The Companies Amendment Bill 2020 - Impact on Penalties / Fine / Imprisonment

1. Section - 8(11) - Formation of Companies with Charitable Objects, etc.

AFTER AMENDMENT

If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both "twenty five lakh rupees":

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

2. Section - 26(9)(a) - Matters to be Stated in Prospectus

AFTER AMENDMENT

If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and every person
who is knowingly a party to the issue of such prospectus shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to
three lakh rupees, or with both "three lakh rupees''

3. Section - 40(5) - Securities to be Dealt with in Stock Exchanges

AFTER AMENDMENT

If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the
company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both "three lakh rupees"

4. Section - 48(5) - Variation of Shareholders' Rights

BEFORE AMENDMENT

Where any default is made in complying with the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.

AFTER AMENDMENT

Omitted 

5. Section - 56(6) - Transfer and Transmission of Securities

BEFORE AMENDMENT

Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.

AFTER AMENDMENT

"(6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.".

6. Section 59 (5) - Rectification of Register of Members.

BEFORE AMENDMENT

If any default is made in complying with the order of the Tribunal under this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.

AFTER AMENDMENT

Omitted

7. Section - 64(2) - Notice to be Given to Registrar for Alteration of Share Capital

BEFORE AMENDMENT

Where any company fails to comply with the provisions of sub-section (1), such company 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, or five lakh rupees whichever is less.

AFTER AMENDMENT

Where any company fails to comply with the provisions of sub-section (1), such company and every officer who is in default shall be liable to a penalty of one thousand rupees five hundred rupees for each day during which such default continues, or five lakh rupees whichever is less subject to a maximum of five lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

8. Section - 66(11) - Reduction of Share Capital

BEFORE AMENDMENT

If a company fails to comply with the provisions of sub-section (4), it shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees.

AFTER AMENDMENT

Omitted

9. Section-68(11) - Power of Company to Purchase its Own Securities

AFTER AMENDMENT

If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board, for the purposes of clause (f) of sub-section (2), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both "three lakh rupees"

10. Section - 71(11) - Debentures

BEFORE AMENDMENT

If any default is made in complying with the order of the Tribunal under this section, every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than two lakh rupees but which may extend to five lakh rupees, or with both.

AFTER AMENDMENT

Omitted

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