Monday, January 21, 2019

Highlights of Companies (Amendment) Ordinance 2019

  1. Commencement Certificate is mandatory now to be obtain within 6 months of Incorporation without which, it can not commence its business activity or borrow money.
  2. The ROC can strike off a company if the address of Regd Office is bogus or incomplete/ improper address. 
  3. Conversion of Public Ltd to Pvt Ltd matters shifted from NCLT to Regional Director.
  4. Company cannot issue shares at discount - heavy penalty imposed on violation. 
  5. Alteration of Authorised Capital to be intimated within 30 days, default - penalty Rs. 1000 per day or Rs. 5 Lakh, whichever is less.
  6. Creation of charge filing with ROC -  time limit reduced from 300 days to 60 days. 
  7. Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail.
  8. Annual Return should be filed within 60 days from AGM, failure to this, penalty of 100 per day to Company and directors max 5 Lakh apart from ROC delay charges is applicable. 
  9. Penalty of Rs. 5 lakh to Company Secretary certifying wrong Annual Return. 
  10. Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading - penalty for Company, Directors and KMP is Rs. 50,000
  11. Filing of Resolutions with ROC - Penalty for delay increased. Rs. 500 for each day of delay up to a maximum of Rs. 25 Lakh
  12. Filing of Balance sheet with ROC within time limit - Failure is costly for Company + Directors both. Penalty of Rs. 100 per day and Rs. 1 lakh to Company and Director each. 
  13. Resignation of Auditor must be filed by the resigning Auditor within 30 days, failure to which the resigning Auditor is liable for penalty of Rs. 50,000 and Rs. 500 per day. 
  14. A director can not become director in  more than 20 companies. If he continues, he becomes disqualified. 
  15. Appointment of CS on payroll (Pvt Co having paid-up capital 5 crore and above) is mandatory.
  16. ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months.