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The President has assented to the Ordinance [reviewing the offences under the Companies Act, 2013 (“Act”)] which has been promulgated with effect from November 02, 2018. The major highlights of the Ordinance are as under:

(a) Commencement Certificate requirement has been re-introduced: New Section 10A has been inserted whereby, a company, having share capital, is not allowed to commence business or borrow money unless (i) a declaration is filed by a director, within 180 days, with the RoC, verifying that every subscriber has paid the subscription amount; and (ii) verification of registered office has been filed with the RoC.

Non-compliance with Section 10A, within 180 days, would lead to strike off of the company.

(b) Disqualification of Director: A director holding directorship beyond permissible limits, as provided under Section 165(1) of the Act, will trigger disqualification of such directors.

(c) Creation of Charge: The time frame for registration of charge has been reduced to 60 days from 300 days. Further, a company may seek, via application, a further period of 60 days for registration of charge.

(d) Vesting of power with the Central Government: The following powers have been vested in the Central Government from the Tribunal:

(i) Alteration in the financial year of a company; and

(ii) Conversion of public companies into private companies.

(e) Penalty for repeated default: New Section 454A has been inserted, whereby, if a company or officer of a company commits a default within 3 years of the earlier default, it or he shall be liable to

twice the penalty provided under the relevant provisions of the Act.

(f) Power of Regional Director: The pecuniary jurisdiction of Regional Director has been enhanced by enhancing the limit up to INR 25 Lakh as against earlier limit of INR 5 Lakh (Section 441).

(g) Revision of penalty amount: The penalty amount has been revised under various provisions of the Act, i.e. Section 53, Section 64, 90, 92, 102 etc.


 

Published by

Ankit Agarwal
(Managing Partner)
Category Corporate Law   Report

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