Company Law: Highlights of Companies (Amendment) Ordinance 2019
Number of changes and amendment affecting almost every company is the part of new
Companies (Amendment) Ordinance 2019. One need to be careful as non compliance is going to be very costlier. The major amendment in the ordinance is as under:
1. Commencement Certificate is mandatory now to be obtain within 6 months of Incorporation without which, it can not comment its business activity or borrow money.
2. The ROC can strike off a company if the address of Regd Office is bogus or incomplete/improper address.
3. Conversion of public Ltd to Pvt Ltd matters shifted from NCLT to Regional Directorate.
4. Company cannot issue shares at discount, – heavy penalty imposed on violation.
5. Alteration of Authorised Capital to be intimated within 30 days, default – penalty 1000 every day or 5 Lac whichever is less.
6. Creation of charge filing with ROC- time limit reduced from 300 days to 60 days.
7. Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail
8. Annual Return should be filed within 60 days from AGM, failure to this, penalty of 100 per day to Company + directors max 5 Lakh apart from ROC delay charges is applicable.
9. Penalty of 5 lakh to Company secretary certifying wrong Annual Return.
10. Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading – penalty for Company + Directors + KMP – 50K
11. filing of Resolutions with ROC- delay will be very costly now. Penalty for defaulter increased substantially. 500 every day max 25 Lakh
12.Filing of Balance sheet with ROC within time limit- failure is costly for Company + Directors both. Penalty of 100 per day + 1 lakh to Company + Director each.
13. Resignation of Auditor must be filed by the resigning Auditor within 30 days, failure to which the resigning Auditor is liable for penalty of 50,000 + 500 per day.
14. A director can not become director in morethan 20 companies. If he continues, he becomes disqualified now.
15. Appointment of CS on payroll (Pvt Co having paid-up capital 5 cr & above) is mandatory. Default is now very costly- penalty increased substantially.
16. ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months.