companies bill 2009

7/29/2019 Companies Bill 2009

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COMPANYS BILL

2009


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NEW COMPANYS BILL 2008

In 1956, on recommendations of Bhaba committee,

Companies Act,1956 governing the legal Framework

for corporate entities in India was enacted. With

Significant changes and development in National &international Environment since the introduction in

this act, restoration of the companies act was long

awaited.

Addressing the need of sustained growth in aglobalized and competitive environment, the govt.

constituted an expert committee under the

chairmanship of Dr. J.J.Irani in December, 2004 for a

Comprehensive revision of companies act.

INTRODUCTION


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Contd..

Drafted on the recommendation of the committee and the

detailed consultation with various Ministries, Departments

And Govt. Regulators. The Companies Bill, 2009 was

introduced in the Parliament so many times in variousyears.


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NEW COMPANYS BILL 2009

2008 Bill Introduced in LokSabha on 23rd Oct. 2008could not come in vogue

Several New Concepts/Ideas Introduced-MainlyBorrowed from UK Companies Act

Number of sections Reduced from 658 to 426 in the newBill

All Procedural aspects Brought to SubordinateLegislation


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Share Holder Democracy Recognized-Central Govt.

Power given to Share Holders

BIFR Roll Transferred to NCLT

All Powers of High Court Transferred to Proposed NCLT

Director General Registration-Central Registry


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Purpose

To modernize the structure for Corporate Regulation in Indiaand represents a Major Reform statement by the Government

to promote the development of the Indian Corporate Sectorthrough Enlightened Regulation

To enable Corporate Regulation in an effective and efficient

manner with Reasonable Costs of Compliance so thatIndian Companies are competitive in attracting Investment forgrowth.


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To enable the Corporate sector in India to operate in aRegulatory Environment ofBest International Practices that

foster Entrepreneurship, Investment and Growth

To amend and consolidate the law relating to Companies and

certain other associations


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New Concepts

Introduction of One Person Company

Incorporation Procedure modified-Standardized MOA,Declaration on Affidavit Reg. Conviction for fraud

Companies can be struck off if Business not

Commenced within 180 Days of Incorporation.


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Class-Action Suit by Group of Share Holders Permitted

for Misstatement in Prospectus

Certified (Registered) Valuer Introduced

Electronic Mode Recognized for Meetings, Maintenance

of accounts etc.


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The Concept of Non-Banking, Non-Finance Company

Abolished

Existing NBNFC given one Year Time to Repay all

Public Deposits

Registration of charge Mandatory for priority inLiquidation


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Secretarial Standards Made Mandatory

IEPF Administrator also to Consider Refund ofUnclaimed Dividends, Application money etc.

Audit Services DefinedAuditor liable for Damages for

Misleading or Incorrect Statements in his Reports


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One Resident Director Mandatory

Duties of Directors Defined

Procedure for Resignation of Director Defined

Stakeholders Relationship Committee Mandatory if More

than 1000 Members


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Insider Trading Punishable

CEO,CFO Introduced

Sec 560 Procedure Modified Application to be

Supported by S/R and NOC from Regulatory Authority to

be Attached


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Company Liquidator to be appointed from panel of

Professionals maintained by Central Govt.

Value Added Services to be Provided by Central Govt.

on Payment of Fee

Constitution of Special Courts-Orders Appealable to

High Court


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Appointment of Adjudicating officers (ROC) for

Adjudging Penalty under the Act Procedural

Noncompliance-Appealable to RD

Concept of Dormant Company Introduced-Not Carrying

on Business or No Significant accounting Transactions in

Last Two Years-Register of Dormant Company to bemaintained by ROC Based upon Application by

Company on Annual Fee


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Concept of Small Company Introduced-PUC less than

Rs. 5 Crores total Turn Over Less than 20 Crores-Such

Companies Exempted from Provisions of the Act as may

be Notified

Director can himself file details of his Resignation to ROC

Matter Pending with CLB will be Transferred to NCLT


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A Company may issue Depository Receipt to be dealtwith in a depository mode in any foreign country

Where a Company fails to register the Charge, thePerson in whose Favor the Charge is Created may applyto the Registrar for Registration of Charge.


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Every Listed Company shall prepare a report on eachAGM and A Copy of Report shall be Filed with theRegistrar.

Contracts entered by One Person Companies and its Solemembers shall be informed to Registrar.

Power of Compounding offences will be with CentralGovt. Concurrently with Court


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A Whole-Time Director, as prescribed by Central Govt.,shall not hold office in more than One Company except

when Company Permits.

Freezing of Assets on an Inquiry and Investigation of aCompany and No Suit or Proceeding till Submission of

Final Report


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Provision for Inquiry or Investigation to be applied onForeign Companies

The Merger or Amalgamation scheme is to be approvedby the members at a General Meeting by Passing aSpecial Resolution and by 3/4th in value of the Creditors

Liability of Officer of Transferor Company in respect ofoffences committed prior to the Amalgamation,Transfers etc.


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Appointment of Committee of Experts by Central Govt.

Penalty in Case of Fraudulent Applications for Removalof Name of the Company

Appointment of Interim Administrator for Revival &

Rehabilitation of Sick Companies


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Punishment in case of Repeated Defaults

Protection of Action taken in Good Faith

Central Govt. may by notification exempt the complianceof certain provisions in case of One Person Company or

Small Company


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Repeal of certain Enactments and Savings

Central Govt. may remove any difficulty which may arisein giving effects to the provisions within three years ofCommencement of the Act by publishing it in the Official

Gazette and laying before each House of Parliament


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Appeal against order of NCLT will be with National CompanyLaw Appellate Tribunal (NCLAT)

Appeal against order of NCLAT to Supreme court

Firm of Professionals or Body Corporate formed by

Professionals can be appointed as Official Liquidator


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Change of registered office outside city only by SpecialResolution. However, Changes outside state will require

approval of Central Govt.

In Certain cases, Power of CLB and Composition of Offencesto be Transferred to Central Govt.


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Auditing Standards will be mandatory

Cost Auditor will be appointed by Board of Directors butRemuneration to be fixed by the Members. Approval ofCentral Govt. is not required

Listed Company with paid up capital above prescribed

limit to have at least 1/3rd Independent Director


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Board Meeting to require seven days notice except forurgent business if at least one Independent Director is

present

Prior approval in General Meeting is Required if there isarrangement between Company and Director in respect

to Acquisition of Assets


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Approval of General meeting for disposal of undertakingonly if Investment in such Undertaking is more than20% of the Net Worth of the Company

Summary Procedure for liquidation where book value ofAssets of Company are less than Rs. 1 crore


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Foreign Company to comply with prescribed provisionsonly if not less than 50% of the capital of the ForeignCompany is held by Indian Citizen or Companies

incorporated in India.

Auditor can do such Services as approved by the Board orAudit Committee but Auditor cannot perform certain

services as Internal Audit, Actuarial Services etc.


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Independent Director will not be entitled to anyRemuneration except Sitting fees and Reimbursement of

expenses. He will be entitled to Profit related commissionand Stock options as approved by members.

Alternate Directors appointed to Independent Directors

should also be Independent Directors.


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An Extensive Insolvency Code based on the latestprinciples recommended by the United Nations

Commission on International Trade Law (UNCITRAL)

Companies not to be allowed to raise deposits from thepublic except on the basis of permission available to

them through other Special Acts.


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It proposes to bar the issue of shares at a discount toowners of a company except in case of sweat equity

shares.

Levy of cess on all companies within a range of 0.005%and 0.1% on the value of gross turnover or annual gross

receipt, whichever is higher


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Company Secretary in the Key Managerial Personnel

The scope of Annual return has been widened.

Annual Return is required to be signed by CompanySecretaries in Employment and in practice.


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Insurance for Company Secretaries but the premiumpaid on such insurance shall not be treated as part ofthe remuneration.

Tribunal appoints a provisional liquidator or theCompany Liquidator as the case may be.

Qualifications of President and Members of Tribunal


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No limit has been prescribed on payment of sitting feesto the directors

Issue and transfer of securities and non-payment ofdividend by listed companies, has to be administered bySEBI

A company limited by shares can not issue anypreference shares which are irredeemable exceedingperiod of 20 years exclusive of infrastructural projects.


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Every company shall deliver Debenture Certificate issuedby the company within six months of allotment.

The method of depreciation prescribed in section 205have been revamped to remove the option to depreciate95% of the original cost of the asset over the specifiedperiod. Accordingly depreciation is now required to be

provided at prescribed rates and where no rates has beenprescribed, on the basis as may be approved by centralgovt.


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Central Govt. has been given additional power to requirecompanies to keep books of accounts for a period longerthan eight years, where an investigation has been

ordered.

If financial statement is not adopted at AGM oradjourned meeting then such un-adopted statement to

be filed with Registrar within 30 days of the AGM andsuch statement would be considered as provisional tillthe submission of the final Statement.


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Comparative Analysis

Differential Voting Rights-

Equity Shares Abolished

It is divided in 426Clauses.

Maximum number of

partners to 100

Differential Voting Rights-

Equity Shares Allowed

It is divided in 658Sections and XV

Schedule.

Maximum number of

partners to 20

Companies Bill, 2009 Companies Act, 1956


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Restriction on Non-CashTransaction involving

Directors Prohibition on Forward

dealing in Securities ofCompany by a KeyManagerial Personnel

All Restriction onManagerial RemunerationRemoved

Non-Cash Transactioninvolving Directors allowed

Forward dealing inSecurities of Company by aKey Managerial Personnelallowed

Limitation on ManagerialRemuneration



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Provisions relating tominimum capital of Privateand Public Companies

dispensed with Provision relating to

Certificate ofCommencement of business

dispensed with. Onlydeclarations required bypublic Company

Provisions relating tominimum capital ofPrivate and Public

Companies

Provision relating toCertificate ofCommencement of

business



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Provision of Printing ofMemorandum and Article

dispensed with Unpaid Dividend can be

claimed any time

One subscriber to formthe company (One PersonCompany)

Provision of Printing ofMemorandum and Article

Unpaid Dividend can beclaimed within a period ofseven years

At least two subscriber toform the company



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Board meeting to requireseven days notice

The notice may be sent

by electronic means

The company law doesnot prescribe any length

of notice for calling ameeting either.

The secretarial standardprescribes at least 15

days notice



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A Director can bedisqualified for the Non-Attendance only if heremains absent for allmeetings of Board for aperiod of Twelve monthswithout Obtaining leave

from Board

A Director can bedisqualified for the Non-Attendance if he remainsabsent from consecutivethree meetings of Boardfor without Obtainingleave from Board



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Time interval between twoBoard Meetings to be 120days

Postal Ballot proposed to bemade applicable to allcompanies

Minimum shareholding

criterion of members inabsolute terms fordemanding a poll is INR5,00,000

Time interval between twoBoard Meetings to be 90days

Postal Ballot applicable toonly Listed company

Minimum shareholding

criterion of members inabsolute terms fordemanding a poll is INR50,000



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Time limit for filing theAnnual Return to be 30

days from the date ofAGM

Auditors are required toattend the General

Meeting unless exemptedby the company

Time limit for filing theAnnual Return is 60 days

from the date of AGM

Auditors had a right butnot the duty to attend the

General Meeting of thecompany



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Thank you

companies bill 2009

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