Companies Act 2013 CA Bharat Sonkhiya| R Sogani & Associates R Sogani & Associates By: CA BHARAT SONKHIYA R Sogani & Associates By: CA BHARAT SONKHIYA 1

C OMPANIES A CT, 2013 CA Bharat Sonkhiya| R Sogani & Associates 470 Sections 29 Chapters 7 Schedules 658 Sections 18 Chapters 15 Schedules COMPANIES ACT,

Now it has become a proactive law with inclusion and emphasis on more and more stringent clauses. CA Bharat Sonkhiya| R Sogani & Associates 3

Key HIGHLIGHTS Transparency CSR Corporate Governance Compliance Investor Protection CA Bharat Sonkhiya| R Sogani & Associates 4

MAJOR CHANGES P&L STATEMENT OPEN FOR INSPECTION BY GENERAL PUBLIC FILING OF SOME MORE BOARD RESOLUTIONS STIFF PENALTIES RESTRICTION ON INTER CORPORATE LOAN AND GUARANTEE CIN ON OFFICIAL DOCUMENTS RESTRICTIONS ON ACCEPTANCE OF DEPOSITS E-VOTING AND VIDEO CONFERENCING CA Bharat Sonkhiya| R Sogani & Associates 5

L IMIT ON NUMBER OF MEMBERS IN PRIVATE COMPANIES CA Bharat Sonkhiya| R Sogani & Associates

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TAKING OF LOANS BY PRIVATE C OMPANY CA Bharat Sonkhiya| R Sogani & Associates Loan taken from Upto 31 st March, 2014 After 31 st March, 2014 Director Director’s relatives Shareholders (Strict procedure) 8

DEPOSITS FROM MEMBERS / S HAREHOLDERS CA Bharat Sonkhiya| R Sogani & Associates Stringent Provisions 9

L OAN FROM DIRECTORS CA Bharat Sonkhiya| R Sogani & Associates Out of Borrowed Funds Out of Borrowed Funds Out of Own Funds Out of Own Funds Not Allowed Allowed Wrong Declaration by Directors- Huge Penalties. 10

S ECTION - 74 R EPAYMENT OF DEPOSITS CA Bharat Sonkhiya| R Sogani & Associates F ILING OF DOCUMENTS WITH ROC Penalty for violation For company – Penalty minimum of Rs. One crore and upto Rs. Ten crores Officer in default – Seven year jail and fine from Rs. 25 Lacs to Rs. Two crores By- 31 st March, 2015 By- 31 st March, 2015 B Y :- 30 TH J UNE, 2014 B Y :- 30 TH J UNE,

CA Bharat Sonkhiya| R Sogani & Associates Loan from Other Companies ALLOWED 12

CA Bharat Sonkhiya| R Sogani & Associates Business deposits older than 365 days Treated as Deposits. 13

Share Application Money Allotment Within 60 days. CA Bharat Sonkhiya| R Sogani & Associates If not alloted - Treated as Deposits. 14

A NY QUERIES ….. CA Bharat Sonkhiya| R Sogani & Associates 15

M ANDATORY FILING OF B OARD R ESOLUTION CA Bharat Sonkhiya| R Sogani & Associates Board Resolutions To invest the funds of company Approve the financial statement and board report To take note of disclosure of directors interest and shareholding Section 184 To appoint internal auditor To grant loans or give guarantee or provide security To approve quarterly, half yearly financial statement or results To borrow monies 16

B ORROWING NEEDS S HAREHOLDER ’ S A PPROVAL S ECTION 180(1)( C ) CA Bharat Sonkhiya| R Sogani & Associates  Borrowings > Paid up share capital + Free Reserves  Special Resolution needs to be passed in the General Meeting  Borrowings does not includes CC Limit.  Borrowings > Paid up share capital + Free Reserves  Special Resolution needs to be passed in the General Meeting  Borrowings does not includes CC Limit. 17

M ENTIONING CIN AND OTHER DETAILS ! S ECTION 12(3)( C ) CA Bharat Sonkhiya| R Sogani & Associates What to mention? Name Address of its registered office Corporate Identity Number (CIN) Telephone number Fax number and Website addresses Where to mention? business letters, billheads, letter papers all its notices (including E- Mail) and other official publications ** Paint or affix its name, and the address of its registered office outside every office or place of its business. 18

Consent to act as director Consent within 30 days of appointment Director shall file form DIR-12 with ROC CA Bharat Sonkhiya| R Sogani & Associates 19

A PPOINTMENT OF DIRECTOR R S.1,00,000/- SECURITY S ECTION 160 Requirement of 14 days prior notice and Rs.1,00,000/- as security for appointment of Directors in General Meeting. CA Bharat Sonkhiya| R Sogani & Associates 20

RESIGNATION OF DIRECTORS- S ECTION 168 CA Bharat Sonkhiya| R Sogani & Associates Intimation by Company to Registrar –within 30 days – Form DIR – 12. Intimation by Director to Registrar –within 30 days – Form DIR – 11. Directors who have resigned shall be liable even after his resignation for the offences occurred during his tenure. Stringent provisions. Detailed reasons required to be given by the Directors 21

A PPOINTMENT OF WTD/ MD S ECTION CA Bharat Sonkhiya| R Sogani & Associates WTD AGE Limit If above 70 Years? Not more than 5 years. 21 to 70 years Special Resolution Reasons 22

O RIGINAL DOCUMENTS TO BE KEPT TILL DISSOLUTION CA Bharat Sonkhiya| R Sogani & Associates Original documents filed with ROC MOA and AOA Particulars of Subscribers of memorandum Declaration by professionals Affidavit from subscribers and first directors that he has not committed any offence Particulars of First Directors Particulars of interest of first directors in other entities Address for correspondence till registered office is established 23

INSPECTION OF STATEMENT OF PROFIT AND LOSS CA Bharat Sonkhiya| R Sogani & Associates 24

C ORPORATE S OCIAL R ESPONSIBILITY S ECTION 135 CA Bharat Sonkhiya| R Sogani & Associates Applicability Net worth>Rs 500 crore. Turnover > Rs. 1,000 Crores Net Profit >Rs 5 crore. CSR Committee Atleast 2 directors CSR Policy specifie d the schedule VII Expenditure = 2 % average net profit of immediately preceding 3 F.Y. 25

R EGISTRATION OF C HARGES CA Bharat Sonkhiya| R Sogani & Associates All Charges To be registered with ROC 26

CA Bharat Sonkhiya| R Sogani & Associates CFO & CEO also liable for default. 27

STRINGENT AND HEFTY PENALTIES Under the Companies Act, 2013 strict penalties have been imposed on the Company and Officer who is in Default, in case of non- compliance of provisions as mentioned in the Act. The amounts of penalties have been increased as compared to the previous provisions. CA Bharat Sonkhiya| R Sogani & Associates 28

P RIVATE COMPANY EQUIVALENT TO PUBLIC COMPANY CA Bharat Sonkhiya| R Sogani & Associates Company L. L. P. ONLY WAY FORWARD LLP 29

CA Bharat Sonkhiya| R Sogani & Associates ParticularsPrivate Company LLP Structure Law regulated underCompanies Act, 2013LLP Act, 2008 Minimum Capital requirement 1 LakhNo such requirement Requirement of filing of documents at the time of Incorporation Need of filing detailed document No Such Requirements Number of shareholders / directors / partners Minimum 2& maximum 200 Shareholders Minimum 2 Directors Minimum 2 partners. 30

CA Bharat Sonkhiya| R Sogani & Associates ParticularsPrivate Company LLP Restrictions Taking Loans More stringent provisions No such restrictions Advances to others Related party restrictions Number of restrictions No such restrictions 31

CA Bharat Sonkhiya| R Sogani & Associates ParticularsPrivate Company LLP Additional Cost Dividend Distribution Tax (on withdrawal of money) 16.99%Not applicable Deemed Dividend (advance to shareholders) Taxable in the hands of shareholders Not applicable Corporate Social Responsibility Expenses to be incurred Not applicable Form filing feesHigher filing feesLower filing fees 32

CA Bharat Sonkhiya| R Sogani & Associates ParticularsPrivate Company LLP Compliances Substantial level of Compliance Lower Level of Compliance Filing of Resolutions with ROC Most of business decisions required filing with ROC No such mandatory requirement. Meetings to be heldPeriodic meetings required No such requirements Minutes and statutory records Detailed recordsNo such detail records 33

CA Bharat Sonkhiya| R Sogani & Associates ParticularsPrivate Company LLP Penalties Heavy penalties Not stiff penalties 34

ANY QUESTIONS ….. CA Bharat Sonkhiya| R Sogani & Associates 32

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