The changes brought in the Companies Act, 2013 and the Companies(Amendment) Act, 2017 were not sufficient enough and so the Ministry of Law and Justice has brought in an Ordinance on 2nd November, 2018 named as Companies (Amendment) Ordinance, 2018 bringing amendment in 31 sections of the Act being enforced from the same day.
1. Section 2(41): Definition of financial year :
Any Application applied for change of financial year shall be made to the Central Government.Further, if any applications pending with National Company Law Tribunal (NCLT) with respect to the change of financial year shall be disposed in the manner prescribed before the commencement of the Companies (Amendment) Ordinance, 2018 ACT.
2. Insertion of new Section 10A: Submission of Declaration :
If a company is having share capital, they shall not commence its business:
a.) Until a declaration is filed within 180 days from the date of starting of the Company that every subscriber has paid the value of the shares agreed to be taken by him on the date of making such type of declaration.
b.) Company has filed a verification of its registered office within One month in e-Form INC-22.
3. Insertion of subclause 9 in Section 12 after subsection 8 Registered Office:
The Registrar may come for physical verification of the registered office of the Company in case he has reasonable cause to believe that the Company is not carrying on any business or operations and in case the default is found, the Registrar may take action for removal of company from the registrar of Companies.
4. Section 14: Adjustment of Articles of Association :
For conversion of a public Company to private company application should be filed with the Central Government. Existing application shall be disposed of in accordance with the earlier ACT.
5. Section 77: Duty to register charges:
If the charge is created after the commencement of Ordinance, then the same shall be registered within 60 days. Further, the Registrar may allow such registration to be made within a further period of 60 days on payment of ad valorem fees.
6. Section 86: Penalty for contravention:
In case of willful submission of wrong information or suppression of any material information w.r.t. registration of charges then the liability of Section number 447 i.e. fraud shall be attracted.
7. Section 90: Registrar of significant beneficiar owner in a Company:
a) An aggrieved person may make an application to the Tribunal within a period of one year and further, such application shall be accepted.
b) Penal provisions: one year of Imprisonment has been inserted in the new law.
8. Section 164: Disqualifying the appointment of Director:
If the maximum number of limits as prescribed under Section 165 i.e. 20 exceed, the same shall be the ground for disqualification of the Director.
9. Section 197(7): Remuneration in case of adequacy or absence of profits:
Whole of the sub-section has been omitted and accordingly, coming out with stricter rules for Independent Directors of companies.
10. Section 248: Power of Registrar to remove name of Company from its List:
Following two grounds has been added for compulsory striking off the Companies by the Registrar:
a) Not filed declaration as discussed in above point number 2.
b) Company which has not filed e-Form INC-22