The Lok Sabha has recently on 4th January 2019, passed the Companies (Amendment) Bill, 2018. The bill aims to amend the Companies Act, 2013. The bill would replace the ordinance promulgated on November 2018.
The amendments are brought in as per the recommendations of a committee constituted to suggest changes to the Companies Act, 2013.
The Bill provides for re-categorization of offenses. The bill re-categorizes 16 offenses including the issuance of shares at a discount, and failure to file an annual return as a civil offense.
The Bill aims to remove the clause of imprisonment for officers for defaulting the rule which prohibits issuing shares at a discount, except in certain cases. Instead, the bill provides for a penalty equal to the amount raised by the issue of shares at a discount or five lakh rupees, whichever is lower.
The Bill states that a company may not commence business unless it files a declaration within 180 days of incorporation.
The Bill transfers the power to approve any changes in the financial year for a company associated with a foreign company and any alteration in the incorporation document of a public company which has the effect of converting it to a private company to the central government from the National Company Law Tribunal.
The Bill provides that failure make a declaration of interest when a person holds the beneficial interest of at least 25% shares in a company or exercises significant influence or control over the company may either be fined or imprisoned for up to one year or both.
The Bill increases the ceiling up to which the regional director can compound (settle) offences with a penalty of up to 25 lakhs from 5 lakh rupees.