COMPANIES (AMENDMENT) ORDINANCE 2019 IMPORTANT CHANGES NOTIFIED

COMPANIES (AMENDMENT) ORDINANCE 2019

IMPORTANT CHANGES NOTIFIED

1.COMMENCEMENT CERTIFICATE IS MANDATORY

Commencement Certificate is mandatory now to be obtain within 6 months of Incorporation without which, it can not comment its business activity or borrow money.

2.ROC HAS POWER TO STRIKE OFF THE COMPANY IF THE REGISTERED OFFICE IS BOGUS

The ROC can strike off a company if the address of Regd Office is bogus or incomplete/improper  address.

3.REGIONAL DIRECTORS HAVE TO APPROVE THE CONVERSION OF PUBLIC TO PRIVATE NOW

Conversion of public Ltd to Pvt Ltd matters shifted from NCLT to Regional Directorate.

4.COMPANY HAS TO PAY HEAVY PENALTY IF IT ISSUES SHARES AT A DISCOUNT

 Company cannot issue shares at discount, - heavy penalty imposed on violation.

5.NON-INTIMATION OF ALTERATION OF AUTHORISED CAPITAL WILL ATTRACT HEAVY PENALTY

Alteration of Authorised Capital to be intimated within 30 days, default - penalty 1000 every day or 5 Lac whichever is less.

6.CHARGE FILING –TIME LIMIT REDUCED FROM 300 DAYS TO 60 DAYS

Creation of charge filing with ROC-  time limit reduced from 300 days to 60 days.

7.MISREPRESENTATION IN FILING CHARGE- IMPRISONMENT

Wrong statement/ information in filing Charge forms with ROC may lead to misrepresentation and jail imprisonment

8.HEAVY PENALTY FOR NON-FILING OF ANNUAL RETURN WITHIN DUE DATE

Annual Return should be filed within 60 days from AGM, failure to this, penalty of 100 per day to Company + directors max 5 Lakh apart from ROC delay charges is applicable.

9.RS 5 LAKH PENALTY TO COMPANY SECRETARY WHO CERTIFIES WRONG ANNUAL RETURN

Penalty of 5 lakh to Company secretary certifying wrong Annual Return.

10.PENALTY FOR WRONG DIRECTORS REPORT

Explanatory statement to be given with Notice of General Meeting must contain all details as required by Law, if no detail/short detail/misleading - penalty for Company + Directors + KMP - 50K

11.DELAY IN FILING MGT-14 MAY COST COMPANY NOW RS 25 LACS

 Filing of Resolutions with ROC- delay will be very costly now. Penalty for defaulter increased substantially. 500 every day max 25 Lakh

12.HEAVY PENALTY FOR NON-FILING OF ANNUAL ACCOUNTS WITHIN DUE DATES

Filing of Balance sheet with ROC within time limit- failure is costly for Company + Directors both. Penalty of 100 per day + 1 lakh to Company + Director each.

13.RESIGNING AUDITOR SHALL HAVE TO INTIMATE MCA ELSE PENALTY OF RS 50000 AND RS 500 PER DAY

 Resignation of Auditor must be filed by the resigning Auditor within 30 days, failure to which the resigning Auditor is liable for penalty of 50,000 + 500 per day.

14.NOW A DIRECTOR WILL BE 

DISQUALIFIED IF HE CONTINUE AS A DIRECTOR IN MORE THAN 20 COMPANIES

A director can not become director in  more than 20 companies. If he continues, he becomes disqualified now.

15.NON-APPOINTMENT OF COMPANY SECRETARY IN PRIVATE LIMITED COMPANIES WILL ATTRACT HEAVY PENALTY

Appointment of CS on payroll (Pvt Co having paid-up capital 5 cr & above) is mandatory. Default is now very costly- penalty increased substantially.

16.IF INITITAL SUBSCRIPTION IS NOT RECEIVED WITHIN 6 MONTHS , ROC MAY STRIKE OFF THE COMPANY

ROC may strike off a company if subscribers have not paid initial share capital after incorporation of a Company within 6 months-

17.FOREIGN SUBSIDIARIES IN INDIA MAY HAVE ACCOUNTING PERIOD OF THEIR CHOICE

The Indian subsidiary or associate or holding company of the foreign company may be allowed to follow any period as its financial period on an application made by such company if it is required for consolidation of its financials with the foreign company. Also the such period may or may not be one year.