A Presentation On The Salient Features Of The Companies Bill, 2009.

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A Presentation On The Salient Features Of The Companies Bill, 2009. September 26, 2009

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Introduction A liberal administrative set-up for corporate elements is on the iron block with the Cabinet supporting the presentation of another Companies Bill ("the Bill") that will supplant the current inflexible and voluminous Companies Act of 1956 ("the Act"). The Companies Bill, 2009, has been presented in the last session of Parliament in October and once instituted, will supplant the Companies Act, 1956. The Bill proposes to divide the Sections from 650 in the current Act to around 426. The Companies Bill 2009 is a push to introduce self-direction in corporate issues with revelations and responsibility, and to substitute government control over interior corporate procedures and choices by shareholder control.

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Salient Features of the Bill One Person Company (OPC) permitted, more stringent administration for Not-For-Profit Firms (Section 25 organizations). Move of Companies from private to open and the other way around to be simpler. Limitations on number of accomplices in organization firms, saving money firms loose.( least 2 and no roof on greatest accomplices) Insider exchanging by Company Directors/Key Managerial Personnel (KMP) to be an offense with criminal obligation. Class activity suits/Derivative suits by shareholder affiliations, bunches against Companies permitted. Arrangement of least 33% autonomous chiefs on board. No issue of shares on rebate. Accommodates a solitary discussion endorsement handle for M&As. Profit can be asserted by financial specialists even following 7 years. Utilization of innovation, for example, tele and video conferencing, email, advanced marks and so on in different circumstances.

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Speedy Incorporation A Majority of the suggestions made by Sir JJ Irani have been actualized; e.g; e-administration and on line documenting, constrained interfacing with ROC authorities, rectify exposure based procedure of fuse, Reduced time for reaction; No prerequisite to acquire "COB Certificate", No base capital required for organizations. Judicious Classification of Companies; little, OPCs, control based and so forth. Arrangement of "printing" of notice and articles abstained from. Procedure of joining rearranged and compacted in few segments.

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Incorporation Process Clause 3:A organization might be shaped for any legitimate reason by any – (a) seven or more people, where the organization to be framed is to be an open organization, or (b) two or more people, where the organization to be shaped is to be a privately owned business, or (c) one individual, where the organization to be shaped is to be a One Person Company. An organization shaped under sub-area (l) might be either:- (a) a organization restricted by shares, or (b) a organization constrained by certification, or ( c) a boundless organization.

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Incorporation Process Clause 5. Reminder of an organization might state – name of the organization; with last words as "Privately owned business"; Public Company; or OPC Limited; Place of Registered Office' Objects; the risk of individuals from the organization, whether restricted or boundless . Name of the Company not to be indistinguishable to some other organization. Not to be enlisted with a name giving impression that it has Govt. support. Name Availability application to be made in the shape to be endorsed. Enlistment center to save the name for 2 months and most extreme 4 months. Notice to be in the frame as might be endorsed.

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Incorporation Process Clause 6. The articles might likewise contain such matters, as might be endorsed. Organization allowed to give Additional matters in he Articles. - articles may contain arrangements for entrenchment such that predefined arrangements of the articles might be adjusted just if conditions or systems as that are more prohibitive than those material on account of an uncommon determination, are met or conformed to. The Central Government may recommend display articles for various sorts of organizations . (areas 12,13,14,20,26,27,28,29 of the 1956 Act managing consolidation have been diminished and clubbed into Clauses 3,5,6 and 7 of the Bill). Area 25 organization has been managed in segment 4 of the Bill.

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Incorporation Process Clause 7 (1) record with the Registrar inside whose locale the enlisted office of an organization is proposed to be arranged, after archives and data for enrollment, to be specific:- (i) notice and articles of the organization appropriately marked by every one of the supporters of the reminder in such way as might be prescribed; (ii) assertion by a backer, a Chartered Accountant, Cost Accountant or Company Secretary, occupied with the development of the organization, or by a man named in the articles as a chief, administrator or Secretary that the sum total of what arrangements have been consented to; (iii) a sworn statement from each of the endorsers of the update and from people named as first executives that no conviction of any offense regarding the advancement, development or administration of any organization, or that he has not been discovered blameworthy of any break of obligation to any organization under this Act .

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Incorporation Process Affidavit to express that that every one of the reports documented with the Registrar for enlistment of the organization contain data that is right and finish and consistent with the best of his insight and conviction; (iv) the particulars of name, including surname or family name, private address, nationality and such different particulars of each endorser of the update alongside verification of personality, as might be recommended, and on account of a supporter being an organization, such particulars as might be recommended; (v) the particulars of the people said in the articles as first executives of the organization, their names, including surnames or family names, the Director Identification Number, private address, nationality and such different particulars including evidence of way of life as might be endorsed;

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Incorporation Process (vi) the particulars of the interests of the people specified in the articles as first chiefs of the organization in different firms or bodies corporate alongside their agree to go about as executives of the organization in such shape and way as might be recommended. Endless supply of the above conditions, Registrar to issue declaration of fuse and CIN. Accommodation of false data or making of false revelations for joining organization made culpable with a detainment of one year and a base fine of Rs.25,000 and most extreme of Rs. One lakh. Promoters, first chiefs and different people making false announcements are at risk to be rebuffed. (Proviso 7(5)) Without bias to above, Tribunal has ben given clearing forces to pass requests of overseeing organization by coordinating changes in M/A, making risk boundless, evacuation of name and twisting up.

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Incorporation… . Provision 8: Effect of Registration Clause 9: Effect of M/A &A/A. Provision 10: Commencement of Business-No authentication required; However, an organization once framed can't work together unless a statement by an executive or endorser that each supporter has paid full estimation of shares and check of the Registered Office has been recorded in the recommended way with the Registrar. Provision 11: Registered off ice of the Company including moving thereof; Clause 12 & 13: Alteration of M/An and An/An including change of name. Statement 15: Rectification of name of Company (segment 21/22).

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One Person Company (OPC) Currently, least number of people required to consolidate a Company is 2 on account of a Private Company and 7 on account of a Public Company. Provision 3 read with 2(zzk) of the Bill accommodates another element as a One-Person Company (OPC) . This is with the aim of urging individual business people to work and contribute successfully in the financial space. The J.J. Irani Report proposes for an OPC with the accompanying attributes:- a) OPC might be enlisted as a Private Company with one part and may likewise have no less than one executive; b) Adequate protects in the event of death/incapacity of the sole individual ought to be given through arrangement of another person as Nominee Director. On the downfall of the first executive, the chosen one chief will deal with the undertakings of the Company till the date of transmission of shares to legitimate beneficiaries of the demised part. c) Letters "OPC" to be suffixed with the name of One Person Companies to recognize it from different Companies.

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One Person Company-Background & Concept expanding utilization of data innovation rise of the administration division; the entrepreneurial capacities of the general population are given an outlet for support in monetary movement; Such financial action may occur through the formation of a financial individual as an organization called OPC; OPC is an undertaking that keeps running with to a great degree couple of human, money related and infrastructural assets while offering items or administrations to a vast client base;

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Back to Saloman versus Saloman Classic OPC=Salomon v. Salomon & Co. was chosen by the House of Lords in 1897. It was fundamentally the principal case to maintain the idea that a partnership is a free legitimate substance. Mr Solomon was a Victorian bootmaker. He sold the benefits of his business to an organization Solomon & Co Ltd. of which he was the sole (or basically the sole shareholder). He kept on exchanging as a bootmaker in his own particular name and became penniless. His leasers attempted to sieze the benefits of the business (now possessed by Solomon & Co Ltd. The choice of the court was that Solomon & Co Ltd shaped a different legitimate element from Mr Solomon. Mr Solomon's obligations were not the obligations of Solomon & Co. Ltd. The decide is that an appropriately shaped restricted obligation organization is a legitimate element in its own particular right.

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Relaxation of point of confinement to have Number of Partners Section 11 of the 1956 Act accommodates a most extreme of 20 accomplices all in all