Article explains amendments by Companies Amendment Bill, 2020 in Section 2(52)- Listed Company, Section 8(11) – Default in compliance of requirements of Section 8 (Formation of Companies with charitable objects), Section 16(1)(b)- Rectification of name of the Company, Section 16(3)- Penal provisions, Section 23(3)-Public Offer an Private Placement, Section 23(4)-Public Offer an Private Placement, Section 26(9)-Matters to be stated in prospectus (Penal Provisions), Section 40(5)- Securities to be Dealt with in Stock Exchanges (Penal provisions), Section 48(5)- Variation of shareholder’s right (Penal provision), Section 56(6)- Transfer or transmission of shares (Penal Provisions), Section 59(5)- Rectification of Register of members (Penal Provisions), Section 62-Further issue of share capital, Section 64(2)-Notice to be given to Registrar for Alteration of Share Capital (Penal provisions), Section 66(11)- Reduction of share capital (Penal provisions), Section 68(11)-Power of company to purchase its own securities, Section-71(11)- Debentures, Section 88(5)-Register of Members, Section 89(5) Declaration In Respect To Beneficial Interest Of Shares, Section 89(7) Declaration in respect to Beneficial Interest of Shares, New Sub-Section Inserted: – 89(11)-Declaration in respect to Beneficial Interest Of Shares, Section 90(10)- Register of significant beneficial owners in a company, Section90(11)- Register of significant beneficial owners in a company and various other sections. Details as as follows:-

Companies Amendment Bill, 2020

Particulars New Provisions Earlier Provisions
Section2(52)- Listed Company

 

A proviso shall be inserted to the definition of Listed Company stating-

“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 SEBI, shall not be considered as listed companies.

“Listed company”means a company which has any of its securities listed on any recognised stock exchange
Section 8(11) – Default in compliance of requirements of Section 8 (Formation of Companies with charitable objects)

 

1. The imprisonment of 3 years to directors and every officers of the Company shall be omitted

2. The words “with both” shall be omitted

1. Company- Fine of not less than Rs. 10 lakhs but which may extend to Rs. 1 cr and

2. Directors and every officers- Imprisonment for a term which may extend to 3 years or fine of not less than Rs. 25,000/- which may extend to Rs. 25 lakhs or with both

Section 16(1)(b)- Rectification of name of the Company If a company is registered with a name which is identical or too nearly resembles a registered trade mark, the Company shall change its name within 3 months from the issue of CG’s direction If a company is registered with a name which is identical or too nearly resembles a registered trade mark, the Company shall change its name within 6 months from the issue of CG’s direction
Section 16(3)- Penal provisions The CG 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 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 subsection shall prevent a company from subsequently changing its name in accordance with the provisions of Section 13

1. Fine on Company: Rs. 1000 for every day during which the default continues.

2. Fine on Every officer who is in default: shall not be less than Rs. 5,000/- but which may extend to Rs. 1 Lakh.

Section 23(3)-Public Offer an Private Placement 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. Not Existed

 

Section 23(4)-Public Offer an Private Placement CG 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 Not Existed

 

Section 26(9)-Matters to be stated in prospectus (Penal Provisions) For Every person which is knowingly a party in default in issue of wrong prospectus-

1. Imprisonment for a term which may extend to 3 years shall be omitted

2. The words “with both” shall be omitted

If prospectus is issued in contravention os section 26-

1. Company-Fine of not less than Rs. 50000/- but which may extend to Rs.3 lakhs

2. Every person which is knowingly a party in default- Imprisonment for a term which may extend to 3 years or with fine of not less than Rs. 50,000/- which may extend to Rs.3 lakhs or with both

Section 40(5)- Securities to be Dealt with in Stock Exchanges (Penal provisions) For Every officer in default-

1. Imprisonment for a term which may extend to 1 years shall be omitted

2. The words “with both” shall be omitted

In case of default-

1. Company-Fine of not less than Rs. 5 Lakhs but which may extend to Rs.50 lakhs

2. Every officer- Imprisonment for a term which may extend to 1 year or with fine of not less than Rs. 50,000/- which may extend to Rs.3 lakhs or with both 

Section 48(5)- Variation of shareholder’s right (Penal provision) Sub section shall be omitted i.e. no penal provisions

 

In case of default-

1. Company-Fine of not less than Rs. 25,000/- but which may extend to Rs.5 lakh

2. Every officer- Imprisonment for a term which may extend to 6 months or with fine of not less than Rs. 25,000/- which may extend to Rs.5 lakhs or with both 

Section56(6)- Transfer or transmission of shares (Penal Provisions) In case of default-

The company and every officer of the company who is in default shall be liable to a penalty of Rs. 50,000/-

In case of default-

1. Company-Fine of not less than Rs. 25,000/- but which may extend to Rs.5 lakh

2. Every officer- Fine of not less than Rs. 10,000/- which may extend to Rs.1 lakh

Section 59(5)- Rectification of Register of members (Penal Provisions) Sub section shall be omitted i.e. no penal provisions If any default is made in complying with the order of the Tribunal-

1. Company-Fine of not less than Rs. 1 lakh which may extend to Rs. 5 lakh

2. Every office- Imprisonment for a term which may extend to 1 year or with fine of not less than Rs. 1 lakh which may extend to Rs.3 lakh or with both

Section 62-Further issue of share capital The offer for issue of further shares to existing shareholders shall be made for not less than 15 days or such lesser number of days as may be prescribed and not exceeding 30 days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined; The offer for issue of further shares to existing shareholders shall be made for not less than 15 days and not exceeding 30 days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined;
Section 64(2)-Notice to be Given to Registrar for Alteration of Share Capital (Penal provisions) In case of default of Section 64(1)- The company and every officer of the company shall be liable to a penalty of Rs.500 for each day during which such default continues subject to a maximum of Rs.5 lakhs in case of a company and one lakh rupees in case of an officer who is in default  In case of default of Section 64(1)- The company and every officer of the company shall be liable to a penalty of Rs.1000 for each day during which such default continues, or Rs.5 lakhs whichever is less
Section 66(11)- Reduction of share capital (Penal provisions) Sub section shall be omitted i.e. no penal provisions If a company fails to comply with section 66(4); it shall be Punishable with Fine of; Min. 5Lakh Rupees Which may extend to Rupees 25 lakh
Section 68(11)-Power of company to purchase its own securities If a company make default in complying the provisions of section 68 or the regulations made by SEBI for the section 68(2)(f); then Company shall be Punishable with Fine of;

Min. 1Lakh Rupees Which may extend to Rupees 3 Lakh &

EVERY OFFICER of company in default, shall be punishable with Fine which shall not be less than 1Lakh Rupees ; which may extend to 3 Lakh rupees

If a company make default in complying the provisions of section 68 or the regulations made by SEBI for the section 68(2)(f); then

Company shall be Punishable with Fine of;

Min. 1Lakh Rupees Which may extend to Rupees 3 Lakh

&

EVERY OFFICER of company in default, shall be punishable with imprisonment for a term which may extend upto 3 years or

Fine which shall not be less than 1Lakh Rupees ; which may extend to 3 Lakh rupees or Both 

Section-71(11)- Debentures Sub section shall be omitted i.e. no penal provisions  If any default made in complying with the order of the tribunal under section 71, Then every officer of company who is in default shall be punishable with;

Imprisonment which may extend to 3 years

or

Fine which shall not be less than 2 lakh rupees but which may extend upto 5lakh rupees or

both 

Section88(5)-Register of Members If company does not maintain

registers of members(MGT-1) or debenture holders(MGT-2) or other security holders;

OR

Fails to maintain them as per provision of 88(1)&(2); THEN, company shall be liable to penalty for 3 Lakh rupees and Every officer in default shall be liable to penalty of 50,000 Rupees.

If company does not maintain registers of members(MGT-1) or debenture holders(MGT-2) or other security holders;

OR Fails to maintain them as per provision of 88(1)&(2); THEN, company and every officer in default shall be punishable, Fine shall not be less than 50,000 Rupees, but which may extend to rupees 3 Lakh & if failure is continuing then further fine which may extend to 1000 rupees per day after the first day.

Section89(5)- Decleration in respect to BENEFICIAL INTREST OF SHARES

 

If any preson fails to give decleration as required u/s 89(1)or(2or(3)- shall be liable to penalty of 50,000 rupees & where failure is continuing one; with further fine of 2000 rupees per day, after the first day; Subject to a maximum of 500,000 rupees. If any preson fails to give decleration as required u/s 89(1)or(2or(3)-without any reasonable cause punishable with fine, which may extend to 50,000 rupees & where failure is continuing one; with further fine which my extend upto 1000 rupees per day, after the first day.
Section89(7)- Decleration in respect to BENEFICIAL INTREST OF SHARES

 

if company required to file a return under section 89(6) & the company fails to do so within 30 days; The company & every officer in default shall be liable to penalty of 1000 rupees for each day during which such failure continues subject to a maximum of 5,00,000 rupees in case of company & 2,00,000 rupees in case of officer in default. if company required to file a return under section 89(6) & the company fails to do so within 30 days;

The company & every officer in default shall be punishable with fine, which shall not be less than 5,00 rupees, but which may extend to 1000 rupees & where failure is continuing one;

with further fine which my extend upto 1000 rupees per day, after the first day.

NEW SUB-SECTION INSERTED :- 89(11)-Decleration in respect to BENEFICIAL INTREST OF SHARES

 

C/g may by notification, exempt any class or classes of persons from complying with any of the requirement of section 89 except section 89(10);

if necessary to grant exeption in public intrest & any such exemption may be grantd either unconditionally or subject to such condition as may be specified in notification.

N.A.

 

Section90(10)- Register of significant beneficial owners in a company If any person fails to make Decleration u/s90(1), he shall be liable to Penalty of 50,000 Rupees; & where if failure is continuing a further penalty of 1000 rupees per day, after the first day; SUBJECT to maximum 2 Lakh Rupees. If any person fails to make Decleration u/s90(1), he shall be punishable with; Imprisonment for a term which may extend to 1 year or

Fine which shall not be less than 1 Lakh rupees, but may extend to 10 Lakh Rupees

or Both & where if failure is continuing a further fine which may extend to 1000 rupees per day, after the first day.

Section90(11)- Register of significant beneficial owners in a company

 

If a company, Required to maintain registers u/s90(2); file information u/s 90(4); or required to take necessary steps as per section 90(4A); fails to do so or denies inspection as provided therein;

Then, The company shall be liable to penalty of 100,000 rupees & where failure is continuing one; with further fine which my extend upto 500 rupees per day, after the first day, Subject to maximum 500,000 rupees.

&

Every officer of the company who is in default shall be liable to penalty of 25,000 rupees & in case of continuing failure, with further penalty of 200 rupees each day, after first day, suring which such failure continues;

Subject to maximum of 1,00,000 rupees.

If a company, Required to maintain registers u/s90(2); file information u/s 90(4); or required to take necessary steps as per section 90(4A); fails to do so or denies inspection as provided therein;

Then, The company & every officer in default shall be punishable with fine, which shall not be less than 10,00,000 rupees, but which may extend to 50,00,000 rupees & where failure is continuing one; with further fine which my extend upto 1000 rupees per day, after the first day, during which the failure continues. 

Section92(5)-Annual

Return

 

If any company fails to file it’s Annual Return, u/s92(4); within 60 days from the time specified therin, Then Such company & every Officer in default; Shall be liable to a Penalty of Rupees 10,000 & in case of continuing failure- further penalty of Rupees 100 per day, during which such failure continues; Subject to maximum Rupees 200,000-in case of company & Subject to maximum Rupees 50,000- in case of officer in default. If any company fails to file it’s Annual Return, u/s92(4); within 60 days from the time specified therin, Then Such company & every Officer in default; Shall be liable to a Penalty of Rupees 50,000 & in case of continuing failure- further penalty of Rupees 100 per day, during which such failure continues; Subject to maximum Rupees 500,000.
Section92(6)-Annual

Return

 

If a PCS, certifies the Annual return otherwise in conformity with the requirement of this section or rules made thereunder;

He shall be LIABLE TO A PENALTY OF RUPEES 2,00,000. 

If a PCS, certifies the Annual return otherwise in conformity with the requirement of this section or rules made thereunder; He shall be punishable with Fine which shall be not less than 50,000 rupees, but which may extend to rupees 5,00,000.
Section105(5)-Proxies 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 authorises or permits their issue, shall be liable to a penalty of fifty thousand rupees. Provided That….

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 wilfully authorises or permits their issue shall be punishable with fine which may extend to one lakh rupees. Provided That….

Section105(5)-

PROVIDED THAT-

Proxies

 

Provided that an officer shall not be LIABLE under 105(5) 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. Provided that an officer shall not be punishable under 105(5) 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.
Section 117(2)- Resolutions and agreements to be filed (Penal Provisions)

 

if a company fails to file form MGT-14 within 30 days of passing the resolution, then

1. Company-penalty of Rs.10,000 and in case of continuing failure further penalty of Rs.100 for each day after first during which such failure continues subject to maximum of 2 lakh rupees, and

2. Every officer of the company who is in default including a liquidator- penalty of Rs.10,000 and if failure continues penalty of rupees Rs.100 per day after first during which such failure continues subject to maximum of Rs.50,000.

if a company fails to file form MGT14 within 30 days of passing the resolution, then

1. Company- penalty of Rs. 1 lakh & in case of continuing failure further penalty of Rs.500 for each day subject to maximum of 25 lakh rupees

2. Every officer of the company who is in default includinag a liquidator- penalty of Rs. 50,000 and if failure continues penalty of Rs. 500 per day subject to macimum Rs.5 lakh.

Section 117(3)(g)

SECOND PROVISO- Resolutions and agreements to be filed

 

Provided further that, nothing in this clause shall apply to resolutions passed to give loans, gurantee or to provide security in respect of loans under section 179(3)(f) in ordinary course of business by :-

(a) BANKING COMPANIES;

(b) NBFC (any class);

(c) HOUSING FINANCE COMPANIES (any class registered under National Housing Bank Act).

Provided further that nothing in this clause shall apply to BANKING COMPANIES, w.r.t. granting loans,providing security in respect of loans under section 179(3)(f) in the ordinary course of business.
Section 124(7)- Unpaid Dividend Account

 

If company fails to comply with provision of section 124;

The Company shall be LIABLE to PENALTY OF 1,00,000 Rupees & IN CASE OF CONTINUING FAILURE A FURTHER PENALTY OF 500 RUPEES PER DAY, AFTER FIRST DAY; SUBJECT TO MAXIMUM 10,00,000 RUPEES & Every Officer in default, shall be LIABLE to PENALTY OF 25,000 Rupees & IN CASE OF CONTINUING FAILURE A FURTHER PENALTY OF 100 RUPEES PER DAY, AFTER FIRST DAY;

SUBJECT TO MAXIMUM 2,00,000 RUPEES.

If company fails to comply with provision of section 124;

The Company shall be punishable with fine, Minimum 5,00,000 Rupees, but which may extend to Rupees 25,00,000 &

Every Officer in default, shall be punishable with Fine, Minimum 1,00,000 Rupees, but which may exttend to Rupees 5,00,000. 

Section 128(6)- Books of Account, etc., to be kept by Company If MD, WTD (finance), CFO or any other person of the company charge by board with duty of complying provisions of section 128, contravenes such provisions; Then MD, WTD, CFO OR SUCH OTHER PERSON;

Shall be punishable with Fine of minimum 50,000 Rupees, which may extend to 5,00,000 Rupees.

If MD, WTD (finance), CFO or any other person of the company charge by board with duty of complying provisions of section 128, contravenes such provisions;

Then MD, WTD, CFO OR SUCH OTHER PERSON;

Shall be punishable with Imprisonment for a term which may extend to one year OR Fine of minimum 50,000 Rupees, which may extend to 5,00,000 Rupees OR Both. 

NEW SECTION

INSERTED :-

129A-PERIODICAL

FINANCIAL RESULTS

 

CG may require such classes of unlisted companies, as may be prescribed:-

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

(b) To obtain approval of BOD & complete Audit or Limited review report of such periodical financial results IN SUCH MANNER AS MAY BE PRESCRIBED. (C) To file a copy with ROC, within 30 days of completion of relevant period with such fees as may be prescribed.

Not Existed

 

Section 134(8)-

Financial Statement,

Board’s Report, etc.

If company contravenes provision of Section 134;

Company shall be LIABLE TO PENALTY of 3,00,000 Rupees.

&

Every Officer in default shall be LIABLE TO PENALTY OF 50,000 RUPEES

If company contravenes provision of Section 134;

Company shall be punishable with Fine of minimum 50,000 Rupees, but which may extend to Rupees 25,00,000.

&

Every Officer in default shall be punishable with Imprisonment for a term which may extend to 3 Years

or

Fine of minimum 50,000 Rupees, but which may extend to Rupees 5,00,000 Rupees

or

Both.

NEW PROVISO INSERTED :-

135(5)(AFTER SECOND PROVISO)- corporate social responsibility

 

PROVIDED ALSO THAT, if a company spends on CSR in excess of the amount as required under section 135(5); such company may SET-OFF SUCH EXCESS AMOUNT, againstr the requirement to spend on csr under section 135(5) for such number of succeding financial year & in manner as may be prescribed.  Not Existed

 

135(7)-corporate

social responsibility

 

If a company contravenes provision of section 135(5)&(6), Penal Provision :-

company shall be liable to penalty of TWICE THE AMOUNT required to be transfered by the company to the fund;

SPECIFIED IN SCHEDULE VII

or

THE UNSPENT CSR ACCOUNT(as the case may be)

or

ONE CRORE RUPEES WHICHEVER IS LESS.

&

every officer of company who is in default shall be LIABLE for penalty of 1/10th of the amount required to be transfered by the company to such fund SPECIFIED IN SCHEDULE VII

or

THE UNSPENT CSR ACCOUNT(as the case may be)

or

TWO LAKH RUPEES. WHICHEVER IS LESS.

If a company contravenes provision of section 135(5)&(6), Penal Provision :-

company shall be punishable with fine which shall be not less than 50,000 Rupees but may extend upto Rupees 25 lakh

&

every officer of company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or with fine which shall not be less than 50,000 rupees which may extend to rupees 5 lakh or with both.

New SUB-SECTION

INSERTED

135(9)- CSR

 

If Amount to be spent by the company under section 135(5);

Does not exceed 50 Lakh Rupees;

THEN, requirement of constitution of CSR COPMMITTEE U/S135(1) shall not be applicable.

&

FUNCTIONS of CSR committee provided in this section shall be dischrged by the BOD.

N.A.

 

137(3)-Copy of

Financial Statement

to be Filed with

Registrar

 

If company fails to file copy of Financial Statement u/s137(1)or(2), before the expiry of period specified therein;

Company shall be liable to penalty of ten thousand rupees and in case of continuing failure, with a further penalty of 100 Rupees per day;

Subject to Maximum 2,00,000 Rupees.

&

MD, CFO(if any) & in their absence any other director who is charged by the board to comply provisions of section 137 & in absence of any such director; All The Directors Of Company;

Shall be liable to penalty of 10,000 Rupees & if failure continues further penalty of 100 rupees per day, after the first day;

Subject to maximum 50,000 Rupees.

If company fails to file copy of Financial Statement u/s137(1)or(2), before the expiry of period specified therein;

Company shall be liable to penalty of 1000 Rupees per day, during which failure continues, but which shall not be more than 10,00,000 Rupees & MD, CFO(if any) & in their absence any other director who is charged by the board to comply provisions of section 137 & in absence of any such director; All The Directors Of Company;

Shall be liable to penalty of 100,000 Rupees & if failure continues further penalty of 100 rupees per day, after the first day;

Subject to maximum 500,000 Rupees.

140(3)-Removal,

Resignation of

Auditor and Giving of

Special Notice

 

If Auditor does not comply with provision of section 140(2);

He shall be liable to Penaltyof 50,000 Rupees

OR

Amount equal to remuneration of Auditor;

Whichever is Less

&

If failure continues, further penalty of 500 rupees per day, after the first day.

Subject to maximum 200,000 Rupees.

If Auditor does not comply with provision of section 140(2);

He shall be liable to Penaltyof 50,000 Rupees

OR

Amount equal to remuneration of

Auditor;

Whichever is Less

&

If failure continues, further penalty of 500 rupees per day, after the first day.

Subject to maximum 500,000 Rupees.

143(15)-

Powers and Duties of

Auditors and Auditing

Standards

 

If any Auditor, Cost Accountant or Company Secretary in practice do not comply with section 143(12), he shall in case of a listed company, be liable to a penalty of five lakh rupees;

and

in case of any other company, be liable to a penalty of one lakh rupees.”

If any Auditor, Cost Accountant or Company Secretary in practice do not comply with section 143(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.
147(1)-

Punishment for

Contravention

 

If any provisions of sections 139 to 146 is contravened, 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 in default shall be punishable with fine which shall not be less than ten thousand rupees, but which may extend to one lakh rupees.

If any provisions of sections 139 to 146 is contravened, 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 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

Both.

147(2)-Punishment

for Contravention

 

If auditor of a company contravenes any of the provisions of section 139, section 144 or section 145;

Then auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees or four times the remuneration of the auditor, whichever is less.

Provided that…

 

If auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145;

Then auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees

or

four times the remuneration of the auditor, whichever is less.

Provided that…

NEW PROVISO

INSERTED :-

149(9)-COMPANY TO

HAVE BOARD OF

DIRECTORS

 

PROVIDED THAT, If a company has NO or INADEQUATE PROFIT;

an Independent Director may receive remuneration- exclusive of any fees payable u/s197(5) in accordance with provision of SCHEDULE-V.

N.A.

 

165(6)-Number of

Directorships

 

If a person accepts an appointment as a director in violation of section165, he shall be;

Liable to a Penalty of 2000 rupees for each day after the first day which such violation continues.Subject to maximum 2,00,000

If a person accepts an appointment as a director in contravention of 165(1), he shall be;

Liable to a Penalty of 5000 rupees for each day after the first day which such contravention continues.

167(2)-Vacation of

Office of Director

 

If person, functions as a Director, even after him knowing that he is disqualified to act as a Director u/s 167(1);

He shall be punishable Fine which shall not be less than 1,00,000 but which may extend to 5,00,000 rupees.

If person, functions as a Director, even after him knowing that he is disqualified to act as a Director u/s 167(1);

He shall be punishable with Imprisonment, for a term which may extend upto 1 year,

or

Fine which shall not be less than 1,00,000 but which may extend to 5,00,000 rupees,

or

Both.

172-Punishment If company contravenes any provisions of Chapter XI- Appointment & Qualification Of Director; for which no specific PENALTY or punishment is provided;

Then, company & Every Officer of company who is in default shall be LIABLE TO PENALTY 50,000 Rupees; &

IF FAILURE CONTINUES , SUBJECT to MAXIMUM 3,00,000 Rupees, IN CASE OF COMPANY

&

INCASE OF OFFICER IN DEFAULT 1,00,000 RUPEES 

If company contravenes any provisions of Chapter XI- Appointment & Qualification Of Director; for which no specific punishment is provided;

Then, company & Every Officer of company who is in default shall be Punishable with Fine of minimum 50,000 Rupees, which may extend to 5,00,000 Rupees.

178-Nomination and

Remuneration

Committee and

Stakeholders

Relationship

Committee

In case any contravention of the provisions of section 177 & 178, The company shall be Liable to a Penalty of 5,00,000 rupees

&

Every Officer in default shall be liable to a penalty of 1,00,000 rupees.

Provided That…. 

In case any contravention of the provisions of section 177 & 178, The company shall be punishable with fine which shall not be less than 1,00,000 rupees, but which may extend to 5,00,000 rupees

&

Every Officer 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 25,000 rupees but which may extend to 1,00,000,

or

Both

Provided that….

184(4)-Disclosure of

Interest by Director

 

If a Director of company contravenes the provisions of Section 184(1) or Section 184(2);

Such Director shall be LIABLE TO PENALTY OF 1,00,000 RUPEES.

If a Director of company contravenes the provisions of Section 184(1) or Section 184(2);

Such Director shall be Punishable with Imprisonment for a term which may extend to 1 year or with fine which may extend to 1,00,000 rupees; or

Both.

187(4)-Investments of

Company to be Held

in its Own Name

 

If a Company contravenes the provisions of section187,

The company shall be LIABLE TOPENALTY OF 500,000 rupees

&

Every Officer in default shall be LIABLE TO PENALTY 50,000 Rupees.

If a Company contravenes the provisions of section187, The company shall be punishable with fine which shall not be less than 25,000 rupees but which may extend to 25,00,000 rupees

&

Every Officer in default shall be Punishable with Imprisonment for  a term which may extend to 6 months

or

Fine which shall not be less than 25,000 rupees but which may extend to 1,00,000 Rupees

or

Both.

188(5)-RELATED

PARTY TRANSACTION

 

Any Director or Other Employee of a company;

who had entered into or authorised the contract or arrangement in violation of the provisions of Section188 shall;

(i) in case of listed company, be LIABLE TO PENALTY OF 25,00,000 RUPEES;

&

(ii) In case of any other Company, be LIABLE TO PENALTY OF 5,00,000 rupees.

Any Director or Other Employee of a company;

who had entered into or authorised the contract or arrangement in violation of the provisions of Section188 shall;

(i) in case of listed company, be Punishable with Imprisonment for a term which may extend to 1 year

or

Fine which shall not be less than 25,000 rupees but which may extend to 5,00,000 rupees

or

Both;

(ii) In case of any other Company, be Punishable with Fine which shall not be less than 25,000 rupees but which may extend to 5,00,000 rupees.

197(3)-Overall Maximum Managerial Remuneration and Managerial Remuneration in Case of Absence or Inadequacy of Profits

 

If in any financial year acompany has no profits or inadequate profits, the company shall not pay to its;

DIRECTORS (including any MANAGING or WHOLE TIME DIRECTOR or MANAGER or ANY OTHER NON-EXECUTIVE DIRECTOR INCLUDING AN INDEPENDENT DIRECTOR);

by way of remuneration any sum exclusive of any fees payable to directors u/s 197(5) except in accordance with provision of schedule-V.

If in any financial year acompany has no profits or inadequate profits, the company shall not pay to its;

DIRECTORS (including any MANAGING or WHOLE TIME DIRECTOR or MANAGER);

by way of remuneration any sum exclusive of any fees payable to directors u/s 197(5) except in accordance with provision of schedule-V.

204(4)-

Secretarial Audit for

Bigger Companies

 

If a company or any officer of the company or the company secretary in practice, contravenes the provisions Section204,

The Company, Every Officer of the Comapny or the company secretary in practice, who is in default, shall be LIABLE TO A PENALTY OF 2,00,000 RUPEES.

If a company or any officer of the company or the company secretary in practice, contravenes the provisions Section204, The Company, Every Officer of the Comapny or the company secretary in practice, who is in default, shall be punishable with fine which shall not be less than 1,00,000 rupees but which may extend to 5,00,000 rupees
232(8)- Merger and Amalgamation of Companies.

 

If a company fails to comply with Section 232(5);

The Company & Every officer of the company who is in default shall be liable to a penalty of 20,000 rupees

&

where the failure is a continuing one, with a further penalty of 1000 rupees for each day after the first during which such failure continues, subject to a maximum of 3,00,000 rupees.

If a transferor company or a transferee company contravenes the provisions of Section232, the transferor company or the transferee company, as the case may be, shall be punishable with fine which shall not be less than 1,00,000 rupees but which may extend to 25,00,000rupees

&

Every Officer of such transferor or transferee 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 1,00,000 rupees but which may extend to 3,00,000 rupees

or

Both.

242(8)-Powers of Tribunal

 

If a company contravenes the provisions of Section 242(5);

The Company shall be Punishable with Fine which shall not be less than 1,00,000 rupees but which may extend to 25,00,000 rupees

&

Every Officer of the company in default shall be Punishable WITH Fine which shall not be less than 25,000 rupees but which may extend to 1,00,000 rupees

If a company contravenes the provisions of Section 242(5);

The Company shall be Punishable with Fine which shall not be less than 1,00,000 rupees but which may extend to 25,00,000 rupees

&

Every Officer of the company in default shall be Punishable with imprisonment for a term which may extend to 6 months

oR

Fine which shall not be less than 25,000 rupees but which may extend to 1,00,000 rupees or

Both.

243(2)-

Consequence of Termination or Modification of  Certain Agreements

Any person who knowingly acts as a managing director or other director or manager of a company in contravention of clause (b) of Section243(1)

&

Every Other Director of the company who is knowingly a party to such contravention, shall be punishable Fine which may extend to 5,00,000 rupees.

Any person who knowingly acts as a managing director or other director or manager of a company in contravention of clause (b) of Section243(1)

&

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

Fine which may extend to 5,00,000 rupees

or

Both.

247(3)-

Valuation by Registered Valuers.

 

If a valuer contravenes the provisions of this section247 or the rules made thereunder;

The Valuer shall be LIABLE TO PENALTY OF 50,000 RUPEES.

Provided that….

If a valuer contravenes the provisions of this section247 or the rules made thereunder;

The Valuer shall be punishable with fine which shall not be less than 25,000 rupees but which may extend to 1,00,000rupees.

Provided that….

 

284(2)-

Promoters, Directors, etc., to Cooperate with Company Liquidator.

If any person required to assist or cooperate with the Company Liquidator u/S284(1) does not assist or cooperate, the Company Liquidator may make an application to the Tribunal for necessary directions. Where any person, without reasonable cause, fails to discharge his obligations u/S28(1), He shall be Punishable with Imprisonment which may extend to 6 months

or

Fine which may extend to 50,000 rupees

or

Both.

NEW SUB-SECTION INSERTED

284(3)- Promoters, Directors, etc., to Cooperate with Company Liquidator.

 

On receiving an application u/S 284(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. NOT EXISTED

 

302(3)-

Dissolution of

Company by Tribunal.

 

The Tribunal shall, within a period of 30 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.

A copy of the order shall, within 30 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.
302(4)-

Dissolution of Company by Tribunal.

OMMITED If the Company Liquidator makes a default in forwarding a copy of the order within the period specified in u/s 302(3), the Company Liquidator shall be punishable with fine which may extend to five thousand rupees for every day during which the default continues.
342(6)-

Prosecution of Delinquent Officers and Members of Company

OMMITED If a person fails or neglects to give assistance required by u/s342(5), he shall be liable to pay fine which shall not be less than 25,000 rupees but which may extend to 1,00,000 rupees.
347(4)-Disposal of Books and Papers of Company If any person acts in contravention of any rule framed or an order made u/s 347(3), he shall be punishable Fine which may extend to 50,000 rupees. If any person acts in contravention of any rule framed or an order made u/s 347(3), he shall be punishable with imprisonment for a term which may extend to 6 months or

Fine which may extend to 50,000 rupees

or

Both.

348(6)-Information as to Pending Liquidations.

 

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 section348, 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.”; If a Company Liquidator contravenes the provisions of section348, The Company Liquidator shall be punishable with fine which may extend to 5,000 rupees for every day during which the failure continues.
348(7)-Information as to Pending Liquidations.

 

OMMITED If a Company Liquidator makes wilful default in causing the statement referred to in U/S348(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 6months or Fine which may extend to 100,000 rupees

or

Both.

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

 

The Tribunal shall—

(a) forward a copy of the order, within 30 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 30 days from the date thereof or such further period as allowed by the Tribunal, with the Registrar who shall record the same.

It shall be the duty of the Company Liquidator or the person on whose application the order was made, within 30 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 10,000 rupees for every day during which the default continues.

Author Bio

Qualification: CS
Company: N/A
Location: Delhi, New Delhi, IN
Member Since: 13 Apr 2020 | Total Posts: 1

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