Article explains Sections of Companies Amendment Act 2020 which came into force from 21 December 2020. Article also contains Section of Companies Act, 2013 corresponding to Section of Companies Amendment Act 2020. Article explains Provision of Sections of Companies Amendment Act 2020 which came into force from 21 December 2020.
Following provisions of the Companies Amendment Act 2020 were notified on 21 December 2020 to be effective from 21.122.2020 vide Notification No. S.O. 4646(E).
| Sr. No. | Section of CAA 2020 | Section of CA 2013 | Amendments |
| 1 | Section 1; | Power of Central Government | The CAA 2020 shall come into force on such date as the Central Government may appoint by notification in the Official Gazette.
Few sections as mentioned below are notified with effect from 21st December, 2020. |
| 2. | Section 3; | Sec. 8 (11)
Section 8 company |
In case of default in complying with the requirements imposed on Section 8 Companies, Fine of Rs. 25 lakhs will be imposed on the Directors and every officer of the Company in default. (punishment with imprisonment is omitted) |
| 3. | Section 6; | Sec. 26 (9)
Prospectus |
If a prospectus is issued in contravention of the provisions of the Section 26 of CA 2013, then every person who is knowingly a party to the issue of such prospectus will be punished with a Fine of Rs. 50,000 upto Rs. 3 lakhs.
(punishment with imprisonment of three years is omitted) |
| 4. | Section 7; | Sec. 40 (5)
Listing of Securities with Stock Exchange |
If a default is made in complying with the provisions of Section 40 of CA 2013 for the public offer, every Officer of the Company who is in default shall be punishable with Fine of Rs. 50,000 upto Rs. 3 lakhs.
(punishment with imprisonment is omitted) |
| 5. | Section 8; | Sec. 48 (5)
Variation of Rights |
Fine and imprisonment for Officer in Default, for default in complying with the provisions relating to Variation of Rights of Shareholders is Omitted |
| 6. | Section 9; | Sec. 56 (6)
Transfer and Transmission of securities |
Where any default is made in complying with the provisions of Section 56 of CA 2013 for the manner in which the transfer of securities is required to be done, the Company and every Officer of the Company in default shall be liable to a penalty of Rs. 50,000.
(Fine is changed with lesser amount of Penalty) (Re-categorized compoundable offence to in-house adjudication i.e. liable to penalty instead of fine and being punishable with imprisonment) |
| 7. | Section 10; | Sec. 59 (5)
Rectification of Register of Members |
If any default is made in complying with the Order of the Tribunal under this section, fine and punishment to officer in default with imprisonment and fine or both is Omitted |
| 8. | Section 12; | Sec. 64 (2)
Notice to be Given to Registrar for Alteration of Share Capital |
In case a Company fails to comply with filing of Notice with Registrar for any alteration in Share Capital within 30 days from such event; the amount of penalty is reduced
(a) on Company (b) On every Officer in default from Rs. 1,000 to Rs. 500 for each day during which default continues Maximum amount of penalty (a) On Company–Rs 5 Lakhs (b) On every Officer in default –Rs. 1 Lakhs. (reduction in amount of monetary penalty) |
| 9. | Section 13; | Sec. 66 (11)
Reduction of Share Capital. |
Punishment with Fine for default in compliance of the Order of Tribunal for Reduction of Share Capital, is Omitted. |
| 10. | Section 14; | Sec. 68 (11)
Power of Company to Purchase its Own Securities |
If any default is made in complying with the provisions of Section 68 of CA 2013 or SEBI regulations w.r.t buy-back, Every Officer in default shall be punishable with fine of Rs. 1 Lakhs up to Rs. 3 Lakhs.
(punishment with imprisonment is omitted) |
| 11. | Section 15; | Sec. 71 (11)
Debentures |
Punishment with Fine and Imprisonment for any default in complying with the Order of the Tribunal relating to Debentures, is Omitted. |
| 12. | Section 16; | Sec. 86 (1)
Punishment for Contravention of Chapter on Charge |
If a Company contravenes any provision of Chapter VI relating to Registration of Charges, then Company will be punished with a penalty of Rs. 5 lakhs and every officer in default will be punished with a penalty Rs. 50,000.
(Fine to penalty & no imprisonment) (Re-categorized compoundable offence to an in-house adjudication i.e. liable to penalty instead of being punishable with fine and imprisonment) |
| 13. | Section 17; | Sec. 88 (5)
Register of Members |
Failure to maintain register of members/ debenture holders/ other security holders, then a penalty of Rs. 3 lakhs on the Company and Rs. 50,000 on every officer of the Company in default.
Punishment with Fine is changed to Penalty . |
| 14. | Section 18 (a) and (b); | Sec. 89 (5) and 89 (7)
Declaration in Respect of Beneficial Interest in any Share
|
Failure to make declaration in respect of beneficial interest in shares by registered owner and beneficial owner under Section 89 of CA 2013, such person 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 up to a maximum of Rs. 5 Lakhs.
If a Company, required to file a return after receiving a declaration of beneficial interest in shares from a person, fails to do so before the expiry of the time specified, the Company and every Officer in default shall be liable to a penalty of Rs. 1000 for each day, subject to a maximum of Rs. 5 Lakhs for a Company and Rs. 2 Lakhs for an Officer in default. The penalty is reduced |
| 15. | Section 19; | Sec. 90 (10) and 90(11)
Register of significant beneficial owners in a company
|
Any person failing to make a declaration of SBO under this section, shall be liable to a penalty of Rs. 50,000 and in case of continuing failure, with a further penalty of Rs. 1000 for each day upto a maximum of Rs. 2 Lakhs.
Fine to penalty and reduced penalty and No imprisonment Re-categorized compoundable offence to in-house adjudication A Company, required to maintain register or file the information or required to take necessary steps under this section, fails to do so or denies inspection as provided therein, penalty on Company of Rs. 1 Lakhs and in case of continuing failure, with a further penalty of Rs. 500 for each day, upto Rs. 5 Lakhs and on every Officer in default a penalty of Rs. 25,000 and in case of continuing failure, with further penalty of Rs. 200 for each day, upto Rs. 1 Lakhs. Fine to penalty and reduced penalty , Re-categorized compoundable offence to in-house adjudication |
| 16. | Section 20; | Sec. 92(6)
Annual Return |
A penalty of Rs. 2 Lakhs on a Company Secretary in practice certifying the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder.
Fine is reduced from Rs.5 lakh to Rs.2 Lakh |
| 17. | Section 21; | Sec. 105(5)
Proxies |
Fine of Rs.1 Lakh is reduced as penalty of Rs. 50,000 on every Officer of the Company who knowingly issues the invitations to appoint proxies (for any meeting of the Company) to any member who is entitled to attend the meeting at the Company’s expense or willfully authorizes or permits their issue.
(re-categorized compoundable offence to in-house adjudication) |
| 18. | Section 22 Clause (i); | Sec. 117(2)
Resolutions and Agreements to be Filed |
The penalty amount for failure or delay in filing of resolutions or agreements with ROC within specified time (i.e. 30 days from the date of passing the resolution), is fixed at Rs. 10,000. Further, in case a default continues, the penalty is fixed at Rs. 100 per day subject to a maximum of Rs. 2 lakhs for a Company and Rs. 50,000 for Officer in default.
(reduction in amount of penalty) |
| 19. | Section 24; | Sec. 128(6)
Books of Accounts |
If MD, WTD in charge of finance, CFO or any other person of a Company charged by the Board with the duty of complying with the provisions of this Section, contravenes such provisions, they shall be punishable with fine of Rs. 50,000 upto Rs. 5 Lakhs.
(punishment with imprisonment is omitted) |
| 20. | Section 26; | Sec. 134(8)
Financial Statement and Board’s Report |
If a Company fails to comply with the provisions regarding signing of financial statement and contents & signing of Board’s Report, Company is to a penalty of Rs. 3 Lakhs and every Officer in default shall be liable to a penalty of Rs. 50,000.
Fine to penalty and reduced amount (re-categorized compoundable offence to in-house adjudication ) |
| 21. | Section 28; | Sec. 137(3)
Copy of Financial Statement to be filed with Registrar |
The penalty amount for failing to file the financial statements with the ROC within the time specified therein (i.e. within 30 days from the date of AGM), is fixed at Rs. 10,000 instead of Rs. 1 lakhs. Further, in case a default continues, the penalty is fixed at Rs. 100 per day subject to a maximum of Rs. 2 lakhs for a Company and Rs. 50,000 for MD/ CFO/ Directors in default.
(reduction in amount of penalty) |
| 22. | Section 29; | Sec. 140(3)
Removal, Resignation of Auditor and Giving of Special Notice |
The maximum amount of penalty for failure in filing resignation by an auditor with the Registrar within the time specified therein (i.e. 30 days from the date of resignation), the maximum penalty is reduced to Rs. 2 Lakhs in place of Rs. 5 Lakhs.
(reduction in amount of penalty) |
| 23. | Section 30; | Sec. 143(15)
Powers and Duties of Auditors and Auditing Standards |
If any auditor, cost accountant or Company secretary in practice does not comply with the provisions regarding reporting of fraud, such professional 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 Lakhs (reduction in amount of penalty) |
| 24. | Section 31; | Sec. 147(1) and 147(2)
Punishment for Contravention From section 139 to 146 wrt Audit and Auditors |
If any of the provisions of Sections 139 to 146 (both inclusive) (Audit and Auditors) is contravened, imprisonment for a term of one year is deleted or fine of minimum 10,000/- to maximum 1 Lakh .
( Imprisonment is deleted ) The reference of section 143 mentioned in section 147 has been omitted as punishment for default of section 143 is already provided in section 143 itself. |
| 25. | Section 33; | Sec. 165(6)
Number of Directorship |
For violation of this section and holding of directorships beyond specified limits the penalty is now Rs. 2,000 in stead of Rs. 5,000 and a maximum penalty is Rs. 2 lakhs for defaulting Directors.
(reduction in amount of penalty and capon maximum penalty) |
| 26. | Section 34; | Sec. 167(2)
Vacation of Office of Directors |
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 sub-section (1) of this section, he shall be punishable with a fine of Rs. 1 lakhs upto maximum of Rs. 5 lakhs.
(punishment with imprisonment is omitted and fine is reduced) |
| 27. | Section 35; | Sec. 172
Punishment for Chapter XI Appointment and Qualifications of Directors |
The penalty for contravening any provisions of Chapter XI and for which no specific punishment is provided therein, is fixed at Rs. 50,000 for the Company and every Officer in default.
And in case default continues, the penalty is fixed at Rs. 500 per day, subject to a maximum of Rs. 3 Lakhs in case of a Company and Rs.1 Lakhs in case of every Officer in default. Fine to penalty and reduced amount of penalty (re-categorized compoundable offence to in-house adjudication) |
| 28. | Section 36; | Sec. 178(8)
Nomination and Remuneration and Stakeholders Relationship Committee |
The penalty for contravention of the provisions relating to Audit Committee, Nomination and Remuneration Committee and Stakeholder’s Relationship Committee is fixed at Rs. 5 lakhs for the Company and Rs. 1 lakhs for every Officer in default.
Fine to penalty and reduced amount of penalty. Imprisonment is deleted . (re-categorized compoundable offence to in-house adjudication) |
| 29. | Section 37; | Sec. 184(4)
Disclosure of interest by Directors |
A penalty of Rs. 1 lakhs shall be imposed on the Directors, for contravention of the provisions of the Act mandating disclosure of interest by the Director in the first Board Meeting of every financial year or wherever there is any change in relation to any contract or arrangement.
Fine to penalty and Imprisonment is deleted (re-categorized compoundable offence to in-house adjudication) |
| 30. | Section 38; | Sec. 187(4)
Investments of Company to be Held in its Own Name |
The penalty for default in contravention of the provisions regarding holding of investments is Rs. 5 lakhs for a Company and Rs. 50,000 for every Officer in default.
Fine to penalty and reduced amount of penalty. Imprisonment is deleted . (re-categorized compoundable offence to in-house adjudication) |
| 31. | Section 39; | Sec. 188(5)
Related Party Transactions |
Fine to Penalty to any Director or any other employee of a Company, who had entered into or authorized the contract or arrangement in violation of the provisions of this section:
Ø In case of listed Company: Penalty of Rs. 25 Lakhs. Ø In case of Company other than listed Company: penalty of Rs. 5 Lakhs. Fine to penalty and imprisonment is deleted . (re-categorized compoundable offence to in-house adjudication) |
| 32. | Section 41; | Sec. 204(4)
Secretarial Audit for Bigger Companies |
The penalty for default in contravention of provisions mandating secretarial audit for certain classes of companies, is fixed at Rs. 2 lakhs for the Company, every Officer of the Company or the Company secretary in practice, who is in default.
(re-categorized compoundable offence to in-house adjudication i.e. liable to penalty instead of being punishable with imprisonment) |
| 33. | Section 42; | Sec. 232(8)
Merger and Amalgamation of Companies. |
The penalty for failure to comply with the obligations imposed by Section 232 in relation to merger and amalgamation of companies by the transferor company or a transferee company, is fixed at Rs. 20,000 for the Company and every Officer in default. Further, in case default continues, the penalty is fixed at Rs. 1000 per day, subject to a maximum of Rs. 3 Lakhs in case of a Company and every Officer in default.
(re-categorized compoundable offence to in-house adjudication i.e. liable to penalty instead of being punishable with imprisonment) |
| 34. | Section 43; | Sec. 242(8)
Powers of Tribunal |
For contravention of the order of Tribunal relating to alterations in Memorandum or Articles of Association, fine on the Company is Rs. 1 Lakhs upto a maximum of Rs. 25 Lakhs and Rs. 25,000 upto a maximum of Rs. 1 Lakhs for every Officer in default.
(punishment with imprisonment is omitted) |
| 35. | Section 44; | Sec. 243(2)
Consequence of Termination or Modification of Certain Agreements |
Any person who knowingly acts as a MD or other Director or Manager of a Company in contravention Section 243(1)(b) or Section 243(1A), and every other Director of the Company who is knowingly a party to such contravention, shall be punishable with fine which may extend to Rs. 5 Lakhs.
(punishment with imprisonment is omitted) |
| 36. | Sections 46 | Sec. 284(2)
Promoters, Directors, etc., to Cooperate with Company Liquidator |
A liquidator of a Company may apply to NCLT for co-operation in case a person required to co-operate or assist the Company Liquidator does not do so. Further, it also empowers NCLT to direct such person to comply with the directions of the Company Liquidator.
(punishment with imprisonment and fine is deleted) |
| 37. | Sections 47 | Sec.302(3) and 302(4)
Dissolution of Company by Tribunal. |
The NCLT (within a period of 30 days from the date of the order) have to forward a copy of the order of dissolution to ROC who will record in the register relating to the Company of the dissolution of the Company. Additionally, the NCLT will also direct the Company Liquidator to forward a copy of the Order to the ROC.
The provision under Section 302(4) of CA 2013 relating to imposition of Fine is omitted. |
| 38. | Sections 48 | Sec. 342(6)
Prosecution of Delinquent Officers and Members of Company |
The provisions relating to default for non-cooperation by liquidator or other persons during the prosecution in the course of winding up under Section 342(6) of CA 2013 is omitted. |
| 39. | Sections 49 | Sec. 347(4)
Disposal of Books and Papers of Company. |
A fine upto Rs. 50,000 for if any person contravenes directions of the Central Government in relation to disposal of books and papers of the Company which has been wound up.
(punishment with imprisonment is omitted) |
| 40. | Sections 50 | Sec. 348(6) and 348(7)
Information as to Pending Liquidations. |
If a Company Liquidator, who is an Insolvency Professional, is in default in complying with the provisions of section 348 of CA 2013, the default will be deemed to be a contravention of the IBC, 2016 and the rules and regulations made thereunder.
Contravention of the provisions by Company Liquidator under Section 348(7) of CA 2013 relating to audit of information of the Company pending liquidations under Section 348(1) of CA 2013 is omitted. |
| 41. | Sections 51 | Sec. 356(2)
Powers of Tribunal to Declare Dissolution of Company Void |
NCLT shall forward a copy of the order to the Registrar, and direct the Company Liquidator or the person on whose application such order was made to also file a certified copy of the order with the Registrar within 30 days of the order.
The provision under Section 356(2) of CA 2013 relating to imposition of Fine is omitted. |
| 42. | Sections 54; | Sec. 392
Punishment for Contravention of Chapter XXII Companies Incorporated Outside India |
If a Foreign Company contravenes the provisions of Chapter XXII relating to ‘Companies Incorporated outside India’,
Fine on Foreign Company- Minimum: Rs. 1 Lakhs and Maximum Rs. 3 Lakh. Further, if the default continues an additional of maximum Rs. 50,000 per day. Every Officer of the Foreign Company in default shall be punishable with fine of Rs. 25,000 up to Rs. 5 Lakhs. (punishment with imprisonment is omitted) |
| 43. | Sections 57; | Sec. 405(4)
Power of Central Government to Direct Companies to Furnish Information or Statistics |
Fine of Rs. 25,000 is reduced to penalty of Rs. 20,000 for non-compliance with the Orders of Central Government directing a Company or Companies to furnish any information or statistics or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect. Further, in case of continuing default, penalty of Rs. 1,000 per day upto a Rs. 3 lakhs for Company and every Officer in default.
Fine to penalty and Imprisonment is deleted. (re-categorized compoundable offence to in-house adjudication) |
| 44. | Sections 61; and | Sec. 441(5)
Compounding of Certain Offences |
If any Officer or other employee of the Company fails to comply with the order of NCLT, RD or any other officer authorized by Central Government the maximum amount of fine for the offence to be compounded under Section 441 of CA 2013, shall be twice the amount provided in the corresponding Section in which punishment for such offence is provided.
(punishment with imprisonment is omitted) |
| 45. | Sections 63. | Sec. 450
Punishment Where No Specific Penalty or Punishment is Provided.
|
The penalty is Rs. 10,000 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.
Further, if default continues, penalty is Rs. 1,000 per day subject to a maximum of Rs. 2 Lakhs in case of Company and Rs. 50,000 in case of an Officer who is in default or any other person. Fine to penalty. (re-categorized compoundable offence to in-house adjudication) |
Author Bio
