C OMPANIES ACT,2013

COMPANIES ACT,2013

CA. Arun Saxena

Saxena & SaxenaChartered Accountants

811, Ansal Bhawan

16, Kasturba Gandhi Marg,

New Delhi – 110 001.

Mob.: 9810037364E-mail : [email protected]

COMPROMISE, ARRANGEMENT

AND AMALGAMATION

Compromise or arrangement (Section 230)

Jurisdiction Compromise includes: * Company with credirors or * Company with members Arrangement includes:* Consolidation or division of share capital of

different classes.

3

SAXENA & SAXENA

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.


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%.

SAXENA & SAXENA

5


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.

SAXENA & SAXENA

6


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.

SAXENA & SAXENA

7


Merger & Amalgamation (Section 233)

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.

SAXENA & SAXENA

8


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

9


Setting off the Fee on authorised.Copy of order to ROCPenalty: Company : Rs 1 to 5 lakh Officer : Rs 1to 3 lakh Imp. : Upto 1 year

FAST TRACK MERGER / ACQUISITION

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) Eligibility : 90% of each class of shareholders and the

creditors and

2) Solvency declaration of all the companies to be sent to the Registrar of Companies and Official Liquidator.

11

SAXENA & SAXENA

Fast Track merger and amalgamationFast 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

12

SAXENA & SAXENA


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

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.

14

SAXENA & SAXENA

Powers to acquire shares of descending shareholders

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.

15

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 within 180 days from

commencement of Act to NCLT.

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:- Authorised officer / an advocate

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)


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. Ex-parte order can be passed. Appeal against such order for set aside be made to Tribunal. OrderExecution of order Review of orders


Compliance of orders:-

Affidavit for compliance on the direction of NCLTFailure 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)

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

33

Offences Trialable by Special Courts

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

34

Offences Trialable by Special Courts

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

35

PENALTIESAND

PROSECUTION

PENALTIES

Company officer in default auditor CS/ Cost Accountant/ experts

PENALTIES

Some of the important penalties provided in the new Companies Act, 2013:-

38

SAXENA & SAXENA

Section Particulars and nature of penalty

Minimum Penalty

Maximum Penalty

4(5)(ii) Reservation of the names by wrong particularsa)If incorporatedb)In not incorporated

Strike off the name.

Cancelled the name

Action u/s 447 or 448.Rs. 1.00 lac

8 Non-Profit making companies

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

PENALTIES39

SAXENA & SAXENA

Section

Particulars and nature of penalty

Minimum Penalty

Maximum Penalty

11(2) Commencement of business without declaration:a)Companyb)Officer

If not complied within 180 days

Rs.5,000/-Rs.1000/-

per dayRemoval of

name

12(8) Failure to intimate address of the registered office or its changea)Companyb)Officer

Rs. 1000/- per day

Rs.1,00,000/-

PENALTIES40

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

26 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/-

PENALTIES41

SAXENA & SAXENA


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)

46 Default in issue of duplicate certificate of shares with intend to defraud

Five times of face value

Ten times of face value or Rs.10.00 crores whichever is higher and every officer shall be punishable under clause 447.

PENALTIES42

SAXENA & SAXENA


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 fine Rs.25.00 lacs or Rs.2.00 crores for every officer in default).

PENALTIES43

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

92(5) Filing of Annual Return after 330 days (270 + 60)

Company : Rs.50,000/-Officer :Imprisonment upto 6 months or fine Rs.50,000/- to Rs.5,00,000/- or both.

Rs.5,00,000/-

117 Filing of Resolutions and agreements (30 + 270)

Rs.5.00 Lacs Rs.25.00 Lacs (with fine of Rs.1.00 lac to Rs.5.00 lacs for every officer in default).

PENALTIES44

SAXENA & SAXENA


Minimum Penalty Maximum 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

Rs.5,00,000/- or both

129(7) Financial Statements

Directors : imprisonment upto one year or fine 50,000/- to 5,00,000/-

PENALTIES45

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

134(8) Non-compliance in Board Report

Company:Rs.50,000/-Officer:Imprisonment upto 3 years or fine Rs.50,000/-

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 Government

Rs.1,00,000/- Rs.25,00,000/-

PENALTIES46

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

143, 144, 145

On Auditors Rs25,000/- Rs.5,00,000/-

147 If intention to deceive

Where convicted

Imprisonment for one year

Refund the remuneration, pay damages. Liability of partners, firm shall be jointly or severally.

Fine Rs.1,00,000/- to Rs.25,00,000/-

PENALTIES47

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

164 Dis-qualification of the Directors


Fine Rs.1,00,000/- to Rs.25,00,000/- or both

184(4) Failure to disclose interest by Directors


Fine Rs.50,000/- to Rs.1,00,000/- or both

PENALTIES48

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

185 Loan to Directors

Company: Rs.5,00,000/-Directors to whom loan given: imprisonment for 6 months

Rs.25,00,000/-

Fine Rs.5,00,000/- to Rs.25,00,000/-

186 Investment of Loan

Company: Rs.25,000/-Officer in default: imprisonment upto 2 years

Rs.5,00,000/-

Fine Rs.25,000/- to Rs.1,00,000/-

PENALTIES49

SAXENA & SAXENA


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 Non-appointment of KMP or MD

Fine Rs.1,00,000/- and Rs.1000/- per day.

Fine Rs.5,00,000/-

PENALTIES50

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

447 Fraud Imprisonment : six months to ten yearsFine : equivalent to amount of fraud

Amount equivalent to three times of fraud amount

448 False statement

Imprisonment : six months to ten yearsFine : equivalent to amount of fraud

Amount equivalent to three times of fraud amount

449 False evidence 3 years imprisonment

Fine upto Rs.10,00,000/-

PENALTIES51

SAXENA & SAXENA


Minimum Penalty

Maximum Penalty

450 Not provided in any provision

Rs.10,000/- Rs. 1000/- per day

451 Repeated offence in three years

Twice of the fine

452 Wrongly holding of property of company

Fine Rs.1,00,000/-

Fine Rs.5,00,000/-

Adjudication of offences

by adjudicating officers Appeal to RD : 60 days Payment of penalty : 90 days

If default:-Company : Rs. 25000 to 5 lakhOfficer : Rs. 25000 to 1 lakhImp. Up to 6 month

Prosecution / Compounding of Offence

Suo Moto Prosecution is filed by ROC

THANK YOU

54 SAXENA & SAXENA