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Brief information on

NEW COMPANYS BILL

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NEW COMPANYS BILL

New Bill Introduced in LokSabha on 23 rd Oct2008

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

Number of sections Reduced from 658 to 426 inthe new Bill

All Procedural aspects Brought to SubordinateLegislation

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Share Holder Democracy Recognized-CentralGovt. Power given to Share Holders

BIFR Roll Transferred to NCLT

All Powers of High Court Transferred toProposed NCLT

Director General Registration-Central Registry

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New Concepts

Introduction of OPC

Incorporation Procedure modified-StandardizedMOA, Declaration on Affidavit Reg. Convictionfor fraud

Companies can be struck off if Business notCommenced within 180 Days of Incorporation.

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Class-Action Suit by Group of Share HoldersPermitted for Misstatement in Prospectus

Differential Voting Rights-Equity SharesAbolished

Certified Valuer Introduced

Electronic Mode Recognized for Meetings,Maintenance of accounts etc.

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Secretarial Standards Made Mandatory

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

Audit Services DefinedAuditor liable forDamages for Misleading or Incorrect Statementsin his Reports

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One Resident Director Mandatory

Duties of Directors Defined

Procedure for Resignation of Director Defined

Stakeholders Relationship CommitteeMandatory 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 RegulatoryAuthority to be Attached

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Company Liquidator to be appointed from panelof Professionals maintained by Central Govt.

Value Added Services to be Provided by CentralGovt. on Payment of Fee

Constitution of Special Courts-OrdersAppealable to High Court

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Appointment of Adjudicating officers (ROC) forAdjudging Penalty under the Act ProceduralNoncompliance-Appealable to RD

Concept of Dormant Company Introduced-NotCarrying on Business or No Significantaccounting Transactions in Last Two Years-

Register of Dormant Company to be maintainedby ROC Based upon Application by Company onAnnual 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

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Thank you