The Companies (Amendment) Bill, 2019 |The LexSphere Library

SECTION Section 1

Untitled Section

•1

•THE COMPANIES (AMENDMENT) BILL, 2019

•A

•BILL

•further to amend the Companies Act, 2013.

•BE it enacted by Parliament in the Seventieth Year of the Republic of India as follows:—

SECTION Section 10

Untitled Section

8.In section 35 of the principal Act, in sub-section ( 2), in clause (c), for the words

•“delivery of a copy of the prospectus for registration”, the words “filing of a copy of the

•prospectus with the Registrar” shall be substituted.

SECTION Section 100

Untitled Section

•Clause 12 of the Bill seeks to insert sub-section (2) in section 86 of the Act to provide

•that any person who wilfully furnishes any false or incorrect information or knowingly

•suppresses any material information, required to be registered in accordance with the

•provisions of section 77, shall be liable for action under section 447.

SECTION Section 101

Untitled Section

•Clause 13 of the Bill seeks to substitute section 87 of the Act to empower the Central

•Government to extend time or allow rectification, if it is satisfied that omission to give

•intimation to the Registrar of the payment or satisfaction of a charge, within the time required

•under Chapter VI; or the omission or misstatement of any particulars, in any previous filing

•with respect to any such charge or modification thereof or with respect to any memorandum

•of satisfaction or other entry made in pursuance of section 82 or section 83 was accidental or

•was due to inadvertence.

SECTION Section 102

Untitled Section

•Clause 14 of the Bill seeks to amend section 90 of the Act by inserting sub-section

•(4A) to provide that the company shall take necessary steps to identify an individual who is

•a significant beneficial owner. Failure to take necessary steps shall lead to action under

•sub-section (11). It also seeks to amend sub-section (9) of section 90 of the Act to provide

•that the company or the person aggrieved by the order of the Tribunal may make an

•application to the Tribunal for relaxation or lifting of the restrictions placed under

•sub-section (8), within a period of one year from the date of such order and if no such

•application is filed, such shares shall be transferred without any restrictions to Investor

•Education and Protection Fund Authority. It also seeks to insert sub-section (9A) to provide

•the power to the Central Government to make rules for the purposes of this section.

SECTION Section 103

Untitled Section

•Clause 15 of the Bill seeks to amend sub-section (5) of section 92 of the Act to provide

•that if any company fails to file its annual return under sub-section (4), before the expiry of

•the period specified therein, such company and its every officer who is in default shall be

•liable to monetary penalty as specified in the provision.

SECTION Section 104

Untitled Section

•Clause 16 of the Bill seeks to amend sub-section ( 5) of section 102 of the Act to

•provide that in case of any default made in complying with the provisions of such section,

•every promoter, director, manager or other key managerial personnel of the company who is

•in default shall be liable to monetary penalty as specified in the provision.

SECTION Section 105

Untitled Section

•Clause 17 of the Bill seeks to amend sub-section ( 3) of section 105 of the Act to

•provide that for any default under sub-section (2) of said section, the officer in default shall

•be liable for monetary penalty as specified in sub-section (3).

SECTION Section 106

Untitled Section

•Clause 18 of the Bill seeks to amend sub-section (2) of section 117 of the Act to

•provide that for failure in filing a copy of every resolution or an agreement as per sub-section

(1)of said section, the company and its officer in default shall be liable for monetary penalty

•as specified in sub-section (2).

SECTION Section 107

Untitled Section

•Clause 19 of the Bill seeks to amend sub-section ( 3) of section 121 of the Act to

•provide for liability to pay monetary penalty for not filing with the Registrar a copy of report

•within the stipulated period as per sub-section (2) of said section.

SECTION Section 108

Untitled Section

•Clause 20 of the Bill seeks to amend section 132 of the Act to provide that the National

•Financial Reporting Authority shall perform its functions through such divisions as may be

•prescribed by the Central Government. It also seeks to provide that there shall be an executive

•body of the National Financial Reporting Authority consisting of the Chairperson and full-time

•Members for efficient discharge of its certain functions. The clause also seeks to amend

•sub-clause (B) of clause (c) of sub-section (4) of section 132 with respect to the extent of

•debarring of the member or firm by National Financial Reporting Authority in case

•professional or other misconduct is proved.

•16

SECTION Section 109

Untitled Section

•Clause 21of the Bill seeks to amend sub-section ( 5) of section 135 and insert

•sub-sections (6), ( 7) and ( 8) in the said section of the Act to provide, inter alia for (a)

•carrying forward the unspent amounts, to a special account to be spent within three financial

•years and transfer thereafter to the Fund specified in Schedule VII, in case of an ongoing

•project; and (b) transferring the unspent amounts to the Fund specified under Schedule VII,

•in other cases.

SECTION Section 11

Untitled Section

9.In section 53 of the principal Act, for sub-section ( 3), the following sub-section

•shall be substituted, namely:—

•“(3) Where any company fails to comply with the provisions of this section,

•such company and every officer who is in default shall be liable to a penalty which

•may extend to an amount equal to the amount raised through the issue of shares at a

•discount or five lakh rupees, whichever is less, and the company shall also be liable to

•refund all monies received with interest at the rate of twelve per cent. per annum from

•the date of issue of such shares to the persons to whom such shares have been

issued.”.

SECTION Section 110

Untitled Section

•Clause 22 of the Bill seeks to amend sub-section ( 3) of section 137 of the Act to

•provide for payment of monetary penalty in case of failure to file a copy of financial statements

•with the Registrar.

SECTION Section 111

Untitled Section

•Clause 23 of the Bill seeks to amend sub-section ( 3) of section 140 of the Act to

•provide for payment of monetary penalty of fifty thousand rupees or an amount equal to the

•remuneration of the auditor whichever is less and further penalty for continuous failure, if

•the auditor does not comply with sub-section (2) of the said section.

SECTION Section 112

Untitled Section

•Clause 24 of the Bill seeks to amend sub-section ( 2) of section 157 of the Act to

•provide for payment of monetary penalty in case there is failure to furnish Director

•Identification Number pursuant to sub-section (1) of the said section.

SECTION Section 113

Untitled Section

•Clause 25 of the Bill seeks to amend section 159 of the Act to provide for payment of

•monetary penalty if any individual or director of a company makes default in complying with

•sections 152, 155 and 156 of the Act.

SECTION Section 114

Untitled Section

•Clause 26 of the Bill seeks to insert clause (i) in sub-section (1) of section 164 of the

•Act to provide disqualification to become a director if an individual has not complied with

•the provisions of sub-section (1) of section 165 of the Act.

SECTION Section 115

Untitled Section

•Clause 27 of the Bill seeks to amend sub-section ( 6) of section 165 of the Act to

•provide for payment of monetary penalty in case a person accepts an appointment as a

•director in contravention of sub-section (1) of the said section.

SECTION Section 116

Untitled Section

•Clause 28 of the Bill seeks to amend sub-section ( 5) of section 191 of the Act to

•provide for payment of monetary penalty if a director makes default in complying with the

•said section.

SECTION Section 117

Untitled Section

•Clause 29 of the Bill seeks to omit sub-section (7) and to amend sub-section (15) of

SECTION Section 118

Untitled Section

•section 197 of the Act to provide for payment of monetary penalty by any person or the

•company in case of default.

SECTION Section 119

Untitled Section

•Clause 30 of the Bill seeks to amend sub-section ( 5) of section 203 of the Act to

•provide for payment of monetary penalty by any company and director and key managerial

•personnel who is in default in complying with the said section.

SECTION Section 12

Untitled Section

10.In section 64 of the principal Act, for sub-section ( 2), the following sub-section

•shall be substituted, namely:—

•“(2) Where any company fails to comply with the provisions of sub-section (1),

•such company and every officer who is in default shall be liable to a penalty of one

•thousand rupees for each day during which such default continues, or five lakh rupees

•whichever is less.”.

SECTION Section 120

Untitled Section

•Clause 31 of the Bill seeks to amend section 212 of the Act to provide that any officer

•not below the rank of Assistant Director of Serious Fraud Investigation Office (SFIO), if so

•authorised, may arrest any person in accordance with the provisions of this section. It also

•seeks to provide that the person so arrested may be taken to a Special Court or Judicial

•Magistrate or Metropolitan Magistrate within twenty four hours of his arrest. Further, the

SECTION Section 121

Untitled Section

•clause also seeks to provide that where an investigation report submitted by SFIO states

•that a fraud has taken place and any director, key managerial personnel or officer has taken

•undue advantage or benefit, then the Central Government may file an application before

•Tribunal with regard to disgorgement and such director, key managerial personnel or officer

•may be held personally liable without any limitation of liability.

•17

SECTION Section 122

Untitled Section

•Clause 32 of the Bill seeks to amend sub-section ( 3) of section 238 of the Act to

•provide for payment of monetary penalty for the director who issues a circular which has not

•been presented for registration and registered as per sub-section ( 1) of the said section.

SECTION Section 123

Untitled Section

•Clause 33 of the Bill seeks to amend sub-section ( 2) of section 241 of the Act by

•inserting a proviso to empower the Central Government to prescribe such company or class

•of companies in respect of which, applications under such sub-section, shall be made before

•the Principal Bench of the Tribunal and shall be dealt with by such Bench. It also seeks to

•provide that in certain circumstances, the Central Government may refer the matter and

•request to the Tribunal to inquire into the case and record a decision about whether the

•person is a fit and proper person to hold the office of director or any other office connected

•with the conduct and management of any company.

SECTION Section 124

Untitled Section

•Clause 34 of the Bill seeks to amend section 242 of the Act to provide that at the

•conclusion of the hearing of the case in respect of section 241, the Tribunal shall record its

•decision stating specifically as to whether or not the respondent is a fit and proper person to

•hold the office of director or any other office connected with the conduct and management

•of any company.

SECTION Section 125

Untitled Section

•Clause 35 of the Bill seeks to amend section 243 of the Act to provide that the person

•who is not a fit and proper person pursuant to section 242 shall not hold the office of a

•director or any other office connected with the conduct and management of the affairs of

•any company for a period of five years from the date of the relevant decision of the Tribunal.

•It also seeks to provide that the Central Government may, with the leave of the Tribunal,

•permit such person to hold any such office before the expiry of the said period of five years.

•The clause also seeks to provide that the person so removed from the office of a director or

•any other office connected with the conduct and management of the affairs of the company

•shall not be entitled to, or be paid, any compensation for the loss or termination of office.

SECTION Section 126

Untitled Section

•Clause 36 of the Bill seeks to amend sub-section (1) of section 248 of the Act to insert

•new clauses (d) and (e) to provide that in case the subscribers to the memorandum have not

•paid the subscription which they had undertaken to pay and declaration under section 10A

•has not been filed or where the company is not carrying on any business or operation as

•revealed after the physical verification, the Registrar shall send notice to such companies

•and its directors informing them of his intention to remove the name of the company from

•the register of companies.

SECTION Section 127

Untitled Section

•Clause 37 of the Bill seeks to amend sub-section (3) of section 272 of the Act to allow

•the Registrar to present a petition of winding up on the ground that it is just and equitable to

•do so under clause (e) of section 271.

SECTION Section 128

Untitled Section

•Clause 38 of the Bill seeks to amend clause (f) of sub-section (1) of section 398 of the

•Act by omitting the word "prospectus" as it would not be required to be registered by the

Registrar.

SECTION Section 129

Untitled Section

•Clause 39 of the Bill seeks to amend clause (b) of sub-section (1) of section 441 of the

•Act to increase the threshold of maximum amount of fine that does not exceed twenty-five

•lakh rupees for compounding by the Regional Directors.

SECTION Section 13

Untitled Section

11.In section 77 of the principal Act, in sub-section ( 1), for the first and second

•provisos, the following provisos shall be substituted, namely:—

•“Provided that the Registrar may, on an application by the company, allow such

•registration to be made––

•Amendment of

SECTION Section 130

Untitled Section

•Clause 40 of the Bill seeks to amend section 446B of the Act to provide for payment of

•reduced amount of monetary penalty in case of default by One Person Companies or small

companies.

SECTION Section 131

Untitled Section

•Clause 41 of the Bill seeks to amend section 447 of the Act to enhance the amount of

•fine from "twenty lakh rupees" to "fifty lakh rupees".

•18

SECTION Section 132

Untitled Section

•Clause 42 of the Bill seeks to amend sub-sections (3) and (8) of section 454 of the Act

•to provide that adjudicating officer may also direct the company or officer in default or other

•person to rectify default, wherever he considers fit.

SECTION Section 133

Untitled Section

•Clause 43 of the Bill seeks to insert a new section 454A relating to monetary penalty

•for repeated default, which is twice the amount of penalty provided for such defaults under

•the relevant provisions of this Act.

SECTION Section 134

Untitled Section

•Clause 44 of the Bill seeks to repeal the Companies (Amendment) Second Ordinance,

•2019 and to save the actions done during the course of the period of Ordinance.

•19

•FINANCIAL MEMORANDUM

•The provisions of the Companies (Amendment) Bill, 2019 will not involve any

•expenditure of recurring or non-recurring nature, on its enactment.

•20

•MEMORANDUM REGARDING DELEGATED LEGISLATION

•Sub-clause (a) of clause 2 of the Bill confers power upon the Central Government to

•prescribe, under first proviso to clause (41) of section 2 of the Act, the form and manner in

•which application shall be made by the relevant company or body corporate to the Central

•Government to allow any period as financial year.

SECTION Section 135

Untitled Section

•Clause 3 empowers the Central Government to prescribe, under clause ( a) of

•sub-section (1) of section 10A, the form and manner in which a declaration is to be filed and

•verified by a director to the effect that every subscriber to the memorandum has paid the

•value of the shares agreed to be taken by him on the date of making such declaration.

SECTION Section 136

Untitled Section

•Clause 4 empowers the Central Government to prescribe, under sub-section ( 9) of

SECTION Section 137

Untitled Section

•section 12 of the Act, the manner in which the Registrar may cause a physical verification of

•the registered office of the company if he has reasonable cause to believe that the company

•is not carrying on any business or operations.

SECTION Section 138

Untitled Section

•Clause 5 empowers the Central Government to prescribe, under the second proviso to

•sub-section (1) of section 14 of the Act, the form and manner in which an application is to be

•made to the Central Government for seeking its approval for any alteration of articles having

•the effect of conversion of a public company into a private company.

SECTION Section 139

Untitled Section

•Clause 7 empowers the Central Government to prescribe, under sub-section (1A) of

SECTION Section 14

Untitled Section

•section 14.

•Amendment

•of section 26.

•Amendment

•of section 29.

•22 of 1996.

•Amendment of

SECTION Section 140

Untitled Section

•section 29, the class or classes of unlisted companies where securities shall be held or

•transferred only in dematerialised form.

SECTION Section 141

Untitled Section

•Clause 11 empowers the Central Government to prescribe, under sub-section ( 1) of

SECTION Section 142

Untitled Section

•section 77 of the Act, (a) the additional fees which a company shall pay while making an

•application to the Registrar for registration of charge after the expiry of original period of

•filing; (b) additional fees and different fees for different class of companies; and the ad valorem

fees.

SECTION Section 143

Untitled Section

•Clause 14 empowers the Central Government, under proviso to sub-section ( 9) of

SECTION Section 144

Untitled Section

•section 90 of the Act, to prescribe the manner in which the shares shall be transferred to the

•authority constituted under sub-section (5) of section 125 of the Act, if no application has

•been filed within a period of one year from the date of the order referred to in sub-section (8).

•The clause also seeks to insert a new sub-section (9A) to empower the Central Government

•to prescribe rules for the purpose of section 90 of the Act.

SECTION Section 145

Untitled Section

•Clause 20 empowers the Central Government to prescribe, under sub-section (1A) of

SECTION Section 146

Untitled Section

•section 132, such divisions through which National Financial Reporting Authority shall

•performs its functions.

SECTION Section 147

Untitled Section

•Clause 21 empowers the Central Government to prescribe, under sub-section ( 6) of

SECTION Section 148

Untitled Section

•section 135, the conditions which need to be fulfilled w.r.t. the ongoing project in respect of

•which unspent CSR amounts may be transferred to the special account.

SECTION Section 149

Untitled Section

•Clause 33 empowers the Central Government to prescribe, under proviso to

•sub-section (2) of section 241, such company or class of companies in respect of which

•applications shall be made before the Principal Bench of the Tribunal.

SECTION Section 15

Untitled Section

•section 35.

•Amendment

•of section 53.

•Amendment of

SECTION Section 150

Untitled Section

2.The matters in respect of which the said rules may be made are matters of procedure

•and administrative detail, and as such, it is not practicable to provide for them in the proposed

•Bill itself. The delegation of legislative power is, therefore, of a normal character.

•21

Definitions.

•Alteration of

SECTION Section 151

Untitled Section

articles.

•Matters to be

•stated in

prospectus.

•ANNEXURE

•EXTRACTS FROM THE COMPANIES ACT, 2013

•(18 OF 2013)

•* ****

SECTION Section 152

Untitled Section

2.In this Act, unless the context otherwise requires,––

•* ****

(41)“financial year”, in relation to any company or body corporate, means the

•period ending on the 31st day of March every year, and where it has been incorporated

•on or after the 1st day of January of a year, the period ending on the 31st day of March

•of the following year, in respect whereof financial statement of the company or body

•corporate is made up:

•Provided that on an application made by a company or body corporate, which is

•a holding company or a subsidiary of a company incorporated outside India and is

•required to follow a different financial year for consolidation of its accounts outside

•India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether

•or not that period is a year:

•Provided further that a company or body corporate, existing on the

•commencement of this Act, shall, within a period of two years from such commencement,

•align its financial year as per the provisions of this clause;

•* * * * *

SECTION Section 153

Untitled Section

14.(1) Subject to the provisions of this Act and the conditions contained in its

•memorandum, if any, a company may, by a special resolution, alter its articles including

•alterations having the effect of conversion of—

(a)a private company into a public company; or

(b)a public company into a private company:

•Provided that where a company being a private company alters its articles in such a

•manner that they no longer include the restrictions and limitations which are required to be

•included in the articles of a private company under this Act, the company shall, as from the

•date of such alteration, cease to be a private company:

•Provided further that any alteration having the effect of conversion of a public company

•into a private company shall not take effect except with the approval of the Tribunal which

•shall make such order as it may deem fit.

(2)Every alteration of the articles under this section and a copy of the order of the

•Tribunal approving the alteration as per sub-section ( 1) shall be filed with the Registrar,

•together with a printed copy of the altered articles, within a period of fifteen days in such

•manner as may be prescribed, who shall register the same.

•* * * * *

SECTION Section 154

Untitled Section

26.(1)* * * * *

(4)No prospectus shall be issued by or on behalf of a company or in relation to an

•intended company unless on or before the date of its publication, there has been delivered

•22

•to the Registrar for registration, a copy thereof signed by every person who is named therein

•as a director or proposed director of the company or by his duly authorised attorney.

(5)A prospectus issued under sub-section (1) shall not include a statement purporting

•to be made by an expert unless the expert is a person who is not, and has not been, engaged

•or interested in the formation or promotion or management, of the company and has given

•his written consent to the issue of the prospectus and has not withdrawn such consent

•before the delivery of a copy of the prospectus to the Registrar for registration and a

•statement to that effect shall be included in the prospectus.

(6)Every prospectus issued under sub-section (1) shall, on the face of it,—

(a)state that a copy has been delivered for registration to the Registrar as

•required under sub-section (4); and

(b)specify any documents required by this section to be attached to the copy

•so delivered or refer to statements included in the prospectus which specify these

documents.

(7)The Registrar shall not register a prospectus unless the requirements of this section

•with respect to its registration are complied with and the prospectus is accompanied by the

•consent in writing of all the persons named in the prospectus.

•* * * * *

SECTION Section 155

Untitled Section

29.(1) Notwithstanding anything contained in any other provisions of this Act,—

•* * * * *

(b)such other class or classes of public companies as may be prescribed,

•shall issue the securities only in dematerialised form by complying with the provisions of the

•Depositories Act, 1996 and the regulations made thereunder.

•* * * * *

SECTION Section 156

Untitled Section

35.(1)* * * * *

(2)No person shall be liable under sub-section (1), if he proves—

•* ****

•“(c) that, as regards every misleading statement purported to be made by an

•expert or contained in what purports to be a copy of or an extract from a report or

•valuation of an expert, it was a correct and fair representation of the statement, or a

•correct copy of, or a correct and fair extract from, the report or valuation; and he had

•reasonable ground to believe and did up to the time of the issue of the prospectus

•believe, that the person making the statement was competent to make it and that the

•said person had given the consent required by sub-section ( 5) of section 26 to the

•issue of the prospectus and had not withdrawn that consent before delivery of a copy

•of the prospectus for registration or, to the defendant’s knowledge, before allotment

thereunder.”.

•* * * * *

SECTION Section 157

Untitled Section

53.(1)* * * * *

(3)Where a company contravenes the provisions of this section, the company shall

•be punishable with fine which shall not be less than one lakh rupees but which may extend

•to five lakh rupees and every officer who is in default shall be punishable with imprisonment

•for a term which may extend to six months or with fine which shall not be less than one lakh

•rupees but which may extend to five lakh rupees, or with both.

•* * * * *

•Public offer

•of securities

•to be in

•dematerialised

form.

•Civil liability

•for

•misstatements

•in prospectus.

•Prohibition

•on issue of

•shares at

discount.

•22 of 1996.

•23

SECTION Section 158

Untitled Section

64.(1)* * * * *

(2)If a company and any officer of the company who is in default contravenes the

•provisions of sub-section (1), it or he shall be punishable with fine which may extend to one

•thousand rupees for each day during which such default continues, or five lakh rupees,

•whichever is less.

•* * * * *

SECTION Section 159

Untitled Section

•CHAPTER VI

•R

•EGISTRATION OF CHARGES

SECTION Section 16

Untitled Section

•section 64.

•Amendment

•of section 77.

•5

•10

•15

•20

•25

•30

•35

•40

•45

•4

(a)in case of charges created before the commencement of the Companies

•(Amendment) Act, 2019, within a period of three hundred days of such creation; or

(b)in case of charges created on or after the commencement of the

•Companies (Amendment) Act, 2019, within a period of sixty days of such creation,

•on payment of such additional fees as may be prescribed:

•Provided further that if the registration is not made within the period specified—

(a)in clause (a) to the first proviso, the registration of the charge shall be

•made within six months from the date of commencement of the Companies

•(Amendment) Act, 2019, on payment of such additional fees as may be prescribed

•and different fees may be prescribed for different classes of companies;

(b)in clause (b) to the first proviso, the Registrar may, on an application,

•allow such registration to be made within a further period of sixty days after

•payment of such ad valorem fees as may be prescribed.”.

SECTION Section 160

Untitled Section

77.(1) It shall be the duty of every company creating a charge within or outside India,

•on its property or assets or any of its undertakings, whether tangible or otherwise, and

•situated in or outside India, to register the particulars of the charge signed by the company

•and the charge-holder together with the instruments, if any, creating such charge in such

•form, on payment of such fees and in such manner as may be prescribed, with the Registrar

•within thirty days of its creation:

•Provided that the Registrar may, on an application by the company, allow such

•registration to be made within a period of three hundred days of such creation on payment

•of such additional fees as may be prescribed:

•Provided further that if registration is not made within a period of three hundred days

•of such creation, the company shall seek extension of time in accordance with section 87:

•* * * * *

SECTION Section 161

Untitled Section

86.If any company contravenes any provision of this Chapter, the company shall be

•punishable with fine which shall not be less than one lakh rupees but which may extend to

•ten lakh rupees and every officer of the company who is in default shall be punishable with

•imprisonment for a term which may extend to six months or with fine which shall not be less

•than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.

SECTION Section 162

Untitled Section

87.(1) The Central Government on being satisfied that—

(i)(a) the omission to file with the Registrar the particulars of any charge created

•by a company or any charge subject to which any property has been acquired by a

•company or any modification of such charge; or

(b)the omission to register any charge within the time required under this Chapter

•or the omission to give intimation to the Registrar of the payment or the satisfaction of

•a charge, within the time required under this Chapter; or

(c)the omission or mis-statement of any particular with respect to any such

•charge or modification or with respect to any memorandum of satisfaction or other

•entry made in pursuance of section 82 or section 83,

•was accidental or due to inadvertence or some other sufficient cause or it is not of a nature

•to prejudice the position of creditors or shareholders of the company; or

•(ii) on any other grounds, it is just and equitable to grant relief,

•it may on the application of the company or any person interested and on such terms and

•conditions as it may seem to the Central Government just and expedient, direct that the time

•for the filing of the particulars or for the registration of the charge or for the giving of

•intimation of payment or satisfaction shall be extended or, as the case may require, that the

•omission or mis-statement shall be rectified.

(2)Where the Central Government extends the time for the registration of a charge, the

•order shall not prejudice any rights acquired in respect of the property concerned before the

•charge is actually registered.

•* * * * *

•Notice to be

•given to

•Registrar for

•alteration of

•share capital.

•Duty to

•register

•charges, etc.

•Punishment

•for

contravention.

•Rectification

•by Central

•Government

•in register of

charges.

•24

SECTION Section 163

Untitled Section

90.(1)* * * * *

(9)The company or the person aggrieved by the order of the Tribunal may make an

•application to the Tribunal for relaxation or lifting of the restrictions placed under

•sub-section (8).

(10)If any person fails to make a declaration as required under sub-section ( 1), he

•shall be punishable with fine which shall not be less than one lakh rupees but which may

•extend to ten lakh rupees and where the failure is a continuing one, with a further fine which

•may extend to one thousand rupees for every day after the first during which the failure

continues.

(11)If a company, required to maintain register under sub-section ( 2) and file the

•information under sub-section (4), fails to do so or denies inspection as provided therein,

•the company and every officer of the company who is in default shall be punishable with fine

•which shall not be less than ten lakh rupees but which may extend to fifty lakh rupees and

•where the failure is a continuing one, with a further fine which may extend to one thousand

•rupees for every day after the first during which the failure continues.

•* * * * *

SECTION Section 164

Untitled Section

92.(1)* * * * *

(5)If a company fails to file its annual return under sub-section (4), before the expiry

•of the period specified under section 403 with additional fee, the company shall be punishable

•with fine which shall not be less than fifty thousand rupees but which may extend to five

•lakhs rupees and every officer of the company who is in default shall be punishable with

•imprisonment for a term which may extend to six months or with fine which shall not be less

•than fifty thousand rupees but which may extend to five lakh rupees, or with both.

•* * * * *

SECTION Section 165

Untitled Section

102.(1)* * * * *

(5)If any default is made in complying with the provisions of this section, every

•promoter, director, manager or other key managerial personnel who is in default shall be

•punishable with fine which may extend to fifty thousand rupees or five times the amount of

•benefit accruing to the promoter, director, manager or other key managerial personnel or any

•of his relatives, whichever is more.

•* * * * *

SECTION Section 166

Untitled Section

105.(1)* * * * *

(3)If default is made in complying with sub-section (2), every officer of the company

•who is in default shall be punishable with fine which may extend to five thousand rupees.

•* * * * *

SECTION Section 167

Untitled Section

117.(1)* * * * *

(2)If a company fails to file the resolution or the agreement under sub-section ( 1)

•before the expiry of the period specified under section 403 with additional fee, the company

•shall be punishable with fine which shall not be less than five lakh rupees but which may

•extend to twenty-five lakh rupees and every officer of the company who is in default, including

•liquidator of the company, if any, shall be punishable with fine which shall not be less than

•one lakh rupees but which may extend to five lakh rupees.

•* * * * *

•Register of

•significant

•beneficial

•owners in a

company.

•Annual

return.

•Statement to

•be annexed to

notice.

Proxies.

•Resolutions

•and

•agreements to

•be filed.

•25

SECTION Section 168

Untitled Section

121.(1)* * * * *

(3)If the company fails to file the report under sub-section (2) before the expiry of the

•period specified under section 403 with additional fee, the company shall be punishable with

•fine which shall not be less than one lakh rupees but which may extend to five lakh rupees

•and every officer of the company who is in default shall be punishable with fine which shall

•not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

•* * * * *

SECTION Section 169

Untitled Section

132.(1)* * * * *

(4)Notwithstanding anything contained in any other law for the time being in force,

•the National Financial Reporting Authority shall—

•* * * * *

(c)where professional or other misconduct is proved, have the power to make

•order for—

•* * * * *

(B)debarring the member or the firm from engaging himself or itself from

•practice as member of the Institute of Chartered Accountant of India referred to

•in clause ( e) of sub-section ( 1) of section 2 of the Chartered Accountants

•Act, 1949 for a minimum period of six months or for such higher period not exceeding

•ten years as may be decided by the National Financial Reporting Authority.

Explanation.—For the purposes of this sub-section, the expression "professional or

•other misconduct" shall have the same meaning assigned to it under section 22 of the

•Chartered Accountants Act, 1949.

•* * * * *

SECTION Section 17

Untitled Section

12.Section 86 of the principal Act shall be numbered as sub-section (1) thereof and

•after sub-section (1) as so numbered, the following sub-section shall be inserted, namely:—

•“(2) If any person wilfully furnishes any false or incorrect information or

•knowingly suppresses any material information, required to be registered in accordance

•with the provisions of section 77, he shall be liable for action under section 447.”.

SECTION Section 170

Untitled Section

135.(1) * * * * *

(5)The Board of every company referred to in sub-section ( 1), shall ensure that the

•company spends, in every financial year, at least two per cent. of the average net profits of

•the company made during the three immediately preceding financial years, in pursuance of

•its Corporate Social Responsibility Policy.

•Provided that the company shall give preference to the local area and areas around it

•where it operates, for spending the amount earmarked for Corporate Social Responsibility

activities.

•Provided further that if the company fails to spend such amount, the Board shall, in its

•report made under clause (o) of sub-section (3) of section 134, specify the reasons for not

•spending the amount.

Explanation.—For the purposes of this section “net profit” shall not include such sums

•as may be prescribed, and shall be calculated in accordance with the provisions of section 198.

SECTION Section 171

Untitled Section

137.(1)* * * * *

(3)If a company fails to file the copy of the financial statements under sub-section (1)

•or sub-section ( 2), as the case may be, before the expiry of the period specified in

SECTION Section 172

Untitled Section

•section 403, the company shall be punishable with fine of one thousand rupees for every

•day during which the failure continues but which shall not be more than ten lakh rupees, and

•the managing director and the Chief Financial Officer of the company, if any, and, in the

•absence of the managing director and the Chief Financial Officer, any other director who is

•charged by the Board with the responsibility of complying with the provisions of this

•section, and, in the absence of any such director, all the directors of the company, shall be

•punishable with imprisonment for a term which may extend to six months or with fine which

•shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

•* * * * *

SECTION Section 173

Untitled Section

140.(1)* * * * *

(3)If the auditor does not comply with sub-section (2), he or it shall be punishable with

•fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

•Report on

•annual general

meeting.

•Constitution

•of Natural

•Financial

•Reporting

Authority.

•Corporate

•social

responsibility.

•38 of 1949.

•Copy of

•financial

•statement to

•be filed with

Registrar.

•Removal,

•resignation of

•auditor and

•giving of

•special notice.

•38 of 1949.

•26

•* * * * *

SECTION Section 174

Untitled Section

157.(1)* * * * *

(2)If a company fails to furnish Director Identification Number under sub-section (1),

•before the expiry of the period specified under section 403 with additional fee, the company

•shall be punishable with fine which shall not be less than twenty-five thousand rupees but

•which may extend to one lakh rupees and every officer of the company who is in default shall

•be punishable with fine which shall not be less than twenty-five thousand rupees but which

•may extend to one lakh rupees.

•* * * * *

SECTION Section 175

Untitled Section

159.If any individual or director of a company, contravenes any of the provisions of

SECTION Section 176

Untitled Section

•section 152, section 155 and section 156, such individual or director of the company shall be

•punishable with imprisonment for a term which may extend to six months or with fine which

•may extend to fifty thousand rupees and where the contravention is a continuing one, with

•a further fine which may extend to five hundred rupees for every day after the first during

•which the contravention continues.

•* * * * *

SECTION Section 177

Untitled Section

165.(1)* * * * *

(6)If a person accepts an appointment as a director in contravention of

•sub-section (1), he shall be punishable with fine which shall not be less than five thousand

•rupees but which may extend to twenty-five thousand rupees for every day after the first

•during which the contravention continues.

•* * * * *

SECTION Section 178

Untitled Section

191.(1)* * * * *

(5)If a director of the company contravenes the provisions of this section, such

•director shall be punishable with fine which shall not be less than twenty-five thousand

•rupees but which may extend to one lakh rupees.

•* * * * *

SECTION Section 179

Untitled Section

197.(1)* * * * *

(7)Notwithstanding anything contained in any other provision of this Act but subject

•to the provisions of this section, an independent director shall not be entitled to any stock

•option and may receive remuneration by way of fees provided under sub-section ( 5),

•reimbursement of expenses for participation in the Board and other meetings and profit

•related commission as may be approved by the members.

•* * * * *

(15)If any person contravenes the provisions of this section, he shall be punishable

•with fine which shall not be less than one lakh rupees but which may extend to five lakh

rupees.

•* * * * *

SECTION Section 18

Untitled Section

13.For section 87 of the principal Act, the following section shall be substituted,

•namely:—

•“87. The Central Government on being satisfied that—

(a)the omission to give intimation to the Registrar of the payment or

•satisfaction of a charge, within the time required under this Chapter; or

(b)the omission or misstatement of any particulars, in any filing previously

•made to the Registrar with respect to any charge or modification thereof or with

•respect to any memorandum of satisfaction or other entry made in pursuance of

SECTION Section 180

Untitled Section

203.(1)* * * * *

(5)If a company contravenes the provisions of this section, the company shall be

•punishable with fine which shall not be less than one lakh rupees but which may extend to

•Company to

•inform

•Director

•Identification

•Number to

Registrar.

•Punishment

•for

contravention.

•Number of

directorships.

•Payment to

•director for

•loss of office,

etc., in

•connection

•with transfer

•of

•undertaking,

•property or

shares.

•Overall

•maximum

•managerial

•remuneration

•and

•managerial

•remuneration

•in case of

•absence or

•inadequacy of

profits.

•Appointment

•of key

•managerial

personnel.

•27

•five lakh rupees and every director and key managerial personnel of the company who is in

•default shall be punishable with fine which may extend to fifty thousand rupees and where

•the contravention is a continuing one, with a further fine which may extend to one thousand

•rupees for every day after the first during which the contravention continues.

•* * * * *

SECTION Section 181

Untitled Section

212.(1)* * * * *

(8)If the Director, Additional Director or Assistant Director of Serious Fraud

•Investigation Office authorised in this behalf by the Central Government by general or

•special order, has on the basis of material in his possession reason to believe (the reason for

•such belief to be recorded in writing) that any person has been guilty of any offence punishable

•under sections referred to in sub-section (6), he may arrest such person and shall, as soon

•as may be, inform him of the grounds for such arrest.

(9)The Director, Additional Director or Assistant Director of Serious Fraud Investigation

•Office shall, immediately after arrest of such person under sub-section (8), forward a copy of

•the order, along with the material in his possession, referred to in that sub-section, to the

•Serious Fraud Investigation Office in a sealed envelope, in such manner as may be prescribed

•and the Serious Fraud Investigation Office shall keep such order and material for such

•period as may be prescribed.

(10)Every person arrested under sub-section ( 8) shall within twenty-four hours, be

•taken to a Judical Magistrate or a Metropolitan Magistrate, as the case may be, having

•jurisdiction:

•Provided that the period of twenty-four hours shall exclude the time necessary for the

•journey from the place of arrest to the Magistrate’s court.

•* * * * *

SECTION Section 182

Untitled Section

238.(1)* * * * *

(3)The director who issues a circular which has not been presented for registration

•and registered under clause (c) of sub-section (1), shall be punishable with fine which shall

•not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

•* * * * *

SECTION Section 183

Untitled Section

243.(1)* * * * *

(2)Any person who knowingly acts as a managing director or other director or manager

•of a company in contravention of clause (b) of sub-section (1), and every other director of

•the company who is knowingly a party to such contravention, shall be punishable with

•imprisonment for a term which may extend to six months or with fine which may extend to five

•lakh rupees, or with both.

•* * * * *

SECTION Section 184

Untitled Section

248.(1)* * * * *

(c)a company is not carrying on any business or operation for a period of two

•immediately preceding financial years and has not made any application within such

•period for obtaining the status of a dormant company under section 455,

•he shall send a notice to the company and all the directors of the company, of his intention

•to remove the name of the company from the register of companies and requesting them to

•send their representations along with copies of the relevant documents, if any, within a

•period of thirty days from the date of the notice.

•Investigation

•into affairs of

•Company by

•Serious Fraud

•Investigation

Office.

•Registration

•of offer of

•schemes

•involving

•transfer of

shares.

•Consequence

•of termination

•or

•modification

•of certain

agreements.

•Power of

•Registrar to

•remove name

•of company

•from register

•of companies.

•28

•* * * * *

SECTION Section 185

Untitled Section

272.(1)* * * * *

(3)The Registrar shall be entitled to present a petition for winding up under section

•271, except on the grounds specified in clause (a) or clause (e) of that sub-section:

•Provided that the Registrar shall obtain the previous sanction of the Central Government

•to the presentation of a petition:

•Provided further that the Central Government shall not accord its sanction unless the

•company has been given a reasonable opportunity of making representations.

•* * * * *

SECTION Section 186

Untitled Section

398.(1)* * * * *

(f)the Registrar shall register change of registered office, alteration of

•memorandum or articles, prospectus, issue certificate of incorporation, register such

•document, issue such certificate, record the notice, receive such communication as

•may be required to be registered or issued or recorded or received, as the case may be,

•under this Act or the rules made thereunder or perform duties or discharge functions

•or exercise powers under this Act or the rules made thereunder or do any act which is

•by this Act directed to be performed or discharged or exercised or done by the Registrar

•in the electronic form in such manner as may be prescribed.

Explanation.—For the removal of doubts, it is hereby clarified that the rules made

•under this section shall not relate to imposition of fines or other pecuniary penalties or

•demand or payment of fees or contravention of any of the provisions of this Act or punishment

therefor.

•* * * * *

SECTION Section 187

Untitled Section

441.(1)* * * * *

(b)where the maximum amount of fine which may be imposed for such offence

•does not exceed five lakh rupees, by the Regional Director or any officer authorised by

•the Central Government,

•on payment or credit, by the company or, as the case may be, the officer, to the Central

•Government of such sum as that Tribunal or the Regional Director or any officer authorised

•by the Central Government, as the case may be, may specify:

•Provided that the sum so specified shall not, in any case, exceed the maximum amount

•of the fine which may be imposed for the offence so compounded:

•Provided further that in specifying the sum required to be paid or credited for the

•compounding of an offence under this sub-section, the sum, if any, paid by way of additional

•fee under sub-section (2) of section 403 shall be taken into account:

•Provided also that any offence covered under this sub-section by any company or its

•officer shall not be compounded if the investigation against such company has been initiated

•or is pending under this Act.

•* * * * *

(6)Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—

(a)any offence which is punishable under this Act, with imprisonment or fine, or

•with imprisonment or fine or with both, shall be compoundable with the permission of

•the Special Court, in accordance with the procedure laid down in that Act for

•compounding of offences;

•Petition for

•winding up.

•Provisions

•relating to

•filing of

•applications,

•documents,

•inspection,

etc., in

•electronic

form.

•Compounding

•of certain

offences.

•2 of 1974.

•29

(b)any offence which is punishable under this Act with imprisonment only or

•with imprisonment and also with fine shall not be compoundable.

•* * * * *

446B.Notwithstanding anything contained in this Act, if a One Person Company or a

•small company fails to comply with the provisions of sub-section ( 5) of section 92,

•sub-section (2) of section 117 or sub-section (3) of section 137, such company and officer in

•default of such company shall be punishable with fine or imprisonment or fine and

•imprisonment, as the case may be, which shall not be more than one-half of the fine or

•imprisonment or fine and imprisonment, as the case may be, of the minimum or maximum fine

•or imprisonment or fine and imprisonment, as the case may be, specified in such sections.”.

•* * * * *

SECTION Section 188

Untitled Section

•CHAPTER XXIX

•M

•ISCELLANEOUS

SECTION Section 189

Untitled Section

447.(1)* * * * *

•“Provided further that where the fraud involves an amount less than ten lakh

•rupees or one per cent. of the turnover of the company, whichever is lower, and does

•not involve public interest, any person guilty of such fraud shall be punishable with

•imprisonment for a term which may extend to five years or with fine which may extend

•to twenty lakh rupees or with both.”.

SECTION Section 19

Untitled Section

•section 82 or section 83,

•was accidental or due to inadvertence or some other sufficient cause or it is not of a

•nature to prejudice the position of creditors or shareholders of the company, it may, on

•the application of the company or any person interested and on such terms and

•conditions as it deems just and expedient, direct that the time for the giving of intimation

•of payment or satisfaction shall be extended or, as the case may require, that the

•omission or misstatement shall be rectified.”.

SECTION Section 190

Untitled Section

454.(1)* * * * *

(3)The adjudicating officer may, by an order impose the penalty on the company and

•the officer who is in default stating any non-compliance or default under the relevant provision

•of the Act.

(4)The adjudicating officer shall, before imposing any penalty, give a reasonable

•opportunity of being heard to such company and the officer who is in default.

•* * * * *

(8)(i) Where company does not pay the penalty imposed by the adjudicating officer

•or the Regional Director within a period of ninety days from the date of the receipt of the

•copy of the order, the company shall be punishable with fine which shall not be less than

•twenty-five thousand rupees but which may extend to five lakh rupees.

•(ii) Where an officer of a company who is in default does not pay the penalty within a

•period of ninety days from the date of the receipt of the copy of the order, such officer shall

•be punishable with imprisonment which may extend to six months or with fine which shall

•not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or

•with both.

•* * * * *

•Lesser

•penalties for

•One Person

•Companies or

•small

companies.

•Punishment

•for fraud.

•Adjudication

•of penalties.

•LOK SABHA

•————

•A

•BILL

•further to amend the Companies Act, 2013.

•————

•(Smt. Nirmala Sitharaman, Minister of Finance and Corporate Affairs )

•MGIPMRND—1882LS(S3)—22.07.2019.

•LOK SABHA

•------

•CORRIGENDUM

•to

•THE COMPANIES (AMENDMENT) BILL, 2019

•[To be/As introduced in Lok Sabha]

•Page 6, line 28,-

•for “second prviso,”

•read “second proviso,”

•NEW DELHI;

•July 24, 2019_________

•Shravana 2, 1941 (Saka)

SECTION Section 2

Untitled Section

1.(1) This Act may be called the Companies (Amendment) Act, 2019.

(2)The provisions of this Act, except sections 6, 7 and 8, clauses (i), (iii) and clause

•(iv) of section 14, sections 20 and 21, section 31, sections 33, 34 and 35, sections 37 and 38

•shall be deemed to have come into force on the 2nd day of November, 2018.

(3)The provisions of sections 6, 7 and 8, clauses (i), (iii) and clause (iv) of section 14,

•sections 20 and 21, section 31, sections 33, 34 and 35, sections 37 and 38 shall come into force

•on such date as the Central Government may, by notification in the Official Gazette, appoint

•Short title and

commencement.

•AS INTRODUCED IN LOK SABHA

•Bill No. 189 of 2019

•5

•2

•and different dates may be appointed for these provisions and any reference in any such

•provision to the commencement of this Act shall be construed as a reference to the coming

•into force of that provision.

SECTION Section 20

Untitled Section

14.In section 90 of the principal Act,—

(i)after sub-section (4), the following sub-section shall be inserted, namely:—

•“(4A) Every company shall take necessary steps to identify an individual

•who is a significant beneficial owner in relation to the company and require him

•to comply with the provisions of this section.”;

•(ii) for sub-section (9), the following sub-section shall be substituted, namely:—

•“(9) The company or the person aggrieved by the order of the Tribunal

•may make an application to the Tribunal for relaxation or lifting of the restrictions

•placed under sub-section (8), within a period of one year from the date of such

•order:

•Provided that if no such application has been filed within a period of one

•year from the date of the order under sub-section ( 8), such shares shall be

•Amendment

•of section 86.

•Substitution of

•new section for

SECTION Section 21

Untitled Section

•section 87.

•Rectification

•by Central

•Government

•in Register of

charges.

•Amendment

•of section 90.

•5

•10

•15

•20

•25

•30

•35

•40

•45

•5

•transferred, without any restrictions, to the authority constituted under

•sub-section (5) of section 125, in such manner as may be prescribed.”;

•(iii) after sub-section (9), as so substituted, the following sub-section shall be

•inserted, namely:—

•“(9A) The Central Government may make rules for the purposes of this

section.”;

•(iv) in sub-section (11), after the word, brackets and figure “sub-section ( 4)”,

•the words, brackets, figure and letter “or required to take necessary steps under

•sub-section (4A)” shall be inserted.

SECTION Section 22

Untitled Section

15.In section 92 of the principal Act, for sub-section ( 5), the following sub-section

•shall be substituted, namely:—

•“(5) If any company fails to file its annual return under sub-section (4), before

•the expiry of the period specified therein, such company and its every officer who is in

•default shall be liable to a penalty of fifty thousand rupees and in case of continuing

•failure, with a further penalty of one hundred rupees for each day after the first during

•which such failure continues, subject to a maximum of five lakh rupees.”.

SECTION Section 23

Untitled Section

16.In section 102 of the principal Act, for sub-section (5), the following sub-section

•shall be substituted, namely:—

•“(5) Without prejudice to the provisions of sub-section ( 4), if any default is

•made in complying with the provisions of this section, every promoter, director, manager

•or other key managerial personnel of the company who is in default shall be liable to a

•penalty of fifty thousand rupees or five times the amount of benefit accruing to the

•promoter, director, manager or other key managerial personnel or any of his relatives,

•whichever is higher.”.

SECTION Section 24

Untitled Section

17.In section 105 of the principal Act, in sub-section (3), for the words “punishable

•with fine which may extend to five thousand rupees”, the words “liable to a penalty of five

•thousand rupees” shall be substituted.

SECTION Section 25

Untitled Section

18.In section 117 of the principal Act, for sub-section (2), the following sub-section

•shall be substituted, namely:—

•“(2) If any company fails to file the resolution or the agreement under

•sub-section (1) before the expiry of the period specified therein, such company shall

•be liable to a penalty of one lakh rupees and in case of continuing failure, with a further

•penalty of five hundred rupees for each day after the first during which such failure

•continues, subject to a maximum of twenty-five lakh rupees and every officer of the

•company who is in default including liquidator of the company, if any, shall be liable to

•a penalty of fifty thousand rupees and in case of continuing failure, with a further

•penalty of five hundred rupees for each day after the first during which such failure

•continues, subject to a maximum of five lakh rupees.”.

SECTION Section 26

Untitled Section

19.In section 121 of the principal Act, for sub-section (3), the following sub-section

•shall be substituted, namely:—

•“(3) If the company fails to file the report under sub-section (2) before the expiry

•of the period specified therein, such company shall be liable to a penalty of one lakh

•rupees and in case of continuing failure, with a further penalty of five hundred rupees

•for each day after the first during which such failure continues, subject to a maximum

•of five lakh rupees and every officer of the company who is in default shall be liable to

•a penalty which shall not be less than twenty-five thousand rupees and in case of

•continuing failure, with a further penalty of five hundred rupees for each day after the

•first during which such failure continues, subject to a maximum of one lakh rupees.”.

•Amendment

•of section 92.

•Amendment

•of section

SECTION Section 27

Untitled Section

102.

•Amendment

•of section

SECTION Section 28

Untitled Section

105.

•Amendment

•of section

SECTION Section 29

Untitled Section

117.

•Amendment

•of section

SECTION Section 3

Untitled Section

2.In section 2 of the Companies Act, 2013 (hereinafter referred to as the principal Act),

•in clause (41),––

(a)for the first proviso, the following provisos shall be substituted, namely:—

•“Provided that where a company or body corporate, which is a holding

•company or a subsidiary or associate company of a company incorporated

•outside India and is required to follow a different financial year for consolidation

•of its accounts outside India, the Central Government may, on an application

•made by that company or body corporate in such form and manner as may be

•prescribed, allow any period as its financial year, whether or not that period is a

•year:

•Provided further that any application pending before the Tribunal as on

•the date of commencement of the Companies (Amendment) Act, 2019, shall be

•disposed of by the Tribunal in accordance with the provisions applicable to it

•before such commencement.”;

(b)in the second proviso, for the words “Provided further that”, the words

•“Provided also that” shall be substituted.

SECTION Section 30

Untitled Section

121.

•5

•10

•15

•20

•25

•30

•35

•40

•45

•6

SECTION Section 31

Untitled Section

20.In section 132 of the principal Act,—

(a)after sub-section (1), the following sub-section shall be inserted, namely:—

•“(1A) The National Financial Reporting Authority shall perform its functions

•through such divisions as may be prescribed.”;

(b)after sub-section (3), the following sub-sections shall be inserted, namely:—

•“(3A) Each division of the National Financial Reporting Authority shall be

•presided over by the Chairperson or a full-time Member authorised by the

Chairperson.

•(3B) There shall be an executive body of the National Financial Reporting

•Authority consisting of the Chairperson and full-time Members of such

•Authority for efficient discharge of its functions under sub-section ( 2) [other

•than clause (a)] and sub-section (4).”.

(c)in sub-section (4), in clause (c), for sub-clause (B), the following sub-clause

•shall be substituted, namely:—

•“(B) debarring the member or the firm from–

I.being appointed as an auditor or internal auditor or undertaking

•any audit in respect of financial statements or internal audit of the

•functions and activities of any company or body corporate; or

II.performing any valuation as provided under section 247,

•for a minimum period of six months or such higher period not exceeding ten

•years as may be determined by the National Financial Reporting Authority.”.

SECTION Section 32

Untitled Section

21.In section 135 of the principal Act,—

(a)in sub-section (5), —

(i)after the words “three immediately preceding financial years,”, the

•words “or where the company has not completed the period of three financial

•years since its incorporation, during such immediately preceding financial years,”

•shall be inserted;

•(ii) in the second prviso, after the words, “reasons for not spending the

•amount” occurring at the end, the words, brackets, figure and letters “and,

•unless the unspent amount relates to any ongoing project referred to in sub-

•section (6), transfer such unspent amount to a Fund specified in Schedule VII,

•within a period of six months of the expiry of the financial year” shall be inserted;

(b)after sub-section (5), the following sub-sections shall be inserted, namely:—

•“(6) Any amount remaining unspent under sub-section ( 5), pursuant to

•any ongoing project fulfilling such conditions as may be prescribed, undertaken

•by a company in persuance of its Corporate Social Responsibility Policy, shall

•be transferred by the company within a period of thirty days from the end of the

•financial year to a special account to be opened by the company in that behalf

•for that financial year in any scheduled bank to be called the Unspent Corporate

•Social Responsibility Account, and such amount shall be spent by the company

•in pursuance of its obligation towards the Corporate Social Responsibility Policy

•within a period of three financial years from the date of such transfer, failing

•which, the company shall transfer the same to a Fund specified in Schedule VII,

•within a period of thirty days from the date of completion of the third financial

year.

(7)If a company contravenes the provisions of sub-section ( 5) or

•sub-section (6), the company shall be punishable with fine which shall not be

•less than fifty thousand rupees but which may extend to twenty-five lakh rupees

•Amendment

•of section

SECTION Section 33

Untitled Section

132.

•Amendment

•of section

SECTION Section 34

Untitled Section

135.

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•7

•and every officer of such company who is in default shall be punishable with

•imprisonment for a term which may extend to three years or with fine which shall

•not be less than fifty thousand rupees but which may extend to five lakh rupees,

•or with both.

(8)The Central Government may give such general or special directions

•to a company or class of companies as it considers necessary to ensure compliance

•of provisions of this section and such company or class of companies shall

•comply with such directions.”.

SECTION Section 35

Untitled Section

22.In section 137 of the principal Act, in sub-section (3),—

(a)for the words “punishable with fine”, the words “liable to a penalty” shall be

•substituted;

(b)for the portion beginning with the words “punishable with imprisonment”,

•and ending with the words “five lakh rupees or with both”, the words “shall be liable

•to a penalty of one lakh rupees and in case of continuing failure, with a further penalty

•of one hundred rupees for each day after the first during which such failure continues,

•subject to a maximum of five lakh rupees” shall be substituted.

SECTION Section 36

Untitled Section

23.In section 140 of the principal Act, for sub-section (3), the following sub-section

•shall be substituted, namely:—

•“(3) If the auditor does not comply with the provisions of sub-section (2), he or

•it shall be liable to a penalty of fifty thousand rupees or an amount equal to the

•remuneration of the auditor, whichever is less, and in case of continuing failure, with

•a further penalty of five hundred rupees for each day after the first during which such

•failure continues, subject to a maximum of five lakh rupees.”.

SECTION Section 37

Untitled Section

24.In section 157 of the principal Act, for sub-section (2), the following sub-section

•shall be substituted, namely:—

•“(2) If any company fails to furnish the Director Identification Number under

•sub-section (1), such company shall be liable to a penalty of twenty-five thousand

•rupees and in case of continuing failure, with a further penalty of one hundred rupees

•for each day after the first during which such failure continues, subject to a maximum

•of one lakh rupees, and every officer of the company who is in default shall be liable to

•a penalty of not less than twenty-five thousand rupees and in case of continuing

•failure, with a further penalty of one hundred rupees for each day after the first during

•which such failure continues, subject to a maximum of one lakh rupees.”.

SECTION Section 38

Untitled Section

25.For section 159 of the principal Act, the following section shall be substituted,

•namely:—

•“159. If any individual or director of a company makes any default in complying

•with any of the provisions of section 152, section 155 and section 156, such individual

•or director of the company shall be liable to a penalty which may extend to fifty

•thousand rupees and where the default is a continuing one, with a further penalty

•which may extend to five hundred rupees for each day after the first during which such

•default continues.”.

SECTION Section 39

Untitled Section

26.In section 164 of the principal Act, in sub-section (1), after clause (h), the following

SECTION Section 4

Untitled Section

3.After section 10 of the principal Act, the following section shall be inserted,

•namely:—

•“10A. (1) A company incorporated after the commencement of the Companies

•(Amendment) Act, 2019 and having a share capital shall not commence any business

•or exercise any borrowing powers unless—

(a)a declaration is filed by a director within a period of one hundred and

•eighty days of the date of incorporation of the company in such form and

•verified in such manner as may be prescribed, with the Registrar that every

•subscriber to the memorandum has paid the value of the shares agreed to be

•taken by him on the date of making of such declaration; and

(b)the company has filed with the Registrar a verification of its registered

•office as provided in sub-section (2) of section 12.

(2)If any default is made in complying with the requirements of this section, the

•company shall be liable to a penalty of fifty thousand rupees and every officer who is

•in default shall be liable to a penalty of one thousand rupees for each day during

•which such default continues but not exceeding an amount of one lakh rupees.

(3)Where no declaration has been filed with the Registrar under clause (a) of

•sub-section ( 1) within a period of one hundred and eighty days of the date of

•incorporation of the company and the Registrar has reasonable cause to believe that

•the company is not carrying on any business or operations, he may, without prejudice

•to the provisions of sub-section (2), initiate action for the removal of the name of the

•company from the register of companies under Chapter XVIII.”.

SECTION Section 40

Untitled Section

•clause shall be inserted, namely:—

•“(i) he has not complied with the provisions of sub-section (1) of section 165.”.

SECTION Section 41

Untitled Section

27.In section 165 of the principal Act, in sub-section ( 6), for the portion beginning

•with the words “punishable with fine” and ending with the words “contravention continues”,

•the words “liable to a penalty of five thousand rupees for each day after the first during

•which such contravention continues” shall be substituted.

•Amendment

•of section

SECTION Section 42

Untitled Section

137.

•Amendment

•of section

SECTION Section 43

Untitled Section

140.

•Amendment

•of section

SECTION Section 44

Untitled Section

157.

•Substitution of

•new section for

SECTION Section 45

Untitled Section

•section 159.

•Penalty for

•default of

•certain

provisions.

•Amendment

•of section

SECTION Section 46

Untitled Section

164.

•Amendment

•of section

SECTION Section 47

Untitled Section

165.

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SECTION Section 48

Untitled Section

28.In section 191 of the principal Act, for sub-section (5), the following sub-section

•shall be substituted, namely:—

•“(5) If a director of the company makes any default in complying with the

•provisions of this section, such director shall be liable to a penalty of one lakh rupees.”.

SECTION Section 49

Untitled Section

29.In section 197 of the principal Act,—

(a)sub-section (7) shall be omitted;

(b)for sub-section (15), the following sub-section shall be substituted, namely:—

•“(15) If any person makes any default in complying with the provisions of

•this section, he shall be liable to a penalty of one lakh rupees and where any

•default has been made by a company, the company shall be liable to a penalty of

•five lakh rupees.”.

SECTION Section 5

Untitled Section

4.In section 12 of the principal Act, after sub-section (8), the following sub-section

•shall be inserted, namely:—

•“(9) If the Registrar has reasonable cause to believe that the company is not

•carrying on any business or operations, he may cause a physical verification of the

•registered office of the company in such manner as may be prescribed and if any

•default is found to be made in complying with the requirements of sub-section (1), he

•may without prejudice to the provisions of sub-section ( 8), initiate action for the

•removal of the name of the company from the register of companies under

SECTION Section 50

Untitled Section

30.In section 203 of the principal Act, for sub-section (5), the following sub-section

•shall be substituted, namely:—

•“(5) If any company makes any default in complying with the provisions of this

•section, such company shall be liable to a penalty of five lakh rupees and every

•director and key managerial personnel of the company who is in default shall be liable

•to a penalty of fifty thousand rupees and where the default is a continuing one, with

•a further penalty of one thousand rupees for each day after the first during which such

•default continues but not exceeding five lakh rupees.”.

SECTION Section 51

Untitled Section

31.In section 212 of the principal Act,—

(a)in sub-section ( 8), for the words “If the Director, Additional Director or

•Assistant Director”, the words “If any officer not below the rank of Assistant Director”

•shall be substituted;

(b)in sub-section (9), for the portion beginning with the words “The Director”

•and ending with the word, brackets and figure “sub-section (8)”, the words, brackets

•and figure “The officer authorised under sub-section (8) shall, immediately after arrest

•of such person under such sub-section” shall be substituted;

(c)in sub-section (10)—

(i)for the words “Judicial Magistrate”, the words “Special Court or Judicial

•Magistrate” shall be substituted;

•(ii) in the proviso, for the words “Magistrate’s court”, the words “Special

•Court or Magistrate’s court” shall be substituted;

(d)after sub-section (14), the following sub-section shall be inserted, namely:—

•“(14A) Where the report under sub-section (11) or sub-section (12) states

•that fraud has taken place in a company and due to such fraud any director, key

•managerial personnel, other officer of the company or any other person or entity,

•has taken undue advantage or benefit, whether in the form of any asset, property

•or cash or in any other manner, the Central Government may file an application

•before the Tribunal for appropriate orders with regard to disgorgement of such

•asset, property or cash and also for holding such director, key managerial

•personnel, other officer or any other person liable personally without any limitation

•of liability.”.

SECTION Section 52

Untitled Section

32.In section 238 of the principal Act, in sub-section (3), for the words “punishable

•with fine which shall not be less than twenty-five thousand rupees but which may extend to

•five lakh rupees”, the words “liable to a penalty of one lakh rupees” shall be substituted.

•Amendment

•of section

SECTION Section 53

Untitled Section

191.

•Amendment

•of section

SECTION Section 54

Untitled Section

197.

•Amendment

•of section

SECTION Section 55

Untitled Section

203.

•Amendment

•of section

SECTION Section 56

Untitled Section

212.

•Amendment

•of section

SECTION Section 57

Untitled Section

238.

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SECTION Section 58

Untitled Section

33.In section 241 of the principal Act,—

(a)in sub-section (2), the following proviso shall be inserted, namely:—

•“Provided that the applications under this sub-section, in respect of such

•company or class of companies, as may be prescribed, shall be made before the

•Principal Bench of the Tribunal which shall be dealt with by such Bench.”;

(b)after sub-section (2), the following sub-sections shall be inserted, namely:—

•“(3) Where in the opinion of the Central Government there exist

•circumstances suggesting that––

(a)any person concerned in the conduct and management of the

•affairs of a company is or has been in connection therewith guilty of

•fraud, misfeasance, persistent negligence or default in carrying out his

•obligations and functions under the law or of breach of trust;

(b)the business of a company is not or has not been conducted and

•managed by such person in accordance with sound business principles

•or prudent commercial practices;

(c)a company is or has been conducted and managed by such

•person in a manner which is likely to cause, or has caused, serious injury

•or damage to the interest of the trade, industry or business to which such

•company pertains; or

(d)the business of a company is or has been conducted and managed

•by such person with intent to defraud its creditors, members or any other

•person or otherwise for a fraudulent or unlawful purpose or in a manner

•prejudicial to public interest,

•the Central Government may initiate a case against such person and refer the

•same to the Tribunal with a request that the Tribunal may inquire into the case

•and record a decision as to whether or not such person is a fit and proper person

•to hold the office of director or any other office connected with the conduct and

•management of any company.

(4)The person against whom a case is referred to the Tribunal under

•sub-section (3), shall be joined as a respondent to the application.

(5)Every application under sub-section (3)––

(a)shall contain a concise statement of such circumstances and

•materials as the Central Government may consider necessary for the

•purposes of the inquiry; and

(b)shall be signed and verified in the manner laid down in the Code

•of Civil Procedure, 1908, for the signature and verification of a plaint in a

•suit by the Central Government.”.

SECTION Section 59

Untitled Section

34.In section 242 of the principal Act, after sub-section (4), the following sub-section

•shall be inserted, namely:––

•“(4A) At the conclusion of the hearing of the case in respect of sub-section (3)

•of section 241, the Tribunal shall record its decision stating therein specifically as to

•whether or not the respondent is a fit and proper person to hold the office of

•director or any other office connected with the conduct and management of any

company.”.

•Amendment

•of section

SECTION Section 6

Untitled Section

•Chapter XVIII.”.

•Amendment

•of section 2.

•Insertion of

•new section

10A.

•Commencement

•of business, etc.

•Amendment

•of section 12.

•18 of 2013.

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SECTION Section 60

Untitled Section

242.

•5 of 1908.

•Amendment

•of section

SECTION Section 61

Untitled Section

241.

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SECTION Section 62

Untitled Section

35.In section 243 of the principal Act,––

(a)after sub-section (1), the following sub-sections shall be inserted, namely:—

•“(1A) The person who is not a fit and proper person pursuant to

•sub-section (4A) of section 242 shall not hold the office of a director or any

•other office connected with the conduct and management of the affairs of any

•company for a period of five years from the date of the said decision:

•Provided that the Central Government may, with the leave of the Tribunal,

•permit such person to hold any such office before the expiry of the said period

•of five years.

•(1B) Notwithstanding anything contained in any other provision of this

•Act, or any other law for the time being in force or any contract, memorandum or

SECTION Section 63

Untitled Section

•articles, on the removal of a person from the office of a director or any other

•office connected with the conduct and management of the affairs of the company,

•that person shall not be entitled to, or be paid, any compensation for the loss or

•termination of office.”;

(b)in sub-section (2), after the word, brackets and figure “sub-section (1)”, the

•words, brackets, figure and letter “or sub-section (1A)” shall be inserted.

SECTION Section 64

Untitled Section

36.In section 248 of the principal Act, in sub-section (1),—

(a)in clause (c), for the word and figures “section 455,”, the words and figures

•“section 455; or” shall be substituted;

(b)after clause (c) and before the long line, the following clauses shall be inserted,

•namely:—

•“(d) the subscribers to the memorandum have not paid the subscription

•which they had undertaken to pay at the time of incorporation of a company and

•a declaration to this effect has not been filed within one hundred and eighty

•days of its incorporation under sub-section (1) of section 10A; or

(e)the company is not carrying on any business or operations, as revealed

•after the physical verification carried out under sub-section (9) of section 12.”.

SECTION Section 65

Untitled Section

37.In section 272 of the principal Act, in sub-section (3), for the words, brackets and

•letter “or clause (e) of that sub-section”, the words “of that section” shall be substituted.

SECTION Section 66

Untitled Section

38.In section 398 of the principal Act, in sub-section ( 1), in clause ( f), the word

•“prospectus,” shall be omitted.

SECTION Section 67

Untitled Section

39.In section 441 of the principal Act,—

(a)in sub-section ( 1), in clause ( b), for the words “does not exceed five lakh

•rupees”, the words “does not exceed twenty-five lakh rupees” shall be substituted;

(b)for sub-section (6), the following sub-section shall be substituted, namely:—

•“(6) Notwithstanding anything contained in the Code of Criminal

•Procedure, 1973, any offence which is punishable under this Act with

•imprisonment only or with imprisonment and also with fine shall not be

compoundable.”.

SECTION Section 68

Untitled Section

40.In section 446B of the principal Act, for the portion beginning with the words

•“punishable with fine” and ending with the words “specified in such sections”, the words

•“liable to a penalty which shall not be more than one-half of the penalty specified in such

•sections” shall be substituted.

SECTION Section 69

Untitled Section

41.In section 447 of the principal Act, in the second proviso, for the words “twenty

•lakh rupees”, the words “fifty lakh rupees” shall be substituted.

•Amendment

•of section

SECTION Section 7

Untitled Section

5.In section 14 of the principal Act,—

(i)in sub-section ( 1), for the second proviso, the following provisos shall be

•substituted, namely:—

•“Provided further that any alteration having the effect of conversion of a

•public company into a private company shall not be valid unless it is approved

•by an order of the Central Government on an application made in such form and

•manner as may be prescribed:

•Provided also that any application pending before the Tribunal, as on the

•date of commencement of the Companies (Amendment) Act, 2019, shall be

•disposed of by the Tribunal in accordance with the provisions applicable to it

•before such commencement.”;

•(ii) in sub-section (2), for the word “Tribunal”, the words “Central Government”

•shall be substituted.

SECTION Section 70

Untitled Section

243.

•Amendment

•of section

SECTION Section 71

Untitled Section

248.

•Amendment

•of section

SECTION Section 72

Untitled Section

272.

•Amendment

•of section

SECTION Section 73

Untitled Section

398.

•Amendment

•of section

SECTION Section 74

Untitled Section

441.

•Amendment

•of section

446B.

•Amendment

•of section

SECTION Section 75

Untitled Section

447.

•2 of 1974.

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SECTION Section 76

Untitled Section

42.In section 454 of the principal Act,—

(i)for sub-section ( 3), the following sub-section shall be substituted,

•namely:—

•“(3) The adjudicating officer may, by an order—

(a)impose the penalty on the company, the officer who is in default,

•or any other person, as the case may be, stating therein any non-

•compliance or default under the relevant provisions of this Act; and

(b)direct such company, or officer who is in default, or any other

•person, as the case may be, to rectify the default, wherever he considers

fit.”;

•(ii) in sub-section (4), for the words “such company and the officer who is in

•default”, the words “such company, the officer who is in default or any other person”

•shall be substituted;

•(iii) in sub-section (8),—

(a)in clause (i), for the words “does not pay the penalty imposed by the

•adjudicating officer or the Regional Director”, the words, brackets and figures

•“fails to comply with the order made under sub-section (3) or sub-section (7), as

•the case may be,” shall be substituted;

(b)in clause (ii)––

(i)for the words “Where an officer of a company”, the words “Where

•an officer of a company or any other person” shall be substituted;

•(ii) for the words “does not pay the penalty”, the words, brackets

•and figures “fails to comply with the order made under sub-section (3) or

•sub-section (7), as the case may be,” shall be substituted.

SECTION Section 77

Untitled Section

43.After section 454 of the principal Act, the following section shall be inserted,

•namely:—

•“454A. Where a company or an officer of a company or any other person having

•already been subjected to penalty for default under any provisions of this Act, again

•commits such default within a period of three years from the date of order imposing

•such penalty passed by the adjudicating officer or the Regional Director, as the case

•may be, it or he shall be liable for the second or subsequent defaults for an amount

•equal to twice the amount of penalty provided for such default under the relevant

•provisions of this Act.”.

SECTION Section 78

Untitled Section

44.(1) The Companies (Amendment) Second Ordinance, 2019 is hereby repealed.

(2)Notwithstanding such repeal, anything done or any action taken under the said

•Ordinance shall be deemed to have been done or taken under this Act.

•Amendment

•of section

SECTION Section 79

Untitled Section

454.

•Insertion of

•new section

454A.

•Penalty for

•repeated

default.

•Repeal and

savings.

Ord.6 of 2019.

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•STATEMENT OF OBJECTS AND REASONS

•The Companies Act, 2013 (the Act) was enacted with a view to consolidate and amend

•the law relating to companies. The Act introduced significant changes relating to disclosures

•to stakeholders, accountability of directors, auditors and key managerial personnel, investor

•protection and corporate governance.

SECTION Section 8

Untitled Section

6.In section 26 of the principal Act,—

(i)in sub-sections (4), (5) and (6), for the word “registration”, the word “filing”

•shall be substituted;

•(ii) after sub-section (1), sub-section (7) shall be omitted.

SECTION Section 80

Untitled Section

2.In order to review the existing provisions of the Act dealing with the offences and

•to make recommendations to promote better corporate compliance, the Government of India

•constituted a Committee in July, 2018 and the said Committee, after taking the views of

•several stakeholders, submitted its Report in August, 2018. The Committee recommended

•that the existing rigour of the law should continue for serious offences, whereas the lapses

•that are essentially technical or procedural in nature may be shifted to in-house adjudication

process.

SECTION Section 81

Untitled Section

3.The recommendations made by the Committee were examined by the Government

•and it was noted that the changes in the Companies Act, 2013 suggested by the said Committee

•would fill critical gaps in the corporate governance and compliance framework as enshrined

•in the said Act while simultaneously extending greater ease of doing business to law abiding

corporates.Accordingly, it was proposed to amend certain provisions of the Companies

•Act, 2013. However, in view of the urgency, the Companies (Amendment) Ordinance, 2018

•was promulgated on 2nd day of November, 2018. To replace the aforesaid Ordinance, a Bill,

•namely, the Companies (Amendment) Bill, 2018 was introduced in the Lok Sabha and passed

•in the said House on the 4th day of January, 2019. However, the said Bill could not be taken

•up for consideration in the Rajya Sabha.

SECTION Section 82

Untitled Section

4.In order to give continued effect to the Companies (Amendment) Ordinance, 2018,

•the President promulgated the Companies (Amendment) Ordinance, 2019 and the Companies

•(Amendment) Second Ordinance, 2019 on the 12th day of January, 2019 and the 21st day of

•February, 2019 respectively. It is now proposed to bring the Companies (Amendment) Bill,

•2019 to replace the Companies (Amendment) Second Ordinance, 2019 with certain other

•amendments which are considered necessary to ensure more accountability and better

•enforcement to strengthen the corporate governance norms and compliance management in

•corporate sector.

SECTION Section 83

Untitled Section

5.The Companies (Amendment) Bill, 2019 which seeks to replace the Companies

•(Amendment) Second Ordinance, 2019 with certain additional amendments, inter alia ,

•provides for the following, namely:—

(i)to amend clause ( 41) of section 2 of the Companies Act, 2013 so as to

•empower the Central Government to allow certain companies to have a different financial

•year instead of as determined by the Tribunal;

•(ii) to amend section 12 of the Act empowering the Registrar to initiate action for

•the removal of name of the company from register of companies, if the company is not

•carrying on any business or operation in accordance with the provisions of the Act;

•(iii) to amend sixteen sections of the Act so as to modify the punishment as

•provided in the said sections from fine to monetary penalties to lessen the burden

•upon the Special Courts;

•(iv) to amend section 132 of the Act to enable the National Financial Reporting

•Authority to perform its functions through divisions and the Executive Body;

•13

(v)to amend section 135 of the Act so as to bring clarity to—

(a)carry forward the unspent corporate social responsibility amount, to a

•special account to be spent within three financial years and transfer thereafter

•to the Fund specified in Schedule VII, in case of an ongoing project; and

(b)transfer the unspent amount to the Fund specified under Schedule VII,

•in other cases;

•(vi) to amend sections 241, 242 and 243 of the Act so as to empower the Central

•Government to approach Tribunal to issue an order against the persons who are

•connected with the conduct and management of the company as not fit and proper

•persons for the acts committed by them which amount to mismanagement; and

•(vii) to amend section 441 of the Act so as to enhance the jurisdiction of the

•Regional Director for compounding the offences.

SECTION Section 84

Untitled Section

6.As the Parliament was not in session and immediate action was required to be

•taken, the Companies (Amendment) Second Ordinance, 2019 was promulgated by the

•President on the 21st day of February, 2019.

SECTION Section 85

Untitled Section

7.The Notes on Clauses explain in detail the various provisions of the Bill.

SECTION Section 86

Untitled Section

8.The Bill seeks to replace the aforesaid Ordinance.

•N

•EW DELHI; NIRMALA SITHARAMAN.

•The 19th July, 2019.

•14

•Notes on clauses

SECTION Section 87

Untitled Section

•Clause 1 of the Bill provides for the short title and commencement of the proposed

Legislation.

SECTION Section 88

Untitled Section

•Clause 2 of the Bill seeks to amend clause (41) of section 2 of the Companies Act, 2013

•(the Act) so as to enable the relevant companies to follow different financial year with the

•approval of the Central Government, instead of taking approval of the Tribunal.

SECTION Section 89

Untitled Section

•Clause 3 of the Bill seeks to insert a new section 10A relating to commencement of

•business etc., to provide that a company having a share capital shall not commence business

•or exercise any borrowing powers unless a declaration is filed with the Registrar by a director

•that every subscriber to the memorandum has paid the value of shares and the company has

•filed with the Registrar the verification of its registered office. The said clause further provides

•that non-compliance with filing of declaration may result into action by Registrar under

SECTION Section 9

Untitled Section

7.In section 29 of the principal Act,—

(i)in sub-section (1), in clause (b), the word “public” shall be omitted;

•(ii) after sub-section (1), the following sub-section shall be inserted, namely:—

•“(1A) In case of such class or classes of unlisted companies as may be

•prescribed, the securities shall be held or transferred only in dematerialised form

•in the manner laid down in the Depositories Act, 1996 and the regulations made

thereunder.”.

SECTION Section 90

Untitled Section

•Chapter XVIII.

SECTION Section 91

Untitled Section

•Clause 4 of the Bill seeks to insert a new sub-section ( 9) in section 12 of the Act to

•provide that the Registrar may cause a physical verification of the registered office of the

•company if he has reasonable cause to believe that company is not carrying on any business

•or operations as specified and to provide consequent action thereof.

SECTION Section 92

Untitled Section

•Clause 5 of the Bill seeks to amend the second proviso to sub-section (1) of section 14

•of the Act to provide that any alteration having the effect of conversion of a public company

•into a private company shall not be valid unless it is approved by an order of the Central

•Government on an application made in such form and manner as may be prescribed. Earlier

•this approval was obtained from the Tribunal.

SECTION Section 93

Untitled Section

•Clause 6 of the Bill seeks to amend sub-sections (4), (5) and (6) of section 26 of the

•Act so as to substitute the requirement of registration of prospectus with filing of prospectus

•with the Registrar.

SECTION Section 94

Untitled Section

•Clause 7of the Bill seeks to amend sub-section ( 1) of section 29 of the Act and to

•insert sub-section ( 1A) therein to provide for the requirement of issuance, holding or

•transferring of securities in dematerialised form for any class of unlisted companies, as may

•be prescribed by the Central Government.

SECTION Section 95

Untitled Section

•Clause 8 of the Bill seeks to amend clause (c) in sub-section (2) of section 35 of the Act

•to provide that the copy of the prospectus shall be filed with the Registrar instead of

•delivery for registration.

SECTION Section 96

Untitled Section

•Clause 9 of the Bill seeks to amend sub-section (3) of section 53 of the Act to provide

•for monetary penalty and refund of monies in case of failure to comply with the provision of

•the said section.

SECTION Section 97

Untitled Section

•Clause 10 of the Bill seeks to amend sub-section (2) of section 64 of the Act to provide

•for monetary penalty for company and its officers in default in case of failure to comply with

•provision of the said section.

SECTION Section 98

Untitled Section

•Clause 11 of the Bill seeks to amend the first and second proviso of sub-section (1) of

SECTION Section 99

Untitled Section

•section 77 of the Act to provide that the Registrar may, on the application made by a company,

•allow registration of charge, in case of charges created before the commencement of the

•Companies (Amendment) Act, 2019, within a period of three hundred days or in case of

•charges created after the commencement of the said Act within sixty days, on payment of

•15

•additional fees. The additional period within which the charges are required to be registered

•is also provided.