Transcript CRUCIAL ISSUES RELATING TO NEW COMPANY BILL 2011

COMPANIES ACT,2013
CA. Arun Saxena
Saxena & Saxena
Chartered Accountants
811, Ansal Bhawan
16, Kasturba Gandhi Marg,
New Delhi – 110 001.
Mob.: 9810037364
E-mail : [email protected]
COMPROMISE,
ARRANGEMENT
AND
AMALGAMATION
Compromise or arrangement
(Section 230)
3



Jurisdiction
Compromise includes:
* Company with credirors or
* Company with members
Arrangement includes:
* Consolidation or division of share capital of
different classes.
SAXENA & SAXENA
Compromise or arrangement
(Section 230)
F
Application for meeting of creditors and shareholders:
Following information shall be given:
• Details of company, financial position, auditors report.
• Details of investigation pending.
• Reduction of capital if any.
• Details of scheme of CDR ( if any).
o Creditors responsibility statement.
o Safeguard for other secured and unsecured creditors.
o Report by auditor on availability of fund after approval
of CDR proposal .
o Report for compliances of CDR guidelines
• The valuation report of shares, property and assets.
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Compromise or arrangement
(Section 230)
Calling of meeting:


Notice to all SH/ creditors.
to Central Government, Income Tax, RBI, SEBI, Registrar and
Stock Exchanges, OL, Competition, commission of India wherever
applicable.

Notice at Website and

by advertisement.

Notice shall include copy of scheme.

Effect of scheme on KMP, promotors creditors etc.

objections within 30 days except for CCI.

Objections to the scheme can be raised by

holders of the share not less than 10% or

holders of debts not less than 5%.
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Compromise or arrangement
(Section 230)



Resolution be passed by 3/4th majority by share holders
and creditors.
Meeting of creditors/ shareholders can be dispensed
with if consent of 90% of creditors are obtained.
Auditors certificate compliance of accounting standard
for the accounting and entries be passed to implement
the scheme.
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Compromise or arrangement
(Section 230)


Submission of scheme to tribunal
Order by tribunal.




protection of creditors
abetment of BIFER proceedings.
Exit option to dissenting shareholders.
Filing of order of Tribunal with ROC.
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Merger & Amalgamation (Section 233)
8

For the creditors meeting following shall also be
circulated
Draft of proposed terms of scheme as approved by
Directors
 Confirmation of filing of draft scheme with ROC.
 Report on effect of merger on shareholders, KMP, promoters
 Share exchange ratio
 Report on valuation
 If audited accounts are older than 6 months before the first
meeting of shareholders then supplementary account
statement will also be enclosed.

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Merger & Amalgamation (Section 233)
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


If merger of the listed company with unlisted company
then merged company shall remain unlisted.
The statement duly certified by CA, CS, Accountant, that
scheme is being complied with as per order will be filed
every year till the implementation.
Order may include:
 transfer of sheres
 dissolution of transeror company.
 transfer of employees.
 payment to shareholders not
participating in
scheme.
 liability of officers of transferor company. SAXENA & SAXENA
Merger & Amalgamation (Section 233)

Setting off the Fee on authorised.
Copy of order to ROC
Penalty:
Company
 Officer
 Imp.

:
:
:
Rs 1 to 5 lakh
Rs 1to 3 lakh
Upto 1 year
FAST TRACK MERGER / ACQUISITION
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f)
Fast Track merger and amalgamation for certain
companies:
This clause is applicable for merger/amalgamation of:
i)
Holding and wholly owned subsidiary companies.
ii)
Small companies
iii)
Any other company as may be prescribed.
1)
2)
Eligibility : 90% of each class of shareholders and the
creditors and
Solvency declaration of all the companies to be sent to the
Registrar of Companies and Official Liquidator.
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Fast Track merger and amalgamation
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Fast Track merger and amalgamation for certain companies:
In case ROC and OL has no objection then the scheme will be
approved and will be final.
And
In case ROC and OL has make Objections Report to CG. - 15
days
CG shall file with tribunal for orders. - 60 days
SAXENA & SAXENA
Merger & Amalgamation (Section 233)
Amalgamation in public interest:
 Powers with CG
 Appeal in 30 days
 Shall be laid before both the houses of
parliament.
 Preservation of books of accounts
Merger or Amalgamation of company
with Foreign Companies
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Amalgamation
between
Indian
company
and
company incorporated in countries as specified is
now allowed with the prior approval of RBI in addition
to the Tribunal.
SAXENA & SAXENA
Powers to acquire shares of descending
shareholders
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

The scheme of the amalgamation or compromise may
contain that company shall acquire the shares, the
descending shareholders and
payment of such shares shall be made within 60 days
from the date each transfer of shares have been
registered.
SAXENA & SAXENA
NCLT
&
NCLAT
Professional Opportunity
As Technical Member
 As Company Liquidator
 As Registered Valuer
 To represent parties
 Specialised Authorised representative of
Tribunal

Jurisdiction
Company Law Board
 High Court Benches
 BIFER

Pending matters on commencement of
Provisions



All CLB matters:- Appeals to order of CLB before such date before
High Court within 60 days or any extended time not further 60 days.
All proceedings of : Arbitration,
 Compromise, Arrangement,
 Winding up,
 before District Court,
 High Court shall stand transferred
Proceeding of BIFR AAFR:
 shall stand abated,
 company
may make reference
commencement of Act to NCLT.
within
180
days
from
Benches




Double Benches
Powers can be given to single bench :- Difference of opinion
on any matter. Matter shall be referred to President.
Special Benches: Rehabilitation,
 Restructuring ,
 Revival,
 Winding up
Principal Bench:
 New Delhi and presided by President
Representation (Rule 25)




Individual : in person or through authorised
representative, legal practitioners.
Company:- By Director, CFO, CEO, Manager
CG/ ROC/ RD / OL:advocate
Authorised officer / an
Company Liquidator : In person
Powers of Tribunal
NCLT shall not be bound by CPC,
But shall be guided by provisions of CPC. Same powers as to Civil
Court under CPC.
 Summoning and enforcing the attendance of any person.
 Examination on oath.
 Production of documents.
 Receiving evidence on affidavit.
 Requesting for any public record.
 Dismissing representation for default.
 Setting a side order of dismissal of representation.
 Setting a side exparte order
Powers of Tribunal
Power to contempt - as with High Court.
 Any other matter as may be presented –
 Granting stay and status quo order
 Ordering injunction
 Appointing Commissioner
 Reviewing its own order for limited purpose.
 Any order in the interest of justice.

Documents not to form part of Record
(Rule 34)

Unless permitted by NCLT –
 Written submission or reply filed after the expiry of
time allowed.
 Rejoinder filed with leave of tribunal or expiry of time.
 Additional pleading without the leave of Tribunal.
 Any other document not filed in time.
Connected Matters:
Common orders may be passed.
Substitution of Legal Representation


On death or insolvency.
If during pendency of proceeding.
 Legal representative to apply within 90 days.
 NCLT may allow ever after 90 days.
Registration of A/R’s Clerks
Procedure
MOA / Vakalatnama / POA
 Notice of mentioning to:
Bench
 Other parties
 ROC / RD
 State Government

Dress Code
Adjournment with Reasons (Rule 39)
 Not more than 3 times to a party.
 Except reasons beyond control of the party.

Rules 145 – existing 51
Completion of pleading (Paper book)
 Arguments on :
Facts
 Legal issues

Withdrawl of petition/ application with the leave of Court.
 Examination of witness on oath (witness shall be paid
travelling and DA)

Rules 145 – existing 51

Non-Appearance:


NCLT may dismiss the petition / application. Review can be
apply within 15 days of dismissal
NCLT may decide on merit.
 Expertise
Orders : If non-appearance of any party. Exparte order can be passed. Appeal against such order
for set aside be made to Tribunal.
 Order
 Execution of order
 Review of orders
Rules 145 – existing 51

Compliance of orders: Affidavit
for compliance on the direction of NCLT
 Failure to compliance shall not invalidate the order
unless NCLT orders.
Appeal to NCLAT (Section 421)



No appeal on consent order.
Within 45 days from the date on which order was made
available to parties. NCLT may further extend for next
45 days.
Appeals can be filed.
Section 422


All appeals / petitions be decided within 3 months from
the presentation.
If not, Tribunal shall record its reasons and President
may extend the period not exceeding 90 days.
Appeal to Supreme Court
 Against the order of NCLAT within 60 days on Question
of Laws.
 May exceeds the time limit for next 60 days.
SPECIAL
COURTS
Special Courts (Section 435)
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The Central Government may for the purpose of providing
speedy trial of offences under this Act by notification,
establish or designate as many as special courts as may
be necessary.
The Special Court shall consist of single judge appointed
by Central Government with concurrence of Chief Justice
of High Court within the jurisdiction the judge be appointed
as working.
Before the appointment the person appointed as judge
should be holding office of session judge or additional
session judge.
SAXENA & SAXENA
Offences Trialable by Special Courts
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

All offences under this Act.
Where person accused of, or suspected of commission
of an offence under this Act is forwarded to Magistrate
under this section or under section 2A of code of
criminal procedure 1973, such court may


Authorise detention of such person in such custody for not
exceeding 15 days (Judicial Magistrate).
For 7 days, if Magistrate is Executive Magistrate.
SAXENA & SAXENA
Offences Trialable by Special Courts
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
In addition to the offence under this act:





Special Court may also try offence other than under this Act.
With which accused may be charged under CRFC, 1973 for
such trial.
May try in a summary for an offence which is punishable
with imprisonment upto 3 years. Provided no sentence
of imprisonment is passed for more than 1 year.
All appeal against the order of Special Court shall be
before High Court.
Provisions of CRPC shall apply to proceedings before
Special Court.
SAXENA & SAXENA
PENALTIES
AND
PROSECUTION
PENALTIES




Company
officer in default
auditor
CS/ Cost Accountant/ experts
PENALTIES
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Some of the important penalties provided in the new
Companies Act, 2013:Section
Particulars and
nature of penalty
4(5)(ii)
Reservation of the
names by wrong
particulars
a) If incorporated
b) In not
incorporated
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Non-Profit making
companies
Minimum Penalty
Maximum Penalty
Strike off the name.
Cancelled the name
Action u/s 447 or 448.
Rs. 1.00 lac
i. Company –
Rs.10.00 lakh
ii. Director /Officer –
Rs.25,000/-
Rs.100.00 lakhs
Imprisonment upto 3
years or with fine
Rs.25.00 lakhs
SAXENA & SAXENA
PENALTIES
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Section
Particulars and nature of
penalty
Minimum
Penalty
11(2)
Commencement of business
without declaration:
a) Company
Rs.5,000/b) Officer
Rs.1000/- per
day
If not complied within 180
Removal of
days
name
12(8)
Failure to intimate address
of the registered office or its
change
a) Company
b) Officer
Rs. 1000/per day
Maximum
Penalty
Rs.1,00,000/-
SAXENA & SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum
Penalty
Maximum Penalty
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Relating to the
prospectus
Rs.50,000/-
Rs.3.00 lakh (with
imprisonment
which may extend
to three years for
every person in
default)
39(5)
Return for
allotment :
Company and
officer
Rs.1000/- per
day
Rs.1,00,000/SAXENA & SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum
Penalty
Maximum Penalty
40
Making public
offer
Rs.5.00 Lakhs
Rs. 50.00 lakhs,
(imprisonment
one year or with
fine Rs.50,000/to Rs.3,00,000/for every officer in
default)
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Default in issue
of duplicate
certificate of
shares with
intend to
Five times of
face value
Ten times of face
value or Rs.10.00
crores whichever
is higher and
SAXENA & SAXENA
every officer
shall
PENALTIES
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Section Particulars
and nature of
penalty
Minimum
Penalty
Maximum Penalty
64(2)
Failure to
intimate
alteration in
capital
Rs.1000/- per day
or Rs.5,00,000/whichever is
higher
66
Reduction of
capital
Rs.5.00 Lacs Rs.25.00 Lacs
74
Repayment of
deposit
Rs.1.00
crores
Rs.10.00 crores
(imprisonment
which may extend
to 7 years
or with
SAXENA
& SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum
Penalty
Maximum Penalty
92(5)
Filing of Annual Company :
Return after 330 Rs.50,000/Rs.5,00,000/days (270 + 60) Officer :
Imprisonment
upto 6 months or
fine Rs.50,000/to Rs.5,00,000/or both.
117
Filing of
Rs.5.00 Lacs
Resolutions and
agreements (30
+ 270)
Rs.25.00 Lacs
(with fine of
Rs.1.00 lac to
SAXENA
Rs.5.00SAXENA
lacs& for
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum Penalty
118
Tampering of
minutes
Imprisonment upto 2
years or fine from
Rs.25,000/- to
Rs.1,00,000/-
128(6)
Maintenance of
the Books of
accounts
MD or Director
incharge:
Imprisonment upto
one year or fine
Rs.50,000/- or both
129(7)
Financial
Statements
Directors :
imprisonment upto
one year or fine
Maximum
Penalty
Rs.5,00,000/
- or both
SAXENA & SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum
Penalty
134(8)
Non-compliance Company:
in Board Report Rs.50,000/Officer:
Imprisonment
upto 3 years or
fine Rs.50,000/-
Maximum Penalty
Rs.25,00,000/-
Rs.5,00,000/-
140
Filing of
resignation by
Auditors
Rs.50,000/-
Rs.5,00,000/-
143(15)
Reporting of
fraud to Central
Rs.1,00,000/-
Rs.25,00,000/SAXENA & SAXENA
PENALTIES
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Section
Particulars and
Minimum Penalty Maximum Penalty
nature of penalty
143, 144, On Auditors
145
Rs25,000/-
Rs.5,00,000/-
147
Imprisonment for
one year
Fine Rs.1,00,000/to Rs.25,00,000/-
If intention to
deceive
Where convicted Refund the
remuneration,
pay damages.
Liability of
partners, firm
shall be jointly or
severally.
SAXENA & SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum Penalty Maximum
Penalty
164
Dis-qualification Imprisonment for Fine
of the Directors one year
Rs.1,00,000/to
Rs.25,00,000/or both
184(4)
Failure to
Imprisonment for Fine
disclose interest one year
Rs.50,000/- to
by Directors
Rs.1,00,000/or both
SAXENA & SAXENA
PENALTIES
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Section
Particulars and Minimum
nature of
Penalty
penalty
185
Loan to
Directors
186
Investment of
Loan
Company:
Rs.5,00,000/Directors to
whom loan
given:
imprisonment
for 6 months
Company:
Rs.25,000/Officer in
default:
Maximum
Penalty
Rs.25,00,000/Fine
Rs.5,00,000/- to
Rs.25,00,000/Rs.5,00,000/Fine Rs.25,000/SAXENA & SAXENA
PENALTIES
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Section
Particulars and
nature of
penalty
Minimum
Penalty
Maximum Penalty
195
Insider trading
Imprisonment
upto 5 years or
with fine
Rs.5,00,000/-
Imprisonment
upto 5 years or
with fine Rs.25.00
crores or three
times of amount
of profit earned
whichever is
higher.
203
Nonappointment of
KMP or MD
Fine
Rs.1,00,000/and Rs.1000/per day.
Fine
Rs.5,00,000/SAXENA & SAXENA
PENALTIES
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Section Particulars
and nature of
penalty
Minimum
Penalty
Maximum
Penalty
447
Fraud
Imprisonment :
six months to
ten years
Fine :
equivalent to
amount of
fraud
Amount
equivalent to
three times of
fraud amount
448
False
statement
Imprisonment :
six months to
ten years
Fine :
Amount
equivalent to
three times of
SAXENA & SAXENA
fraud amount
PENALTIES
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Section
Particulars and
Minimum Penalty Maximum Penalty
nature of penalty
450
Not provided in
any provision
Rs.10,000/-
451
Repeated
offence in three
years
Twice of the fine
452
Wrongly holding
of property of
company
Fine
Rs.1,00,000/-
Rs. 1000/- per day
Fine Rs.5,00,000/-
SAXENA & SAXENA
Adjudication of offences



by adjudicating officers
Appeal to RD
:
Payment of penalty :
60 days
90 days
If default:Company
: Rs. 25000 to 5 lakh
Officer
: Rs. 25000 to 1 lakh
Imp. Up to 6 month
Prosecution / Compounding of Offence


Suo Moto
Prosecution is filed by ROC
THANK YOU
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SAXENA & SAXENA