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.
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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.
Compromise or arrangement (Section 230)
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%.
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Compromise or arrangement (Section 230)
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.
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Compromise or arrangement (Section 230)
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.
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Compromise or arrangement (Section 230)
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.
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Merger & Amalgamation (Section 233)
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.
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Merger & Amalgamation (Section 233)
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.
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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
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Merger & Amalgamation (Section 233)
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.
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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.
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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)
Rules 145 – existing 51
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
Rules 145 – existing 51
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.
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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.
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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.
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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:-
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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
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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/-
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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.
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Section Particulars and nature of penalty
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).
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Section Particulars and nature of penalty
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).
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
Minimum Penalty
Maximum Penalty
164 Dis-qualification of the Directors
Imprisonment for one year
Fine Rs.1,00,000/- to Rs.25,00,000/- or both
184(4) Failure to disclose interest by Directors
Imprisonment for one year
Fine Rs.50,000/- to Rs.1,00,000/- or both
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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/-
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Section Particulars and nature of penalty
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
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