Friday, December 8

Highlights of The Companies (Amendment) Ordinance, 2019

  1. A company must obtain Commencement Certificate within 6 months of incorporation date without which the company cannot commence any business activity or borrow money.
  2. To create a new Charge Filing with Registrar Of Companies (ROC) the time limit has been reduced from 300 days to 60 days.
  3. If a company willfully or wrongly furnishes statement/ information during filing Charge Forms with RoC, shall be liable for misrepresentation and jail.
  4. A Director cannot become a director in more than 20 companies. If he continues, he becomes a disqualified now.
  5. Any change or alteration that is done in the Authorized Capital by a company, an intimation needs to be done within 30 days, a default penalty of Rs 1,000 every day or Rs 5 Lakhs will be charged whichever is less.
  6. A company shall file its Annual Return within 60 days from Annual General Meeting, failure to do so a penalty of Rs 100 per day to Company + directors max Rs 5 Lakhs apart from RoC delay charges is applicable.
  7. If a Company Secretary certifies wrong Annual Return, he is liable to pay a penalty of Rs 5 lakhs.
  8. Filing of Balance Sheet to RoC should be done within the time limit, failure to do so, both company and directors are liable to be penalized. A penalty of 100 per day + 1 lakh to Company + Director each will be charged.
  9. A company cannot issue shares at discount. A heavy penalty imposed on the violation.
  10. If a Public Limited company is getting converted to Private Limited company, then all the matters are shifted from National Company Law Tribunal (NCLT) to Regional Directorate.
  11. If an Auditor is resigning then within 30 days, the resignation of the Auditor must be filed, failure to do so the Auditor is liable for a penalty of Rs 50,000 + 500 per day.
  12. Company Secretary to be appointed on the payroll (Private Companies who have Paid-up Capital of 5 Crores & above) is mandatory. The penalty has been increased substantially.
  13. If the Registered Address of a company provided to RoC is bogus or incomplete then RoC can strike off the company.
  14. Subscribers of a company have to pay initial share capital within 6 months of incorporation of the company, failure to do so RoC may strike off the company.
  15. The Explanatory Statement that is given with Notice of General Meeting should contain all the details as required by Law if no detail or short detail or misleading details are provided, the Company, Directors, and KMP have to pay a penalty of 50K.
  16. Any delay in filing of Resolution with RoC, a penalty for the defaulting company is Rs. 500 every day or maximum penalty 25 Lakhs.

Important Links

  2. Download The Companies (Amendment) Ordinance, 2019 – in PDF Format
  3. Download The Companies (Amendment) Ordinance, 2019 – in Word Format

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