exemptions and penalties under companies act 2013.pptx
TRANSCRIPT
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
1/56
Exemptions for Private
Limited Companies &Penalties Under the
Companies Act, 2013M R Thiagarajan
Companies Act, 20131
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
2/56
p ,
Further issue of Share Capital b Right issue
Sec! "1 • Applicable onl to #ublic
Co!$s
Sec! %2 • &o' Applicable to #ri(ate
Co!$s also
Exemptions
Additional changes if not right issue then)
•
to an person if authorise* b SpecialResolution+
• at a price to !e determined !" registeredval#er
• subject to other con*itions as ma be prescribe*M R Thiagarajan
Companies Act, 20132
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
3/56
Exemptions
-n case the e.isting sharehol*ers *o not accept theo/er, *irectors shoul* *ispose such shares in amanner $non disadvantageo#s% to theshareholders and compan"! Earlier it 'as to be*ispose* of in manner most !enecial to the
compan"%
n*er the e.isting pro(isions Sec! "1 1A b4if theappro(al 'as gi(en b simple majorit, C5 coul* ha(eallo'e* the issue if it 'as sho'n to be mostbene6cial to the Compan! Such option is remo(e* inthe ne' act
M R ThiagarajanCompanies Act, 2013
3
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
4/56
Restrictions on 7in*s of Capital that can be issue*
Sec! "% • Applicable onl to #ublic
Co!$s
Sec! 83 • &o' Applicable to #ri(ate
Co!$s also
Exemptions
Sec! 19141"% • Applicable onl to #ublic
Co!$sSec! 1014
10:• &o' Applicable to #ri(ate Co!$s
also
;ength of &otice of 5M, e.planatorstatement,
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
5/56
-ntereste* *irector not to participate or (ote in >oar*$s procee*ings
Sec!3002
• Applicable onl to #ublicCo!$s
Sec!1"8
• &o' Applicable to #ri(ateCo!$s also
Exemptions
Sec! 2%: 2 319 • Applicable onl to #ublic Co!$sSec! 1:%
203 • &o' Applicable to #ri(ate Co!$s also
Appointment tenure of Managing ?irector
Section 1"" Relate* #art
M R ThiagarajanCompanies Act, 2013
@
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
6/56
Exemptions ther con*itions)
•
Age limit of 21 to 90
• -f ageB 90 appro(al b S!R in 5!M no further appro(alof the C!5 shall be necessar for such appointment
• M? an* Manager both cannot be appointe* in samecompan
• Term of M? for @ ears
Sec! 2%8 • Applicable onl to #ublic
Co!$s
Sec! 1@2 • &o' Applicable to #ri(ate
Co!$s also
Appointment of ?irector
M R ThiagarajanCompanies Act, 2013
%
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
7/56
Consent to act as *irector to be 6le* 'ith the RC
Exemptions
Sec!2%83
• Applicable onl to #ublicCo!$s
Sec!1@2
• &o' Applicable to #ri(ateCo!$s also
Sec! @"A• ?eposits from members b #(t
Co! 'as e.empt
Sec! 93 98
• Stringent con*itions prescribe* for*eposit from members *iscusse* in
*etaile* in upcoming sli*es
?eposit from members
M R ThiagarajanCompanies Act, 2013
9
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
8/56
Commencement of business
Exemptions
Sec! 18: • Applicable onl to #ublic Co!$s
Sec! 11 • &o' Applicable to #ri(ate
Co!$s also
'ec 11(1)* Co! ha(ing a SC not to commence an
business or e.ercise an borro'ing po'ers unless4
• ?eclaration 6le* 'ith the RC that e(er subscriber tothe MA has pai* the (alue of the shares agree* to betaDen b him
• Co! has 6le* 'ith RC (eri6cation of its Registere*oEce
'ec 11(3)* -f *eclaration is not 6le* 'ithin 1"0 *as ofincorporation an* RC has reasonable cause to belie(e
that the co! is not carring on an business orM R ThiagarajanCompanies Act, 2013 "
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
9/56
#assing of Resolution b #ostal >allot
Exemptions
Sec! 1:2A •
Applicable onl to #ublic Co!$s
Sec! 110 • &o' Applicable to #ri(ate Co!$s
also ha(ing B @0 members
Follo'ing items of business shall be transacte* onl b
means of (oting through a postal ballot4 bject Clause Alteration Articles of Association Alteration Change in Registere* Ece Change in utilisation of fun*s raise* b compan
-ssue of shares 'ith *i/erential (oting rights =ariation in the rights attache* to shares or
*ebentures >u bacD of shares lection of small sharehol*erGs *irector
Sale of un*ertaDingM R ThiagarajanCompanies Act, 2013 :
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
10/56
;oan etc to ?irectors tcH &oti6e* on 12th September 2013
Sec! 2:@ •
Applicable onl to #ublicCo!$s
Sec! 1"@ • &o' Applicable to #ri(ate
Co!$s also
Exemptions
Section 2:@ e.empte* #(t ;imite* Companies+
ne' Act *oes not
n*er the e.isting act, prohibite*loansguarantees can be ma*e 'ith the appro(alof C5, n*er the ne' act no pro(ision for gi(ingloan e(en 'ith C5 permission
;oans from hol*ing compan to subsi*iar note.empte* b Section! Io'e(er Rule has gi(en
e.emption! M R ThiagarajanCompanies Act, 2013 10
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
11/56
Exemptions
.emptions gi(en un*er Rule 101 J Chapter K--
a ;oan b Iol*ing Co! to +holl" -ned'#!sidiar" (+') or guarantee or securitpro(i*e* b a hol*ing compan in respect ofan" loan ma*e to its +' is e.empte*
b Rule 10 2 An guarantee gi(en or securitpro(i*e* b a hol*ing compan in respect ofloan ma*e b an" !an. or / to its s#!sidiar"compan" is e.empte*
c #ro(i*e* loans ma*e un*er 10 1 2 are
utilise* b subsi*iar for its principle businessacti(ities!
) nl e.ceptions in Sec 1"@)) loan gi(en to M? or LT? if such loan is in
accor*ance 'ith the terms of ser(ices e.ten*e*
to all emploees or is appro(e* b sharehol*ersM R ThiagarajanCompanies Act, 2013 11
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
12/56
Exemptions
Conse#ences of non*compliance)
Fine to Compan 4 Rs @ ;aDh to Rs 2@ ;aDh Fine to ?irector or other person 4 Rs @ ;aDh to
Rs 2@ ;aDh or -mprisonment upto Si. monthsor >oth
Unli.e in 'ec 24, the exemption fromimprisonment, if loan is repaid f#ll", is notthere in 'ec 154
M R ThiagarajanCompanies Act, 2013
12
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
13/56
Exemptions
n*er sec! 1"@ person in 'hom ?irector isintereste* means)
the list is same as in Section 2:@ of 1:@% Act An ?irector of len*ing Co or of Iol*ing Co An partner or relati(e of an such ?irector An 6rm in 'hich an such ?irector or relati(e is
partner An #=T Co of 'hich an such ?irector is ?irector
or Member
An >o* Corporate of 'hich 2@N or more of total(oting po'er is e.ercise*controlled b an such?irectors
An >o* Corporate the >o? or M? 'hereof isaccustome* to act in accor*ance 'ith
*irectionsinstructions of >o? or of an ?irectorsM R ThiagarajanCompanies Act, 2013 13
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
14/56
-ntercompan -n(estments an* ;oans
Sec!392A•
Applicable onl to #ublicCo!$sSec!
1"%• &o' Applicable to #ri(ate
Co!$s also
Exemptions
Changes
Exemption in case of loan !" 6olding Co to +' also-ithdra-n in section
7o- #nder 8#le 11 of Chapter 9;oan or guarantee gi(en or securit pro(i*e* b Iol*ingCo! to +holl" -ned '#!sidiar" Co! or O= or acPuisitionof securities of Lholl 'ne* Subsi*iar (+') 44#rior S!R!&ot RePuire*
n*er the e.isting act, no loan shall be gi(en at a R-lo-er than the prevailing !an. rate being the stan*ar*rate ma*e public un*er section 8: of the Reser(e >anD of-n*ia Act, 1:38
As per the ne' pro(ision of the Act, no loan shall be gi(enat a R- lo'er than the prevailing "ield of 1 "ear, 3M R ThiagarajanCompanies Act, 2013 18
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
15/56
Exemptions Additional disclos#re in nancial statements4 full
particulars of the loans gi(en, in(estment ma*e orguarantee gi(en or securit pro(i*e* an* the purpose for'hich the loan or guarantee or securit is propose* to beutiliQe* b the recipient of the loan or guarantee orsecurit
1"%1 Restriction on laers of, -n(estmentsubsi*iaries to t'o laers e.cept for subsi*iariesoutsi*e -n*ia or if rePuire* b la'
1"% 24 &o compan shall *irectl or in*irectl (7ochange)
a gi(e an loan to an person or other bo* corporate+
b gi(e an guarantee or pro(i*e securit in connection'ith a loan to an other bo* corporate or person+ an*c acPuire b 'a of subscription, purchase orother'ise, the securities of an other bo* corporate,e.cee*ing %0N of its pai*4up SC, free reser(es an* S!#account or 100N of its free reser(es an* S!# account,M R ThiagarajanCompanies Act, 2013 1@
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
16/56
#enal #ro(isions
;iolation !" A#ditor /ine< mprisonmentSectio
n?escription Sections -mprison
mentMinimum
Rs!Ma.imum
Rs!
1802
n resignationb au*itor, henee*s tointimatecompan an*RC or CA5
1803 4 0!@ ;ac
1813
?isPuali6cations of au*itors
1818 =acation of oEce
18312
Au*itor not toren*er certainser(ice
1811@ 4 1 ;ac 2@ ;acs
M R ThiagarajanCompanies Act, 2013
1%
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
17/56
#enal #ro(isions
;iolation !"A#ditor
/ine< mprisonment
Section
?escription
Sections
nDno'ingl 7no'ingl Lillfull'ith intention to*ecei(e
13: Appointment ofau*itor
1892an*1893
• Minimum Rs!2@000
• Ma.imum Rs! @;ac
A&?
• Refun*remuneration
• #a *amagesfor lossessu/ere* *ue tomislea*ingstatement in
• -mprisonment upto 1ear+ an*
• Minimum 6ne Rs! 1lac
• Ma.imum 6ne Rs! @lac
A&?
• Refun*remuneration
• #a *amages forlosses su/ere* *ueto mislea*ing
183 #o'eran**uties of
au*itor188 Au*itor
not toren*ercertainser(ice
18@ Au*itor M R ThiagarajanCompanies Act, 2013 19
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
18/56
Cannons of penalt follo'e* un*erthe Companies Act, 2013
• ?eterrent
• #roce*ural non compliances
•
&on *isclosure lea*ing to bene6t• ;iabilit of professionals J sec
1831@, 1893
1"M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
19/56
1:M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
20/56
20M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
21/56
21M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
22/56
22M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
23/56
23M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
24/56
28M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
25/56
2@M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
26/56
2%M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
27/56
29M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
28/56
2"M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
29/56
2:M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
30/56
30M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
31/56
31M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
32/56
32M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
33/56
33M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
34/56
38M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
35/56
3@M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
36/56
3%M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
37/56
39M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
38/56
3"M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
39/56
3:M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
40/56
80M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
41/56
81M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
42/56
82M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
43/56
83M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
44/56
88M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
45/56
8@M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
46/56
8%M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
47/56
7o =inim#m Paid*#p 'hare Capital) The minimum pai*4up share capitalrePuirement of -&R 100,000 in case of a pri(ate compan an* -&R @00,000in case of a public compan un*er CA 2013 has been *one a'a 'ith!ConsePuentl, the *e6nitions of pri(ate an* public companies stan*
amen*e*!
Accordingly, no minimum paid-up capital requirements will now apply forincorporating private as well as public companies in India.
Amen*ments CA 2013
89M R ThiagarajanCompanies Act, 2013
A * t CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
48/56
Amen*ments CA 20138elaxations vis-a-vis 8elated Part" >ransactions
Section 1"" of CA 2013 lists out such relate* part transactions, 'hich rePuire appro(alfrom the boar* of *irectors an*or the sharehol*ers, as prescribe*! -f such relate* parttransactions meet the threshol*s prescribe* in CA 2013 an* the rules thereun*er,appro(al from the sharehol*ers b 'a of passing of a special resolution i!e! rePuiringappro(al of three4fourth majorit of sharehol*ers 'as rePuire*!
The CA Amendment 2!" has rela#ed the approval requirement from a specialresolution $i.e. requiring approval of three-fourth ma%ority of shareholders& to anordinary resolution $i.e. requiring approval of simple ma%ority of shareholders& in caseof related party transactions which require shareholders' approval.Further, Section 1"" an* the rules thereun*er pro(i*e* that in case of relate* parttransactions bet'een a hol*ing compan an* its 'holl o'ne* subsi*iar, a specialresolution passe* b the hol*ing compan 'as suEcient!
The CA Amendment 2!" has rela#ed and done away with the requirement of a specialresolution in the above cases provided the accounts of the 'holl o'ne* subsidiary areconsolidated with the accounts of the holding company, and placed before theshareholders at a general meeting for approval!-n or*er to align 'ith Clause 8: of the ;isting Agreement, Section 199 has beenamen*e* to inclu*e a pro(iso to enable the concerne* au*it committee to pro(i*e
omnibus appro(al for relate* part transactions subject to prescribe* con*itions! 8"M R ThiagarajanCompanies Act, 2013
A * t CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
49/56
Amen*ments CA 2013
nspection of 8esol#tions, etc led -ith the 8egistrar arlier, un*erSection 119 rea* 'ith Section 3:: of CA 2013, certain resolutions e!g! allspecial resolutions, resolutions for terms of appointment of managing*irector, 'in*ing4up resolutions, resolutions in relation to sale ofun*ertaDing borro'ings, etc! 6le* b a compan 'ith the Registrar ofCompanies 'ere open for inspection b an person or to obtain copies!
The CA Amendment 2!" has limited public access of such resolutionsrelating mainly to strategic business matters. (uch documents will no longerbe available for public review or permitted to ta+e copies of. This addressesthe concerns raised by several Corporates in India, speci*cally privatecompanies, in terms of e#posure of critical business matters in public.
8:M R ThiagarajanCompanies Act, 2013
A * t CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
50/56
Amen*ments CA 2013
Common 'eal ptional) CA 2013 rePuire* common seal to be aE.e* oncertain *ocuments such as bill of e.change, share certi6cates, etc! &o', theuse of common seal has been ma*e optional! All such *ocuments 'hichrePuire* aE.ing the common seal ma no' instea* be signe* b t'o*irectors or one *irector an* a compan secretar of the compan!
Consequently, several sections of CA 2! dealing with common seal havebeen amended to incorporate the above requirement.
@0M R ThiagarajanCompanies Act, 2013
A * t CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
51/56
Amen*ments CA 2013
7o declarations for commencement of !#siness, etc) CA 2013 rePuire*all companies to 6le follo'ing a**itional *eclarations 'ith the Registrar ofCompanies prior to commencement of business or e.ercising an borro'ingpo'er) i *eclaration b a *irector that minimum pai*4up share capital hasbeen pai*+ an* ii compan has 6le* (eri6cation of registere* oEce!
The CA Amendment 2!" has removed the above requirements and deleted(ection !! of CA 2!. This reduces the *lings to be made by companies inIndia.
@1M R ThiagarajanCompanies Act, 2013
A * t CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
52/56
Amen*ments CA 2013
;iolation of Acceptance of ?eposits, etc) CA 2013 intro*uce* stringentpro(isions in relation to acceptance rene'al repament of *eposits!Io'e(er, no speci6c penalt 'as prescribe* for non4compliance 'ith therele(ant pro(isions i!e! Section 93 an* Section 9%! This lacuna has been 6lle*b the CA Amen*ment 201@!
A ne' Section 9% A has been intro*uce* for the abo(e non4compliances! The*efaulting compan 'ill be liable for 6ne of a minimum amount of -&R10,000,000 an* a ma.imum of -&R 100,000,000 in a**ition to the amount of*eposit or part thereof, along 'ith interest! Further, e(er oEcer of thecompan in *efault is punishable 'ith imprisonment 'hich ma e.ten* upto9 ears or 'ith a 6ne amounting to a minimum of -&R 2,@00,000 an*
ma.imum of -&R 20,000,000 or both! Such oEcer ma attract a**itionalpenalt for frau* un*er CA 2013 if the non4compliance 'as *one Dno'inglor 'ith the intention to *ecei(e the compan, sharehol*ers, *epositors,cre*itors or ta. authorities!
@2M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
53/56
Amen*ments CA 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
54/56
Amen*ments CA 2013
Exemptions to 'ection 154 Section 1"@ inclu*es restrictions on loans b a
compan to a *irector or other intereste* persons entities! Io'e(er, therules prescribe* un*er Section 1"@ e.empte* an loans guarantee securitb a hol*ing compan to its 'holl o'ne* subsi*iar, an* an guarantee orsecurit b a hol*ing compan to a 6nancial institution for loan a(aile* b itssubsi*iar, pro(i*e* the loan in each of these cases is utilise* b thesubsi*iar for its principal business!
The above provisions of the ules have now been inserted under (ection !"of CA 2!" itself.?ividend) Section 123 is an enabling pro(ision for companies to *eclare*i(i*e* in a 6nancial ear, subject to ful6lment of prescribe* con*itions! TheCA Amen*ment 201@ has intro*uce* a ne' pro(iso 'hich states that a
compan cannot *eclare *i(i*en* for a 6nancial ear, unless the losses an**epreciation carrie* o(er from past ears ha(e been set4o/ against thepro6ts of the compan, in the ear it proposes to *eclare a *i(i*en*!'pecial Co#rts) Section 83@ rea* 'ith Section 83% pro(i*es the Central5o(ernment the po'er to set up special courts to tr o/ences un*er CA2013!
@8M R ThiagarajanCompanies Act, 2013
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
55/56
An"@#estions
or@#eries
M R ThiagarajanCompanies Act, 2013 @@
-
8/15/2019 Exemptions and Penalties under Companies Act 2013.pptx
56/56