1. Companies Bill 2012 M A (Astrology) Chief Finance Officer & CompanyBy
Dr P V S Jagan Mohan Rao
M Com, LL B, FCS, FCMA, Ph D &
M A (Astrology)
Chief Finance Officer & Company
Secretary
Ind-Barath Power Infra Ltd -Hyderabad
Past President – The Institute of Company
Secretaries of India – New Delhi
Council Member – The Institute of Cost
Accountants of India - Kolkata

2. 29 Chapters
470 Sections
7 Schedules
Substantial part of the Bill will be in the form of rules – will be prescribed
The Government of India has power to notify different provisions of the Act at different parts of time
The bill has 33 new definitions

3. Financial year Financial year can be only April to March
Only certain companies complying with certain conditions can have different financial year with the approval of the NCLT – no restriction under companies Act, 1956

4. Memorandum to have objects and matters required for the furtherance of such objects. No other objects
Members in pvt co 200

5. One person company A private company Subscribed by one person
Memorandum to affix name of nominee
Name shall affix OPC or One Person Company
More flexibility less compliance
Board meeting at least one in half of calendar year
AGM not mandatory
quorum
Annual returns to be filed
Board to give approval
Effective date of resolution
Contracts by one person company with the member
To intimate ROC within 15 days from the date approved by the board

6. Cost Accountants Incorporation of a company Internal audit
Powers and duties of auditors and auditing standards – cl 143
Report to Central Government – cl 12 of 143
Central Government to specify audit of items of cost in respect of certain companies
Merger and amalgamation of companies
Appointment of administrator
Company liquidators and their appointment

7. Class action suit
Appointment of KMPs
Appointment of CS
Secretarial audit
Functions of CS

8. National Authority for Financial Reporting
One chairperson and members not exceeding 15
Recommendation t CG on accounting and auditing standards
Enforcement for the compliances of accounting and auditing standards
Overseeing the quality compliances of accounting and auditing standards
Special powers have been vested with NAFR

9. Class action
Endeavor to protect the rights of deposit holders and members
Only specific number or % of members/depositors can file class action suit
Right of claiming damages or compensation by members in case of wrongful conduct of Company directors, auditors, experts and advisors
Banking companies are out of the perviw of class action suit

10. Corporate Social Responsibility
Mandatory provision for corporate social responsibility for specified companies
Constitution of CSR Committee, recommending and monitoring CSR Policy
2% of the average net profits of 3 preceding financial years to be spent – csr
Disclosure of CSR Policy on company’s website

11. Secretarial Audit Introduction of the concept of Secretarial Audit
Mandatory Secretarial Audit for specic class companies
Secretarial Audit Report to be part of Board report
Disclaimer of every reservation or adverse remarks in the report in the Board Report
Stringent penalty in case of default

12. Independent Directors
Powers, duties and responsibilities and role

13. Associate company

14. Holding – subsidiary merger

15. Registered valuer

16. Dormant Company and Inactive Company

17. Rotation of Auditors
Compulsory rotation of individual auditors in every 5 years and audit firm in 10 years in listed companies and certain other classes of companies
Auditor shall also comply with auditing standards
Auditor shall not provide directly or indirectly the specified services to the company its holding and subsidiary company

18. Provision for professional assistance to company liquidator
Qualification of president and members of tribunal
Right to legal representation in Tribunal

19. The Bill covers all securities and not only shares and debentures
Prospectus has now has more details
The bill defines private placement
The company which has varied terms of contract referred in Prospectus or objects for which it is issued shall not use any amount raised by it through prospectus for buying, trading or dealing in equity securities of any other listed company and shall also provide exit route to the dissenting shareholders

20. Right shares and ESOPS with the approval of members
Company cannot accept deposits from persons other than its members and approval of shareholders will be required for the acceptance of the same. Such deposit can only be accepted subject to complying with neccesary conditions

21. Offer for sale by members
Shelf prospectus – will be prescribed by SEBI
Criminal liability for misstatements in prospectus
civil liability for misstatements in prospectus
GDR Issues

22. Books of accounts can be in electronic form
Financial statements have been defined
Along with financial statement, consolidated financial statements of all subsidiaries and company will be prepared and shall also be laid before the annual general meeting. Subsidiary shall for the purpose of this requirement include associate company and joint venture
No provision for extension of financial year

23. Directors report to have additional information including number of meetings of the board, company’s policy on directors appointment, explanations to auditors report
Directors responsibility statement to include additional issues – compliance with laws et c
Corporate social responsibility committee
3 or more directors – at least one independent director

24. NBFCs will be governed by rules by RBI
Every listed company shall file with ROC a return in the prescribed form with the with respect to Change in Shareholding of promoters and top 10 shareholders – 15 days
Postal ballet will be applicable to all companies
Restrictions on interim dividend. Average dividend – 3 preceding financial year – loss during the year up to last quarter

25. Financial statements defined
Provision for re opening or recasting of the books of accounts of a company
National Advisory Committee on Accounting Standards has been changed to National Financial Reporting Authority
Provisions for CSR

26. Auditors compulsory rotation – individual 5 years – firm 10 years
Bill provides – auditors to comply with the auditing standards
Auditor shall not provide specified services to the company directly or indirectly, to the company, holding or subsidiary
Joint and several responsibility

27. In specified companies at least one women director
At least one director should have stayed in India at least for not less than 182 days
Every listed company - One third of total no of directors as independent director
The bill provides for limiting the liability of independent director and non executive director not being promoter or key managerial personnel

28. A person can be director in 20 companies (earlier 15) – including 10 in public cos
Provision for vigil mechanism
Stakeholders relationship committee – 1000 shareholders/deposit holders and any other security holders – chairman non executive director
Loan to director – Central Government permission dispensedwith

29. Inter corporate loans and investments includes the same a person also
No approval of central government is required for – related party transactions
No approval of the central government is required to appoint a director or any other person to office or place of profit in the co or subsidiary

30. NCLT will have 11 technical and judicial persons – earlier 2
Central Government – establish special courts

31. Types of companies
Affidavit by subscribers and directors
Objects clause in MoA
Duration of name reservation – 60days – in the act itself
Registered office at incorporation – from15 th day – state at the time of incorporation – verification in 30 days. Address for communication to be provided until the address is provided

32. Commencement of business by public co – only declaration is to be filed within 180 days
Conversion of public co into pvt or opc – tribunal
Contents of prospectus – stated in the section itself – earlier in a schedule
Sections to be administered by SEBI

33. Private placement
Application of premium
Issue of shares at discount – only in case of sweat equity
Bonus shares
Sweat equity – not to subsidiaries incorporated outside India

34. Reduction of share capital
Prohibition on buyback in certain cases
Registration of charges

35. AGM
Quorum
15 - > 1000 – 5000
30 - > 5000

36. Demand for poll
Voting through Electronic means

37. Books of accounts
Period – 8 years
Re opening of accounts
Voluntary revision of financial statements

38. Cost Audit

39. Defunct company
Dormant company

40. Thank You

41. Special Courts By notification by Central Government
Establish or designate
Speedy trial of offences under this Act
As many special courts as may be possible
Single Judge
With the concurrence of Chief Justice of the High Court
Qualifications.. Holding office of a Sessions Judge or Additional Sessions Judge
All appeals from special court shall lie to the High Court

42. Serious Fraud Investigation Office
Clause 212