2. *
SECTIONS AMENDED ARE:
Sec. 2, 14, 77, 87, 90, 102, 132, 135, 164, 248,
(Amended for penalty or imprisonment etc.:
53, 64, 86, 92,105, ,117, 121, 137, 140, 157, 159, 165,
191, 197, 203, 238, 441, 446B, 447, 454, 454A )
Insertion of New Section or sub section :
Section 10A, sub section 9 inserted in section 12
3. *Aim of this amendment :
“Control Shell Companies and promote Ease of
Doing Business.”
4. Key Features of this Amendment:
1) Allowing subsidiaries of foreign companies to follow
different Financial Year for accounting.
2) Measure to Control ‘shell companies’.
3) Provisions to deal with unspent CSR amount.
4) Debarring of erring auditors.
5) Provisions to deal with person ‘unfit and improper to
manage companies’
6) Expending the power to compound offences
7) Disqualification of directors
5. *1) Allowing subsidiaries of foreign companies
to follow different Financial Year for
accounting:
Clause 41 of Section 2 of Company law is amended “ that a
company or body corporate , which is holding or a subsidiary, or
associate company of a company incorporated outside india can
follow any accounting year by applying to central government
whether or not that period is a year. “
6. New Section 10 A:
Commencement of Business:
After the effect of this amendment : Any company with
share capital can commence its business or exercise any
of its borrowing power after complying the following
steps:
a) A declaration must be submitted to the registrar with in
180 days of incorporation “That the Subscriber of the
memorandum has paid the value of share agreed by him.”
b) the Company has filed a verification of its registered
office with registrar as per section 12(2)
7. Section 12: insertion of sub section 9 in section
12
“ If Registrar came to know about that any
company company is not in operation or not doing
any business than he may cause a physical
verification of the registered office of that
company and if any default is found registrar can
order the removal of the name of that company .
8. Section 14: Authority for conversion of Public
Company into Private company is now “ Central
Government “ earlier it was Tribunal.
Section 29: Unlisted company required to held or
transfer its share in dematerialise form only .
Section 135: Corporate Social
Responsibility (CSR)
a) Sub Section 5: If company has not completed it’s 3
years of incorporation than for this section we use
“ During such preceding financial years.”
b) any unspent amount should be transferred to Fund
specified in schedule VII within 6 months of expiry
of FY.
9. Sub section 6 is inserted in section 135 : If any unspent
amount of CSR is there than with in 30 days of the end of
financial year the amount should be transferred to a
schedule bank by opening a special account named
“unspent CSR account “ and such amount only can be
spent by the company to CSR activities within 3 years if
fails to utilise the same than it will transfer the amount
to funds specified in schedule VII within 30 days of
completion of 3 FY.
If company fails to comply the provision of above sub section5
and 6 of Section 135 than can be fined from 50 thousand to 25
Lakh Rs.
10. Provisions to deal with person ‘unfit and
improper to manage companies’
Section: Sub section 2 of Section 241
If in the openion of Central Government the exist circumstances
suggested that:
a) Any peron connected with the business of the company found
guilty of fraud , misfeasance, persistent negligence , or default in
carrying out his obligation and function under law or of breach of
trust .
b) Person is not conducting the business with sound business
principle and prudent commercial practice.
c) Company is conducted and managed by such person in a manner
which will cause serious injury or damage to the interest of the
trade , industry or business.
d) Company is conducted or managed by a person with intent to
defraud its creditors , members or other person or otherwise for
unlawful or fraudulent purposes or in a manner prejudicial to
public interest
11. The CG may intiate a case against such person and refer it
to Tribunal .
Every Application under sub section 3 of section 241 shall
contain all circumstances and materials as CG may
consider necessary for this enquiry and be signed as
required under CPC, 1908for a Plaint.
Section 242 : “Tribunal shall decide whether the person is
fit or proper peron to hold the office or not”
12. Section 243: Person declared as not fit or not
proper to hold or manage any office by the
Tribunal u/s 242 shall not hold or manage and
office for next 5 years from the date of decision.
Provided the CG with the leave of tribunal may
permit him to hold such office before expiry of 5
years.
Such person not entitled to have any
compensation for loss of office.
