The Companies (Amendment) Bill, 2020 Assented by President as Companies (Amendment) Act, 2020, provides the following, namely: —

To incorporate a new Chapter XXIA in the Act related to Producer Companies.

To decriminalize certain offences under the Act.

To make provisions for allowing payment of adequate remuneration to non-executive directors in case of inadequacy of profits.

To speed up timeline of right issue under section 62.

To extend exemptions to certain classes of NBFC and housing finance companies.

To provide companies not required to constitute CSR Committee and to allow to set off any amount spent in excess of their CSR.

To provide for specified classes of unlisted companies to prepare and file their periodical financial results.

To allow direct listing of securities by Indian companies in permissible foreign jurisdictions as per rules to be prescribed.

To clarify the jurisdiction of Trial Court.

To set up Benches of the NCLT.

To relax provisions relating to charging of higher additional fees for default as provided in section 403.

To extend applicability lesser penalties to Producer Companies and start-ups.

Let’s have a quick over view on the provisions amended in the Companies (Amendment) Act, 2020

Sections Companies Act, 2013 (existing Provisions) Companies (Amendment) Act, 2020 (New Provisions)
2(52) Definition of Listed Company

(Amended)

“Listed company” means a company which has any of its securities listed on any recognized stock exchange. “Listed company” means a company which has any of its securities listed on any recognized stock exchange.

“Provided that such class of companies, which have listed or intend to list such class of securities, as may be prescribed in consultation with the Securities and Exchange Board, shall not be considered as listed companies.”

8(11): Formation of Companies with Charitable Objects etc.

(Amended)

If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the 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 twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both:

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors 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 twenty-five lakh rupees:

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

16(1)(b) & Rectification of Name of Company (is identical with or too nearly resembles to an existing trade mark)

(Amended)

“within a period of Six months” “Within a period of three months”
16(3) Rectification of Name

(Amended)

If a company makes default in complying with any direction given under sub-section (1), the company shall be punishable with fine of Rs. 1,000/- for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be less than Rs. 5,000/- but which may extend to Rs. 100,000/-. If a company is in default in complying with any direction given under sub-section (1), the Central Government shall allot a new name to the company in such manner as may be prescribed and the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, which the company shall use thereafter:

Provided that nothing in this sub-section shall prevent a company from subsequently changing its name in accordance with the provisions of Section 13.”

23 Public Offer and Private Placement

(Insertion of certain Sub Sections)

————- 23(3): Such class of public companies may issue such class of securities for the purposes of listing on permitted stock exchanges in permissible foreign jurisdictions or such other jurisdictions, as may be prescribed.

23(4): The Central Government may, by notification, exempt any class or classes of

public companies referred to in sub-section (3) from any of the provisions of this Chapter, Chapter IV, section 89, section 90 or section 127 and a copy of every such notification shall, as soon as may be after it is issued, be laid before both Houses of Parliament.

26(9) Matters to be stated in Prospectus

(Amended)

If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and every person who is knowingly a party to the issue of such prospectus 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 three lakh rupees, or with both. If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than Rs. 50,000/- but which may extend to Rs 3,00,000/- and every person who is knowingly a party to the issue of such prospectus shall be punishable with fine which shall not be less than Rs. 50,000/- but which may extend to Rs 3,00,000/-.
40(5) Securities to be Dealt with in Stock Exchange

(Amended) 

If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both. If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than Rs 5,00,000/- but which may extend to Rs 50,00,000/- and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000/- but which may extend to Rs 3,00,000/-.
48(5) Variation of Shareholders’ Rights

(Omitted)

Where any default is made in complying with the provisions of this section, the company shall be punishable with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 5,00,000 and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 6 months or with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 5,00,000 or with both. Omission of Sub-Section 5.
56(6) Transfer and Transmission of Securities

(Amended)

Where any default is made in complying with the provisions of sub-sections (1) to (5), 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 and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees. Where any default is made in complying with the provisions of sub-sections (1) to (5), the company and every officer of the company who is in default shall be liable to a penalty of Rs 50,000/-.
59(5) Rectification of Register of Members

(Omitted)

If any default is made in complying with the order of the Tribunal under this section, the company shall be punishable with fine which shall not be less than Rs. 1,00,000 but which may extend to Rs. 5,00,000 and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs. 1,00,000 but which may extend to Rs. 3,00,000, or with both Omission of Sub-Section 5.
62(1)(a)(i) Further Issue of Share Capital

(Insertion of few words)

The offer shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days and not exceeding thirty days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined. The offer shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days or such lesser number of days as may be prescribe and not exceeding thirty days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.
64(2) Notice to be given to Registrar for Alteration of Share Capital

(Amended)

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. 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 five hundred rupees for each day during which such default continues, subject to a maximum of five lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.
66(11) Reduction of Share Capital

(Omitted)

If a company fails to comply with the provisions of sub-section (4), it shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees. Omitted
68(11) Power of company to Purchase its Own Securities

(Amended)

If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board, for the purposes of clause (f) of sub-section (2), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and every officer of the 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 one lakh rupees but which may extend to three lakh rupees, or with both. If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board, for the purposes of clause (f) of sub-section (2), the company shall be punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs 3 Lakh and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 3 Lakh.
71(11) Debentures

(Omitted)

If any default is made in complying with the order of the Tribunal under this section, every officer of the 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 two lakh rupees but which may extend to five lakh rupees, or with both. Omitted
86(1) Punishment for Contravention with respect to charges

(Amended)

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. If any company is in default in complying with any of the provisions of this Chapter, the company shall be liable to a penalty of Rs 5 Lakhs and every officer of the company who is in default shall be liable to a penalty of Rs 50,000/-.
88(5) Register of Members etc.

(Amended)

If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 3,00,000 and where the failure is a continuing one, with a further fine which may extend to Rs. 1,000 for every day, after the first during which the failure continues. If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company shall be liable to a penalty of Rs 3 Lakhs and every officer of the company who is in default shall be liable to a penalty of Rs 50,000/-.
89(5) Declaration in respect of Beneficial Interest in any Share

(Amended)

If any person fails, to make a declaration as required under sub-section (1) or sub-section (2) or sub-section (3), without any reasonable cause, he shall be punishable with fine which may extend to Rs. 50,000 and where the failure is a continuing one, with a further fine which may extend to Rs. 1000 for every day after the first during which the failure continues. If any person fails to make a declaration as required under sub-section (1) or sub-section (2) or sub-section (3), he shall be liable to a penalty of Rs 50,000/- and in case of continuing failure, with a further penalty of Rs 200/- for each day after the first during which such failure continues, subject to a maximum of Rs 5 Lakhs.
89(7) Declaration in respect of Beneficial Interest in any Share

(Amended)

If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 500/- but which may extend to Rs. 1,000/- and where the failure is a continuing one, with a further fine which may extend to Rs. 1,000/- for every day after the first during which the failure continues. If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be liable to a penalty of one thousand rupees for each day during which such failure continues, subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default
89(11) Declaration in respect of Beneficial Interest in any Share

(Insertion of Sub Section)

——- The Central Government may, by notification, exempt any class or classes of persons from complying with any of the requirements of this section, except sub-section (10), if it is considered necessary to grant such exemption in the public interest and any such exemption may be granted either unconditionally or subject to such conditions as may be specified in the notification.
90(10) Register of Significant Beneficial Owners of the Company

(Amended)

If any person fails to make a declaration as required under sub-section (1), he shall be punishable with imprisonment for a term which may extend to 1 year or with fine which shall not be less than Rs 1,00,000/- but which may extend to Rs 10,00,000/- or with both and where the failure is a continuing one, with a further fine which may extend to Rs. 1,000/- for every day after the first during which the failure continues. If any person fails to make a declaration as required under sub-section (1), he shall be liable to a penalty of Rs 50,000/- and in case of continuing failure, with a further penalty of Rs 1,000/- for each day after the first during which such failure continues, subject to a maximum of Rs 2 Lakhs.
90(11) Register of Significant Beneficial Owners of the Company

(Amended)

If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) [or required to take necessary steps under sub-section (4A)], 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 Rs. 10,00,000/- but which may extend to Rs. 50,00,000/- and where the failure is a continuing one, with a further fine which may extend to Rs. 1,000/- for every day after the first during which the failure continues. If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of Rs 1 Lakhs and in case of continuing failure, with a further penalty of Rs 500/- for each day, after the first during which such failure continues, subject to a maximum of Rs 5,00,000/- and every officer of the company who is in default shall be liable to a penalty of Rs 25,000/- and in case of continuing failure, with a further penalty of Rs 200/- for each day, after the first during which such failure continues, subject to a maximum of Rs. 1,00,000/-.
92(5) Annual Return

(Amended)

 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 Rs.50,000/- and in case of continuing failure, with further penalty of Rs.100/- for each day during which such failure continues, subject to a maximum of Rs.500,000/-. 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 Rs. 10,000/- and in case of continuing failure, with further penalty of Rs.100 for each day during which such failure continues, subject to a maximum of Rs. 200,000/- in case of a company and Rs. 50,000/- in case of an officer who is in default.
92(6) Annual Return

(Amended)

 

If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees. If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be liable to a penalty of Rs 2,00,000/-.
105(5) Proxies

(Amended)

If for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company’s expense to any member entitled to have a notice of the meeting sent to him and to vote thereat by proxy, every officer of the company who knowingly issues the invitations as aforesaid or willfully authorizes or permits their issue shall be punishable with fine which may extend to 1 lakh rupees:

Provided that an officer shall not be punishable under this sub-section by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

If for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company’s expense to any member entitled to have a notice of the meeting sent to him and to vote thereat by proxy, every officer of the company “who issues the invitation as aforesaid or authorizes or permits their issue, shall be liable to a penalty of Rs. 50,000/-.

Provided that an officer shall not be liable under this sub-section by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

117(2) Resolutions and Agreements to be filed

(Amended)

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 1 lakh rupees and in case of continuing failure, with 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 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. 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 Rs. 10,000/- and in case of continuing failure, with a further penalty of Rs. 100/- for each day after the first during which such failure continues, subject to a maximum of Rs 2,00,000/- and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of Rs 10,000/- and in case of continuing failure, with a further penalty of Rs. 100/- for each day after the first during which such failure continues, subject to a maximum of Rs 50,000/-.
117(3)(g) 2nd Proviso Resolutions and Agreements to be filed

(Amended)

Provided further that nothing contained in this clause shall apply to a banking company in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business. Provided further that nothing contained in this clause shall apply in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business by –

(a) a Banking Company;

(b) Any class of Non-Banking Financial Company registered under Chapter IIIB of the Reserve Bank of India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;

(c) Any class of Housing Finance Company registered under the National Housing Bank Act, 1987, as may be prescribed in consultation with the National Housing Bank.

124(7) Unpaid Dividend Account

(Amended)

If a company fails to comply with any of the requirements of this section, the company shall be punishable with fine which shall not be less than Rs.5,00,000 but which may extend to Rs.25,00,000 and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs.1,00,000 but which may extend to Rs.5,00,000. If a company fails to comply with any of the requirements of this section, such company shall be liable to a penalty of Rs. 1 Lakh and in case of continuing failure, with a further penalty of Rs. 500/- for each day after the first during which such failure continues, subject to a maximum of Rs. 10 Lakhs and every officer of the company who is in default shall be liable to a penalty of Rs. 25,000/- and in case of continuing failure, with a further penalty of Rs. 100/- for each day after the first during which such failure continues, subject to a maximum of Rs. 2,00,000/-.
128(6) Books of Accounts, etc., to be kept by Company

(Omitted)

“With imprisonment for a term which may extend to one year or”

“Or with both”

Omitted

Omitted

129A: Periodical Financial Results

(Insertion of new Section 129A)

——— The Central Government may, require such class or classes of unlisted companies, as may be prescribed —

(a) to prepare the financial results of the company on such periodical basis and in such form as may be prescribed;

(b) to obtain approval of the Board of Directors and complete audit or limited review of such periodical financial results in such manner as may be prescribed; and

(c) File a copy with the Registrar within a period of thirty days of completion of the relevant period with such fees as may be prescribed.

134(8) Financial Statement, Board’s Report, etc.

(Amended)

If a company contravenes the provisions of this section, 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 and every officer of the 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 If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of Rs. 50,000/-.
135(5) Corporate Social Responsibility “CSR”

(Insertion of third proviso after second proviso)

——— Provided also that if the company spends an amount in excess of the requirements provided under this sub-section, such company may set off such excess amount against the requirement to spend under this sub-section for such number of succeeding financial years and in such manner, as may be prescribed.
135(7) Corporate Social Responsibility “CSR”

(Amended)

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 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. If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or Rs. 1 Crore, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or Rs. 2 lakhs, whichever is less
135(9) Corporate Social Responsibility “CSR”

(Insertion of Sub Section 9)

————– Where the amount to be spent by a company under sub-section (5) does not exceed Rs. 50 Lakhs, the requirement under sub-section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company.
137(3) Copy of Financial Statement to be filed with Registrar

(Amended)

for the words “one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees”

for the words “Rs. 1 Lakh”

for the words “Rs. 5 Lakhs “

Rs. 10,000/- and in case of continuing failure, with a further penalty of Rs. 100/- for each day during which such failure continues, subject to a maximum of Rs. 2 Lakhs, shall be substituted.

“Rs. 10,000/-” shall be substituted.

“Rs. 50,000/-” shall be substituted.

140(3) Removal, Resignation of Auditor and giving of Special Notice

(Amended)

for the words “Rs. 5 Lakhs” “Rs. 2 Lakhs” shall be substituted.
143(15) Powers and Duties of Auditors and Auditing Standards

(Amended)

If any auditor, cost accountant or company secretary in practice do not comply with the provisions of sub-section (12), he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees. If any auditor, cost accountant, or company secretary in practice does not comply with the provisions of sub-section (12), he shall, —

(a) in case of a listed company, be liable to a penalty of Rs. 5 Lakhs;

and

(b) in case of any other company, be liable to a penalty of Rs. 1 Lakh.

147(1) Punishment for Contravention in regard to Audi

(Amended)

If any of the provisions of sections 139 to 146 (both inclusive) is contravened, 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 and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both. If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 5,00,000/- and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 10,000/- but which may extend to Rs. 1 Lakh.
147(2) Punishment for Contravention in regard to Audit

(Omitted)

for the words “Section 143” Omitted
149(9) Company to have Board of Directors

(Amended)

Notwithstanding anything contained in any other provision of this Act, but subject to the provisions of sections 197 and 198, an independent director shall not be entitled to any stock option and may receive remuneration by way of fee provided under sub-section (5) of section 197, reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members. Provided that if a company has no profits or its profits are inadequate, an independent director may receive remuneration, exclusive of any fees payable under sub-section (5) of section 197, in accordance with the provisions of Schedule V.
165(6) No. of Directorship

(Amended)

 If a person accepts an appointment as a director in contravention of sub-section (1), he shall be liable to a penalty of Rs. 5,000/- for each day after the first during which such contravention continues. If a person accepts an appointment as a director in violation of this section, he shall be liable to a penalty of Rs. 2,000/- for each day after the first during which such violation continues, subject to a maximum of Rs. 2 Lakhs.
167(2) Vacation of office of Director

(Amended)

If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both. If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 5 Lakhs.
172 Punishment

(Amended)

If a company contravenes any of the provisions of this Chapter and for which no specific punishment is 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 fifty thousand rupees but which may extend to five lakh rupees If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of Rs. 50,000/-, and in case of continuing failure, with a further penalty of Rs. 500/- for each day during which such failure continues, subject to a maximum of Rs. 3 Lakhs in case of a company and Rs. 1 Lakh in case of an officer who is in default.
178(8) Nomination and Remuneration Committee and Stakeholders Relationship Committee

(Amended)

for the words “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 imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both” liable to a penalty of Rs.  Lakhs and every officer of the company who is in default shall be liable to a penalty of Rs. 1 Lakh Shall be substituted.
184(4) Disclosure of Interest by Director

(Amended)

for the words “punishable with imprisonment for a term which may extend to one year or with fine which may extend to one lakh rupees, or with both” “liable to a penalty of Rs. 1 Lakh”  shall be substituted
187(4) Investments of Company to be held in its Own Name

(Amended)

If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five 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. If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of Rs. 5 Lakhs and every officer of the company who is in default shall be liable to a penalty of Rs. 50,000/-s.
188(5)(i) & (ii) Related Party Transactions

(Amended)

188(5)(i) in case of listed company, be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both; and

188(5)(ii) In case of any other company, be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

188(5)(i) in case of listed company, be “liable to a penalty of Rs. 25 Lakhs”; and

188(5)(ii) In case of any other company, be liable to a penalty of Rs. 5 Lakhs”.

197(3) Overall maximum Managerial Remuneration and Managerial Remuneration in case of absence or inadequacy of Profits

(Insertion of few words)

after the words “whole-time director or manager,” the words “or any other non-executive director, including an independent director” shall be inserted.
204(4) Secretarial Audit for Bigger Companies

(Amended)

for the words “punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 5 Lakhs”, the words “liable to a penalty of Rs. 2 Lakhs” shall be substituted
232(8) Merger & Amalgamation of Companies

(Amended)

If a transferor company or a transferee company contravenes the provisions of this section, the transferor company or the transferee company, as the case may be, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of such transferor or transferee company who is in default, shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both. If a company fails to comply with sub-section (5), the company and every officer of the company who is in default shall be liable to a penalty of Rs. 20,000/-, and where the failure is a continuing one, with a further penalty of Rs. 1,000/- for each day after the first during which such failure continues, subject to a maximum of Rs. 3 Lakhs.
242(8) Powers of Tribunal

(Amended)

If a company contravenes the provisions of sub-section (5), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five 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. If a company contravenes the provisions of sub-section (5), the company shall be punishable with fine which shall not be less than Rs 1 Lakh but which may extend to Rs 25 Lakhs and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs 25,000/- but which may extend to Rs 1 Lakhs.
243(2) Consequence of Termination or Modification of certain Agreements

(Amended)

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) or sub-section (1A), 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. 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) or sub-section (1A), 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 6 months or with fine which may extend to Rs. 25 Lakhs, or with both.
247(3) Registered Valuers

(Amended)

for the words “punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees”, the words “liable to a penalty of Rs. 50,000/-” shall be substituted
284(2) Promoters, Directors etc. to Cooperate with Company Liquidator

(Amended)

Where any person, without reasonable cause, fails to discharge his obligations under sub-section (1), he shall be punishable with imprisonment which may extend to six months or with fine which may extend to fifty thousand rupees, or with both. 284(2): If any person required to assist or cooperate with the Company Liquidator under sub-section (1) does not assist or cooperate, the Company Liquidator may make an application to the Tribunal for necessary directions.

284(3): On receiving an application under sub-section (2), the Tribunal shall, by an

order, direct the person required to assist or cooperate with the Company liquidator to comply with the instructions of the Company Liquidator and to cooperate with him in discharging his functions and duties

302(3) Dissolution of Company by Tribunal

(Amended)

A copy of the order shall, within thirty days from the date thereof, be forwarded by the Company Liquidator to the Registrar who shall record in the register relating to the company a minute of the dissolution of the company. The Tribunal shall, within a period of thirty days from the date of the order, —

(a) forward a copy of the order to the Registrar who shall record in the register relating to the company a minute of the dissolution of the company; and

(b) direct the Company Liquidator to forward a copy of the order to the Registrar who shall record in the register relating to the company a minute of the dissolution of the company.

302(4) Dissolution of Company by Tribunal

(Omitted)

If the Company Liquidator makes a default in forwarding a copy of the order within the period specified in sub-section (3), the Company Liquidator shall be punishable with fine which may extend to five thousand rupees for every day during which the default continues. Omitted
342(6) Prosecution of Delinquent Officers and Members of Company

(Omitted)

If a person fails or neglects to give assistance required by sub-section (5), he shall be liable to pay fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees Omitted
347(4) Disposal of Books and Papers of Company

(Amended)

If any person acts in contravention of any rule framed or an order made under sub-section (3), he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees, or with both. If any person acts in contravention of any rule framed or an order made under sub-section (3), he shall be punishable with fine which may extend to Rs. 50,000/-.
348(6) & (7) Information as to Pending Liquidations

(Amended & Omitted)

348(6)- If a Company Liquidator contravenes the provisions of this section, the Company Liquidator shall be punishable with fine which may extend to five thousand rupees for every day during which the failure continues.

348(7) If a Company Liquidator makes willful default in causing the statement referred to in sub-section (1) audited by a person who is not qualified to act as an auditor of the company, the Company Liquidator shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one lakh rupees, or with both.

Where a Company Liquidator, who is an insolvency professional registered under the Insolvency and Bankruptcy Code, 2016 is in default in complying with the provisions of this section, then such default shall be deemed to be a contravention of the provisions of the said Code, and the rules and regulations made thereunder for the purposes of proceedings under Chapter VI of Part IV of that Code.

Omitted

356(2) Powers of Tribunal to Declare Dissolution of Company Void

(Amended)

It shall be the duty of the Company Liquidator or the person on whose application the order was made, within thirty days after the making of the order or such further time as the Tribunal may allow, to file a certified copy of the order with the Registrar who shall register the same, and if the Company Liquidator or the person fails so to do, the Company Liquidator or the person shall be punishable with fine which may extend to ten thousand rupees for every day during which the default continues. The Tribunal shall—

(a) forward a copy of the order, within thirty days from the date thereof, to the Registrar who shall record the same; and

(b) Direct the Company Liquidator or the person on whose application the order was made, to file a certified copy of the order, within thirty days from the date thereof or such further period as allowed by the Tribunal, with the Registrar who shall record the same.

379(1) Application of act to Foreign Companies

(Omitted)

Provided that the Central Government may, by Order published in the Official Gazette, exempt any class of foreign companies, specified in the Order, from any of the provisions of sections 380 to 386 and sections 392 and 393 and a copy of every such Order shall, as soon as may be after it is made, be laid before both Houses of Parliament. Omitted.
392 Punishment for Contravention

(Amended)

 

 

Without prejudice to the provisions of section 391, if a foreign company contravenes the provisions of this Chapter, the foreign company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and in the case of a continuing offence, with an additional fine which may extend to fifty thousand rupees for every day after the first during which the contravention continues and every officer of the foreign 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 five lakh rupees, or with both. Without prejudice to the provisions of section 391, if a foreign company contravenes the provisions of this Chapter, the foreign company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and in the case of a continuing offence, with an additional fine which may extend to fifty thousand rupees for every day after the first during which the contravention continues and every officer of the foreign 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 five lakh rupees.
393A Exemption Under This Chapter

(Insertion of new Section)

———— The Central Government may, by notification, exempt any class of—

(a) foreign companies;

(b) companies incorporated or to be incorporated outside India, whether the company has or has not established, or when formed may or may not establish, a place of business in India, as may be specified in the notification, from any of the provisions of this Chapter and a copy of every such notification shall, as soon as may be after it is made, be laid before both Houses of Parliament.8

403(1) 3rd Proviso Fee for filling etc.

(Amended)

Provided also that where there is default on two or more occasions in submitting, filing, registering or recording of the document, fact or information, it may, without prejudice to any other legal action or liability under this Act, be submitted, filed, registered or recorded, as the case may be, on payment of a higher additional fee, as may be prescribed and which shall not be lesser than twice the additional fee provided under the first or the second proviso as applicable. Provided also that where there is default on two or more occasions in submitting, filing, registering or recording of such document, fact or information, as may be prescribed, it may, without prejudice to any other legal action or liability under this Act, be submitted, filed, registered or recorded, as the case may be, on payment of such higher additional fee, as may be prescribed.
405(4) Power of CG to Direct Companies to Furnish Information or Statistics

(Amended)

If any company fails to comply with an order made under sub-section (1) or subsection (3), or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company shall be punishable with fine which may extend to twenty-five thousand 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 three lakh rupees, or with both. If any company fails to comply with an order made under sub-section (1) or sub-section (3), or furnishes any information or statistics which is incorrect or incomplete in any material respect, the company and every officer of the company who is in default shall be liable to a penalty of twenty thousand rupees and in case of continuing failure, with a further penalty of one thousand rupees for each day after the first during which such failure continues, subject to a maximum of three lakh rupees.
410 Constitution of Appellate Tribunal

(Amended)

the words “not exceeding eleven”

and

“Section 53N”,

omitted;

and

“Section 53A” shall be substituted.

418A Benches of Appellate Tribunal

(Insertion of new Section)

—————- 418A: (1) The powers of the Appellate Tribunal may be exercised by the Benches thereof to be constituted by the Chairperson:

Provided that a Bench of the Appellate Tribunal shall have at least one Judicial Member and one Technical Member.

(2) The Benches of the Appellate Tribunal shall ordinarily sit at New Delhi or such other places as the Central Government may, in consultation with the Chairperson, notify:

Provided that the Central Government may, by notification, after consultation with the Chairperson, establish such number of Benches of the Appellate Tribunal, as it may consider necessary, to hear appeals against any direction, decision or order referred to in section 53A of the Competition Act, 2002 and under section 61 of the Insolvency and Bankruptcy Code, 2016.

435(1) Establishment of Special Courts

(Amended)

The Central Government may, for the purpose of providing speedy trial of offences under this Act, by notification, establish or designate as many Special Courts as may be necessary. The Central Government may, for the purpose of providing speedy trial of offences under this Act, except under section 452, by notification”, establish or designate as many Special Courts as may be necessary.
441(5) Compounding of Certain Offences

(Amended)

Any officer or other employee of the company who fails to comply with any order made by the Tribunal or the Regional Director or any officer authorized by the Central Government under sub-section (4) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding one lakh rupees, or with both. If any officer or other employee of the company who fails to comply with any order made by the Tribunal or the Regional Director or any officer authorized by the Central Government under sub-section (4), the maximum amount of fine for the offence proposed to be compounded under this section shall be twice the amount provided in the corresponding section in which punishment for such offence is provide.
446B Lesser Penalties for certain Companies (Substitution of new Section for Section 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 liable to a penalty which shall not be more than one half of the penalty specified in such sections. 446B: Notwithstanding anything contained in this Act, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.

Explanation. —For the purposes of this section, —

(a) “Producer Company” means a company as defined in clause (l) of section 378A;

(b) “start-up company” means a private company incorporated under this Act or under the Companies Act, 1956 and recognized as start-up in accordance with the notification issued by the Central Government in the Department for Promotion of Industry and Internal Trade

450 Punishment where no specific Penalty or Punishment is provided

(Amended)

 If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues. If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.
452(2) 1st Proviso Punishment for wrongful withholding of Property

(Insertion of Proviso after sub section 2)

 

——— Provided that the imprisonment of such officer or employee, as the case may be, shall not be ordered for wrongful possession or withholding of a dwelling unit, if the court is satisfied that the company has not paid to that officer or employee, as the case may be, any amount relating to—

(a) provident fund, pension fund, gratuity fund or any other fund for the welfare of its officers or employees, maintained by the company;

(b) Compensation or liability for compensation under the Workmen’s Compensation Act, 1923 in respect of death or disablement.

454(3) Adjudication of Penalties

(Insertion of proviso)

———– Provided that in case the default relates to non-compliance of sub-section (4) of section 92 or sub-section (1) or sub-section (2) of section 137 and such default has been rectified either prior to, or within thirty days of, the issue of the notice by the adjudicating officer, no penalty shall be imposed in this regard and all proceedings under this section in respect of such default shall be deemed to be concluded.
465(1) First Proviso Repeal of certain Enactments and Savings

(Omitted)

Provided that the provisions of Part IX A of the Companies Act,1956 shall be applicable mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies. Omitted
465(1) Second Proviso Repeal of certain Enactments and Savings

(Amended)

Provided further that until a date is notified by the Central Government under subsection (1) of Section 434 for transfer of all matters, proceedings or cases to the Tribunal, the provisions of the Companies Act, 1956 in regard to the jurisdiction, powers, authority and functions of the Board of Company Law Administration and court shall continue to apply as if the Companies Act, 1956 has not been repealed. Provided that until a date is notified by the Central Government under subsection (1) of Section 434 for transfer of all matters, proceedings or cases to the Tribunal, the provisions of the Companies Act, 1956 in regard to the jurisdiction, powers, authority and functions of the Board of Company Law Administration and court shall continue to apply as if the Companies Act, 1956 has not been repealed.
465(1) Third Proviso Repeal of certain Enactments and Savings

(Amended)

 

 

Provided also that provisions of the Companies Act, 1956 referred in the notification issued under section 67 of the Limited Liability Partnership Act, 2008 shall, until the relevant notification under such section applying relevant corresponding provisions of this Act to limited liability partnerships is issued, continue to apply as if the Companies Act, 1956 has not been repealed. Provided further that provisions of the Companies Act, 1956 referred in the notification issued under section 67 of the Limited Liability Partnership Act, 2008 shall, until the relevant notification under such section applying relevant corresponding provisions of this Act to limited liability partnerships is issued, continue to apply as if the Companies Act, 1956 has not been repealed.

About the Author

ACS Divya Goel

Author is Divya Goel, ACS working as Assistant Manager- Company Secretary with Neeraj Bhagat & Co. Chartered Accountants, a Chartered Accountancy firm helping foreign companies in setting up business in India and complying with various tax laws applicable to foreign companies while establishing their business in India.

Author Bio

Qualification: CA in Practice
Company: Neeraj Bhagat & Co.
Location: New Delhi, New Delhi, IN
Member Since: 28 Feb 2019 | Total Posts: 73
Neeraj Bhagat & Co. is helping foreign companies in opening up of Liaison/ Branch Office in India and complying with various tax laws applicable to foreign companies while establishing a business in India. Neeraj Bhagat is the founder of Neeraj Bhagat & Co. Chartered Accountants, a Chartered View Full Profile

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