Companies Amendment Ordinance approved by the cabinet, sent for Presidential Assent : The Ordinance has been promulgated based on the Report of Committee Constituted to Review Offences and suggested Corporate Governance Reforms.
Some of the basic points are :
1. Over 80 offences under company Act 2013 have been decriminalised.
2. Provisions of disclosure of Beneficial Interest have been made more strict.
3. Penalties for minor offences and system of e-adjudication to be introduced wherein ROC shall send online show cause notice.
4. Salary of Independent director to be capped and to be linked with profitability of the company.
5. Other changes proposed are as follows :
Section 2(41) – Change in Financial Year to be done by CG (to be delegated to RD).
Section 11 – Re-introducing the Requirements of Obtaining Certificate of Commencement of Business. Non-obtaining of the same to be a ground of Striking Off.
Section 12 – Non – Maintenance of Registered Office to be a ground for striking off of the Company.
Section 14 – Conversion of Public Co to Private to be with Central Govt who can delegate it to ROC/RD & in case of bigger companies to NCLT.
Section 73 to 76 & Deposit Rules- An e-form to be introduced for reporting transactions which are exempted deposits.
Section 77, 78 & 87 – Maximum time period for registration/modification of charges to be 30 days + additional 30 days. Further condonation to be done in 60 days. After total of 120 days Charge Cannot be Registered.
Section 149 – Stricter norms for IDs & capping of their sitting fee & remuneration.
Section 164, 165 & 167 – Breach in Maximum no of Directorships to be a Ground for Disqualification.
Section 248- Non-obtaining of Certificate of Commencement of Business and Non maintenance of Registered Office to be a Ground for Striking off by ROC.
Section 441 – Compounding
- Compounding Threshold for going to NCLT to be revised to 25 lakhs from 5 lakh.
- Prior permission of Special Court not required for Compounding of offences punishable with imprisonment or fine or with both by NCLT.
- Minimum Compounding fee shall be as minimum fine mentioned in the section.