Statutory Lifting of Corporate veil

Statutory Lifting of Corporate veil

• Section 45

• Members severally liable for debts where business carried on with fewer than seven, or in the case of a private company, two members

• Section 147 (Sec 12 – 2013)

• Publication of name by Co. • (8) If any default is made in complying with the

requirements - the Co & every officer who is in default shall be liable to a penalty of Rs. 1000 for every day during which the default continues – Not exceeding Rs. 1 lakh

Section 212 -213 (129 – 2013)Balance-sheet of holding company to include certain particulars as

to its subsidiaries; Financial year of holding co & subsidiary

(3) Where a Co. has one or more subsidiaries - It shall, in addition to financial statements P/U/SS (2) - Prepare a consolidated financial statement of the Co. & of all the subsidiaries in the same form & manner as that of its own which shall also be laid before AGM… along with the laying of its financial statement U/SS (2)

P…Co. shall also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiary or subsidiaries…

P…CG may provide for the consolidation of accounts of Co’s… Explanation - For the purposes of this SS, the word

“subsidiary” shall include Associate Co. & JV

SS (4) Provisions of T/A applicable to the preparation, adoption & audit of the financial statements of a HC shall, mutatis mutandis, apply to the consolidated financial statements referred to in SS (3).

SS (4) Provisions of T/A applicable to the preparation, adoption & audit of the financial statements of a HC shall, mutatis mutandis, apply to the consolidated financial statements referred to in SS (3).

Section 542 (339 - 2013)Liability for fraudulent conduct of business

Declare that any person, who is or has been a director, manager, or officer of the Co. or any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible - Without any limitation of liability - for all or any of the debts or other liabilities of the Co. as the Tribunal may direct

In Addition - Every person who was knowingly a party to the carrying on of

the business in the manner aforesaid, shall be liable for action U/S 447. (Punishment for fraud)

447 - … Shall be punishable with Imprisonment for a term which shall not be less than six months

but which may extend to 10 years Shall also be liable to fine which shall not be less than the amount

involved in the fraud, but which may extend to 3 times the amount involved in the fraud:

Sec. 453 Punishment for improper use of “Limited” or “Private Limited”

That Person/Each of those persons shall unless duly incorporatedwith Ltd. Liability, or as a Pvt. Co. with Ltd. Liability,

Punishable with fine which shall not be less than Rs. 500 but may extend to Rs. 2000 for every day for which that name or title has been used.

Steps to be taken to incorporate a New

Company

Steps to be taken to get a New Co. incorporated

Steps to be taken to get a new company incorporated

Login to the portal & fill the following forms & attach the mandatory documents listed in the e-Form

Additional Steps To Be Taken For Formation of A PLC

Commencement of business, etc. Sec. 11 (2013) (1) Co. having a SC shall not commence any business or exercise any

borrowing powers unless- A declaration is filed by a director in such form & verified in such

manner…, with ROC that every subscriber to MOA has paid the value of the shares agreed to be taken by him & the paid-up SC of the Co. is Not less thanRs. 5 lakh in case of a PLC & Rs. 1 lakh in case of a Pvt. Co. On the date of making of this declaration; &

(b) Co. has filed with ROC a verification of its RO as provided in Sec. 12 (2).

(2) If any default is made in complying with the requirements of this section, - Co. shall be liable to a penalty which may extend to Rs. 5000 &

Every officer who is in default shall be punishable with fine which may extend to Rs. 1000 for every day during which the default continues.

(3) Where no declaration has been filed with ROC- within a period of 180 days of the date of incorporation of the Co. &

ROC has reasonable cause to believe that the Co. is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section

(2) Initiate action for the removal of the name of the Co. from the register of Co’s U/Ch. XVIII. (Removal of names of Co’s from the register of Co’s)