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.
Tags :Corporate Law