Performance materials India Limited Mr. Devashish Ohri Mr. Dheeraj Tiwari Mr. Siddhartha Agarwal Section 92- Non filing of Annual Return 31 days Rs.50000 and in case of continuing offence Rs. 100 each day for company and every officer of the company who is in default No penalty imposed as th company filed the form prior to the issue of notice by adjudicating officer. 8. 06.04.2021 Karmabhoomi Real Estate Limited Mr. Sardar Singh Mr. Manoj Senger Mr. Mahipal Singh Section 12(1)- Non maintenance of registered office More than a year Rs.1000 per day but not exceeding one lakh rupees for Company and every officer of the Company who is in default Rs. 100000 each on the Company and every office who is in default 9. 26.02.2021 Ranaul Machinery Private Limited Section 12(1)-Non maintenance of registered office of the Company More than a year Rs.1000 per day but not exceeding one lakh rupees for Company and every officer of the Company who is in default Rs. 1,00,000 on the Company and officer in default 10. 15.02.2021 Quadgen Wireless Solutions Private Limited Section 203-Non- Appointment of Key Managerial Personnel and Company Secretary 187 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 1,25,000 on officer in default
ILLSUTRATIVE ADJUDICATION ORDERS PASSED BY REGIONAL DIRECTOR Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 1. 21.07.2022 Bright Laundry and Housekeeping Private Limited Parakh Jain Vinay Deria Section 12- Register office of the Company 02.07.2020- 20.07.2021 Company and Every officer in default be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees. Rs. 1,00,000 on Rs. 10,000 on every officer in default. Rs. 10,000 on company and Rs. 10,000 on every officer in default. 2. 28.01.2022 Kirloskar Integrated Technologies Private Limited Section 203- Appointment of Key Managerial Personnel 325 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 5,00,000 on the company Rs. 20,64,000 director, Key Managerial Personnel. Rs. 1,00,000on the Company and Rs. 4,12,800 on Director and Key Managerial Personnel 3. 03.02.2022 Sogefi ADM Suspensions Private Limited Section 203(1)&(4)- Appointment of Key Managerial Personnel 304 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 Rs. 5 lakhs on the Company and Rs. 8,57,000 on officer in default Rs. 1 lakh on the company and Rs. 1,71,400 on officer in default
ILLSUTRATIVE ADJUDICATION ORDERS PASSED BY REGIONAL DIRECTOR Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 4. 07.01.2022 Angala Enterprises Limited Shri. Kumar Shanmugasundaram Nadimuthu Section 203- Appointment of Key Managerial Personnel 61 days Company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupess Rs. 5 lakh on the company and Rs. 1,11,000 on the Director Rs. 50,000 for the Company and Rs. 12,000 on the director 5. 26.02.2021 Gaffino resorts and motels private limited Section 92- Non filing of Annual return for the year 2018 Section 137- Non filing of Financial Statements 133 days in case of Financial Statements 104 days in case of Annual return Section 92- Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Section 137- Rs 1 lakh on company and every officer in default and in case on continuing offence Rs. 100 per day, subject to maximum of Rs. 5 lakhs Section 92- Rs. 604000 on the Company and on every officer in default Section 137- Rs. 133000 on the Company and Rs. 60400 on every officer in default Section 92- Rs.12080 on company and every officer in default Section 137 Rs. 26600 on the Company and Rs. 22660 on every officer of the Company in default 6. 12.02.2021 Tokyo Finance Limited Section 203 11.08.2017- 26.02.2019 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs.5 lakh on the Company and Rs. 167000 on officer of the Company Rs. 125000 on the Company and Rs. 11750 on the officer of the Company
Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 7. 12.02.2021 CF Pharmaceutica ls Limited Section 92- Non filing of Annual Return 30.11.2015- 05.10.2017 Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Rs. 117400 on the Company and every officer in default Rs. 11740 on the Company and every officer in default 8. 27.01.2021 M/s Jivrom Technologies Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencem ent of business Delay of 56 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 56000 on officer in default of the Company Rs. 15000 on the Company and Rs. 12500 on officer in default of the Company
No Order Applicants provision of CA, 1956/2013 violation provision of the Act imposed by Adjudicating officer Imposed by R 9. 07.01.2022 Gopuram Enterprises Limited Section 203- Appointment of Key Managerial and Company Secretary 94 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 5 lakhs on the Company and Rs. 1,44,000 on director Rs. 50,000 o the Company and Rs. 15000 on Director 10. 20.072021 KHB Infra Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencem ent of business 170 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 1,00,000 on director of the Company Rs. 50000 on the Company and Rs. 1,00,000 on director of the Company
JUDGMENT OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI • Registrar of Companies, West Bengal v/s Sabyasachi Bagchi • Brief Facts of this case are that Respondent Sabyasachi Bagchi was holding Directorship of 17 Companies on 01.04.2014 when section 165 (1) of the Act, came into force. However, he vacated directorship of three companies during the period of 01.04.2014 to 31.03.2015. After receipt of the notice from Appellant the Respondent has resigned from the Directorship of four Companies on 22.02.2016, thus, the Respondent has contravened the provisions of Section 165(1) of the Act, for a period of 01.04.2015 to 21.02.2016 i.e. 326 days. The reply of Respondent to show cause notice found unsatisfactory, therefore, the Appellant filed a complaint under Section 165 (6) of the Act, against the Respondent before Chief Metropolitan Magistrate, Kolkata. During the pendency of the Prosecution, Respondent filed an Application under Section 441(1) of the Act, before the National Company Law Tribunal, Kolkata (in brief Tribunal) for compounding the offence. The Appellant, ROC West Bengal, filed his report on compounding application before the Tribunal. After hearing the parties Learned Tribunal allowed the Application subject to payment of compounding fees Rs. 25,000/- within 15 days from the date of order.
• Learned Company Prosecutor appearing on behalf of the Appellant submitted that the Respondent has accepted that he contravened the provisions of 165 (1) of the Act, for a period of 01.04.2015 to 21.02.2016 i.e. 326 days. However, in the impugned order the period of default is shown 21 days only and Learned Tribunal has imposed compounding fees of Rs. 25,000/-. The Tribunal has ignored the provisions of sub-Section 6 of Section 165 of the Act, and directed to deposit compounding fees less than a minimum prescribed for the offence. The Tribunal has no jurisdiction to reduce the fine less than the minimum prescribed for the offence. For this purpose, he placed reliance on the order of this Tribunal in the case of Company Appeal (AT) No. 249/2018 Registrar of Companies cum Official Liquidator Vs. Gyan Chandra Agarwal order dated 12.09.2018. it is further, submitted that the Tribunal should have imposed minimum compounding fees i.e. Rs. 5,000/- per day for default to be continued 326 days amounting to Rs. 16,30,000/-. Thus, the order is liable to be set aside and Respondent be directed to deposit remaining compounding fees. • The Respondent has contravened the provisions of 165(1) of the Act, which is punishable under Sub-Section 6 of Section 165 of the Act. Taking into consideration, the facts and circumstances of the case, we impose minimum fine at the rate of five thousand rupees for every day for the period 01.04.2015 to 21.02.2016 i.e. 326 days. We quantified penalty to Rs. 16,30,000/-. The Respondent has already paid Rs. 25,000/- after adjustment, now he is liable to pay Rs. 16,05,000/-. Therefore, the Respondent is directed to pay such amount within a period of 60 days in National Company Law Tribunal, Kolkata. The Registrar of Companies will ensure compliance of the order.
JUDGMENT OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL • Quinn Logistics India Private Limited v/s ROC, • Ld. Tribunal held that the Appellant Company and its directors are liable to be penalized under Section 168 of Companies Act, 1956 for the violation of Section 166 of the Companies Act, 1956 the violation continued up to 31.03.2014 thereafter, they are liable to be penalized under Section 99 of Companies Act 2013 for violation of the Sub-Section (1) Section 96 of the Companies Act, 2013 with effect from 01.04.2014. Ld. Tribunal after hearing the parties allowed the Compounding Applications subject to pay the penalty as indicated above. Being aggrieved with this order, Appellants filed this Appeal. • Depending on nature of offence and its gravity and if it is pleaded by the applicant or reported by Registrar of Companies, the Tribunal is required to notice the relevant factors while compounding any offence, such as:- (i) The gravity of offence; (ii) The act is intentional or unintentional; (iii) The maximum punishment prescribed for such offence, such as fine or imprisonment or both fine and imprisonment. (iv) The report of the Registrar of Companies. (v) The period of default.
(vi) Whether petition for compounding is suo moto before or after notice from Registrar of Companies or after imposition of the punishment or during the pendency of a proceeding. (vii) The defaulter has made good of the default. (viii) Financial condition of the company and other defaulters (ix) Offence is continuous or one time. Company Appeal (AT) No. 238 of 2019 (x) Similar offence earlier committed or not. (xi) The act of defaulters is prejudicial to the interest of the member(s) or company of public interest or not. (xii) Share value of the company, etc. • Ld. Tribunal to maintain the consistency has to impose Penalty which is as per calculation maximum fine Rs. 2,35,90,000/-. 1/5th of the maximum amount is Rs. 47, 18,000/-. However, Ld. Tribunal has imposed Penalty Rs. 27, 09,000/- which is less than 1/5th of the Maximum amount. Therefore, we are of the view that Ld. Tribunal has undertaken a lenient view in imposing Penalty.
• Pahuja Takii Seeds Ltd. & Ors. v. Registrar of Companies • The NCLAT was to determine: • a) Whether the Companies Act, 2013 bars Joint Applications for compounding of offence by a defaulting company along with its officers in default. • b) Whether joint applications for compounding of the same offence committed in different years can be filed. • The Hon’ble NCLAT ruled that Section 441 neither prohibits filing a single application for compounding the same offence nor does it prohibit a joint application filed by the Company along with the officers in default. The Hon’ble NCLAT observed that “procedures are deemed to be permitted unless expressly barred”.
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 (3) OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 158 OF THF COMPANIES AC'I' 2013. • In the matter M/s Premier Solution Private Limited • Ld. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad vide letter No. RD (NWR)/ 230-232/ (496)/2021/479 dated,29.04.2022 has informed to ROC, Ahmedabad that O/o ROC, Ahmedabad has pointed out certain violations and non compliance of the Companies Act, 2013 by both the petitioner companies in ROC‘s report dated 26.10.2021 in the matter of Scheme of Amalgamation of Premier Solution Private Limited with D.J. Shah Investment Finance Private Limited and their respective shareholders and creditors in CA(CAA) No. 31 of 2021. Directorate has further instructed to this office that it is observed from last three years financial statements filed by Transferor and transferee company that both companies have not mentioned DIN therein in accordance with section 158 of the Companies Act, 2013. Thus, the Transferor and Transferee company have violated the provisions of the Section 158 of the Companies Act, 2013. In this regard, Directorate has instructed to take necessary action for violation of Section 158 of the Companies Act, 2013 and submit action taken report to the Directorate.
• Having considered the facts and circumstances of the case and submissions made by the Presenting officer and oral submission made by Ld. PCS and after taking into accounts the factors above, I hereby imposed following penalty on company and its directors as prescribed under Section 172 of the Companies Act, 2013 for violation of section 158 of the Companies Act, 2013. On Company : Rs. 1,50,000 On Mr. Kirit Harilal Shah : Rs. 1,50,000 On Ms. Bharti Kirit Shah : Rs. 1,50,000 On Ms. Shital Chintan Shah : Rs. 1,50,000
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 42(8) OF THF COMPANIES AC'I' 2013. • In the matter of Valley Monks Private Limited • Whereas, the Company had submitted its adjudication application on 05.02.2021 for adjudicating the matter. It was noticed from the application that company has allotted 50,000 compulsorily convertible debentures (CCDs) of Rs.103/- each to the tune of Rs. 50 lakhs to Shri Sampath Kumar Srinivas, Shri Pratha Jayadevappa, Shri Nailmothu Venkata Avilash and Shri knit Saxeria on private placement basis pursuant to Section 42 of the Companies Act, 2013. The company has obtained shareholders’ approval for allotment on 27.11.2018 as per PAS 3 filed on 9.1.2019. • Though the company was compliant with respect to the other applicable provisions of the Companies Act, 2013 and Rules made thereunder, it has missed out to mention Section 42 in the extracts of Board Resolution and extraordinary general meeting resolutions and the disclosures as required under Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014, of Companies (Share capital and debentures) Rules, 2014 In the notice to extraordinary general meeting. • As per Rule 14(8) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the special resolution is required to be filed before the issue of private placement offer cum application letter. However, the company has made delay in filing special resolution for issue of CCDs. The Form MGT 14 was filed after the issue of private placement offer turn application letter.
• Pursuant to the provisions of Section 42(6) of the Companies Act, the company ought to have received the application money on account of private placement on a separate bank account In a scheduled bank However, the company has not opened a separate bank account. • Whereas as per the provisions of Sub-Section (10) of Section 42 of Companies Act, 2013, if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount involved in the offer or invitation or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. • Penalty imposed: On Company : Rs. 50,00,000 On Ashwin Kumar Bedre Vijay kumar (Whole time director cum promoter): Rs. 50,00,000 On Swami Mohammad (Director cum promoter) : Rs. 50,00,000
In the matter of Patodia Syntex Limited • The Company held its Annual General Meeting for the Financial Year 2020-2021 on 15/12/2021, violating provisions of Section 96 of the Companies Act, 2013. • The punishment for contravention of section 96 is prescribed under section 99 of the Act which prescribes that if any default is made in holding meeting of the company in accordance with section 96 or section 97 or section 98or in complying with any directions of the Tribunal, the company and every officer who is in default shall be punishable with fine which may extend to one lakh rupees and in case of continuing default , with a further fine which may extend to five thousand rupees for every day during which such default continues. • “In reference to NCLAT, New Delhi order dated 12.09.2018 on Company Appeal (AT) No. 249 of 2018, Ministry Vide its letter No. 10/19/2018 – Legal cell, dated : 04.10.2018 has directed that in no case, compounding fee should be levied less than the minimum compounding fees as provided uder various sections of Companies Act, 2013. “
• After carefully considering the submissions made in the compounding application and oral submission of the authorized representatives and report of the Registrar of Companies, Mumbai and having regard to the facts and circumstances of the case, it was ordered that the offence committed under Section 96 of the Companies Act, 2013, deserves to be compounded. I am of the considered view that taking into consideration the facts of the case following compounding fees shall be enough deterrent and was ordered accordingly with further order that the applicant directors/ officers shall pay the compounding fee out of their own pockets. Rs. 50,000/- (Rupees Fifty Thousand Only) for the company and Rs.20,000/- (Rupees Twenty Thousand Only) each for six applicant directors/ officers of the company.
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 12(3)(c) OF THF COMPANIES AC'I' 2013 BY WISE R&D INDIA PRIVATE LIMITED. • The company has filed INC-24 on 22.10.2021 vide SRN T55327951. It is noticed from the attachment that company’s CIN not mentioned on the letterhead of the company. Hence the company was directed to file Adjudication application for non- compliance of provisions of Section 12(3)(c) of the Companies Act, 2013. The company has submitted the Adjudication application on 11.11.2021. • The penalty imposed : On Company : Rs. 7000 On Shri Venkatesh Krishnaswamy : Rs. 2000 On Ms. Kaveri Kumar: Rs. 2000 On Shri BNG Kumar: Rs. 2000 On Shri Arjun Thyagarajan: Rs. 2000 On Shri Raghav Lal : Rs. 2000
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 135 OF THF COMPANIES AC'I' 2013 BY COMVIVA TECHNOLOGIES LIMITED. • An application dated 26.07.2022 has been received from the company admitting non-compliance of section 135(5) of the Companies Act, 2013 whereby it has been stated that Company was required to spent 2,88,65 811 as part of its CSR obligation during the financial year 2020-21. However, the company spent Rs, 2,83,15,689 towards its CSR obligation during the financial year 2020-21 • The Applicant Company and its officers who have made the default in complying the provision of section 135(5) by not transferring unspent CSR amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year are now liable for penalties under section 135(7) of the Companies Act, 2013. • Now in exercise of the powers conferred on me vide Notification dated 24th March, 2015 and having considered the reply submitted by the notice in response to the notice issued vide letter no. No. ROC/D/Adj/2022/Section 135/Comviva/5472 5480 dated 07.09.2022, I do hereby impose the penalty on the company and its officers in default for violation of section 135 (5) of the Companies Act, 2013 r/w Rule 10 of the Companies (Corporate Social Responsibility Policy) Rules, 2014
• Penalty imposed : - On Company - Rs. 1100244 - Manoranjan Mohapatra (CEO) - Rs. 55012.20 - Neeraj Jain (CFO) - Rs. 55012.20 - Parminder Singh Bakshi (CS) - Rs. 55012.20 - Rajat Mukherjee, Director - Rs. 55012.20 - Vivek Satish Agarwal,, Director - Rs. 55012.20 - Jagdish Mitra, Director - Rs. 55012.20 - Sunita Umesh, Director - Rs. 55012.20 - Manishkumar Murlimanohar Vyas, - Rs. 55012.20
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 137 OF THF COMPANIES AC'I' 2013 BY CROODS VENTURE CAPITAL PRIVATE LIMITED. • The company has failed to file its financial Statement alongwlth all the documents which are required to be attached to such financial statements under the Act for the financial year 2019-20 in compliance of section 137 of the Companies Act,2013 and Rules made thereunder. • The undersigned has reasonable cause to believe that the provisions of section 137 of the Companies Act,2013 has not been complied with. The company and its officers in default have violated the provisions of section 137 of Companies Act,2013 which may be adjudication under the purview of section 454(3) of the Companies Act,2013. The Company and every officer of the Company who is in default are liable to be penalized u/s. 137(3) of the Companies Act,2013. • Penalty on Company: - On Company : Rs. 65,300 - On Dharmendrra chunilal Atruja,officer in default : Rs. 50,000 - On Maulik Ketranbhai Hingu, officer in default : Rs. 50,000
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 136(1) OF THF COMPANIES AC'I' 2013, HUIZHONGAUTOMOBILE COMPONENTS INDIA PRIVATE LIMITED • The company has filed an adjudication application in GNL-1 vide SRN F17729930 dated 29.07.2022 under the MCA21 portal to adjudicate the default under Section 136(1) of the Companies Act, 2013 regarding not sending Financial Statements etc. for the Financial Year 2020-21to Members before the Annual General Meeting dated 30.11,.2021 as per the requirement of the aforesaid provisions of the Companies Act,2013. lt is noticed from adjudication application that the company has not complied with the provisions of Section 136[1) of the Companies Act, 2013. • Penalty imposed : - On Company : Rs. 25,000 - On Mr. Junhua Guo : Rs. 5,000 - On Ms. Hua Ying : Rs. 5,000 - On Ms. Surbhi Rathore : Rs. 5,000
• IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 203(4) OF THF COMPANIES AC'I' 2013 BY PITCHERS INTERNET PRIVATE LIMITED. • On perusal of the Application of eform GNL-1 (SRN T22341762). It has been noticed that Company Secretary Prakash Jha resigned from the company w.e.f. 15.10.2019 from the office of whole time company secretary that thereafter company appointed a whole time company secretary on 10.05.2021 during this period the paid up share capital of company was more than ten crore rupees therefore the company was require to appoint a whole time company secretary u/s 203 of the Companies Act, 2013 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. • In terms of the provisions of section 203(4) r/w 454 of the Companies Act, 2013, this office had issued Show Cause Notices (SCN) vide no. No. ROC/D/Adj/2022/Section 92&137/Jindal/1743-1746 dated-25.03.2022 to the Company and officers in default. • A reply dated 05.04.2022 of Noticee No. 2 Shri Akshay Kumar Lal (on behalf of company and himself) received to this office on 08.04.2022 in respect of SCN issued by this office, wherein the company cited difficulties it faced on account of the COVID-19 pandemic in appointment of a new whole time Company Secretary and asked for a hearing.
• A hearing was fixed on 18.05.2022 as requested by company vide e-mail dated 02.05.2022. Sh. Mohit Singhal, CS, the authorized representative of the company appeared in the hearing. • Penalty Imposed : - On Company : Rs. 5,00,000 - On Mr. Akshay Kumar : Rs. 4,41,000 - On Mr. Siddharth Mall (Director) : Rs. 4,41,000 - On Ajinkya Rajendra Malasne (Director) : Rs. 4,41,000
IN THE MATTER OF SONASUMAN CONSTECH ENGINEERS PRIVATE LIMITED • Facts of the Case: As per Section 129(1) of the Companies Act, 2013, the Financial Statements shall give true and fair view of the state of affairs of the Company, comply with the accounting standards notified under section 133 and be in form as provided in Schedule III. For each class of equity share capital as per Schedule III of the Companies Act, 2013, the Company needs to disclose in the financial statements, the shares held by each shareholder holding more than five percent shares specifying the number of shares held.However, the Company has not disclosed the same in its financial statement for the F.Y. 2019- 20 and has contravened the provisions of the Section 129 read with Schedule III of the Companies Act, 2013, thereby affecting the true and fair view of the state of affairs of the Company. Thus, the auditor has failed to comment on the same in the audit report for the aforesaid financial year. Hence it is observed that the Company has contravened with the AS-18 read with Section129 read with Schedule III of the Companies Act, 2013 thereby affecting the true and fair view of the state of affairs of the Company in the financial year 2017-18, 2018-19 and 2019-20. Thus, the auditor has failed to comment on the same in the audit report for the aforesaid financial years.
• Whereas, this office has issued show cause notice for default under section 143 of the Companies Act, 2013 vide this office letter no. ROC/PAT/SCN/sec.143/36124/2216-2217 dated 05.12.2022 • However, this office has not received any reply from the abovesaid auditors. Hence, the provisions of Section 143 of the Companies Act, 2013 has been contravened by the auditors and therefore they are liable for penalty u/s. 450 of the Companies Act, 2013 for the Financial Years 2017-2018, 2018-2019 and 2019-2020. • Having considered the facts and circumstances of the case and after taking into account the provisions of Rule- 11 of Companies (Adjudication of Penalties) Rules, 2014 (as amended), I hereby impose a penalty of Rs. 10,000 (Ten Thousand) on Shri Ravikant Kumar, Kumar Vivek & Associates and Rs. 5000 on Shri Basant Kumar Jaiswal, Basant Jaiswal & Associates as per Table Below for violation of Section 143 of the Companies Act, 2013 for the financial years 2017- 2018, 2018-2019 and 2019-2020:
Nature of Default Violation of Section of Companies Act, 2013 Company/ Officer to whom penalty imposed No. of days in default Penalty for defaults as per Section 450 of the Act Total Penalty Penalty imposed as per Section 446B of the Act Non- Reporting of violations/ non- compliances made by the company in Audit Report Section 143 On Shri Ravikant Kumar, Kumar Vivek & Associates FY 2017-2018 and FY 2018- 2019 Rs.10000 Rs. 10000*2 No of years = 20000 10000 Shri Basant Kumar Jaiswal, Basant Jaiswal & Associates FY 2019-2020 Rs.10000 Rs. 10000 5000
PROVISIONS PUNISHABLE WITH FINE SUBSTITUTED BY PENALTY UNDER COMPANIES (AMENDMENT) ACT, 2019 & 2020
S. No. Section Section Description Companies (Amendment) Act, 2019 Companies (Amendment) Act, 2020 1. 53(3) Prohibition of Issue of shares at a discount - 2. 56(6) Transfer and transmission of Securities - 3. 64(2) Notice to be given to Registrar for alteration of share capital - 4. 86 Punishment for contravention of provisions from section 77 to 87 under chapter VI - 5. 88(5) Register of Members - 6. 89(5) & (7) Declaration in respect of beneficiary interest in any Share - 7. 90(10)& (11) Register of significant beneficial owners in a company - 8. 92(5) Annual Return - 9. 92(6) Certifying Annual Return in contravention of the provisions of this Section - 10. 102(5) Statement to be annexed to Notice - 11. 105(3) Proxies - 12. 105(5) Invitation of Proxies issued at Company’s Cost -
Sr. No. Section Section Description Companies (Amendment) Act, 2019 Companies (Amendment) Act, 2020 14. 121(3) Report on annual general meeting - 15. 124(7) Unpaid Dividend Account - 16. 134(8) Financial Statement Board’s Report - 17. 135(7) Corporate Social Responsibility - 18. 137(3) Copy of financial statement to be filed with Registrar - 19. 140(3) Removal, resignation of auditor and giving of special notice - 20. 143(15) Punishment for Failure to report fraud to Central Government by the Auditor - 21. 157(2) Company to inform Director Identification Number to Registrar - 22. 159 Punishment for Contravention – in respect of DIN - 23. 165(6) Number of Directorships - 24. 172 Punishment for contravention of provisions from section 149 to 172 - 25. 178(8) Nomination and Remuneration Committee and Stakeholders Relationship Committee - 26. 184(4) Disclosure of Interest by Director -
S. No. Sectio n Section Description Companies (Amendment Act) ,2019 Companies (Amendment) Act, 2020 27. 187(4) Investment of the Company held in its own name - 28. 188(5) Related Party Transaction - 29. 191(5) Payment to Director for Loss of Office - 30. 197(15) Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - 31. 203(5) Appointment of Key Managerial Personnel - 32. 204(4) Secretarial Audit for Bigger Companies - 33. 232(8) Merger and Amalgamation of Companies - 34. 238(3) Registration of the offer of scheme involving transfer of shares - 35. 247(3) Valuation by Registered Valuers - 36. 405(4) Power of Central Government to direct companies to furnish information or Statistics - 37. 446(B) Penalties for One Person Company or Small Companies - 38. 450 Punishment where no specific penalty is provided -
Sr. No Date of Order Name of persons/entities to whom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 1. 12.05.2021 M/s Baba Resorts Private Limited Mr.Kripal Singh Mr. Vikram Sharma Mr. Dharam Pal Singh Mr, Navneet Singh Section 12(1)- Non maintenance of registered office 32 days Rs.1000 per day for Company and every officer of the Company who is in default Rs. 32000 each on the Company and every officer who is in default 2. 06.04.2021 Karmabhoomi Real Estate Limited Mr. Sardar Singh Mr. Manoj Senger Mr. Mahipal Section 12(1)- Non maintenance of registered office More than a year Rs.1000 per day for Company and every officer of the Company who is in default Rs. 100000 each on the Company and every officer who is in default ILLUSTRATIVE ADJUDICATON ORDERS PASSED BY ADJUDICATING OFFICER
Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 3. 07.04.202 1 Avanotr Performance materials India Limited Mr. Devashish Ohri Mr. Dheeraj Tiwari Mr. Siddhartha Agarwal Section 92- Non filing of Annual Return 31 days Rs.50000 and in case of continuing offence Rs. 100 each day for company and every officer of the company who is in default No penalty imposed as the company filed the form prior to the issue of notice by adjudicating officer. 4. 20.04.202 1 Orind Steels Limited Mr. Kashi Jhunjhunwala Mr. Kanhaiya Lal Murarka Mr. Sanjay Kumar Murarka Mr. Ashok Kumar Murarka Mr.Bhaskar Chandra Sethi Mr. Gaurav Kumar Section 203(1)- Non appointment of KMP and Company Secretary KMP- 02.011.2019 to 31.10.2019 CS- 02.11.2018 TO 30.09.2019 and again from1.06.2020 to 23.03.2021 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 10 lakhs on the Company and on every officer in default as per their term of holding of office during the default.
ILLSUTRATIVE ADJUDICATION ORDERS PASSED BY REGIONAL DIRECTOR S r. N o Date of Order Name of Applica nts Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 1 . 27.01.202 1 M/s Jivrom Technol ogies Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencement of business Delay of 56 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 56000 on officer in default of the Company Rs. 15000 on the Company and Rs. 12500 on officer in default of the Company 2 . 26.02.202 1 Gaffino resorts and motels private limited Section 92- Non filing of Annual return for the year 2018 Section 137- Non filing of Financial Statements 133 days in case of Financial Statements 104 days in case of Annual return Section 92- Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Section 137- Rs 1 lakh on company and every officer in default and in case on continuing offence Rs. 100 per day, subject to maximum of Rs. 5 lakhs Section 92- Rs. 604000 on the Company and on every officer in default Section 137- Rs. 133000 on the Company and Rs. 60400 on every officer in default Section 92- Rs.12080 on company and every officer in default Section 137 Rs. 26600 on the Company and Rs. 22660 on every officer of the Company in default
ILLSUTRATIVE ADJUDICATION ORDERS PASSED BY REGIONAL DIRECTOR Sr .N o Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 3. 12.02.2021 CF Pharmaceutic als Limited Section 92- Non filing of Annual Return 30.11.2015- 05.10.2017 Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Rs. 117400 on the Company and every officer in default Rs. 11740 on the Company and every officer in default 4. 12.02.2021 Tokyo Finance Limited Section 203 11.08.2017- 26.02.2019 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs.5 lakh on the Company and Rs. 167000 on officer of the Company Rs. 125000 on the Company and Rs. 11750 on the officer of the Company
IMPORTANT JUDGEMENTS OF HON’BLE SUPREME COURT ON ADJUDICATION PROCEEDINGS UNDER SEBI ACT,1992 • The Chairman, SEBI Vs. Shriram Mutual Fund & Another (Appeal (Civil) 9523 of 2003-9524 of 2003) Para 5 of the said Order: Chapter VI-A of the SEBI Act deals with the penalties and the adjudication. Section 15-I of the Act envisages appointment of Adjudicating Officer for holding an inquiry in the prescribed manner, after giving reasonable opportunity of being heard for the purpose of imposing any penalty. Section 15-J provides various factors which are to be taken into consideration while adjudging the question of penalty under Section 15-I namely, the amount of disproportionate gain or unfair advantage whenever quantifiable, loss caused to an investor or group of investors and the repetitive nature of default. The legislature in its wisdom had not included mens rea or deliberate or willful nature of default as a factor to be considered by the Adjudicating Officer in determining the quantum of liability to be imposed on the defaulter. Sections 15A to 15H and 15HA employ the words “ shall be liable” and therefore, mandatorily provides for imposition of monetory penalties for respective breaches or non compliance of provisions of the SEBI Act and the Regulations. Default or failure, as contemplated under the Act includes: 15A- Failure to furnish Information, return 15B- Failure to enter into agreement with clients 15C- Failure to redress investor’s grievances 15D- Default in case of mutual funds 15E- Failure to observe rules and regulations by an asset management Company
15F- Default in case of Stock Brokers 15G- For Insider Trading 15H- Non-disclosure of acquisition of shares and takeovers 15HA- Fraudulent and unfair trade practices 15HB- Penalty, if not separately provided Para 9 of the said Order: It is settled law that when a penalty is imposed by an Adjudicating Officer, it is done so in adjudicatory proceedings and not by way of fine as a result of prosecution of an accused for commission of an offence in criminal proceedings. Para 11 of the said Order: In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regualation is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must made by the defaulter with guilty intention or not.
• The Chairman, SEBI Vs. Roofit Industries Limited (Civil Appeal No 1364-1379 of 2005) Para 5 of the said Order A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non compliance occurs and recurs there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.
Adjudicating Securities and Exchange Board of India Vs. Bhavesh Pabari (Civil Appeal No 11311 of 2013) • Para 6 of the said Order: Sections 15-A(a) to 15-HA have to be read along with Section 15-J in a manner to avoid any inconsistency or repugnancy. We must avoid conflict and head-on-clash and construe the said provisions harmoniously. Provisions of one section cannot be used to nullify and obtrude another unless it is impossible to reconcile the two provisions. The explanation to Section 15-J of SEBI Act added by Act No.7 of 2017, quoted above, has clarified and vested in the Adjudicating Officer a discretion under Section 15-J on the quantum of penalty to be imposed while adjudicating defaults under Sections 15-A to 15-HA. Explanation to Section 15-J was introduced/ added in 2017 for the removal of doubts created as a result of pronouncement in M/s Roofit Industries. • Para 9 of the said Order: A narrow view would be in direct conflict with the provisions of Section 15-I(2) of the SEBI Act which vests jurisdiction in the Adjudicating Officer, who is empowered on completion of the inquiry to impose “such penalty as he thinks fit in accordance with the provisions of any of those sections.
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final_presentation_on_coompany_llaw.pptx

  • 1.
  • 2.
    INTRODUCTION TO COMPANIESACT, 2013 The Companies Bill was passed by the Lok Sabha (the Lower House of the Parliament of India) on 18 December 2012 and in the Rajya Sabha (the Upper House of the Parliament of India) on 8 August 2013. It received Presidential Assent on 29th August 2013 thereby creating the Companies Act 2013. The new Companies Act is a positive step towards modernising India’s company law and aligning it to global standards. It has given increased decision making powers to the company, and introduced provisions giving minority shareholders additional rights and protections. The introduction of one person companies and small companies should alleviate some of the administrative burdens that small businesses have to bear, but larger companies should prepare themselves for further administrative burdens as a result of changes in the appointment of auditors and directors.
  • 3.
    EVOLUTION OF THECOMPANIES ACT, 2013 • The Companies Act, 2013 has undergone five major amendments so far. The Companies (Amendment) Act of 2015 and 2017 aimed at enhancing the efficiency and promote ease of doing business. The Companies Act, 2013 was also amended by The Insolvency and Bankruptcy Code of 2016 and Finance Act of 2017. The Insolvency and Bankruptcy Code, 2016 omitted various sections in the Act 2013 like Section 253 to Section 269, Section 289, Section 304 to Section 323 and Section 325. The Finance Act 2017 amended Section 182 which provides for the prohibitions and restrictions regarding political donations. The most recent amendment was done by the Finance Act 2020 which aimed to ease the listing of Indian companies in foreign recognized stock exchanges.
  • 4.
    JOURNEY OF THECOMPANIES ACT SO FAR Companies Act, 1956 Companies Act, 2013 Companies (Amendment) Act, 2015 Companies (Amendment) Act, 2017 Companies (Amendment) Ordinance, 2018 Companies (Amendment) Act, 2019 Companies (Amendment) Act, 2020
  • 5.
    HIGHLIGHTS OF COMPANIESACT, 2013 AS COMPARED TO COMPANIES ACT, 1956 • Concept of Woman Director, Corporate Social Responsibility (CSR), Key Managerial Personnel (KMP), Class Action Suits, Entrenchment clause in Articles of Association are new concepts introduced by the Companies Act, 2013. It also introduced new types of companies i.e., OPC, Small Company, Associate Company. New concept of ‘Dormant Company’ has also been introduced in the Companies Act, 2013. Provision of vigil mechanism has been added by this Act. Term ‘Promoter’ has been there in the earlier Act, but this Act defined it. The Companies Act, 2013 has also defined the term ‘Fraud’ in explanation attached to Sec. 447. The Companies Act, 2013 has undergone amendments in 2015, 2017, 2019 and by Amendment Act, 2020.
  • 6.
    SIGNIFICANT AMENDMENTS MADEBY THE COMPANIES AMENDMENT ACT, 2020 1. Decriminalization of offences: The Amendment Act has decriminalized certain offences under the Companies Act. In case of defaults which lack any element of fraud or do not involve large public interest, instead of imprisonment and/or fine, penalty will be imposed under departmental adjudication proceedings. 2. Definition of Listed Company: A proviso has been inserted to Sec. 2(52) of Companies Act, 2013 excluding certain class of companies from the definition of listed company (mainly for removing companies which are listed only for debt securities). 3. Issue of securities of public company for listing in foreign jurisdictions: Provision has been made to enable public companies to list their securities in foreign jurisdiction. 4. Reduction in timeline for rights issue
  • 7.
    5. Insertion ofprovisions relating to ‘Producer Company in the 2013 Act: Chapter XXIA (containing Secs. 378A to 378ZU) has been inserted in Companies Act, 2013. 6. Lesser penalty for start-up company, small company, producer company, OPC: Lesser monetary penalty will be imposed on a start-up company, Producer Company, One Person Company, or small company on failure to comply with provisions of the Companies Act, 2013 which attracts monetary penalties.
  • 8.
    AMENDMENTS MADE BYTHE COMPANIES (AMENDMENT) ACT, 2019  It added Sec. 10A requiring the Company having a share capital to make certain declarations;  Reduced the burden of NCLT by transferring certain approvals, to the Central Government e.g., conversion of Public Company into Private, changing financial year of a company;  It also substituted ‘liable to penalty’ in place of ‘fine’ in several provisions, thereby further easing the mounting work pressure on NCLT. The Registrar of Companies (RoC) and Regional Director (RD) can impose penalties directly after issuing show cause notice (SCN) in place of going to judiciary for imposing fines under several provisions.
  • 9.
    SIGNIFICANT AMENDMENTS MADEBY THE COMPANIES AMENDMENT ACT, 2017  Revision in concept of KMP: It now includes such other officer, not more than one level below the directors who is in whole time employment and designated as KMP by the Board and also such other officers as may be prescribed;  For defining Associate Company, Holding and Subsidiary Company Relationship words ‘total share capital’ were substituted by ‘total voting power’;  Section 3A was inserted which relates to liability of continuing members in case of reduction in number of members below statutory minimum;  New section related to ‘private placement’ was substituted using the term ‘identified persons’;  Amendment related to ‘issue of shares at a discount’ inserted that a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme as per directions of RBI;
  • 10.
     Amendment introducingthe concept of ‘Significant Beneficial Owner’ making a declaration to the company in the manner as prescribed for was one of the significant amendments as it adds to transparency;  The matters which are required to be transacted by means of ‘Postal Ballot’ may be transacted by ‘E-voting’, where it is applicable to company;  ‘CSR Committee’ of a Company which is not required to have ‘independent director’ shall have two or more directors in its CSR Committee.
  • 11.
    HIGHLIGHTS OF COMPANIES(AMENDMENT) ACT, 2015 • Some of the important amendments made by the Companies (Amendment) Act, 2015 are: • Common Seal has been made optional. • No company shall declare dividend without setting off carried over previous year or years losses and depreciation against profits for the current year. • Reporting of fraud by the Auditor to Central Government in case amount exceeds prescribed amount (presently Rs. 1 crore or more). Thus, the principle of materiality has been introduced by specifying the amount. Frauds involving lower amounts shall be intimated to Audit Committee, wherever company is required to have one or the Board of Directors in other cases.
  • 12.
    SOME MAJOR DEVELOPMENTSHAVING A BEARING ON THE COMPANIES ACT, 2013 1. The Insolvency and Bankruptcy Code, 2016 (IBC) became operational with effect from November, 2016. The Insolvency and Bankruptcy Code, 2016 is the new bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. Secs. 304 to 323 (related to voluntary winding-up) of the Companies Act, 2013 have been omitted by the Insolvency and Bankruptcy Code, 2016 w.e.f. 15.11.2016. 2. National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have become operational. The powers which were earlier entrusted to the Company Law Board or Court in relation to companies are now with NCLT. Appeal against the order of NCLT can be made to NCLAT. 3. Serious Fraud Investigation Office (SFIO) has been given Statutory Recognition through Sec.211. SFIO is vested with requisite legal authority to conduct investigation.
  • 13.
    4. Secretarial Standards(SS) have been statutorily recognised. The revised SS-1 and SS- 2 became effective from Oct. 1, 2017. 5. The Finance Act, 2017 amended Sec. 182 related to Political Contribution and abolished limit on amount of political contribution by company. 6. Constitution of National Financial Reporting Authority (NFRA): Constitution of NFRA has been notified on 1st October, 2018. NFRA has been bestowed with significant powers in issuing authoritative pronouncements and also in regulating audit profession. 7. On-line Compliance Monitoring and e-adjudication launched: Ministry of Corporate Affairs (MCA) launched Compliance Monitoring System on November 6th, 2019. It works on artificial intelligence. It automatically detects the non-compliance by company and digitally sends Show Cause Notice to the defaulter company. The defaulting company is required to submit its reply within 15 days digitally via MCA CMS portal (https://mcacms.gov.in/#/). In case of non-reply, the Registrar of Companies would initiate the penal action against the company/director as mentioned in the Show Cause Notice.
  • 14.
    8. Test forIndependent Directors: According to Companies (Creation and Maintenance of data bank of Independent Directors) Rules, 2019, independent directors must qualify online proficiency self- assessment test conducted by the Indian Institute of Corporate Affairs (IICA), Manesar. The new rules are effective from December 1st, 2019. 9. Amendments in Schedule VII: Schedule VII prescribing list of activities on which money can be spent by the companies to which Sec. 135 relating to Corporate Social Responsibility (CSR) is applicable has been amended. By notification dated 26/05/2020 in item (VIII) of Schedule VII of the Companies Act, 2013 after the words “Prime Minister’s National Relief Fund” the words “Prime Minister’s Citizen Assistance and Relief in Emergency Situation Fund” (PM CARES FUND) have been inserted. 10. Measures taken in the light of COVID-19 and resultant lockdown: Due to COVID-19 and resultant lockdown, compliance timeline has been extended and certain exemptions also given. Conduct of Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) through Video Conferencing and Other Audio-Visual Means (OAVMs) is also allowed. It needs to be noted that these are temporary measures to deal with problems created by pandemic.
  • 15.
    LATEST UPDATE UNDERMCA FOR COMPANIES  The Ministry of Corporate Affairs department is launching a new set of 56 company forms in two separate lots on the MCA21 V3 portal in a continuous effort to serve you better. On 09th January 2023, 10 out of 56 forms were launched at 12:00 AM and 46 will be launched from 23rd January 2023.  Company Incorporation forms (Spice + Part A, Part B & RUN) were available for filing in V2 until Friday, January 6 at 12:00 p.m. Incorporated companies will be able to file these forms on the V3 Portal from 09th January 2023.  There are 45 forms remaining in V2 that could be filed until 06th January 11:59 PM. On 23rd January 2023, these forms will be available on the V3 portal.
  • 16.
    LIST OF 10COMPANY FORMS TO BE ROLLED OUT ON 9th Jan 2023 1. SPICe+ PART A Application for reservation of name for new company incorporation 2. RUN Application for change of name of existing company 3. SPIce+ PART B Integrated Company Incorporation Application 4. AGILE PRO S Application for Goods and services tax Identification number , employees state Insurance corporation registration pLus Employees provident fund organisation registration, Profession tax Registration, Opening of bank account and Shops and Establishment Registration 5. e-AOA[INC-34] Articles of Association 6. e-MOA[INC-13] Memorandum of Association 7. e-MOA[INC-31] Articles of Association 8. e-MOA[INC-33] Memorandum of Association 9. INC-9 Declaration by Subscribers and First Directors 10. URC-1 Application by a company for registration under section 366
  • 17.
    RELEASE PLAN OF45 COMPANY E-FORMS IN MCA 21 VERSION 3.0-REG. (GENERAL CIRCULAR NO. 01/2023) DATED - 09/01/2023  Ministry is in the process of introducing certain company e-Forms in MCA21 Version 3.0 and thus these e- Forms will not be available in MCA21 Version-2 from 07.01.2023 to 22.01.2023.  It has been decided by the Competent Authority to allow additional time of 15 days, without levying additional fees, to the stakeholders, in cases where the due dates for filing of these 45 e-Forms fall during the period between 07.01.2023 and 22.01.2023.  SR. NO. FORM NO. FORM NAME 1. DIR-12 Particulars of appointment of directors and the key managerial personnel and the changes among them 2. DIR-11 Notice of resignation of a director to the Registrar 3. DIR-3 Application for allotment of Director Identification Number
  • 18.
    4. DIR-3C Intimationof Director Identification Number by the company to the Registrar DIN services 5. DIR-5 Application for surrender of Director Identification Number 6. DIR-6 Intimation of change in particulars of Director to be given to the Central Government 7. INC-12 Application for grant of License to an existing company under section 8 8. INC-18 Application to Regional Director for conversion of section 8 company into any other kind of company 9. INC-20 Intimation to Registrar of revocation of license issued under section 8 10. INC-20A Declaration for commencement of business 11. INC-22 Notice of situation or change of situation of registered office 12. INC-23 Application to the Regional Director for approval to shift the Registered Office from one State to another state or from jurisdiction of one Registrar to another Registrar within the State 13. INC-24 Application for approval of Central Government for change of name 14. INC-27 Conversion of public company into private company or private company into public company or Conversion of Unlimited Liability Company into Limited Liability Company
  • 19.
    15. INC-28 Noticeof Order of the Court or any other competent authority 16. INC-4 One Person Company - Change in Member/ Nominee 17. INC-6 One Person Company - Conversion form 18. MGT-14 Filing of Resolutions and agreements to the Registrar under section 117 19. MR-1 Return of appointment of managing director or whole time director or manager 20. MR-2 Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to managing director or whole time director or manager and commission or remuneration to directors 21. NDH-4 Form for filing application for declaration as Nidhi Company or updation of status by Nidhis. 22. SH-7 Notice to Registrar of any alteration of share capital 23. SH-11 Return in respect of buy-back of securities 24. SH-8 Letter of Offer 25. SH-9 Declaration of Solvency 26. NDH-1 Return of Statutory Compliances 27. NDH-2 Application for extension of time 28. NDH-3 Return of Nidhi Company for the half year ended
  • 20.
    29. GNL-3 Particularsof person(s) charged for the purpose of sub-clause (iii) or (iv) of clause 60 of section 2 30. PAS-6 Reconciliation of Share Capital Audit Report (Half-yearly) 31. MGT-3 Notice of situation or change of situation or discontinuation of situation, of place where foreign register shall be kept 32. PAS-2 Information Memorandum 33. DIR-9 Report by the company to Registrar for disqualification of Directors 34. DIR-10 Application for removal of Disqualification of Directors 35. AOC-5 Notice of address at which bool<s of account are maintained 36. FC-1 Information to be filed by foreign company 37. FC-2 Return of alteration in the documents filed for registration by foreign company 38. FC-3 Annual accounts along with the list of all principal places of business in India established by foreign company 39. FC-4 Annual Return of a Foreign company 40. GNL-2 Form for submission of documents with the Registrar 41. GNL-4 Addendum to form 42. MSC-1 Application to ROC for obtaining the status of dormant company
  • 21.
    43. MSC-3 Returnof dormant companies 44. MSC-4 Application for seeking status of active company 45. RD-1 Form for filing application to Regional Director 46. PAS-3 Return of Allotment
  • 22.
    FILING OF FORMSGNL-2 AND MGT-14 (GENERAL CIRCULAR NO. 02/2023) DATED - 09/01/2023  Filing of Forms GNL-2 (filing of prospectus related documents) and MGT-14 (filing of Resolutions relating to prospectus related documents) due to migration from V2 Version to V3 Version in MCA 21 Portal from 7 th January, 2023 to 22nd January, 2023  The companies intending to file (i) Form GNL-2 (filing of prospectus related documents) and (ii) MGT-14 (filing of Resolutions relating to prospectus related documents) during 7th January, 2023 to 22nd January, 2023 on the MCA-21 Portal may file such Form in physical mode duly signed by the persons concerned as per requirements of the relevant forms, along with a copy thereof in electronic media, with the concerned Registrar without payment of fee and take acknowledgement thereof.  Such filing will be accompanied by an undertaking from the company that once the filing of such Form is enabled on the portal, the company shall file the relevant Form in electronic form on MCA-21 Portal along with fees payable as per Companies (Registration Offices and Fees) Rules, 2014.  No additional fees will be levied for the period during which the filing was disabled.
  • 23.
    COMPANIES(INCORPORATION) THIRD AMENDMENTRULES, 2022 • New Rule 25B under Section 12 of the Companies Act – Physical Verification of Registered Office of the Company • The Companies (Incorporation) Third Amendment Rules, 2022 were established by the government to ensure a clear procedure for the physical verification of registered addresses. • The MCA has added a new regulation 25B (Physical verification of the company’s registered office) after rule 25A. • Under the new guideline, ROC will physically inspect a company’s registered office in the presence of impartial witnesses . • During the physical verification, the Registrar will also need to take a photo of the registered office of the firm. • ROC will validate the Office’s existence by comparing it to copies of the supporting documents collected during the physical proof, which have been officially validated from the owner of the building. • A thorough report with detailed information, such as location details and pictures, will be prepared after completion of the verification. • If the Registered Office is determined to be incapable of accepting all notices, ROC will notify the Company and all Directors.
  • 24.
    MCA HAS ISSUEDA NOTIFICATION TO NOTIFY THE COMPANIES (ACCOUNTS) THIRD AMENDMENT RULES, 2022  Through this notification, MCA has once again extended the due date of filing Form CSR-2 for the financial year 2020- 2021 to June 30, 2022. Earlier this date was extended up to May 31, 2022 from March 31, 2022.  All companies which are eligible for CSR are required to file Form CSR-2 and shall ensure to file it separately for the preceding financial year i.e., 2020-2021, on or before May 31, 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as is applicable.  Further, it is notified that for the financial year 2021-2022 also, Form CSR-2 shall be filed separately on or before March 31, 2023 after filing Form AOC-4 or AOC-4 XBRL or AOC- NBFC (Ind AS), as the case may be.
  • 25.
    MCA HAS ISSUEDA NOTIFICATION TO NOTIFY THE COMPANIES (COMPROMISES, ARRANGEMENTS, AND AMALGAMATIONS) AMENDMENT RULES, 2022 • Through this amendment, MCA has added a new sub-rule 4 in Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to provide that in case of a compromise or an arrangement or merger or demerger between an Indian company and a company or body corporate which has been incorporated in a country which shares a land border with India, a declaration in Form No. CAA-16 shall be required at the stage of submission of an application under Section 230 of the Act. Accordingly, a new Form CAA – 16 is also notified which is to be signed by the authorised representative of the companies involved and a declaration to be provided that whether the company/body corporate is not required to obtain prior approval under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 or not. A copy of the approval is also required to be attached with the Form CAA-16.
  • 26.
    MCA HAS ISSUEDA CLARIFICATION W.R.T MICRO-FINANCE/MICRO CREDIT AS AN OBJECT IN THE OBJECT CLAUSE OF MOA OF SECTION 8 COMPANIES REGISTERED UNDER THE COMPANIES ACT, 2013.  MCA has been observed that various Section 8 companies are altering their object clause for carrying out micro-finance activities by way of passing Special Resolution, changing Activity code and subsequently filing of e-form MGT-14 with the concerned ROCs, even though at initial incorporation, the ROC (CRC) is not allowing Section 8 companies to get incorporated with the objects of microfinance activities in view of Ministry’s direction letter no. No. 05/33/2017-CL.V dated 10.02.2020 and letter dated 31.8.2020.  It is clarified that immediate action on the part of RoCs is required as per law, including changing their objects to prevent such companies from carrying out micro-finance activities.  Further, the Office of DGCoA shall ensure strict compliance by all the ROCs with the instructions contained in the letters issued earlier by the Ministry on this subject.  Further, the ROCs shall also circulate these directions to all the officers/officials to ensure examination in accordance with the law, while processing e-forms relating to Incorporation of Companies and Change in Objects of the MOA of Section 8 companies registered under the Companies Act, 2013.
  • 27.
    MCA HAS ISSUEDA NOTIFICATION TO NOTIFY THE COMPANIES (APPOINTMENT AND QUALIFICATION OF DIRECTORS) AMENDMENT RULES, 2022  MCA has tightened the norms for the appointment of any person, as director in an Indian Company, who is a national of a country that shares a land border with India.  Accordingly, in case the person seeking appointment is a national of a country that shares a land border with India, necessary security clearance from the Ministry of Home Affairs, the Government of India shall also be attached along with the consent.  Further, no application number shall be generated in case of the person applying for the Director Identification Number is a national of a country that shares a land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with an application for Director Identification Number.
  • 28.
    MCA HAS NOTIFIEDTHE COMPANIES (APPOINTMENT AND QUALIFICATION OF DIRECTORS) SECOND AMENDMENT, RULES,2022  The amendment is brought under Rule 6 which deals with compliances required by a person eligible and willing to restore his name in the independent director databank.  Accordingly, any individual whose name has been removed from the databank may apply for restoration of his name on payment of fees of one thousand rupees and the institute shall allow such restoration subject to the conditions, that his name shall be shown in a separate restored category for a period of one year from the date of restoration within which, he shall be required to pass the online proficiency self-assessment test and thereafter his name shall be included in the databank, only, if he passes the said online proficiency self- assessment test and in such case, the fees paid by him at the time of initial registration shall continue to be valid for the period for which the same was initially paid; and in case he fails to pass the online proficiency self-assessment test within one year from the date of restoration, his name shall be removed from the data bank and he shall be required to apply afresh for inclusion of his name in the databank.
  • 29.
    MCA HAS NOTIFIEDTHE COMPANIES (REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES) AMENDMENT RULES, 2022  The amendment brought the revisions to the procedure for striking off a company. Accordingly, where the Registrar, on examining the application made in Form STK-2, finds that it is necessary to call for further information or finds such application or any document annexed therewith is defective or incomplete in any respect, he shall inform the applicant to remove the defects and re-submit the complete Form within fifteen days from the date of such information, failing which the Registrar shall treat the Form as invalid in the electronic record, and shall inform the applicant.  After the re-submission of the Form or document, if the Registrar finds that the Form or document is defective or incomplete in any respect, he shall give the further time of fifteen days to remove such defects or complete the Form, failing which the Registrar shall treat the Form as invalid in the electronic record and shall inform the applicant, accordingly. Any re-submission of the application in Form STK-2 made prior to the commencement of the Companies (Removal of Names of Companies from the Register of Companies) Amendment Rules, 2022 shall not be counted for the purposes of reckoning the maximum number of re- submissions of such Form.
  • 30.
    MCA HAS NOTIFIEDTHE NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA) AMENDMENT RULES 2022  According to the National Financial Reporting Authority (NFRA) amendment rules 2022, Rule 13 is amended to provide the revised penalty provision for non-compliance or contravention with any of the provisions.  It is provided that any non-compliance or contravention with any of the provisions will attract a penalty of Rs 5,000/- and where the contravention is a continuing one, a further fine of Rs 500/- for every day during the period of contravention.  This applies to offenses for which the penalty is not specified elsewhere in the law. The rule has been amended to drop a reference to Section 450 of the Companies Act which specifies a cap of Rs 200,000/- in the case of a company and Rs 50,000/- for an officer in default or any other person for offenses that persist.
  • 31.
    AMENDMENTS IN SCHEDULEIII • The Ministry of Corporate Affairs, Government of India, issued notifications dated 24th March, 2021 to amend Schedule III to the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Companies (Audit and Auditors) Rule, 2014 to enhance the disclosures required to be made by the Company in its:- a. Financial Statements b. Board Report c. Audit Report • By these amendments MCA is increasing stringency in compliance and adding numerous additional disclosures in Financial Statement, Directors Report and Audit Report.
  • 32.
    Shareholders holding morethan 5% shares The companies shall disclose the shareholding of those shareholders including promotors who hold more than 5% shares in the company during the particular financial year. Promotors holding The companies shall disclose the shareholding of the promotors irrespective of their holdings in the company. Rounding Off Earlier companies had to round off the figures appearing in the financial statements based on “turnover”; however, based on the latest amendment rounding off will be based on the “total income” of the given company. Total Income Rounding Off Less than 100 Crore Rupees To the nearest hundreds, thousands, lakhs or millions or decimals thereof 100 Crore Rupees or more To the nearest lakhs, millions or crores, or decimals thereof
  • 33.
  • 34.
  • 35.
    LOANS & ADVANCESTO DIRECTORS/ KMP/ RELATED PARTIES • Details of Loans & advances to Directors/KMP/Related Parties either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment
  • 36.
    DETAILS OF BENAMIPROPERTY (IF ANY) • Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following:- (a) Details of such property, including year of acquisition, (b) Amount thereof, (c) Details of Beneficiaries, (d) If property is in the books, then reference to the item in the Balance Sheet, (e) If property is not in the books, then the fact shall be stated with reasons, (f) Where there are proceedings against the company under this law as an abettor of the transaction or as the transferor then the details shall be provided, (g) Nature of proceedings, status of same and company‘s view on same.
  • 37.
    TITLE DEEDS OFIMMOVABLE PROPERTY NOT HELD IN THE NAME OF THE COMPANY • Details of immovable property not held in company name (other than lease where company is lessee)
  • 38.
    Ratios to beDisclosed Current Ratio, Debt-Equity Ratio, Debt Service Coverage Ratio, Return on Equity Ratio, Inventory turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio, Net Capital Turnover Ratio, Net Profit Ratio, Return on Capital Employed, Return on Investment. Borrowings From Banks & FI 1. Where the company has borrowed funds from banks/FI (being current assets as collateral security), the company needs to disclose whether quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts and if not, summary of reconciliation and reasons of material discrepancies, if any to be adequately disclosed. 2. Where the company has not used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date, the company shall disclose the details of where they have been used
  • 39.
    FOREIGN EXCHANGE EARNINGS Earningsin foreign exchange shall be classified under the following heads, namely:— a. Export of goods calculated on FOB basis b. Royalty, know-how, professional and consultation fees, c. Interest and dividend d. Other income, indicating the nature thereof.
  • 40.
    UNDISCLOSED INCOME The Companyshall give details of any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), unless there is immunity for disclosure under any scheme and also shall state whether the previously unrecorded income and related assets have been properly recorded in the books of account during the year.
  • 41.
    REVALUATION OF PLANT,PROPERTY AND EQUIPMENT Where the Plant, Property or Equipment has been revalued, the details of the same needs to be mentioned in the Auditor’s report. Also whether the same has been done from a registered valuer or not.
  • 42.
    WILFUL DEFAULTER Wilful Defaulter: Wherea company is a declared wilful defaulter by any bank or financial Institution or other lender, following details shall be given: a. Date of declaration as wilful defaulter b. Details of defaults (amount and nature of defaults) c. “Wilful Defaulter” here means a person or an issuer who or which is categorized as a willful defaulter by any bank or financial institution (as defined under the Act) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India
  • 43.
    TRANSACTIONS WITH STRUCKOFF COMPANIES • Relationship with Struck off Companies: Where the company has any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, the Company shall disclose the following details: Name of struck off Company Nature of transactions with struck-off Company Balance outstanding Relationship with the Struck off company, if any, to be disclosed Investments in securities Receivables Payables Shares held by stuck off company Other outstanding balances (to be specified)
  • 44.
    SCHEME OF ARRANGEMENT Incase a scheme of arrangement has been approved, relevant disclosure has to be made, such as: The effect of such arrangement on the books of accounts of the company. If there is any deviation from the accounting standards while giving effect to the scheme, the reasons for such deviation have to be explained
  • 45.
    BRIEF SUMMARY OFAMENDMENTS IN SCHEDULE III Before Amendment After Amendment Round off to be computed On Turnover Round off to be computed On Total Income Non–Current Assets: to include Fixed Assets with sub-leading i) Tangible Assets and ii) Intangible Assets Non–Current Assets: to include Property, Plant and Equipment and Intangible Assets with sub- leading i) Property, Plant and Equipment and ii) Intangible Assets Securities premium Reserve Reserve word has been deleted and therefore its only called Securities Premium Under the heading Other Current Liabilities the amounts classified as Current maturities of long term debts Current Maturities of long term borrowings shall be disclosed separately under Short Borrowings Securities Deposits were under Long Term Loans and Advances Securities Deposits are under other Non current Assets
  • 46.
    Before Amendment AfterAmendment Under classification of property, plant and equipment A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. Under classification of property, plant and equipment A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment) and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately Under Classification of intangible assets A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately. Under Classification of intangible assets A reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation if change is 10% or more in the aggregate of the net carrying value of each class of Intangible assets and other adjustments and the related depreciation and impairment losses/reversals shall be disclosed separately
  • 47.
    AMENDMENTS IN SCHEDULEIII - IN ACCORDANCE WITH IND AS General Amendments • Amendment brought to include the format and general instructions for preparation of balance sheet by a Company to which Ind AS applies • Revised Schedule III does not permit companies to avail of the option of presenting assets and liabilities in the order of liquidity, as provided by Ind AS 1, Presentation of Financial Statements • Companies to apply revised Schedule III from the transition date.
  • 48.
    Balance Sheet –Amendments Following line items to be shown under equity on the face of the balance sheet: i) Equity share capital, and ii) other equity Word “Property, Plant and Equipment” to be used instead of “Tangible Assets”. Provision word to be used . However the Short Term Provisions/ Long Term Provisions will still be shown in Current/ Non Current Liabilities. Following to be shown separately on the face of the balance sheet : 1. Goodwill 2. Investment Property 3. Intangible assets under development 4. Biological Assets other than bearer plants 5. Financial Assets( Bifurcated into (i) Investments, (ii) Trade receivables, (iii) Loans, (iv) Others ) 6. Financial Liabilities ( Bifurcated into (i) Borrowings, (ii) Trade payable, (iii) Other financial liabilities ).
  • 49.
    Statement of Profit& Loss A/C - Amendments Other Comprehensive income details to be added in the statement of profit and loss as follows: A (i) Items that will not be reclassified to profit or loss (ii) Income tax relating to items that will not be reclassified to profit or loss B (i) Items that will be reclassified to profit or loss (ii) Income tax relating to items that will be reclassified to profit or loss Total Comprehensive Income for the period to be shown.
  • 50.
  • 53.
    Notes to Accounts- Amendments 1. Classification of PPE in the notes: • Land • Buildings • Plant and Equipment • Furniture and Fixtures • Vehicles • Office equipment • Bearer Plants • Others (specify nature) 2. Reconciliation of Changes in Investment Property, goodwill and Biological Assets other than bearer plant to be given separately. 3. Bank deposits with more than 12 months maturity shall be disclosed under 'Other financial assets 4. Materiality limit increased to 1% of turnover or Rs. 10 Lacs whichever is higher.
  • 54.
    FEW IMPORTANT PROVISIONSOF COMPANIES ACT, 2013 AMENDED FROM TIME TO TIME
  • 55.
    SECTION 2(6) ASSOCIATECOMPANY • “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. • Explanation.—For the purposes of this clause, ―significant influence means control of at least twenty percent. of total share capital, or of business decisions under an agreement; • The expression “joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. • Shares held in fiduciary capacity shall not be counted for the purpose of determining the relationship of associate company.(General Circular No. 20/2013 dated 27/12/2013) • Examples – 1) B Ltd is a subsidiary of A Ltd 2) A Ltd Holds 40% shares in B Ltd 3) All directors of A Ltd are on Board of B Ltd 4) C Ltd is a joint venture Company of A Ltd and B Ltd 5) A Ltd is holding shares in B Ltd in Fiduciary Capacity. • Which all are Associate company from the above?
  • 56.
    • “financial year”,in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: • Provided that where a company or body corporate, which is a holding company or a subsidiary or associate company of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Central Government may, on an application made by that company or body corporate in such form and manner as may be prescribed, allow any period as its financial year, whether or not that period is a year: Provided further that any application pending before the Tribunal as on the date of commencement of the Companies (Amendment) Ordinance, 2019, shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement • Provided also that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause SECTION 2(41) FINANCIAL YEAR
  • 57.
    SECTION 2(51) KEYMANAGERIAL PERSONNEL • "key managerial personnel in relation to a company, means- (i) the Chief Executive Officer or the managing director or the manager, (ii) the company secretary, (iii) the whole-time director; (iv) the Chief Financial Officer, (v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and (vi) such other officer as may be prescribed; FAQ Mr. J is the HR head of the Company who is being appointed in the Board Meeting of the Company. Whether he will be considered as a Key Managerial Personnel ("KMP’’)? As per above clause (v) of the definition, the Board can designate any senior whole time employee of the Company other than CEO, MD, Manager, CS, WTD and CFO as the KMP. Therefore, it can be inferred that Mr. J. HR head of the Company, who is being appointed in the Board Meeting of the Company can be a KMP only if he is in whole-time employment working on one level be- low the Directors and if he is designated as KMP by the Board.
  • 58.
    SECTION 2(57) NETWORTH • net worth means the aggregate value of the paid-up share capital and all reserves created out of the profits ", securities premium account and debit or credit balance of profit and loss ac count,Jafter deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation; • FAQ While calculating the Net Worth of the Company, whether Capital Reserve or Free Reserve or both are made part of Reserves? Since, Capital Reserve is generally created from revaluation of assets, therefore it shall not be in- cluded while calculating Net Worth of the Company. Only free reserves shall be taken into con- sideration for purpose of Reserves.
  • 59.
    SECTION 2(68) PRIVATECOMPANY • private company means a company having a minimum paid-up share capital as may be prescribed, and which by its articles.- (i) restricts the right to transfer its shares (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that- (A) persons who are in the employment of the company; and (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company.
  • 60.
    • What isthe minimum paid up capital required for a Private/Public Company? There is no requirement of minimum paid up capital for a private company / public company p suant to Companies (Amendment) Act, 2015 vide Notification No. E No. 1/6/2015-CL..V. dated 29th May, 2015 • Ashiana Pvt. Ltd. is a wholly owned subsidiary of Bada Ashiana Ltd., whether Ashiana Pvt.Ltd. is allowed to avail exemptions provided to a Private Companies? Whether its states will change if Bada Ashiana Ltd. holds only 5% shares in Ashiana Pvt. Ltd.? As per proviso to Section 2(71) a private company which is a subsidiary of a public company will be deemed to be a public company. As in this case, Ashiana Pvt. Ltd. is subsidiary of Bada Ashiana Ltd., which is a public company, therefore, Ashiana Pvt. Ltd. will be deemed to be a public company and will not be allowed to avail exemptions provided to a private company. Where Bada Ashiana Ltd. holds only 5% shares in Ashiana Pvt. Ltd., Ashiana Pvt. Ltd. will be able to avail exemptions provided to a private company. • If a Private Company becomes a subsidiary of a Public Company, whether such Private Company is required to increase its directors to a minimum of 3 directors and its members to a minimum of 7 members? As per the proviso to Section 2(71), a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles. As per Section 3(1), a company may be formed for any lawful purpose by seven or more persons , where the company to be formed is to be a public company. As per Section 149 (1), every company shall have a Board of Directors consisting of individuals as directors and shall have a minimum number of three directors in the case of a public company. Therefore, if a private company becomes subsidiary of a public company, then it will have to comply with all the provisions of the Act as if it were a public company (including compliance with the requirement of having minimum 3 directors and minimum 7 members). Further, it may be inferred that it will not be necessary for such private company to change its articles or convert it self to a public company.
  • 61.
    SECTION 2(71) PUBLICCOMPANY • "public company" means a company which- (a) is not a private company; and (b) has a minimum paid-up share capital, as may be prescribed : Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles;
  • 62.
    SECTION 2(85) SMALLCOMPANY • “small company‘‘ means a company, other than a public company,— (i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than Ten crore rupees; and (ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed Two crore rupees or such higher amount as may be prescribed which shall not be more than One Hundred crore rupees: • Provided that nothing in this clause shall apply to— • (A) a holding company or a subsidiary company; • (B) a company registered under section 8; or • (C) a company or body corporate governed by any special Act
  • 63.
    SECTION 2(87) SUBSIDIARYCOMPANY “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means 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 voting power 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. • Explanation.-For the purposes of this clause,- (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub- clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company's Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression "company" includes any body corporate; (d) "layer" in relation to a holding company means its subsidiary or subsidiaries;
  • 64.
    RESERVATION OF COMPANYNAME • Reserve Unique Name (RUN) is a web service used for reserving a name for a new company or for changing its existing name. The web service helps you verify whether the name you’ve chosen for your company is unique. Before the RUN web-form was introduced, all applications concerning company names were to be made in the Form INC-1. • The names were to be accompanied with a minimum of 2 Director Identification Number and 1 Digital Signature. Today with the introduction of the RUN web-form, a company name can be reserved easily without the requirement of a digital signature. • The validity of the reserved Company names The Central Registration Centre (CRC) may on the basis of information and documents provided, reserve the name for a period of: • 20 days from the date of approval if in case the name is being reserved for a new company. • 60 days from the date of approval if in case of it includes a change in the name of an existing company.
  • 65.
    COMPANIES ( INCORPORATION) RULES, 2014 • Insertion of New Rule 9A and its impact MCA inserted new rule 9A and through this new rule MCA provided the opportunity for reserving name beyond 20 days, if required, subject to condition and payment of fees. Case Number Extension beyond 20 days in days Total Days for name reservation after extension Amount to be paid in addition of Rs. 1000 When to apply 1 20 Days 40 (20 days+20 days) Rupees One Thousand Before the expiry of 20 days from date of approval 2 40 Days 60 (20 days+20 days + 20 days) Rupees Two Thousand Before the expiry of 40 days from date of approval 3 40 Days 60 (20 days +40 days) Three Thousand Before the expiry of 20 days from date of approval
  • 66.
    SECTION 10A COMMENCEMENTOF BUSINESS, ETC • 10A.(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless • (a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and • (b) the company has filed with the Registrar a verification of its registered office as provided in subsection (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 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.
  • 67.
    SECTION 16 RECTIFICATIONOF NAME OF COMPANY • (1) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which,-(a) in the opinion of the "[Central Government), is identical with or too nearly resembles the name by which a company in existence had been previously registered, whether under this Act or any previous company law, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose; • (b) on an application by a registered proprietor of a trade mark that the name is identical with or too nearly resembles to a registered trade mark of such proprietor under the Trade Marks Act, 1999 (47 of 1999), made to the Central Government within three years of incorporation or registration or change of name of the company, whether un- der this Act or any previous company law, in the opinion of the Central Government, is identical with or too nearly resembles to an existing trade mark, it may direct the company to change its name and the company shall change its name or new name, as the case may be, within a period of three months from the issue of such direction, after adopting an ordinary resolution for the purpose. 2) Where a company changes its name or obtains a new name under sub-section (1), it shall within a period of fifteen days from the date of such change, give notice of the change to the Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation and the memorandum. (3) If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be pre- scribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter : Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of section 13.
  • 68.
    • Substitution ofnew section for section 42. For section 42 of the principal Act, the following section shall be substituted, namely:— Issue of shares on private placement basis. ’42. • (1) A company may, subject to the provisions of this section, make a private placement of securities. • (2) A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as “identified persons”), whose number shall not exceed fifty or such higher number as may be prescribed [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62, in a financial year subject to such conditions as may be prescribed. • (3) A company making private placement shall issue private placement offer and application in such form and manner as may be prescribed to identified persons, whose names and addresses are recorded by the company in such manner as may be prescribed: Provided that the private placement offer and application shall not carry any right of renunciation. • (4) Every identified person willing to subscribe to the private placement issue shall apply in the private placement and application issued to such person along with subscription money paid either by cheque or demand draft or other banking channel and not by cash: Provided that a company shall not utilise monies raised through private placement unless allotment is made and the return of allotment is filed with the Registrar in accordance with sub-section (8). • (5) No fresh offer or invitation under this section shall be made unless the allotments with respect to any offer or invitation made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company: Provided that, subject to the maximum number of identified persons under sub-section (2), a company may, at any time, make more than one issue of securities to such class of identified persons as may be prescribed.
  • 69.
    • . (6)A company making an offer or invitation under this section shall allot its securities within sixty days from the date of receipt of the application money for such securities and if the company is not able to allot the securities within that period, it shall repay the application money to the subscribers within fifteen days from the expiry of sixty days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of twelve per cent. per annum from the expiry of the sixtieth day: Provided that monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than— (a) for adjustment against allotment of securities; or (b) for the repayment of monies where the company is unable to allot securities. • (7) No company issuing securities under this section shall release any public advertisements or utilise any media, marketing or distribution channels or agents to inform the public at large about such an issue. • (8) A company making any allotment of securities under this section, shall file with the Registrar a return of allotment within fifteen days from the date of the allotment in such manner as may be prescribed, including a complete list of all allottees, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed. • (9) If a company defaults in filing the return of allotment within the period prescribed under sub-section (8), the company, its promoters and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakh rupees. • (10) Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. • (11) Notwithstanding anything contained in sub-section (9) and sub-section (10), any private placement issue not made in compliance of the provisions of sub- section (2) shall be deemed to be a public offer and all the provisions of this Act and the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992 shall be applicable
  • 70.
    SECTION 78- APPLICATIONFOR REGISTRATION OF CHARGE • Application for registration of charge.—Where a company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, 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 fees or additional fees paid by him to the Registrar for the purpose of registration of charge.
  • 71.
    SECTION 82 –COMPANY TO REPORT SATISFACTION OF CHARGE • (1) A company shall give intimation to the Registrar in the prescribed form, of the payment or satisfaction in full of any charge registered under this Chapter within a period of thirty days from the date of such payment or satisfaction. Provided that in case of a Specified IFSC public company, the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed. Provided that in case of a Specified IFSC private company, the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed. Provided that the Registrar may, on an application by the company or the charge holder, al- low such intimation of payment or satisfaction to be made within a period of three hundred days of such payment or satisfaction on payment of such additional fees as may be prescribed (2) The Registrar shall, on receipt of intimation under sub-section (1), cause a notice to be sent to the holder of the charge calling upon him to show cause within such time not exceeding four- teen days, as may be specified in such notice, as to why payment or satisfaction in full should not be recorded as intimated to the Registrar, and if no cause is shown, by such holder of the charge, the Registrar shall order that a memorandum of satisfaction shall be entered in the register of charges kept by him under section 81 and shall inform the company that he has done so: Provided that the notice referred to in this sub-section shall not be required to be sent, in case the intimation to the Registrar in this regard is in the specified form and signed by the holder of charge. (3) If any cause is shown, the Registrar shall record a note to that effect in the register of charges and shall inform the company. (4) Nothing in this section shall be deemed to affect the powers of the Registrar to make an entry in the register of charges under section 83 or otherwise than on receipt of an intimation from the company.
  • 72.
    SECTION 87 –RECTIFICATION BY CENTRAL GOVERNMENT IN REGISTER OF CHARGES • Rectification by Central Government in Register of charges. The Central Government on being satisfied that - (a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter; or (b) the omission or misstatement of any particulars, in any filing previously made to the Registrar with respect to any charge or modification thereof or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83, was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company, it may, on the application of the company or any person interested and on such terms and conditions as it deems just and expedient, direct that the time for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or misstatement shall be rectified.
  • 73.
    SECTION 100 –CALLING OF EXTRAORDINARY GENERAL MEETING 1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company. Provided that in case of a Specified IFSC public company, the Board may subject to the con- sent of all the shareholders, convene its extraordinary general meeting at any place within or outside India. Provided that in case of a Specified IFSC private company, the Board may subject to the consent of all the shareholders, convene its extraordinary general meeting at any place within or outside India. Provided that an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India. (2) The Board shall, at the requisition made by,- (a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting: (b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in sub-section (4). (3) The requisition made under sub-section (2) shall set out the matters for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company. (4) If the Board does not, within twenty-one days from the date of receipt of a valid requisiotion in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitionists themselves within a period of three months from the date of the requisition. (5) A meeting under sub-section (4) by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board. (6) Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.
  • 74.
    SECTION 101 –NOTICE OF MEETING • A general meeting of a company may be called by giving not less than clear twenty-one days‘ notice either in writing or through electronic mode in such manner as may be prescribed: “Provided that a general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto— (i) in the case of an annual general meeting, by not less than ninty-five per cent. of the members entitled to vote thereat; and (ii) in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or (b) having, if the company has no share capital, not less than ninty-five per cent. of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub-section in respect of the former resolution or resolutions and not in respect of the latter 2) Every notice of a meeting shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting. (3) The notice of every meeting of the company shall be given to- (a) every member of the company, legal representative of any deceased member of assignee of an insolvent member; (b) the auditor or auditors of the company; and (c) every director of the company. (4) Any accidental omission to give notice to, or the non-receipt of such notice by, any member or other person who is entitled to such notice for any meeting shall not invalidate the proceedings of the meeting.
  • 75.
    SECTION 135 –CORPORATE SOCIAL RESPONSIBILITY • (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during "the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors • (2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee. • (3) The Corporate Social Responsibility Committee shall,- (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company in areas or subject, specified in Schedule VII): (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (0), and (c) monitor the Corporate Social Responsibility Policy of the company from time to time. • (4) The Board of every company referred to in sub-section (1) shall,- (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.
  • 76.
    (5) The Boardof every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years for where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years), in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities Provided further that if the company fails to spend such amount, the Board shall, in its re made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending amount and, unless the unspent amount relates to any ongoing project referred to sub-section (6), transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year. Provided also that if the company spends an amount in excess of the requirements pro ed under this sub-section, such company may set off such excess amount against the requirement to spend under this sub-section for such number of succeeding financial years and in s manner, as may be prescribed. Explanation.-For the purposes of this section profit" shall not include such sums o may be prescribed, and shall be calculated in accordance with the provisions of section 198)
  • 77.
    (6) Any amountremaining unspent under sub-section (5), pursuant to any ongoing project fulfilling such conditions as may be prescribed, undertaken by a company in pursuance d Corporate Social Responsibility Policy, shall be transferred by the company within a period thirty days from the end of the financial year to a special account to be opened by the comp in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the company in pursuance its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a fund specified in Schedule VII, within a period of thirty days from the date of completion of the thing financial year. (7) If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to b transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Un spent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less (8) The Central Government may give such general or special directions to a company or class of companies as it considers necessary to ensure compliance of provisions of this section and such company or class of companies shall comply with such directions 9) Where the amount to be spent by a company under sub-section (5) does not exceed fif- lakh rupees, the requirement under sub- section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company
  • 78.
    SECTION 153 –APPLICATION FOR ALLOTMENT OF DIRECTOR IDENTIFICATION NUMBER • Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. • “Provided that the Central Government may prescribe any identification number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed.”.
  • 79.
    SECTION 160 –RIGHT OF PERSONS OTHER THAN RETIRING DIRECTORS TO STAND FOR DIRECTORSHIP • (1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty- five per cent. of total valid votes cast either on show of hands or on poll on such resolution. ‘‘Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the Nomination and Remuneration Committee, if any, constituted under sub-section (1) of section 178 or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee.”. • (2) The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in such manner as may be prescribed.
  • 80.
    SECTION 164 –DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR • (1) A person shall not be eligible for appointment as a director of a company, if (a) he is of unsound mind and stands so declared by a competent court, (b) he is an undischarged insolvent; (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, 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 com 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 the payment of the call; (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. (i) he has not complied with the provisions of sub-section (1) of section 165
  • 81.
    • (2) Noperson who is or has been a director of a company which- (a) has not filed financial statements or annual returns for any continuous period of three financial years; or (b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment. • (3) A private company may by its articles provide for any disqualifications for appointment asa director in addition to those specified in sub-sections (1) and (2):Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification
  • 82.
    Sr.N o Date of OrderName of persons/entities to whom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 1. 29.08.2022 Centella Solutions Private Limited Section 137- Copy of Financial statement to be filed to Registrar 553 days Company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, any other director who is charge by the Board shall be subject to a penalty, of ten 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 fifty thousand rupees. Rs. 65,300 on the company and Rs, 1,95,900 on officer in default 2. 20.07.2022 TR Infrastructure & Developers Private Limited Section 92(4)-Non- filing of Annual Return & Section 137- Copy of Financial statement to be filed by Registrar 957 days in case of section 92 and 987 days in case of Section 137 In case of Section 92: Company not less than Rs. 50,000 to Rs. 5 lakhs and every officer default- imprisonment upto 6 months or fine Rs. 50,000 upto Rs. 5 lakhs or both In case of Section 137: Company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, any other director who is charge by the Board shall be subject to a penalty, of ten 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 fifty thousand rupees. In case of Section 92(4): On company Rs. 1,45,700 and Rs. 1,45,700 on each director In case of Section 137: Rs. 9,67,000 on company and Rs. 1,98,700 on each director. ILLUSTRATIVE ADJUDICATON ORDERS PASSED BY ADJUDICATING OFFICER
  • 83.
    Sr.No Date of Order Nameof persons/entities to whom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 3. 17.03.202 2 Tablespace Technologies Private Limited Section 88 of Companies Act, 2013- Non- maintenance of Register of Members - Rs. 3 Lakhs on the company and Rs. 50 thousand on every officer who is in default Rs. 3,50,000 on the Company and on every officer in default as per their term of holding of office during the default. 4. 21.10.202 1 Gears Mobility Systems Private Limited Section 117(2) of Companies Act,2013- Resolutions and Agreements to be filed 32 Days Rs. 1 Lakh and in case of continuing failure further penalty of Rs. 500 for each day after the first during which the failure continues and every officer in default Rs. 50,000 and in case of continuing default , further penalty of Rs. 500 for each day after the first during which the failure continues subject to a penalty of Rs. 5 Lakh Rs. 3,14,000 on the Company and on every officer in default as per their term of holding of office during the default.
  • 84.
    Sr. No Date of Order Name ofApplicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 5. 12.05.202 1 M/s Baba Resorts Private Limited Mr.Kripal Singh Mr. Vikram Sharma Mr. Dharam Pal Singh Mr, Navneet Singh Section 12(1)- Non maintenance of registered office 32 days Rs.1000 per day for Company and every officer of the Company who is in default Rs. 32000 each on the Company and every officer who is in default 6. 20.04.202 1 Orind Steels Limited Mr. Kashi Jhunjhunwala Mr. Kanhaiya Lal Murarka Mr. Sanjay Kumar Murarka Mr. Ashok Kumar Murarka Mr.Bhaskar Chandra Sethi Mr. Gaurav Kumar Das Section 203(1)- Non appointment of KMP and Company Secretary KMP- 02.011.2019 to 31.10.2019 CS- 02.11.2018 TO 30.09.2019 and again from1.06.2020 to 23.03.2021 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 10 lakhs on the Company and on every officer in default as per their term of holding of office during the default.
  • 85.
    Sr.No Date ofOrder Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 7. 07.04.2021 Avanotr Performance materials India Limited Mr. Devashish Ohri Mr. Dheeraj Tiwari Mr. Siddhartha Agarwal Section 92- Non filing of Annual Return 31 days Rs.50000 and in case of continuing offence Rs. 100 each day for company and every officer of the company who is in default No penalty imposed as th company filed the form prior to the issue of notice by adjudicating officer. 8. 06.04.2021 Karmabhoomi Real Estate Limited Mr. Sardar Singh Mr. Manoj Senger Mr. Mahipal Singh Section 12(1)- Non maintenance of registered office More than a year Rs.1000 per day but not exceeding one lakh rupees for Company and every officer of the Company who is in default Rs. 100000 each on the Company and every office who is in default 9. 26.02.2021 Ranaul Machinery Private Limited Section 12(1)-Non maintenance of registered office of the Company More than a year Rs.1000 per day but not exceeding one lakh rupees for Company and every officer of the Company who is in default Rs. 1,00,000 on the Company and officer in default 10. 15.02.2021 Quadgen Wireless Solutions Private Limited Section 203-Non- Appointment of Key Managerial Personnel and Company Secretary 187 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 1,25,000 on officer in default
  • 86.
    ILLSUTRATIVE ADJUDICATION ORDERSPASSED BY REGIONAL DIRECTOR Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 1. 21.07.2022 Bright Laundry and Housekeeping Private Limited Parakh Jain Vinay Deria Section 12- Register office of the Company 02.07.2020- 20.07.2021 Company and Every officer in default be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees. Rs. 1,00,000 on Rs. 10,000 on every officer in default. Rs. 10,000 on company and Rs. 10,000 on every officer in default. 2. 28.01.2022 Kirloskar Integrated Technologies Private Limited Section 203- Appointment of Key Managerial Personnel 325 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 5,00,000 on the company Rs. 20,64,000 director, Key Managerial Personnel. Rs. 1,00,000on the Company and Rs. 4,12,800 on Director and Key Managerial Personnel 3. 03.02.2022 Sogefi ADM Suspensions Private Limited Section 203(1)&(4)- Appointment of Key Managerial Personnel 304 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 Rs. 5 lakhs on the Company and Rs. 8,57,000 on officer in default Rs. 1 lakh on the company and Rs. 1,71,400 on officer in default
  • 87.
    ILLSUTRATIVE ADJUDICATION ORDERSPASSED BY REGIONAL DIRECTOR Sr. No Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 4. 07.01.2022 Angala Enterprises Limited Shri. Kumar Shanmugasundaram Nadimuthu Section 203- Appointment of Key Managerial Personnel 61 days Company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupess Rs. 5 lakh on the company and Rs. 1,11,000 on the Director Rs. 50,000 for the Company and Rs. 12,000 on the director 5. 26.02.2021 Gaffino resorts and motels private limited Section 92- Non filing of Annual return for the year 2018 Section 137- Non filing of Financial Statements 133 days in case of Financial Statements 104 days in case of Annual return Section 92- Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Section 137- Rs 1 lakh on company and every officer in default and in case on continuing offence Rs. 100 per day, subject to maximum of Rs. 5 lakhs Section 92- Rs. 604000 on the Company and on every officer in default Section 137- Rs. 133000 on the Company and Rs. 60400 on every officer in default Section 92- Rs.12080 on company and every officer in default Section 137 Rs. 26600 on the Company and Rs. 22660 on every officer of the Company in default 6. 12.02.2021 Tokyo Finance Limited Section 203 11.08.2017- 26.02.2019 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs.5 lakh on the Company and Rs. 167000 on officer of the Company Rs. 125000 on the Company and Rs. 11750 on the officer of the Company
  • 88.
    Sr. No Date of Order Name of Applicants Violationof provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 7. 12.02.2021 CF Pharmaceutica ls Limited Section 92- Non filing of Annual Return 30.11.2015- 05.10.2017 Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Rs. 117400 on the Company and every officer in default Rs. 11740 on the Company and every officer in default 8. 27.01.2021 M/s Jivrom Technologies Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencem ent of business Delay of 56 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 56000 on officer in default of the Company Rs. 15000 on the Company and Rs. 12500 on officer in default of the Company
  • 89.
    No Order Applicantsprovision of CA, 1956/2013 violation provision of the Act imposed by Adjudicating officer Imposed by R 9. 07.01.2022 Gopuram Enterprises Limited Section 203- Appointment of Key Managerial and Company Secretary 94 days Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 5 lakhs on the Company and Rs. 1,44,000 on director Rs. 50,000 o the Company and Rs. 15000 on Director 10. 20.072021 KHB Infra Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencem ent of business 170 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 1,00,000 on director of the Company Rs. 50000 on the Company and Rs. 1,00,000 on director of the Company
  • 90.
    JUDGMENT OF NATIONALCOMPANY LAW APPELLATE TRIBUNAL, NEW DELHI • Registrar of Companies, West Bengal v/s Sabyasachi Bagchi • Brief Facts of this case are that Respondent Sabyasachi Bagchi was holding Directorship of 17 Companies on 01.04.2014 when section 165 (1) of the Act, came into force. However, he vacated directorship of three companies during the period of 01.04.2014 to 31.03.2015. After receipt of the notice from Appellant the Respondent has resigned from the Directorship of four Companies on 22.02.2016, thus, the Respondent has contravened the provisions of Section 165(1) of the Act, for a period of 01.04.2015 to 21.02.2016 i.e. 326 days. The reply of Respondent to show cause notice found unsatisfactory, therefore, the Appellant filed a complaint under Section 165 (6) of the Act, against the Respondent before Chief Metropolitan Magistrate, Kolkata. During the pendency of the Prosecution, Respondent filed an Application under Section 441(1) of the Act, before the National Company Law Tribunal, Kolkata (in brief Tribunal) for compounding the offence. The Appellant, ROC West Bengal, filed his report on compounding application before the Tribunal. After hearing the parties Learned Tribunal allowed the Application subject to payment of compounding fees Rs. 25,000/- within 15 days from the date of order.
  • 91.
    • Learned CompanyProsecutor appearing on behalf of the Appellant submitted that the Respondent has accepted that he contravened the provisions of 165 (1) of the Act, for a period of 01.04.2015 to 21.02.2016 i.e. 326 days. However, in the impugned order the period of default is shown 21 days only and Learned Tribunal has imposed compounding fees of Rs. 25,000/-. The Tribunal has ignored the provisions of sub-Section 6 of Section 165 of the Act, and directed to deposit compounding fees less than a minimum prescribed for the offence. The Tribunal has no jurisdiction to reduce the fine less than the minimum prescribed for the offence. For this purpose, he placed reliance on the order of this Tribunal in the case of Company Appeal (AT) No. 249/2018 Registrar of Companies cum Official Liquidator Vs. Gyan Chandra Agarwal order dated 12.09.2018. it is further, submitted that the Tribunal should have imposed minimum compounding fees i.e. Rs. 5,000/- per day for default to be continued 326 days amounting to Rs. 16,30,000/-. Thus, the order is liable to be set aside and Respondent be directed to deposit remaining compounding fees. • The Respondent has contravened the provisions of 165(1) of the Act, which is punishable under Sub-Section 6 of Section 165 of the Act. Taking into consideration, the facts and circumstances of the case, we impose minimum fine at the rate of five thousand rupees for every day for the period 01.04.2015 to 21.02.2016 i.e. 326 days. We quantified penalty to Rs. 16,30,000/-. The Respondent has already paid Rs. 25,000/- after adjustment, now he is liable to pay Rs. 16,05,000/-. Therefore, the Respondent is directed to pay such amount within a period of 60 days in National Company Law Tribunal, Kolkata. The Registrar of Companies will ensure compliance of the order.
  • 92.
    JUDGMENT OF NATIONALCOMPANY LAW APPELLATE TRIBUNAL • Quinn Logistics India Private Limited v/s ROC, • Ld. Tribunal held that the Appellant Company and its directors are liable to be penalized under Section 168 of Companies Act, 1956 for the violation of Section 166 of the Companies Act, 1956 the violation continued up to 31.03.2014 thereafter, they are liable to be penalized under Section 99 of Companies Act 2013 for violation of the Sub-Section (1) Section 96 of the Companies Act, 2013 with effect from 01.04.2014. Ld. Tribunal after hearing the parties allowed the Compounding Applications subject to pay the penalty as indicated above. Being aggrieved with this order, Appellants filed this Appeal. • Depending on nature of offence and its gravity and if it is pleaded by the applicant or reported by Registrar of Companies, the Tribunal is required to notice the relevant factors while compounding any offence, such as:- (i) The gravity of offence; (ii) The act is intentional or unintentional; (iii) The maximum punishment prescribed for such offence, such as fine or imprisonment or both fine and imprisonment. (iv) The report of the Registrar of Companies. (v) The period of default.
  • 93.
    (vi) Whether petitionfor compounding is suo moto before or after notice from Registrar of Companies or after imposition of the punishment or during the pendency of a proceeding. (vii) The defaulter has made good of the default. (viii) Financial condition of the company and other defaulters (ix) Offence is continuous or one time. Company Appeal (AT) No. 238 of 2019 (x) Similar offence earlier committed or not. (xi) The act of defaulters is prejudicial to the interest of the member(s) or company of public interest or not. (xii) Share value of the company, etc. • Ld. Tribunal to maintain the consistency has to impose Penalty which is as per calculation maximum fine Rs. 2,35,90,000/-. 1/5th of the maximum amount is Rs. 47, 18,000/-. However, Ld. Tribunal has imposed Penalty Rs. 27, 09,000/- which is less than 1/5th of the Maximum amount. Therefore, we are of the view that Ld. Tribunal has undertaken a lenient view in imposing Penalty.
  • 94.
    • Pahuja TakiiSeeds Ltd. & Ors. v. Registrar of Companies • The NCLAT was to determine: • a) Whether the Companies Act, 2013 bars Joint Applications for compounding of offence by a defaulting company along with its officers in default. • b) Whether joint applications for compounding of the same offence committed in different years can be filed. • The Hon’ble NCLAT ruled that Section 441 neither prohibits filing a single application for compounding the same offence nor does it prohibit a joint application filed by the Company along with the officers in default. The Hon’ble NCLAT observed that “procedures are deemed to be permitted unless expressly barred”.
  • 95.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 (3) OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 158 OF THF COMPANIES AC'I' 2013. • In the matter M/s Premier Solution Private Limited • Ld. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad vide letter No. RD (NWR)/ 230-232/ (496)/2021/479 dated,29.04.2022 has informed to ROC, Ahmedabad that O/o ROC, Ahmedabad has pointed out certain violations and non compliance of the Companies Act, 2013 by both the petitioner companies in ROC‘s report dated 26.10.2021 in the matter of Scheme of Amalgamation of Premier Solution Private Limited with D.J. Shah Investment Finance Private Limited and their respective shareholders and creditors in CA(CAA) No. 31 of 2021. Directorate has further instructed to this office that it is observed from last three years financial statements filed by Transferor and transferee company that both companies have not mentioned DIN therein in accordance with section 158 of the Companies Act, 2013. Thus, the Transferor and Transferee company have violated the provisions of the Section 158 of the Companies Act, 2013. In this regard, Directorate has instructed to take necessary action for violation of Section 158 of the Companies Act, 2013 and submit action taken report to the Directorate.
  • 96.
    • Having consideredthe facts and circumstances of the case and submissions made by the Presenting officer and oral submission made by Ld. PCS and after taking into accounts the factors above, I hereby imposed following penalty on company and its directors as prescribed under Section 172 of the Companies Act, 2013 for violation of section 158 of the Companies Act, 2013. On Company : Rs. 1,50,000 On Mr. Kirit Harilal Shah : Rs. 1,50,000 On Ms. Bharti Kirit Shah : Rs. 1,50,000 On Ms. Shital Chintan Shah : Rs. 1,50,000
  • 97.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 42(8) OF THF COMPANIES AC'I' 2013. • In the matter of Valley Monks Private Limited • Whereas, the Company had submitted its adjudication application on 05.02.2021 for adjudicating the matter. It was noticed from the application that company has allotted 50,000 compulsorily convertible debentures (CCDs) of Rs.103/- each to the tune of Rs. 50 lakhs to Shri Sampath Kumar Srinivas, Shri Pratha Jayadevappa, Shri Nailmothu Venkata Avilash and Shri knit Saxeria on private placement basis pursuant to Section 42 of the Companies Act, 2013. The company has obtained shareholders’ approval for allotment on 27.11.2018 as per PAS 3 filed on 9.1.2019. • Though the company was compliant with respect to the other applicable provisions of the Companies Act, 2013 and Rules made thereunder, it has missed out to mention Section 42 in the extracts of Board Resolution and extraordinary general meeting resolutions and the disclosures as required under Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014, of Companies (Share capital and debentures) Rules, 2014 In the notice to extraordinary general meeting. • As per Rule 14(8) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the special resolution is required to be filed before the issue of private placement offer cum application letter. However, the company has made delay in filing special resolution for issue of CCDs. The Form MGT 14 was filed after the issue of private placement offer turn application letter.
  • 98.
    • Pursuant tothe provisions of Section 42(6) of the Companies Act, the company ought to have received the application money on account of private placement on a separate bank account In a scheduled bank However, the company has not opened a separate bank account. • Whereas as per the provisions of Sub-Section (10) of Section 42 of Companies Act, 2013, if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount involved in the offer or invitation or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. • Penalty imposed: On Company : Rs. 50,00,000 On Ashwin Kumar Bedre Vijay kumar (Whole time director cum promoter): Rs. 50,00,000 On Swami Mohammad (Director cum promoter) : Rs. 50,00,000
  • 99.
    In the matterof Patodia Syntex Limited • The Company held its Annual General Meeting for the Financial Year 2020-2021 on 15/12/2021, violating provisions of Section 96 of the Companies Act, 2013. • The punishment for contravention of section 96 is prescribed under section 99 of the Act which prescribes that if any default is made in holding meeting of the company in accordance with section 96 or section 97 or section 98or in complying with any directions of the Tribunal, the company and every officer who is in default shall be punishable with fine which may extend to one lakh rupees and in case of continuing default , with a further fine which may extend to five thousand rupees for every day during which such default continues. • “In reference to NCLAT, New Delhi order dated 12.09.2018 on Company Appeal (AT) No. 249 of 2018, Ministry Vide its letter No. 10/19/2018 – Legal cell, dated : 04.10.2018 has directed that in no case, compounding fee should be levied less than the minimum compounding fees as provided uder various sections of Companies Act, 2013. “
  • 100.
    • After carefullyconsidering the submissions made in the compounding application and oral submission of the authorized representatives and report of the Registrar of Companies, Mumbai and having regard to the facts and circumstances of the case, it was ordered that the offence committed under Section 96 of the Companies Act, 2013, deserves to be compounded. I am of the considered view that taking into consideration the facts of the case following compounding fees shall be enough deterrent and was ordered accordingly with further order that the applicant directors/ officers shall pay the compounding fee out of their own pockets. Rs. 50,000/- (Rupees Fifty Thousand Only) for the company and Rs.20,000/- (Rupees Twenty Thousand Only) each for six applicant directors/ officers of the company.
  • 101.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 12(3)(c) OF THF COMPANIES AC'I' 2013 BY WISE R&D INDIA PRIVATE LIMITED. • The company has filed INC-24 on 22.10.2021 vide SRN T55327951. It is noticed from the attachment that company’s CIN not mentioned on the letterhead of the company. Hence the company was directed to file Adjudication application for non- compliance of provisions of Section 12(3)(c) of the Companies Act, 2013. The company has submitted the Adjudication application on 11.11.2021. • The penalty imposed : On Company : Rs. 7000 On Shri Venkatesh Krishnaswamy : Rs. 2000 On Ms. Kaveri Kumar: Rs. 2000 On Shri BNG Kumar: Rs. 2000 On Shri Arjun Thyagarajan: Rs. 2000 On Shri Raghav Lal : Rs. 2000
  • 102.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 135 OF THF COMPANIES AC'I' 2013 BY COMVIVA TECHNOLOGIES LIMITED. • An application dated 26.07.2022 has been received from the company admitting non-compliance of section 135(5) of the Companies Act, 2013 whereby it has been stated that Company was required to spent 2,88,65 811 as part of its CSR obligation during the financial year 2020-21. However, the company spent Rs, 2,83,15,689 towards its CSR obligation during the financial year 2020-21 • The Applicant Company and its officers who have made the default in complying the provision of section 135(5) by not transferring unspent CSR amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year are now liable for penalties under section 135(7) of the Companies Act, 2013. • Now in exercise of the powers conferred on me vide Notification dated 24th March, 2015 and having considered the reply submitted by the notice in response to the notice issued vide letter no. No. ROC/D/Adj/2022/Section 135/Comviva/5472 5480 dated 07.09.2022, I do hereby impose the penalty on the company and its officers in default for violation of section 135 (5) of the Companies Act, 2013 r/w Rule 10 of the Companies (Corporate Social Responsibility Policy) Rules, 2014
  • 103.
    • Penalty imposed: - On Company - Rs. 1100244 - Manoranjan Mohapatra (CEO) - Rs. 55012.20 - Neeraj Jain (CFO) - Rs. 55012.20 - Parminder Singh Bakshi (CS) - Rs. 55012.20 - Rajat Mukherjee, Director - Rs. 55012.20 - Vivek Satish Agarwal,, Director - Rs. 55012.20 - Jagdish Mitra, Director - Rs. 55012.20 - Sunita Umesh, Director - Rs. 55012.20 - Manishkumar Murlimanohar Vyas, - Rs. 55012.20
  • 104.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 137 OF THF COMPANIES AC'I' 2013 BY CROODS VENTURE CAPITAL PRIVATE LIMITED. • The company has failed to file its financial Statement alongwlth all the documents which are required to be attached to such financial statements under the Act for the financial year 2019-20 in compliance of section 137 of the Companies Act,2013 and Rules made thereunder. • The undersigned has reasonable cause to believe that the provisions of section 137 of the Companies Act,2013 has not been complied with. The company and its officers in default have violated the provisions of section 137 of Companies Act,2013 which may be adjudication under the purview of section 454(3) of the Companies Act,2013. The Company and every officer of the Company who is in default are liable to be penalized u/s. 137(3) of the Companies Act,2013. • Penalty on Company: - On Company : Rs. 65,300 - On Dharmendrra chunilal Atruja,officer in default : Rs. 50,000 - On Maulik Ketranbhai Hingu, officer in default : Rs. 50,000
  • 105.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 136(1) OF THF COMPANIES AC'I' 2013, HUIZHONGAUTOMOBILE COMPONENTS INDIA PRIVATE LIMITED • The company has filed an adjudication application in GNL-1 vide SRN F17729930 dated 29.07.2022 under the MCA21 portal to adjudicate the default under Section 136(1) of the Companies Act, 2013 regarding not sending Financial Statements etc. for the Financial Year 2020-21to Members before the Annual General Meeting dated 30.11,.2021 as per the requirement of the aforesaid provisions of the Companies Act,2013. lt is noticed from adjudication application that the company has not complied with the provisions of Section 136[1) of the Companies Act, 2013. • Penalty imposed : - On Company : Rs. 25,000 - On Mr. Junhua Guo : Rs. 5,000 - On Ms. Hua Ying : Rs. 5,000 - On Ms. Surbhi Rathore : Rs. 5,000
  • 106.
    • IN THEMATTER OF ADJUDICATION OF PENALTY UNDER SECI'ION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 203(4) OF THF COMPANIES AC'I' 2013 BY PITCHERS INTERNET PRIVATE LIMITED. • On perusal of the Application of eform GNL-1 (SRN T22341762). It has been noticed that Company Secretary Prakash Jha resigned from the company w.e.f. 15.10.2019 from the office of whole time company secretary that thereafter company appointed a whole time company secretary on 10.05.2021 during this period the paid up share capital of company was more than ten crore rupees therefore the company was require to appoint a whole time company secretary u/s 203 of the Companies Act, 2013 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. • In terms of the provisions of section 203(4) r/w 454 of the Companies Act, 2013, this office had issued Show Cause Notices (SCN) vide no. No. ROC/D/Adj/2022/Section 92&137/Jindal/1743-1746 dated-25.03.2022 to the Company and officers in default. • A reply dated 05.04.2022 of Noticee No. 2 Shri Akshay Kumar Lal (on behalf of company and himself) received to this office on 08.04.2022 in respect of SCN issued by this office, wherein the company cited difficulties it faced on account of the COVID-19 pandemic in appointment of a new whole time Company Secretary and asked for a hearing.
  • 107.
    • A hearingwas fixed on 18.05.2022 as requested by company vide e-mail dated 02.05.2022. Sh. Mohit Singhal, CS, the authorized representative of the company appeared in the hearing. • Penalty Imposed : - On Company : Rs. 5,00,000 - On Mr. Akshay Kumar : Rs. 4,41,000 - On Mr. Siddharth Mall (Director) : Rs. 4,41,000 - On Ajinkya Rajendra Malasne (Director) : Rs. 4,41,000
  • 108.
    IN THE MATTEROF SONASUMAN CONSTECH ENGINEERS PRIVATE LIMITED • Facts of the Case: As per Section 129(1) of the Companies Act, 2013, the Financial Statements shall give true and fair view of the state of affairs of the Company, comply with the accounting standards notified under section 133 and be in form as provided in Schedule III. For each class of equity share capital as per Schedule III of the Companies Act, 2013, the Company needs to disclose in the financial statements, the shares held by each shareholder holding more than five percent shares specifying the number of shares held.However, the Company has not disclosed the same in its financial statement for the F.Y. 2019- 20 and has contravened the provisions of the Section 129 read with Schedule III of the Companies Act, 2013, thereby affecting the true and fair view of the state of affairs of the Company. Thus, the auditor has failed to comment on the same in the audit report for the aforesaid financial year. Hence it is observed that the Company has contravened with the AS-18 read with Section129 read with Schedule III of the Companies Act, 2013 thereby affecting the true and fair view of the state of affairs of the Company in the financial year 2017-18, 2018-19 and 2019-20. Thus, the auditor has failed to comment on the same in the audit report for the aforesaid financial years.
  • 109.
    • Whereas, thisoffice has issued show cause notice for default under section 143 of the Companies Act, 2013 vide this office letter no. ROC/PAT/SCN/sec.143/36124/2216-2217 dated 05.12.2022 • However, this office has not received any reply from the abovesaid auditors. Hence, the provisions of Section 143 of the Companies Act, 2013 has been contravened by the auditors and therefore they are liable for penalty u/s. 450 of the Companies Act, 2013 for the Financial Years 2017-2018, 2018-2019 and 2019-2020. • Having considered the facts and circumstances of the case and after taking into account the provisions of Rule- 11 of Companies (Adjudication of Penalties) Rules, 2014 (as amended), I hereby impose a penalty of Rs. 10,000 (Ten Thousand) on Shri Ravikant Kumar, Kumar Vivek & Associates and Rs. 5000 on Shri Basant Kumar Jaiswal, Basant Jaiswal & Associates as per Table Below for violation of Section 143 of the Companies Act, 2013 for the financial years 2017- 2018, 2018-2019 and 2019-2020:
  • 110.
    Nature of Default Violation of Sectionof Companies Act, 2013 Company/ Officer to whom penalty imposed No. of days in default Penalty for defaults as per Section 450 of the Act Total Penalty Penalty imposed as per Section 446B of the Act Non- Reporting of violations/ non- compliances made by the company in Audit Report Section 143 On Shri Ravikant Kumar, Kumar Vivek & Associates FY 2017-2018 and FY 2018- 2019 Rs.10000 Rs. 10000*2 No of years = 20000 10000 Shri Basant Kumar Jaiswal, Basant Jaiswal & Associates FY 2019-2020 Rs.10000 Rs. 10000 5000
  • 111.
    PROVISIONS PUNISHABLE WITHFINE SUBSTITUTED BY PENALTY UNDER COMPANIES (AMENDMENT) ACT, 2019 & 2020
  • 112.
    S. No. Section Section DescriptionCompanies (Amendment) Act, 2019 Companies (Amendment) Act, 2020 1. 53(3) Prohibition of Issue of shares at a discount - 2. 56(6) Transfer and transmission of Securities - 3. 64(2) Notice to be given to Registrar for alteration of share capital - 4. 86 Punishment for contravention of provisions from section 77 to 87 under chapter VI - 5. 88(5) Register of Members - 6. 89(5) & (7) Declaration in respect of beneficiary interest in any Share - 7. 90(10)& (11) Register of significant beneficial owners in a company - 8. 92(5) Annual Return - 9. 92(6) Certifying Annual Return in contravention of the provisions of this Section - 10. 102(5) Statement to be annexed to Notice - 11. 105(3) Proxies - 12. 105(5) Invitation of Proxies issued at Company’s Cost -
  • 113.
    Sr. No. Section Section DescriptionCompanies (Amendment) Act, 2019 Companies (Amendment) Act, 2020 14. 121(3) Report on annual general meeting - 15. 124(7) Unpaid Dividend Account - 16. 134(8) Financial Statement Board’s Report - 17. 135(7) Corporate Social Responsibility - 18. 137(3) Copy of financial statement to be filed with Registrar - 19. 140(3) Removal, resignation of auditor and giving of special notice - 20. 143(15) Punishment for Failure to report fraud to Central Government by the Auditor - 21. 157(2) Company to inform Director Identification Number to Registrar - 22. 159 Punishment for Contravention – in respect of DIN - 23. 165(6) Number of Directorships - 24. 172 Punishment for contravention of provisions from section 149 to 172 - 25. 178(8) Nomination and Remuneration Committee and Stakeholders Relationship Committee - 26. 184(4) Disclosure of Interest by Director -
  • 114.
    S. No. Sectio n Section Description Companies (AmendmentAct) ,2019 Companies (Amendment) Act, 2020 27. 187(4) Investment of the Company held in its own name - 28. 188(5) Related Party Transaction - 29. 191(5) Payment to Director for Loss of Office - 30. 197(15) Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits - 31. 203(5) Appointment of Key Managerial Personnel - 32. 204(4) Secretarial Audit for Bigger Companies - 33. 232(8) Merger and Amalgamation of Companies - 34. 238(3) Registration of the offer of scheme involving transfer of shares - 35. 247(3) Valuation by Registered Valuers - 36. 405(4) Power of Central Government to direct companies to furnish information or Statistics - 37. 446(B) Penalties for One Person Company or Small Companies - 38. 450 Punishment where no specific penalty is provided -
  • 115.
    Sr. No Date of Order Name of persons/entities towhom SCN was issued Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 1. 12.05.2021 M/s Baba Resorts Private Limited Mr.Kripal Singh Mr. Vikram Sharma Mr. Dharam Pal Singh Mr, Navneet Singh Section 12(1)- Non maintenance of registered office 32 days Rs.1000 per day for Company and every officer of the Company who is in default Rs. 32000 each on the Company and every officer who is in default 2. 06.04.2021 Karmabhoomi Real Estate Limited Mr. Sardar Singh Mr. Manoj Senger Mr. Mahipal Section 12(1)- Non maintenance of registered office More than a year Rs.1000 per day for Company and every officer of the Company who is in default Rs. 100000 each on the Company and every officer who is in default ILLUSTRATIVE ADJUDICATON ORDERS PASSED BY ADJUDICATING OFFICER
  • 116.
    Sr. No Date of Order Name of Applicants Violationof provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Final Penalty Imposed 3. 07.04.202 1 Avanotr Performance materials India Limited Mr. Devashish Ohri Mr. Dheeraj Tiwari Mr. Siddhartha Agarwal Section 92- Non filing of Annual Return 31 days Rs.50000 and in case of continuing offence Rs. 100 each day for company and every officer of the company who is in default No penalty imposed as the company filed the form prior to the issue of notice by adjudicating officer. 4. 20.04.202 1 Orind Steels Limited Mr. Kashi Jhunjhunwala Mr. Kanhaiya Lal Murarka Mr. Sanjay Kumar Murarka Mr. Ashok Kumar Murarka Mr.Bhaskar Chandra Sethi Mr. Gaurav Kumar Section 203(1)- Non appointment of KMP and Company Secretary KMP- 02.011.2019 to 31.10.2019 CS- 02.11.2018 TO 30.09.2019 and again from1.06.2020 to 23.03.2021 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs. 10 lakhs on the Company and on every officer in default as per their term of holding of office during the default.
  • 117.
    ILLSUTRATIVE ADJUDICATION ORDERSPASSED BY REGIONAL DIRECTOR S r. N o Date of Order Name of Applica nts Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 1 . 27.01.202 1 M/s Jivrom Technol ogies Private Limited Section 10A- Non filing of E-form INC- 20A within 180 days of commencement of business Delay of 56 days Rs. 50000 on the Company and Rs. 1000 per day on officer of the Company Rs. 50000 on the Company and Rs. 56000 on officer in default of the Company Rs. 15000 on the Company and Rs. 12500 on officer in default of the Company 2 . 26.02.202 1 Gaffino resorts and motels private limited Section 92- Non filing of Annual return for the year 2018 Section 137- Non filing of Financial Statements 133 days in case of Financial Statements 104 days in case of Annual return Section 92- Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Section 137- Rs 1 lakh on company and every officer in default and in case on continuing offence Rs. 100 per day, subject to maximum of Rs. 5 lakhs Section 92- Rs. 604000 on the Company and on every officer in default Section 137- Rs. 133000 on the Company and Rs. 60400 on every officer in default Section 92- Rs.12080 on company and every officer in default Section 137 Rs. 26600 on the Company and Rs. 22660 on every officer of the Company in default
  • 118.
    ILLSUTRATIVE ADJUDICATION ORDERSPASSED BY REGIONAL DIRECTOR Sr .N o Date of Order Name of Applicants Violation of provision of CA, 1956/2013 Period of violation Penalty as per relevant provision of the Act Penalty imposed by Adjudicating officer Final Penalty Imposed by RD 3. 12.02.2021 CF Pharmaceutic als Limited Section 92- Non filing of Annual Return 30.11.2015- 05.10.2017 Rs. 50000 on company and every officer in default and in case of continuing offence Rs. 100 per day , subject to maximum of Rs. 5 lakhs Rs. 117400 on the Company and every officer in default Rs. 11740 on the Company and every officer in default 4. 12.02.2021 Tokyo Finance Limited Section 203 11.08.2017- 26.02.2019 Rs.5 lakhs on the Company and for every officer in default Rs. 50000 and for continuing default Rs.1000 per day but not exceeding Rs. 5 lakhs Rs.5 lakh on the Company and Rs. 167000 on officer of the Company Rs. 125000 on the Company and Rs. 11750 on the officer of the Company
  • 119.
    IMPORTANT JUDGEMENTS OFHON’BLE SUPREME COURT ON ADJUDICATION PROCEEDINGS UNDER SEBI ACT,1992 • The Chairman, SEBI Vs. Shriram Mutual Fund & Another (Appeal (Civil) 9523 of 2003-9524 of 2003) Para 5 of the said Order: Chapter VI-A of the SEBI Act deals with the penalties and the adjudication. Section 15-I of the Act envisages appointment of Adjudicating Officer for holding an inquiry in the prescribed manner, after giving reasonable opportunity of being heard for the purpose of imposing any penalty. Section 15-J provides various factors which are to be taken into consideration while adjudging the question of penalty under Section 15-I namely, the amount of disproportionate gain or unfair advantage whenever quantifiable, loss caused to an investor or group of investors and the repetitive nature of default. The legislature in its wisdom had not included mens rea or deliberate or willful nature of default as a factor to be considered by the Adjudicating Officer in determining the quantum of liability to be imposed on the defaulter. Sections 15A to 15H and 15HA employ the words “ shall be liable” and therefore, mandatorily provides for imposition of monetory penalties for respective breaches or non compliance of provisions of the SEBI Act and the Regulations. Default or failure, as contemplated under the Act includes: 15A- Failure to furnish Information, return 15B- Failure to enter into agreement with clients 15C- Failure to redress investor’s grievances 15D- Default in case of mutual funds 15E- Failure to observe rules and regulations by an asset management Company
  • 120.
    15F- Default incase of Stock Brokers 15G- For Insider Trading 15H- Non-disclosure of acquisition of shares and takeovers 15HA- Fraudulent and unfair trade practices 15HB- Penalty, if not separately provided Para 9 of the said Order: It is settled law that when a penalty is imposed by an Adjudicating Officer, it is done so in adjudicatory proceedings and not by way of fine as a result of prosecution of an accused for commission of an offence in criminal proceedings. Para 11 of the said Order: In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regualation is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must made by the defaulter with guilty intention or not.
  • 121.
    • The Chairman,SEBI Vs. Roofit Industries Limited (Civil Appeal No 1364-1379 of 2005) Para 5 of the said Order A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non compliance occurs and recurs there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.
  • 122.
    Adjudicating Securities andExchange Board of India Vs. Bhavesh Pabari (Civil Appeal No 11311 of 2013) • Para 6 of the said Order: Sections 15-A(a) to 15-HA have to be read along with Section 15-J in a manner to avoid any inconsistency or repugnancy. We must avoid conflict and head-on-clash and construe the said provisions harmoniously. Provisions of one section cannot be used to nullify and obtrude another unless it is impossible to reconcile the two provisions. The explanation to Section 15-J of SEBI Act added by Act No.7 of 2017, quoted above, has clarified and vested in the Adjudicating Officer a discretion under Section 15-J on the quantum of penalty to be imposed while adjudicating defaults under Sections 15-A to 15-HA. Explanation to Section 15-J was introduced/ added in 2017 for the removal of doubts created as a result of pronouncement in M/s Roofit Industries. • Para 9 of the said Order: A narrow view would be in direct conflict with the provisions of Section 15-I(2) of the SEBI Act which vests jurisdiction in the Adjudicating Officer, who is empowered on completion of the inquiry to impose “such penalty as he thinks fit in accordance with the provisions of any of those sections.
  • 123.
    IF YOU AREWORKING ON SOMETHING THAT YOU REALLY CARE ABOUT, YOU DON’T HAVE TO BE PUSHED. THE VISION PULLS YOU. THANK YOU