Companies Amendment Ordinance approved by the cabinet
The Ordinance has been approved today and SENT for Presidential Assent
The Ordinance has been promulgated based on the Report of Committee Constituted to Review Offences and suggested Corporate Governance Reforms.
As per my (CS Gurminder Dhami) of the aforesaid report, I have compiled below the list of key amendments (SECTION WISE) which are to come through the Ordinance:
- Decriminalization of over 80 offences.
- Tightening Disclosure of Beneficial Interest.
- Simplying penalties for minor offences (moving towards adjudication from prosecution). System of e-adjudication wherein ROC shall send online show cause notice, if not replied by company /director physical shall automatically be sent to the company, submission of reply online and posting of order online by ROC. Appeals to lie with RD.
Section 2(41) – Change in Financial Year to be done by CG (to be delegated to RD).
Section 11 – Re-introducing the Requirements of Obtaining Certificate of Commencement of Business. Non-obtaining of the same to be a ground of Striking Off.
Section 12 – Non Maintenance of Registered Office to be a ground for striking off of the Company.
Section 14 – Conversion of Public Co to Private to be with Central Govt. who can delegate it to ROC/RD & in case of bigger companies to NCLT.
Section 73 to 76 & Deposit Rules – An e-form to be introduced for reporting transactions which are exempted deposits.
Section 77, 78 & 87 – Maximum time period for registration/modification of charges to be 30 days + additional 30 days. Further condonation to be done in 60 days. After total of 120 days Charge Cannot be Registered.
Section 149 – Stricter norms for IDs & capping of their sitting fee & remuneration.
Section 164, 165 & 167 – Breach in Maximum no of Directorships to be a Ground for Disqualification.
Section 248 – Non-obtaining of Certificate of Commencement of Business and Non maintenance of Registered Office to be a Ground for Striking off by ROC.
Section 441 – Compounding
Compounding Threshold for going to NCLT to be revised to 25 lakhs from 5 lakh.
Prior permission of Special Court not required for Compounding of offences punishable with imprisonment or fine or with both by NCLT. Minimum Compounding fee shall be as minimum fine mentioned in the section.
