Companies Act, 2013 Detailed analysis of 98 sections effective 12.09.2013 CS Mamta Binani Past Chairperson (Year 2010), EIRC of ICSI Room No.6, 4th Floor, Commerce House 2A, Ganesh Chandra Avenue, Kolkata 700013 Connect me @ : (033) 3028 8955-57; (033) 3002 5630-33; 98310 99551 [email protected] Visit me @ : www.mamtabinani.com Companies Act, 1956 Companies Act, 2013 • It was introduced on 1st Companies Bill passed by April, 1956. • It has 658 Sections and 15 Schedules. • It extends to the whole of India (Sikkim has its own Companies Act). the Lok-Sabha on 18th December, 2012. Rajya Sabha passed it on 8th August, 2013 by voice vote 29th August-President’s Assent; 30th AugustGazette Notification The Bill has 470 Clauses (309 pages), 29 Chapters, 7 Schedules and 29 Rules It applies to the whole of India. FINALLY……WE SEE THE MUCH AWAITED ACT FLUNGING INTO ACTION • Ministry of Corporate Affairs issues Notification for Commencement of 98 Sections (out of 470 sections) of the New Act on 12th September, 2013 In PHASES • It seems that it has been decided to enforce the provisions of the new legislation in phases. • The provisions of the new Act which require statutory/regulatory consultation or functioning of new bodies or prescription of relevant rules/forms will be brought in force after the preparatory action is completed. Probably, sections which do not require rules • In the first instance it has been decided to notify those provisions of the Act which do not require such preparations. Verbatim • The exact language of Notification is: In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act 2013, the Central Government hereby appoints the 12th day of September, 2013 as the date on which the following provisions of the said Act shall come into force Section 1 (3) • This section shall come into force at once and the remaining provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision Circular dated 12.09.2013 by way of a Notification • http://www.mca.gov.in/Ministry/pdf/Com mencementNotificationOfCA2013.pdf • The notification has been signed by Renuka Kumar, Joint Secretary to the Government of India Clarification on the notification dated 12.09.2013 • The clarification has been made by way of a General Circular no.15/2013 dated 13.09.2013 • The clarifications were: • 1. Sub-section (68) of section 2: ROC may register those Memorandum and Articles of Association received till 11.09.2013 as per the definition clause of the .private company, under the Companies Act, 1956 without referring to the definition of private company under the new Act Clarification on the notification dated 12.09.2013….contd • 2. Section 102: All companies which have issued notices of general meeting on or after 12.9.2o13, the statement to be annexed to the notice shall comply with additional requirements as prescribed in section 102 of the new Act • 3. Section 133: Till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation with and after examination of the recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply Clarification on the notification dated 12.09.2013….contd • 4. section 180: In respect of requirements of special resolution under Section 180 of the said Act, as against ordinary resolution required by the Companies Act 1956, if notice for any such general meeting was issued prior to 12.9.2013, then such resolution may be passed in accordance with the requirement of the Companies Act 1956 Another circular on 18.09.2013 • Ministry of Corporate Affairs had issued a general circular dated 18.09.2013. • Background: Ministry had issued a notification on 12.09.2013 bringing into force 98 sections or part thereof of the Companies Act, 2013. Ministry received requests for clarification as to whether the provisions of the Companies Act, 1956 corresponding to such 98 sections would continue to apply or not and hence as a clarification, it issued this circular dated 18.09.2013. Continued…. • This Circular clarified that with effect from 12.09.2013, the relevant provisions of the Companies Act 1956, which corresponds to the provisions of 98 sections of the Companies Act, 2013 brought into force on 12.09.2013, cease to have effect from that date. In this Power Point Presentation • The objective is provide a chapter-wise comparative summary of the 98 Sections made effective in the Companies Act 2013 vis a vis the Companies Act, 1956 Chapter – I Preliminary • Sections ranging from 1 to 2 • Total 2 sections • On 30th August 2013, Ministry of Law and Justice issued a notification regarding the Companies Act, 2013 immediately after it received assent of President of India. Only section 1 of the Act of 2013 came into effect from that day. Section 1 as usual deals with short title, extent, commencement and application • The 2nd section deals with the definition clauses • Out of 95 definitions, 83 definitions (in which 26 are new definitions) have been notified w.e.f. 12.09.2013 Definitions-Section 2 • The following definitions given against each clause, becomes applicable: 1: abridged prospectus 3: alteration 4: appellate tribunal 5: articles 6: associate company 8: authorised capital (new) 9: banking company 10: board of directors or board 11: body corporate or corporation 12: book and paper and book or paper Definition Continued…… 14: branch office 15: called-up capital (new) 16: charge (new) 17: chartered accountant (new) 18: chief executive officer (new) 19: chief financial officer (new) 20: company 21: company limited by guarantee 22: company limited by shares Definition Continued…. 24: company secretary 25: company secretary in practice 26: contributory 27: control (new) 28: cost accountant (new) 29: Court (except sub clause iv which talks about special courts) 30: debenture 32: depository 33: derivative Definition Continued…. 34: director 35: dividend 36: document 37: employees’ stock option 38: expert (new) 39: financial institution (new) 40: financial statement (new) 43: free reserves 44: global depository receipt (new) 45: government company Definition Continued…. 46: holding company 49: interested director 50: issued capital (new) 51: key managerial personnel (new) 52: listed company 53: manager 54: managing director 55: member 56: memorandum 57: networth Definition Continued…. 58: notification (new) 59: officer 60: officer who is in default 61: official liquidator 63: ordinary or special resolution (new) 64: paid up share capital (new) 65: postal ballot (new) 66: prescribed 67: previous company law (except sub clause ix relating to Registration of Companies (Sikkim) Act, 1961 Definition Continued…. 68: private company 69: promoter (new) 70: prospectus 71: public company 72: public financial institution 73: recognised stock exchange 74: register of companies (new) 75: registrar 76: related party 77: relative (my comment: the list of relatives as per sub clause iii is yet to be prescribed) Definition Continued…. 78: remuneration 79: schedule 80: scheduled bank 81: securities 82: securities and exchange board 84: share 86: subscribed capital (new) 87: subsidiary company or subsidiary (except the proviso and explanation (d) Definition Continued…. 88: sweat equity shares 89: total voting power 90: tribunal (new) 91: turnover (new) 92: unlimited company (new) 93: voting right (new) 94: whole time director (new) 95: words & expression borrowed from SCRA, SEBI and Depositories Act… Chapter – II Incorporation • Sections ranging from 3 to 22 • Total 20 sections • Out of which 3 sections has been made applicable from 12.09.13 • The notified sections are 19,21,22 Subsidiary Co. not to hold shares in its holding Company New Act (section 19) • Subsidiary company shall not hold shares in its holding company (exceptions provided in 19(1)(a),(b),(c) and • No holding company shall allot or transfer its shares to any of its subsidiary companies Old Act (corresponding 42) • Membership of holding company Authentication of documents, proceedings and contracts New Act (section 21) • A document or proceeding or contracts may be signed by any KMP or an officer duly authorised by the Board in this behalf Old Act (corresponding 54) • Authentication of documents and proceedings • A document or proceeding requiring authentication by the company may be signed by a director, manager, secretary or other authorised officer of the company Execution of bills of exchange etc. New Act (section 22) • A bill of exchange, hundi or promissory note shall be deemed to be proper if signed by any person acting under its authority, express or implied • New: Execution of other deeds – POA • Deeds signed by such an POA holder shall bind the company Old Act (corresponding 47 & 48) • Bills of Exchange Promissory Notes & Chapter – III Prospectus & Allotment of Sec • • • • • This chapter is divided into 2 parts Part I – Public Offer and Part II – Private Placement Sections ranging from 23 to 42, i.e. (23 to 41) and 42 Total 20 sections Out of which 15 sections has been made applicable from 12.09.13, all in Part I • The notified sections are 23, 24, 25, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39 and 40 Public offer and pvt. placement New Act (section 23) Old Act (NEW provision) • It provides the ways in which: Public company or a Private company may issue securities. • It is to be noted here that 23(1)(b) and 23(2) has yet not been notified • 23(1)(b): Private placement of shares by public companies • 23(2): Issue of shares by private companies • This is a new provision and no corresponding section could be found Power of SEBI to regulate issue & transfer of securities etc New Act (section 24) • It provides the provisions for the administration of issue and transfer of securities by SEBI, in relation to: *Issue and transfer of securities; and *Non-payment of dividend By *listed companies or *those companies which intends to get there securities listed • Scope widened O. Act(corresponding 55A) • Powers of Securities and Exchange Board of India Doc containing offer of sec. for sale to be deemed prospectus New Act (section 25) • Any document by which the offer for sale of securities is made to the public, it shall be deemed to be a prospectus and all sections for the same, shall be applicable to it. • It is to be noted that section 25(3) has not been notified. • This sub section brings out additional information required to be mentioned in the prospectus Old Act(corresponding 64) • Document containing offer of shares or debentures for sale to be deemed prospectus Public Offer of Sec to be in Demat New Act (section 29) • Applicable to every company making public offer and such other class of public companies as may be prescribed • Other companies may issue securities in physical or demat form Old Act(corresponding 68B) • Applicable to every listed company making an initial public offer of any security for a sum of Rs 10 Crores or more Advertisement of Prospectus New Act (section 30) • Ad of Prospectus published in any manner shall specify the contents of its MOA: • • • • • Objects Liability of Members Share Capital Subscriber Details Capital Structure Old Act(corresponding 66) • Where any prospectus is published as a newspaper ad, it can do away with specification of the contents of the memorandum or signatories thereto or the number of shares subscribed by them Shelf Prospectus (SP) New Act (section 31) • Any class of companies prescribed by SEBI may file SP with ROC • At the stage of 1st offer of securities • Period of Validity 1 year • Date of Opening becomes Commencing Date • Prior to any subsequent offer under the same SP, Co. to file with ROC Information Memorandum on new charges created or of any change in financial position • Option to Refund Money Old Act(corresponding 60A) • Only Public Financial Institutions, Public Sector or Scheduled Banks whose main object is financing allowed to issue SP Red Herring Prospectus (RHP) New Act (section 32) • IM now RHP • Co. proposing to make an offer of securities • RHP may be issued prior to issue of Prospectus • RHP to be filed with ROC at least 3 days prior to opening of subscription list and the offer • Upon closing of the offer, the details of information to be filed with ROC and SEBI Old Act(corresponding 60B) • Information Memorandum (IM) Issue of Application Forms for Securities New Act (section 33) • Every form of Application Issued for purchase of any Securities shall be accompanied by an abridged Prospectus • Talks about abridged prospectus • It is to be noted that section 33(3) has not been notified. • This sub section brings out the penalty provisions in case of default Old Act(Corresponding 56) • Matters to be stated and reports to be set out in Prospectus • New Section Corresponds to Sec 56(3) • Form was required to be accompanied by a Memorandum containing such salient features of a prospectus as was prescribed Criminal Liability for Mis-statements in Prospectus Old Act(Corresponding 63) New Act (section 34) • Any statement which is Untrue or Misleading in form or context or Inclusion or omission likely to mislead • Section 447 (Punishment for Fraud) invoked • Persons who have authorized the issue of such prospectus shall also be criminally liable • Escape mechanism if the person can prove that such statement or omission was • Immaterial • Had reasonable believe etc grounds to • Earlier penal provision was for untrue statements only Civil Liability for Mis-statements in Prospectus New Act (section 35) • Civil Liability in case of prospectus issued for all type of securities. • Where prospectus issued with an intention to defraud every person liable under this section shall be personally liable without any limitation for the losses incurred by any person who has subscribed • It is to be noted that section 35(1)(e) which deals with inclusion of experts in the gamut has not been notified. Old Act(Corresponding 62) • The option to withdraw on becoming aware of any untrue statement after issue of prospectus and before allotment has been dispensed with-Sec 62(3)(b) Punishment for Fraudulently inducing persons to Invest money New Act (section 36) • Persons who fraudulently induces persons to invest money shall be liable for action under Sec 447 (Punishment for Fraud) • This includes any agreement with a view to obtaining credit facilities from bank or financial institutions. • A non compoundable offence Old Act(Corresponding 68) • Bank and Financial Institutions were not covered • It was a compoundable offence Action by Affected Persons (Sec 37) • • • • • • • New Section A suit may be filed or Any other action may be taken U/s 34, 35 or 36 By any person, group of persons or any association of persons Affected by any misleading statements, inclusion, omission of any matter in the prospectus Punishment for Personation for Acquisition etc of Securities New Act (section 38) • Punishment u/s 447 (Fraud) for persons who apply in fictitious names, multiple applications • Court may order disgorgement of gains, if any and seizure and disposal of the securities • The amount so received by the court to be credited to the IAP fund. Old Act(Corresponding 68A) • Disgorgement provisions was not there earlier • Multiple applications in different name or in different combination was not included earlier Allotment of Securities by Companies • • • • New Act (section 39) Where no minimum amount has been subscribed and money received the amount needs to be refunded to all applicants within 30 days from date of issue of prospectus Co. having a share capital on allotment of securities (earlier only shares) file a return of allotment with ROC Rs 1000/- penalty for each day of continuing default It is to be noted that section 39(4) relating to Return of Allotment has not been notified. Old Act(Corresponding 69 & 75) • Prohibition of Allotment unless Minimum Subscription Recd (Sec 69) • Return as to Allotments (Sec 75) • Only pertaining to Shares Securities to be dealt with in SE • • • • • New Act (section 40) Prospectus to mention name of SE where the securities will be dealt with Application money recd from the public to be kept in separate bank account. Co. may pay commission to any person in connection with subscription of securities It is to be noted that section 40(6) relating to commission payment has not been notified. Scope widened from shares and debentures to securities Old Act(Corresponding 73 & 76) • Allotment of shares and debentures to be dealt in on SE (Sec 73) • Power to pay certain commission and prohibition of payment of all other commission, discount etc (Sec 76) Chapter – IV Share Capital & Debentures • • • • Sections ranging from 43 to 72 Total 30 sections Out of which 12 sections has been made applicable from 12.09.13 The notified sections are 44, 45, 49, 50, 51, 57, 58, 59, 60, 65, 69 & 70 Nature of Shares or Debentures New Act (section 44) • Shares or Debentures or other interest of any member in the company shall be moveable property transferable in the manner provided in AOA • No Change Old Act(Corresponding 82) • Provisions retained Numbering of Shares • • • • New Act (section 45) Company having a share capital Shares of such a company to be distinguished by its distinctive number Save and except Shares held by a person as beneficial owner in a depository account No Major change Old Act(Corresponding 83) • Numbering of Shares (provisions retained) Calls on Shares of Same Class to be made on uniform basis New Act (section 49) • No change • When calls are made for further capital on shares of a particular class, the calls shall be made uniformly. Old Act(Corresponding 91) • Provisions retained Company to accept unpaid share capital although not called up New Act (section 50) • No change • Allows a Company if authorized by its AOA to accept amounts from members which are unpaid on the shares even though no call has been made. • The acceptance of such amount shall not confer any voting rights against the amount paid till the call has been made. Old Act(Corresponding 92) • Provisions retained Payment of Dividend in proportion to amount paid up New Act (section 51) • No Change • Company if authorized by AOA may pay dividend in proportion to the amount paid up on each share Old Act(Corresponding 93) • Provisions retained Punishment for Personation of Shareholder New Act (section 57) • It provides penalty for a person who deceitfully personates the owner of any share or interest Old Act(Corresponding 116) • Provisions retained Refusal of Registration & Appeal against Refusal New Act (section 58) • 58(1)-Refusal by Private Ltd Co.-to send intimation within 30 days from the date on which instrument of transfer/transmission is delivered to the Co. • Notice to be sent to transferor and transferee giving reasons for refusal • 58(2)-Securities in a public company is freely transferable. However, the act recognizes contract or arrangement in respect of transfer of securities Old Act(Corresponding 111, 111A) • Contract or arrangement in respect of securities was not there earlier Refusal of Registration & Appeal against Refusal….contd New Act (section 58) • 58(3)-Transferee may appeal to tribunal against refusal. Either within 30 days from the date of refusal notice or in case no notice recd, 60 days from the lodgment date • 58(4)-In case of public co.transferee may appeal within a period of 60 days from such refusal or 90 days from the lodgment date Old Act(Corresponding 111, 111A) • Timelines changed as compared to earlier provisions Rectification of Registration of Members New Act (section 59) • Scope widened to Securities • If a person’s name is omitted from the Register of Members without sufficient cause the aggrieved can appeal to the Tribunal for reinstatement of his name. • Foreign members or debenture holders to prefer an appeal with a competent court to be set up outside India for restoration of their names. Old Act(Corresponding 111, 111A) • Earlier only applicable to shares and debentures • Foreign Members or debenture holders’ appeal provision was not there earlier Publication of Authorized, Subscribed & Paid Up Capital New Act (section 60) • If a Co. publishes a notice, advertisement or other official publications or business letter which states the amount of Authorized Share Capital, the Company should state in the said document the details of the subscribed and paid up capital. • Penalty for non-compliance laid down Old Act(Corresponding 148) • Provisions Retained Unlimited Company to Provide for Reserve Share Capital on Conversion into Limited Company New Act (section 65) • Unlimited Company may be allowed to increase its Nominal Capital provided that the same shall not be called up except at the time of winding up. Old Act(Corresponding 98) • Provisions Retained-No Change Transfer of Certain Sums to CRR Account New Act (section 69) • Where there is a buy back out of Free Reserves or Share premium Account the amount equal to nominal value of shares bought back should be transferred to CRR(Capital Redemption Reserve) • The said Reserve can be used for a bonus issue. Old Act(Corresponding 77AA) • Provisions Retained • Usage for Bonus Issue earlier not specified Prohibition for Buyback in Certain Circumstances New Act (section 70) • A Co. cannot buy back its own shares directly or indirectly through any Subsidiary or Investment Company. • In case a co. defaults as prescribed, prohibition of buy back has an exception: if default is remedied and a period of 3 years has lapsed after such default ceased to subsist. • It is to be noted that section 70(2) relating to prohibition of buy back of its own shares or securities under certain situations has not been notified Old Act(Corresponding 77B) • Provisions Retained Chapter – V Acceptance of Deposits by Co.’s • Sections ranging from 73-76 • Total 4 sections • Out of which ‘NO’ sections has been notified as yet Chapter – VI Registration of Charges • Sections ranging from 77-87 • Total 11 sections • Out of which only 1 section has been made applicable from 12.09.2013 • The notified section is 86 Punishment for Contravention New Act (section 86) • If the Company fails to comply with the provisions relating to Chapter VI, penalty will be imprisonment which may extend to six months or fine of minimum Rs.25,000 and maximum of Rs. 1 lac or with both. • Penal provisions have been made stringent Old Act(Corresponding 142) • Provisions Retained Chapter – VII Management & Administration • • • • Sections ranging from 88 to 122 Total 35 sections Out of which 13 sections has been notified from 12.09.13 The notified sections are 91, 100, 102, 103, 104, 105, 106, 107, 111, 112, 113, 114 and 116 Power to Close Register of Members or Debenture Holders or other Security Holders New Act (section 91) • Manner for closure will be as specified by SEBI • Applicable only to Listed or those intending to get their securities listed Old Act(Corresponding 154) • Power to close Register of Members or Debenture Holders • Not applicable to other Security Holders • As per plain reading was applicable to all companies Calling of Extra-ordinary General Meeting New Act (section 100) • It is to be noted that section 100(6) relating to reimbursement of expenses incurred by requisitionists from the fee or other remuneration under Sec 197 payable to directors who were in default in calling the meeting, has not been notified Old Act(Corresponding 169) • The explanation which was given in the erstwhile 169(7)(b) has now been removed • This means that adjournment to a date after the expiry of three months no more holds good • Other provisions broadly retained Statement to be Annexed to Notice • 1. 2. 3. 4. New Act (section 102) To specify the nature of concern or interest, financial or otherwise, if any in respect of each of the following persons: Every Director and the Manager, if any Every other KMP and Relatives of the persons mentioned above and Also as per 102(1)(b) to give any other information and facts that may enable members to understand the meaning , scope and implications. Old Act(Corresponding 173) • Disclosure for KMP was not required • Not applicable from 11.09.2013 Statement to be Annexed to Notice….contd New Act (section 102) • 102(2)(b)-Disclosure of %age of shareholding in any other co. under consideration to be made if the %age of shares held in that co. is not less than 2% • 102(4)-In case of any benefit or profit by the concerned Promoter, Directors, KMP etc which accrues due to insufficient/nondisclosure, the said person will be liable to compensate the company as specified Old Act(Corresponding 173) • Earlier for such disclosure %age was 20 Quorum for Meetings • • • • • • New Act (section 103) Requirement of Quorum in public co. changed 1000 <= 5 members < 1000 or >= 5000-15 members <5000- 30 Members 103(1)(b)- for private limited company 2 members personally present 103(2)-Where GM adjourned for lack of quorum, the co. to give not less than 3 days notice to members individually or by an advertisement in newspaper Old Act(Corresponding 174) • 5 members personally present in case of public co • 2 members personally present for private co. Chairman of Meetings New Act (section 104) • The members personally present shall elect one amongst themselves to be the Chairman of meeting on a show of hands unless the AOA otherwise provides • On a poll being demanded for this, to be taken forthwith and such other elected person to be the Chairman for the rest of the meeting Old Act(Corresponding 175) • Provisions retained Proxies • • • • New Act (section 105) Central Government given the power to prescribe class of companies whose members shall not be entitled to appoint another member as proxy One person cannot represent as proxy for more than 50 members Proxy will no more be able to vote by show of hands It is to be noted that the 3rd and 4th proviso to Sec 105(1) which relates to first 2 points mentioned herein above has not been notified. Also 105(7) not notified Old Act(Corresponding 176) • The provision of 48 hours has been retained as it is Restriction on voting rights • • • • New Act (section 106) All the 3 sections merged into 1 Broadly the provisions have been retained This section basically mentions that a person can only be prohibited from exercising the voting rights if the call money or other sums payable by him has not been paid or in cases where the company has exercised any right to lien Previously, private limited companies could prescribe other restrictions, which now no more allowed Old Act(Corresponding 181,182 & 183) • Section 181: Restriction on exercise of voting right of members who have not paid calls etc. • Section 182: Restrictions on exercise of voting right in other cases to be void • Section 183: Right of member to use his votes differently Voting by show of hands • • • • New Act (section 107) 2 sections merged into 1 The provisions have been retained Section 107(1): At any general meeting, a resolution put to vote of the meeting shall, unless a poll is demanded under section 109 or the vote is carried out electronically, be decided on a show of hands. The underlined words above, has been added in the new law Old Act(Corresponding 177 & 178) • Section 177: Voting to be by show of hands in first instance • Section 178: Chairman’s declaration of result of voting by show of hands to be conclusive Circulation of member’s resolution • • • • New Act (section 111) This section mentions that the eligibility criteria for members of companies with or without share capital will be as mentioned in section 100 Eligibility reduced to 1/10 (company having share capital) And it lays down the process as to how and where the requisitionists need to deposit the notice etc. And the penalty provisions Old Act(Corresponding 188) • Section 188: Mentioned eligibility as 1/20th of voting power • The provision of restriction of circulating statement of not more than 1000 words by the members has been dispensed with in the new law Representation of President & Governors in meetings New Act (section 112) Old Act(Corresponding 187A) • Provides that the President of India • Complete or the Governor of a State, if he is a retained member of company • May appoint any person to act his representative at any meeting of a company • That member will be deemed to be the member of the company and shall exercise the same rights and powers as the President or the Governor could have exercised • Including the right to vote by proxy provisions Representation of Corporations at meetings of companies and of creditors • • • • • New Act (section 113) Provides that if a body corporate is a member of company, it can authorise any person to act as its representative at any meeting of a company Such authorisation to be given by way of board meeting resolution The authorised person to exercise the same rights and powers, including the right to vote by proxy and by postal ballot The underlined words have been added in the section Sec 113(1)(b) not notified Old Act(Corresponding 187) • Complete provisions retained Ordinary & Special Resolutions New Act (section 114) Old Act(Corresponding 189) • Provides that a resolution shall be • Complete an ordinary resolution if the votes retained cast in favour exceeds the votes cast against the resolution, including the casting vote, if any • A resolution shall be a special resolution when it is specified to be considered that way in the notice and the votes cast in favour is 3 times the votes cast against • The word ‘electronically’ has been introduced in section 114(1) and (2) provisions Resolutions passed at adjourned meeting New Act (section 116) Old Act(Corresponding 191) • A resolution passed at an adjourned • Complete meeting of: retained a. Company or b. The holders of any class of shares c. BOD Shall for all purposes be treated as passed on the date on which it is passed and is not supposed to be deemed to be passed at any earlier date provisions Chapter – VIII Declaration & Payment of Div • • • • Sections ranging from 123 to 127 Total 5 sections Out of which 1 section has been made applicable from 12.09.13 The notified section is 127 Punishment for failure to distribute dividends New Act (section 127) • Dividend to be paid within 30 days from declaration date • This section prescribes penalty provisions for the directors, who knowingly is party to the default • The punishment is imprisonment which may extend to 2 years and with fine not less than Rs.1000 for every day of continuing default • 5 points have been mentioned when no offence will be deemed to have been committed Old Act(Corresponding 207) • The heading read as ‘Penalty for failure to distribute dividends within 30 days • Provisions has been retained • In the heading of the section, the word ‘punishment’ has replaced by the word ‘penalty’ • It is to be noted that in the new law, imprisonment has been reduced from 3 to 2 years Chapter – IX Accounts of Companies • • • • Sections ranging from 128 to 138 Total 11 sections Out of which 1 section has been made applicable from 12.09.13 The notified section is 133 Central Government to prescribe accounting standards New Act (section 133) Old Act(Corresponding 211(3C)) • The CG* may prescribe the • There was a mention of standards of accounting or any the National Advisory addendum thereto Committee on Accounting • As recommended by the Institute of Standards Chartered Accountants of India • The CG would consult with NFRA* and examine the recommendations made by ICAI • CG means Central Government • NFRA means National Financial Reporting Authority Chapter – X Audit & Auditors • Sections ranging from 139 to 148 • Total 10 sections • Out of which ‘NO’ section has been made applicable from 12.09.13 Chapter – XI Appointment & Qualificatn of Dirs • • • • Sections ranging from 149 to 172 Total 24 sections Out of which 3 sections has been made applicable from 12.09.13 The notified sections are 161, 162 and 163 Appointment of additional director, alternate director & nominee director New Act (section 161) Old Act(Corresponding 260,262,313) • All the 3 sections merged into 1 • Section 161(1) deals with addl dir • Section 260: Additional (AD): BOD can appoint AD’s. Person Directors who fails to get appointed in a general meeting will not be eligible to be • Section 262: Filling of casual vacancies among appointed as AD directors • Section 161(2) deals with alternate dir: BOD may appoint any person to • Section 313: act as alternate director for any Appointment and term of director during his absence for a office of alternate period not less than 3 months from India directors • This person should not be holding any alternate directorship for any other director in the company Appointment of additional director, alternate director & nominee director…..contd New Act (section 161) Old Act(Corresponding 260,262,313) • To get appointed as alternate director to any independent director, the • Section 260: Additional incumbent also have to satisfy the Directors conditions laid down for independent • Section 262: Filling of directors casual vacancies among • The period upto which alternate director remains in office has been directors specified • Section 313: • Section 161(3) deals with nominee Appointment and term of dir: BOD may appoint any person as a office of alternate director nominated by any: directors a. institution b. any agreement c. CG or the State Government Appointment of additional director, alternate director & nominee director…..contd New Act (section 161) Old Act(Corresponding 260,262,313) • Section 161(4) deals with filling up of • Section 260: Additional casual vacancies: In case of public Directors companies whose office of directors are vacated before expiry of his term, • Section 262: Filling of the resulting vacancy can be filled by casual vacancies among the BOD directors • Section 313: • It is to be noted that provisions of Appointment and term section 161(2) relating to alternate of office of alternate directors has not been notified yet directors Appointment of directors to be voted individually • • • • New Act (section 162) Old Act(Corresponding 263) A single resolution cannot be passed for appointment of more than 1 • Broadly, the provisions has been retained director Unless an approval for en-bloc appointment has been resolved at a meeting without a single vote cast against it In the new law, this section has been made applicable to private limited companies also In 1956 Act, it was applicable to public company and a private company which is a subsidiary of a public company Option to adopt principle of proportional representation for appointment of directors New Act (section 163) Old Act(Corresponding 265) • Provides that the AOA of a company may provide for appointment of not • Broadly, the provisions has been retained less than 2/3rd of the total number of the directors in accordance with the principle of proportional representation • In the new law, this section has been made applicable to private limited companies also • In 1956 Act, it was applicable to public company and a private company which is a subsidiary of a public company Chapter – XII Meeting of Board & its Powers • • • • Sections ranging from 173 to 195 Total 23 sections Out of which 9 sections has been made applicable from 12.09.13 The notified sections are 176, 180, 181, 182, 183, 185, 192, 194 and 195 Defects in appointment of directors not to invalidate actions taken New Act (section 176) Old Act(Corresponding 290) • Any act done by a person as a director • Provisions have been shall not be invalid if it is subsequently retained noticed that his appointment was invalid • The word ‘discovered’ in • By reason of any: the old act has been a. Defect or replaced with ‘noticed’ in b. Disqualification the new act c.Termination by virtue of any provision in the Act or in AOA • The further acts of directors will be considered as invalid after his appointment have been so noticed by the company Restrictions on powers of Board New Act (section 180) • Certain powers which can be exercised by the BOD with the approval of general meeting, are now applicable to private limited companies also • The word, ‘undertaking’ and the expression, ‘substantially the whole of the undertaking’ has been defined • Some powers now can be exercised by the BOD after passing special resolution vis-à-vis ordinary resolution in the old law • Contribution to charitable funds as mentioned in old section 293(1)(e) has been removed and shifted to a new section Old Act(Corresponding 293) • Quite a number of changes has been made Company to contribute to bonafide and charitable funds etc. New Act (section 181) Old Act(Corresponding 293(1)(e)) • The BOD may contribute to • Few changes bonafide charitable and other funds • Provided that, prior permission by way of resolution at a general meeting is obtained • This permission only required if the amount, the aggregate of which, in any financial year, exceeds 5% of its average net profits for the 3 immediately preceding financial years Prohibitions & restrictions regarding political contributions Old Act(Corresponding 293A) New Act (section 182) • Manner and limits pertaining to political contributions has been laid in the section • What will be considered as a political contribution has been mentioned • The way the said contribution needs to be disclosed in the profit & loss account of the company has been mentioned too • Punishment for contravention has been increased • ‘Political party’ means a political party registered u/s 29A of the Representation of the People’s Act, 1951 • Few changes • 293A(1)(b)(ii) & 293A(2)(b) had a mention of contribution to any person for any political purpose. That is no more allowed in the new law • Proviso to 293A(2) laid the limit of 5% which has been increased to 7.5% in the new law Power of Board and other persons to make contributions to National Defence Fund etc. New Act (section 183) Old Act(Corresponding 293B • Company can contribute such • Provisions retained amount as it thinks fit to the National Defence Fund • Or to any other Fund approved by the CG for the purpose of national defence • The company to disclose in its profit and loss account, the total amount of contribution during the financial year to which it relates Loan to Directors etc. New Act (section 185) • 2 sections combined into 1 • 185(1): Provisos - Circumstances and manner in which a company shall advance any loan to any of its directors • Or to any other person, in whom the director is interested • The expression ‘to any other person in whom director is interested’ has been defined • The section not only mentions loan but also guarantee or any security in connection with loan Old Act(Corresponding 295, 296) • 295: Loans to directors etc. • 296: Application of section 295 to book debts in certain cases • Most important change: The new act makes section 185 applicable to private limited companies also Restriction on non-cash transactions involving directors New Act (section 192) Old Act(Corresponding NIL) • This section regulates the • New Provision arrangements where the: a. Director of the company or b. Director of its holding company c. Director of its subsidiary company d. Director of its associate company acquires assets for consideration other than cash, from the company Prohibition on forward dealings in securities of company by director or KMP New Act (section 194) • It seeks to prohibit whole time director or any of its KMP • From buying certain kinds of future contracts • In relation to the securities of the company Old Act(Corresponding NIL) • New Provision Prohibition on insider trading of securities New Act (section 195) Old Act(Corresponding NIL) • It seeks to prohibit directors • New Provision or any of its KMP • To deal in securities of a company, or counsel, procure or communicate • Directly or indirectly • About any non-public price sensitive information to any person Chapter – XIII Appointment & Remuneration of Managerial Personnel • • • • Sections ranging from 196 to 205 Total 10 sections Out of which 1 section has been made applicable from 12.09.13 The notified section is 202 Compensation for loss of office of managing or whole-time director or manager New Act (section 202) • Manner and circumstances in which any managing director or whole-time director or manager, shall be entitled to receive payment by way of compensation: - for loss of office or - as consideration for retirement from office or - in connection with such loss or retirement • 202(2) lays down the cases when the payment by way of compensation will not be allowed • 202(3) specifies the quantification of such compensation Old Act(Corresponding 318) • Provisions retained Chapter – XIV Inspection, Inquiry & Investigation • Sections ranging from 206 to 229 • Total 24 sections • Out of which ‘NO’ section has been made applicable from 12.09.13 Chapter – XV Compromise, Arrangement & Amalgamation • Sections ranging from 230 to 240 • Total 11 sections • Out of which ‘NO’ section has been made applicable from 12.09.13 Chapter – XVI Prevention of Oppression & Mismanagement • Sections ranging from 241 to 246 • Total 6 sections • Out of which ‘NO’ section has been made applicable from 12.09.13 Chapter – XVII Registered Valuer • Section 247 • Total 1 section • This section has NOT been made applicable from 12.09.13 Chapter – XVIII Removal of name of companies from the Register of Companies • Sections ranging from 248 to 252 • Total 5 sections • Out of which ‘NO’ sections has been made applicable from 12.09.13 Chapter – XIX Revival & Rehabilitation of sick companies • Sections ranging from 253 to 269 • Total 17 sections • Out of which ‘NO’ sections has been made applicable from 12.09.13 Chapter – XX Winding Up • • • • • • • Sections ranging from 270 to 365 Total 96 sections Out of which ‘NO’ sections has been made applicable from 12.09.13 This chapter has been divided into 3 parts Part I – Winding up by the Tribunal Part II – Voluntary winding up Part III – Provisions applicable to every winding up Chapter – XXI Companies authorised to register under this Act • Sections ranging from 366 to 378 • Total 13 sections • Out of which ‘NO’ sections has been made applicable from 12.09.13 • This chapter has been divided into 2 parts • Part I – Companies authorised to register under this Act • Part II – Winding up of unregistered companies Chapter – XXII Companies incorporated outside India • Sections ranging from 379 to 393 • Total 15 sections • Out of which 4 sections has been made applicable from 12.09.13 • The notified sections are 379, 382, 383 and 386 Application of Act to foreign companies New Act (section 379) Old Act(Corresponding 591) • If not less than 50% of the paid-up • Provisions retained capital of a foreign company • Interestingly, the words • Is held by citizen(s) of India, companies used in section 591(2), or bodies corporate registered in India ‘having an established • Then such a foreign company will have place of business in India’ to comply with Chapter XXII has been discontinued in • And comply with other provisions as if the new law it was a company incorporated in India Display with name etc. of foreign company New Act (section 382) • Every foreign company: • 383(a): conspicuously exhibit, name, country in which incorporated in english and also in local use language, outside of its every office • 383(b): same in all business letters, bill heads etc. • 383(c)(i): If its liability is limited, cause notice of the same to be stated in every prospectus issued and official publications in legible english characters • 383(c)(ii): And also of its limited liability outside its every office Old Act(Corresponding 595) • Broad provisions retained • 595(1)(a) mentioned that every foreign company shall in every prospectus inviting subscriptions in India for its shares or debentures, state the country in which the company is incorporated…this doesnot find place in the new law Service on foreign company New Act (section 383) • Any process, notice or other document • Required to be served on a foreign company • Shall be deemed to be sufficiently served • If addressed to any person whose name and address have been delivered to the ROC u/s 380 • And left at, or sent by post • To that address • Or sent by electronic mode Old Act(Corresponding 596) • The matter in provisos, ‘a’ and ‘b’ to section 596 has not been retained • The word ‘by electronic mode’ has been added to section 383 in the new law Interpretation New Act (section 386) Old Act(Corresponding 602) • For the purposes of Chapter XXII: • The interpretation of the - ‘certified’ means certified in the words ‘Prospectus’ and prescribed manner to be a true copy or ‘Secretary’ has been a correct translation dropped in the new law - ‘director’ includes any person in accordance to whose directions or instructions the BOD is accustomed to act - ‘place of business’ includes a share transfer or registration office • It is to be noted that sub-clause (a), i.e. the meaning of ‘certified’ has yet not been notified Chapter – XXIII Government Companies • • • • Sections ranging from 394 to 395 Total 2 sections Out of which 1 section has been made applicable from 12.09.13 The notified section is 394 Annual reports on Government Companies New Act (section 394) Old Act(Corresponding 619A) • 394(1): Where the CG is a member of a • Provisions retained government company • The language in the new • The CG shall cause to prepare the law has been made annual report on the working and simpler affairs of the company • Along with the auditor’s report and comments of the Comptroller and Auditor General of India • And the same be laid before both the Houses of Parliament • If State Government is a member, same provisions, just that the reports etc. be placed before both the Houses of the State Legislature Chapter – XXIV Registration offices & fees • Sections ranging from 396 to 404 • Total 9 sections • Out of which ‘NO’ section has been made applicable from 12.09.13 Chapter – XXV Companies to furnish information or statistics • Section 405 • Total 1 section • This section has been made applicable from 12.09.13 Power of CG to direct co. to furnish information or statistics New Act (section 405) Old Act(Corresponding 615) • 405(1): CG may require companies to • Broad provisions furnish such information within such retained time as specified in its order • 405(2): Every such order shall be • The provisions in section published in the Official Gazette and 615(5) relating to the may be addressed to companies in such power to order inquiry manner as the CG may think fit where the said • 405(3): The CG for the purpose of information is not satisfying itself, may seek for production of such records etc. provided has been done • 405(4): Penal provisions away with • 405(5): Applicable to foreign companies in relation to business carried on in India Chapter – XXVI Nidhi • Section 406 • Total 1 section • This section has NOT been made applicable from 12.09.13 Chapter – XXVII National Company Law Tribunal and Appellate Tribunal • • • • Sections ranging from 407 to 434 Total 28 sections Out of which 8 sections has been made applicable from 12.09.13 The notified sections are 407, 408, 409, 410, 411, 412, 413 and 414 Definitions New Act (section 407) • It seeks to provide the definitions of: a. Chairperson b. Judicial Member c. Member d. President e. Technical Member Old Act(Corresponding 10FD & 10FR) • In the new law, the definitions of Chairperson, Member and President has been introduced Constitution of NCLT New Act (section 408) • The CG shall, by notification, constitute, w.e.f. such date, as may be specified therein a Tribunal known as NCLT • NCLT to consist of a President and such number of Judicial and Technical members, as the CG may deem necessary Old Act(Corresponding 10FB & 10FC) • In the new law, the upper limit of 62 has been done away with Qualification of President & Members of Tribunal Old Act(Corresponding 10FD) New Act (section 409) • The eligibility criterias has been • In the new law, the eligibility criteria for laid out for: appointment of President, a. President Judicial member, Technical b. Judicial Member member have changed c. Technical Member Constitution of Appellate Tribunal New Act (section 410) Old Act(Corresponding 10FR) • The CG shall, by notification, • In the new law, the limit of constitute, w.e.f. such date as members which was 2 has may be specified therein, an been increased to 11 Appellate Tribunal to be known as the National Company Law Appellate Tribunal • Consisting of: a. a chairperson and b. such number of Judicial and Technical members, not exceeding 11 Qualification of Chairperson and members of Appellate Tribunal New Act (section 411) • Qualifications of: a. Chairperson b. Judicial Member c. Technical Member has been laid out. Old Act(Corresponding 10FR) • In the new law, the qualifications for the Chairperson, Judicial member and the Technical member for NCALT has been modified Selection of members of Tribunal & Appellate Tribunal New Act (section 412) • 412(1): President of the Tribunal and the Chairperson & Judicial Members of the Appellate Tribunal shall be appointed after consultation with the Chief Justice of India • 412(2): The Members of the Tribunal and the Technical Members of the Appellate Tribunal to be appointed on the recommendation of the Selection Committee • 412(3): The secretary of MCA shall be the convener of the Selection Committee Old Act(Corresponding 10FX) • In the new law, the selection process has been made stringent. • Also the composition of the selection committee has been changed • In the old law, the time period within which the casual vacancy needs to be filled in was specified • Which is not no in the new law Term of office of President, Chairperson and other Members New Act (section 413) • 413(1): President and every other Member of the Tribunal shall hold office for 5 years + 5 years (on reappointment) • 413(2): Age limit for the Members of the Tribunal: President: 67 years Any other Member: 65 years Lower benchmark age for selection: 50 • 413(3): Chairperson or a Member of NCALT shall hold office for 5 years + 5 years (on reappointment) • 413(4): Age limit for the Members of the Appellate Tribunal: Chairperson: 70 years Any other Member: 67 years Lower benchmark age for selection: 50 Old Act(Corresponding 10FT & 10FE) • Quite a number of changes Salary, allowances & other terms and conditions of service of Old Act(Corresponding 10FG & New Act (section 414) 10FW) Members • No change • The: salary allowances and other terms and conditions of • Service of the Members of the Tribunal and the Appellate Tribunal shall be • Such sum as may be prescribed • And that such sum or the terms etc. shall be varied to their disadvantage after their appointment Chapter – XXVIII Special Courts • • • • Sections ranging from 435 to 446 Total 12 sections Out of which 5 sections has been made applicable from 12.09.13 The notified sections are 439, 443, 444, 445 and 446 Offences to be non-cognizable New Act (section 439) Old Act(Corresponding 621) • 439(1): Every offence except the ones mentioned in 212(6) shall be deemed to be non-cognizable offence • Section 212 deals with investigation into affairs of company by Serious Fraud Investigation Office. 212 is a new provision • 439(2): Court shall take cognizance of any offence under this Act only when the complaint in writing has been made by the ROC, a shareholder or by a person authorised by the CG • 439(3): Offence relating to issue and transfer of securities and of non-payment of dividend, on the complaint by SEBI • Quite a number of changes Power of CG to appoint company prosecutors Old Act(Corresponding 624A) New Act (section 443) • • • • • • • • The CG may appoint • The change is: where the CG appoints any Company One or more persons Prosecutors, they shall have As Company Prosecutors the same powers and For the conduct of prosecutions arising privileges conferred on out of this Act Public Prosecutors by the And the persons so appointed Criminal Procedure Code Shall have the powers and privileges under section 24 of the conferred by the Criminal Procedure Code instead of section 492 Code of the code, as provided in On Public Prosecutors the old law Appointed under section 24 of the Code Appeal against acquittal • • • • • Old Act(Corresponding 624B) New Act (section 444) The CG may • No change In any case arising under this Act Direct any Company Prosecutor or authorise any other person To present an appeal from an Order of Acquittal Passed by any Court other than a High Court Compensation for accusation without reasonable cause New Act (section 445) • The provisions of section 250 of the Code of Criminal Procedure • Shall apply mutatis-mutandis • To compensation for accusation without reasonable cause • Before the Special Court or the Court of Session Old Act(Corresponding 625) • Section 625 is quite long • The old law specifically makes section 250 of the Criminal Procedure Code, non applicable Application of Fines New Act (section 446) Old Act(Corresponding 626) • The Court imposing any fine under this • Provisions retained Act • May direct that the whole or any part • Just that there was a thereof power which was also • Shall be applied towards payment of given to the Tribunal cost of proceedings or along with the Court, in • Towards payment of reward to person the old law, which has • On whose information the proceedings been removed were instituted • The new law mentions, Court only Chapter – XXIX Miscellaneous • Sections ranging from 447 to 470 • Total 24 sections • Out of which 12 sections has been made applicable from 12.09.13 • The notified sections are 456, 457, 458, 459, 460, 461, 462, 463, 467, 468, 469 and 470 Protection of Action Taken on Good Faith New Act (section 456) Old Act(Corresponding 635A) • No suit, prosecution or other legal • Provisions retained proceedings • shall lie against the Government or any other person authorised by the government • For acts done or intended to be done in good faith Non Disclosure of Information in Certain Cases New Act (section 457) Old Act(Corresponding 635AA) • The registrar, any officer of the • Provisions retained government or any other person • Shall not be compelled to disclose to any court etc • The source from where he got any information which led the CG to order an investigation u/s 210 or • Has been material in connection with such investigation Delegation by CG of its powers & functions New Act (section 458) Old Act(Corresponding 637) • 458(1)-CG may delegate any of its • Quite a number of changes powers and functions under this act • CG can delegate its power other than the power to make rules and functions under all • By way of notification provisions of the Act in the • The delegation could be made to such new law authority or officer as prescribed the old law no • The powers to enforce the provisions in • In Sec 194 and 195 relating to forward delegation was allowed in dealing and insider trading to be some specified sections delegated to SEBI only • 458(2)-Copy of every notification as soon as it is issued be laid before each house of parliament Powers of CG or Tribunal to accord approval etc New Act (section 459) Old Act(Corresponding 637A) • While according approval, sanction, • Provisions Retained consent, confirmation or recognition to any matter the CG or the Tribunal give any direction or grant any essentials in relation to any matter • Every application made to the CG or the Tribunal shall be accompanied by such fees as may be prescribed Condonation in delay in certain cases New Act (section 460) Old Act(Corresponding 637B) • 460(a): If any application required to be • Provisions Retained made to the CG under this Act • Has not been made within the specified time • CG may condone the delay • By citing the reasons to be recorded in writing • 460(b): Where any document required to be filed with the ROC under this Act • Has not been filed within the specified time • CG may condone the delay • By citing the reasons to be recorded in writing Annual Report by Central Government New Act (section 461) Old Act(Corresponding 638) • Provisions Retained • The CG • Shall cause a general annual report • On the working and administration of this Act • To be prepared and laid before each House of Parliament • Within 1 year • Of the close of the year to which the report relates Power to exempt companies from provisions of this Act New Act (section 462) Old Act(Corresponding 620) • In the old law, the power • The CG may in the public interest to exempt could have • By way of notification been exercised in • Direct that any of the provisions of this Act shall not apply to such class or relation to Government classes of companies or Companies only • Shall apply with such exceptions, modifications etc. as may be specified in the notification • A copy of the notification to be aid in both the Houses of the Parliament Power of Court to grant relief in certain cases New Act (section 463) Old Act(Corresponding 633) • The Court has the power to grant • Provisions retained relief to any officer of a Company in respect of the negligence, default, breach of duty, misfeasance or breach of trust • Provided that he has acted honestly and reasonably and having regard to all the circumstances of the case Power of CG to amend schedules New Act (section 467) Old Act(Corresponding 641) • CG may by notification alter any of the • Provisions retained regulations, rules, tables, forms and other provisions contained in any of the schedules to this Act • Any such alteration shall come into force on the date of notification, unless the notification otherwise directs • Notification to be laid immediately before each House of Parliament • The manner of laying the same has been laid in the Act Power of CG to make rules relating to winding up Old Act(Corresponding 643) New Act (section 468) • CG may make rules relating to • Provisions retained matters of winding up of companies • The rules made by the Supreme Court shall continue to be in force till the CG make rules Power of CG to make rules New Act (section 469) Old Act(Corresponding 642) • The CG may make rules for carrying out • Few changes the provisions of this Act • By way of notification • Any rule may provide that a contravention to the rules shall be punishable with fine which may extend to Rs.5000 and Rs.500 per day for continuing default • Every rule to be laid before both the Houses of Parliament • Manner of laying in both the Houses has been mentioned in the Act Power of remove difficulties New Act (section 470) Old Act(Corresponding NIL) • If any difficulty arises in giving effect to • NEW provision the provisions of this Act • The CG may, by order in the Official Gazette • Make such provisions for removing the difficulty • But no such order can be made after the expiry of 5 years from the date of commencement of section 1 of this Act • Every such Order will have to be laid before both the Houses of Parliament THERE ARE TOTAL 29 RULES Out of which: 1. 16 Rules have been placed for public comments on 09.09.2013. Last date for receiving comments is 08.10.2013 2. 9 Rules have been placed for public comments on 20.09.2013. Last date for receiving comments is 19.10.2013 3. Some Rules have been placed on 22.10.2013 First set of draft rules • The draft Rules for 16 chapters are for: 1. Chapter I - Preliminary 2. Chapter II - Incorporation of Company and Matters Incidental Thereto 3. Chapter VI - Registration of Charges 4. Chapter VIII - Declaration and Payment of Dividend First set of draft rules….contd 5. Chapter IX - Accounts of Companies 6. Chapter X - Audit and Auditors 7. Chapter XI - Appointment and Qualification of Directors 8. Chapter XII - Meeting of Board and its Powers 9. Chapter XVI - Prevention of Oppression & Mismanagement 10. Chapter XVIII - Removal of Name of Companies from the Register of Companies 11. Chapter XIX - Revival and Rehabilitation of Sick Companies First set of draft rules….contd 12. Chapter XXII - Companies Incorporated Outside India 13. Chapter XXIV - Registration Offices and Fees 14. Chapter XXVI - Nidhi 15. Chapter XXVII - National Company Law Tribunal and Appellate Tribunal 16. Chapter XXIX - Miscellaneous Second set of draft rules • The draft Rules for 9 chapters are for: 1. Chapter III - Prospectus and Allotment of Securities 2. Chapter IV - Shares Capital and Debentures 3. Chapter VII - Management and Administration 4. Chapter XIII - Appointment and Remuneration of Managerial Personnel Second set of draft rules…contd 5. Chapter XV - Compromises, Merger and Amalgamations 6. Chapter XVII - Registered Valuers 7. Chapter XXI - Companies authorized to register under this Act 8. Chapter XXVII - National Company Law Tribunal and Appellate Tribunal 9. Chapter XXVIII - Special Courts (Mediation and Conciliation Panel) Third set of draft rules • The draft Rules are for: 1. Chapter V - Deposits 2. Chapter XIV – Inspection, Inquiry and Investigation 3. Chapter IX - Provisions with respect to NFRA NEW FORMS • Many new forms have been included in the Rules • Now the information required in the forms is more detailed, in order to ensure clarity and further transparency • A note has been inserted at the bottom of the forms for making the officers of the companies aware of the punishment for false statement and certification Disclaimer • The contents of this presentation is based on my understanding and interpretation of the relevant law. The contents are summarized. Please study the provisions in detail before taking any decision on the basis of the information provided in this presentation.