3.  Director/Director of holding Co./Any person connected with such person cannot acquire any asset for consideration other than cash from the company and vice versa without getting approval in general meeting as per section 192(1) of the Companies Act2013.  Now, a Company whether public or private cannot give loan to directors or to any other person in whom director is interested u/s 185(1) of the company’s act 2013. However a co. can give loan to Managing/ Whole-time Director by passing special resolution, No CG Approval required.

4.  No Holding company can allot or transfer its shares to its subsidiaries as per section 19 of the Companies Act2013.  Now all Companies instead of only public companies cannot sell any of its undertaking or cannot borrow money above its paid up capital and free reserves without passing special resolution in general meeting u/s 183 of the Companies Act2013 Here Undertaking means in which the investment of the company exceeds 20% of its net worth or an undertaking which generates 20% of the total income of the company.  Now a new section- 447 i.e. for punishment of fraud has been introduced, where a person is found to be done any “fraud”, “wrongful Gain”, “Wrongful Loss” will be liable for imprisonment from 6 months to 10 years and fine which can be 3 times of the amount involved in fraud.

5.  An Additional director will hold office till next AGM or EGM whichever is earlier, if he fails to get appointed as a director then he cannot remain an additional director as per section 161(1) of the Companies Act2013, otherwise there will be penalty of Rs. 50,000 to Rs. 5 Lac.

6.  Concept of One Person Company (OPC) has been Introduced as per section 3(1)(C) of the Companies Act2013. Now a company can be formed with only one member, one director and have to mention the name of one successor.  OPC is not required to hold AGM  Member Cannot exceed 100  Not required to prepare Cash Flow Statement.  Not required to make Annual Return signed by CS in practice  Have to intimate ROC, every Contract entered within 15 days

7.  Concept of Small Company has been introduced, a Company is said to be small company if paid-up share capital does not exceed Rs. 50 Lac or such amt as prescribed not exceeding 5 crore or otherwise turnover does not exceed Rs. 2 crore or such amt as prescribed not exceeding 20 crore. These companies are not required to file Cash flow statement. However holding and subsidiary companies cannot be considered as small companies as per section 2(85) of the Companies Act2013.  Atleast one director of the company to be stayed in India for atleast 182 days in previous year u/s 149(3) of the Companies Act2013.  As per the draft rules, Secretarial Audit is mandatorily required to be prepared by a CS in practice for a company having paid-up capital of Rs. 100 Crore or more as per section 204(1) of the Companies Act2013.

8.  As per section 203 of the Companies Act2013, A Company having a paid up share capital of Rs. 5 Crore or more shall have composition of all these key Managerial Personnel (KMP) within the age of 21 to 70 years to be appointed by passing special resolution.  A Chief Financial Officer (CFO)  A Company Secretary (CS)  MD/CEO/Manager/Whole-time Director.  Otherwise there will be penalty of Rs. 1 to 5 Lac on company and Rs. 1000-5000 per day on every director or KMP, who is in default. These KMP cannot hold office in more than one company but can be a director in any other co. with the permission of Board of Directors.  There should be atleast one women director in case of public co. having paid-up capital of Rs. 100 Crore or more and turnover of Rs. 300 Crore or more u/s 149(1) of the Companies Act2013.

9.  A Company having paid up capital of Rs. 100 Crore or more/ outstanding loan/borrowing/debenture/deposit exceeding Rs. 200 Crore should have  An audit committee consisting of atleast 3 directors with majority of Independent directors.  A Nomination and remuneration committee consisting of atleast 3 Non-executive directors, out of which one half should be IDs.  A company should have stakeholder’s relationship committee if it has more than 1000 shareholders constituting non- executive director and other member as decided by the board.  A company having net worth of Rs. 500 Crore or more, net profit of Rs. 5 Crore or more should have a corporate social responsibility committee consisting of 3 or more directors and one should be IDs. The committee should ensure that atleast 2% of average net profit before tax of co. during 3 immediately preceding financial year is spent under this as per section 135 of the Companies Act2013.

10.  A Company who have borrowed money from bank or financial Institution in excess of Rs. 50 Crore should establish a Vigil Mechanism u/s 177(9) of the Companies Act2013.  A New Concept of Dormant Company has been introduced as per sec-455 where a co. can apply for certificate of dormant co. and also if any co. don’t make annual filings for 2 years then the ROC after making an application to the co. enter the name of the co. in Dormant Cos. Register.  Financial statement of the company can be voluntary revised only once in a year by making an application to the tribunal giving detailed reasons for revision in respect of any three proceeding years as per section 131 of the Companies Act2013.  Valuation in respect of property, stock, Shares, debentures & Securities, goodwill, any other assets, net worth or liabilities of the company shall be carried out only by a registered valuer to be appointed by audit committee or BOD as per section 247 of the Companies Act2013.

11.  A Public Company having paid up capital of Rs. 100 Crore or more, turnover of Rs. 300 crore or more, outstanding loans/borrowings/debentures/deposits exceeding 200 crore should have an independent director and CG will prescribe the minimum no. of IDs and he is required to furnish a declaration of independence on yearly basis. An ID can be appointed for 5 yrs. and for further 5 years and then cooling off period will be 3 yrs.(As per section 149 of the Companies Act2013).  As per section 149(9) and (10) of the Companies Act2013, an Independent Director receive remuneration by way of fee provided under sub section (5) of section 197 of the Companies Act2013 and can be appointed for 5 years and can also be reappointed for next 5 years only.  New Concept of Associate Co. introduced, a company is said to be associate company if the other company controls atleast 20% share capital of the company as per section 2(6) of the Companies Act2013.

12.  A new provision as class action has been introduced as per sec- 245 of the Companies Act2013 in which a defined group of members and depositors can file an application against the company before the tribunal.  A Consolidated financial statement signed by chairman or two directors is mandatory required to be prepared in case of holding-subsi relationship and associate companies u/s 129(3) of the Companies Actalongwith a separate statement containing the salient features of the financial statement of subsidiary in the form prescribed.  For allotment of securities through private placement, a private placement offer letter is required to be made and to be filed with ROC within 30 days of circulation of offer letter and the allotment cannot be made to more than 50 allottees. And also all receipts towards allotment should be through cheques, DD or other banking channels but not through cash (Section 42 of the Companies Act2013).

13.  Now in both private as well as public companies, a declaration in the prescribed form by any director is to be filed with ROC that subscribers have paid the agreed value of shares, within 180 days of incorporation.  Now, the object clause of MOA is to include only those objects for which the company is proposed to be incorporated and any other necessary matter only as per Table A of Schedule I of the Companies Act2013.  First Board Meeting of the company should be held within one month of its incorporation otherwise there will be penalty of Rs. 25,000 as per section 173 of the Companies Act2013.

14.  Maximum time for holding AGM of the company will be 9 months from closure of accounts; Previous concept of 18 months from the date of incorporation of the company has now been eliminated as per Section -96

15.  An individual or a firm can be appointed as an auditor of the company for a term of 5 years and can be reappointed after that, however in case of listed and prescribed class of companies, an auditor can be appointed for 5 years once in case of individual and twice in case of Firm, cooling off period will be 5 years for both u/s 139 of the Companies Act2013.  First Auditor of the company should be appointed within 30 days through Board meeting or within 90 days through general meeting as per section 139(6) of the Companies Act2013 and now, the company has to intimate both the auditor and the ROC within 15 days of appointment as per section 139(1) of the Companies Act2013.

16.  Auditors are required to report on cash flow statement, statement of changes in equity and to comply with auditing standards u/s 143 of the Companies Act2013.  As per section 144 of the new Act, An auditor cannot render certain services such as accounting and book keeping, internal audit etc.  Now, Auditors are mandatorily required to attend all General meetings of the company either through person or through AR, who shall also be qualified to be an Auditor u/s 146 of the Companies Act2013.  A person cannot be appointed as an auditor if he is holding appointment as an auditor in more than 20 Companies u/s 141(3)(g) of the Companies Act2013.  Remuneration of Auditors is to be decided at General Meeting except in case of First Auditor u/s 142.

17.  Every public co. having paid up capital of Rs. 10 Crores or outstanding loans/ borrowings from banks & financial Institutions exceeding Rs. 25 Crores or accepted Fixed deposits of Rs. 25 Crores and more at any point of time during last financial year shall mandatory appoint an internal auditor who must be chartered accountant or cost accountant or such other professional as per section 138 of the Companies Act2013.  In case of Contravention of the provisions u/s 139 to 146, the auditor and the company will be liable for fine of Rs. 25,000 to Rs. 5,00,000 and every defaulting officer of the company will be punishable for 1 year imprisonment or with fine of Rs. 1,000 to Rs. 1,00,000 and also the auditor shall be liable to refund the remuneration received by him to the company u/s 147 of the Companies Act2013

18.  Maximum number of directors can be 15 in a company and more can be appointed by passing Special Resolution as per section 149(1) of the Companies Act2013.  A director can hold directorship in 20 companies, out of which, only 10 in public companies u/s 165 of the Companies Act2013.  If any co.(Whether public or private) has not filed financial statements and Annual Return for 3 continuous years then every director of such company will not be eligible for appointment or re-appointment in that co. or in any other co as per section 164(2)(a) of the Companies Act2013.

19.  As per sec-203(1) of the Companies Act2013 An individual cannot be appointed as the chairman as well as the Managing Director/CEO of the co. at the same time unless Articles of the Co. allows or the Co. is engaged in multiple business.  As per sec-203(3) of the Companies Act2013 A whole time Key managerial personnel cannot hold office in more than one company except in subsidiary (MD Can be appointed in two Companies). However they can be appointed as a director in another co. with the permission of the Co.  Every Director of the company is required to disclose his nature of interest in other companies, firms and any other entity otherwise there will be penalty of Rs. 50,000 to Rs. 1,00,000 or One year imprisonment.  In case of resign of director u/s 168 of the Companies Act2013, directors are required to give detailed reasons for their resign.

20.  Amount of Deposit for Proposing a candidate to be a director in public companies increased from Rs. 500/- to Rs. 1,00,000/ as per section 160(1) of the Companies Act2013-.  Duties of Directors have specifically defined u/s 166 of the Companies Act2013.  Notice of the Meeting should be before atleast 7 Days and the gap between two board meetings should not be more than 120 days.

21.  As per section 197 of the Companies Act2013,  Overall directors and managerial remuneration shall not exceed 11% of the net profits of the company  Remuneration payable to one managerial person should not exceed 5% of the net profits of the company.  Remuneration payable to more than one managerial person should not exceed 10% in total of the net profits of the company.  Remuneration payable to director should not exceed 1% of the net profits, if there is any managerial person in the company and 3% of net profits of the company in any other case.(Net Profit is to calculated as per section 198)

22.  In case of nil or inadequate profits, remuneration payable by passing resolution but it should not exceed the higher of the limits under A and B shown below:- A:- B:- The above limits shall be doubled if the resolution passed by shareholders is special resolution. B:-  If Managerial Person was not a shareholder, employee or director of the company at any time during the two years prior to his appointment – 2.5% of the current relevant profit. However this Limit shall be doubled if the resolution passed by shareholders is special resolution. - S.No.Where Effective Capital is Yearly remuneration shall not exceed 1Negative or Less Than 5 Crore30 Lac 2Above 5 crore but less than 100 crore42 Lac 3Above 100 crore but less than 250 crore60 Lac 4250 Crore and above60 Lac + 0.01% of effective capital in excess of Rs. 250 Crore.

23.  Companies are required to register all types of charges within or outside India on its property or assets or any of its undertaking. Pledge of Immovable Property also requires registration u/s 77 of the company’s act 2013.  The additional time period for registration of charge can be increased from 30 days to 300 days by making an application to registrar with requisite additional fees u/s 77 & 78 of the Companies Act2013, however in case of charge created outside India for property situated outside India, it shall be registered within 30 days and penalty for contravention will be 1 Lac to 10 lac u/s 86 of the Companies Act2013

24.  A Consolidated financial statement signed by chairman or two directors is mandatory required to be prepared in case of holding-subsi relationship and associate companies u/s 129(3) of the Companies Act 2013 alongwith a separate statement containing the salient features of the financial statement of subsidiary in the form prescribed.  Resolution to approve financial statements and Board Report is also required to filed with ROC otherwise punishment of Rs. 5- 25 lacs for not registering any type of special resolution.  Every Company is required to Maintain minutes of every type of meeting otherwise there is a penalty of Rs. 25000/- on company and Rs. 5000/- on every officer in default as per section 118 of the Companies Act2013. The co. should follow the secretarial standards while making the minutes of the meeting.

25.  Books of Accounts should be maintained by the company at its registered office whether in electronic or physical form otherwise penalty of Rs. 50000/- to Rs. 500000/- or imprisonment upto 1 year u/s 128 of the Companies Act2013.  As per sec-206, 207, 208, 209 A registrar can call for any information, inspect books and conduct inquiries at any time and in case, co. fails to furnish, there will be penalty of Rs. 1 Lac and additional Rs. 500/- per day of default and even seize the documents for not more than 180 days.  All Financial statements are required to be signed by both the directors and by both the directors+CS+CFO in case of co. having paid up of Rs. 5 Crore or More otherwise penalty of Rs. 50000/- to Rs 2500000/- on company and penalty of Rs 50000/- to Rs. 500000/- or 3 years imprisonment on every officer of the company u/s 134 of the Companies Act2013.  Now, The Annual Return of the company shall carry the information upto the date of closure of financial year instead of the date of AGM.

26.  The Annual Return of all types of companies is required to be signed by the director and a company secretary and where there is no company secretary in a company, by CS in practice. However in case of small and one person company, AR can be signed by only one director if there is no CS (section 92(1) of the Companies Act 2013).  In case of a company which has not filed financial statements or annual returns for two financial years consecutively, the Registrar shall issue a notice to that company and enter the name of such company in the register maintained for dormant companies u/s 455(4) of the Companies Act 2013. CONTENTS TO BE INCLUDED IN ANNUAL RETURN  Registered Office, Principal Business Activities, Particulars of Holding, Subsidiary and Associates.]  Shares Debentures, other securities, shareholding pattern and indebtness.  Meetings of BOD, members and Committees.

27.  Promoters, Directors, Key Managerial Personnel, Members & Debenture holders.  Remuneration of Directors & Key Managerial Personnel.  Any penalty or punishment imposed on co., its directors, officers & details of compounding.  Matters relating to certification of compliances, disclosures.  Such other matters as prescribed. CONTENTS TO BE INCLUDED IN BOARD’S REPORT  Extract of Annual Return  Contract or arrangement with related party  Declaration by independent director  Details of Board Resolutions and meetings  Particulars of loans, investment or guarantees.  Financial Summary  Changes in nature of business

28.  Details of directors or KMP who were appointed or resigned during the year.  Name of the company who become or ceased to be its subsidiary, JV or Associate company.

29.  As per sec-188, all types of related party transactions require Board Approval and shareholders’ approval will be required by special resolution in case:-  The paid up capital of the company equals to or exceeds Rs. 1 Crore.  The sale/purchase of goods, buying/selling of services, Availing/ rendering services exceeds 5% of annual turnover (whether Individual or aggregate) or 20% of net worth, whichever is higher.  Any related party appointed to any office or place of profit in Co., Subsidiary or associate and drawing monthly remuneration in excess of Rs. 1 Lac.

30.  Maximum Permissible limit of member in private company exceeded from 50 to 200 as per section 2(68) of the Companies Act2013.  All Cos. Are required to print a CIN No. of Co., Telephone, Fax No, Email and website Address, on all its business letter, billheads, letter paper, notices and all public notifications as per section 12(1)(c) of the Companies Act2013.  Now, Issue of shares cannot be done on discount, except Sweat Equity Shares u/s 53 of the Companies Act2013.  Now As per the new act, Premium amount can also be utilized for purchase of its own shares or securities u/s 52(2)(e) of the Companies Act2013.

31.  Now all private and public limited companies cannot give loan, guarantee and security nor can make investment exceeding 60% of paid-up capital and free reserves or 100% of free reserves to any person or company, except by way of special resolution u/s 186 of the Companies Act2013.  Number of person in any association or partnership cannot exceed 100.  A public company is required to pay penal interest of 12% on share application money, if it held that money for more than 60 days and even for more than 15 days extension period. However, this is not applicable to private Co (Section 42(6) of the Companies Act2013 and also the Share application money cannot be received in cash and should be kept in separate Bank Account.  Now all companies(Public or Private) are required to issue the unissued share capital after increase its subscribe capital as per section 62 of the Companies Act2013.

32.  The time period for Issue of shares or share certificate is 2 months In case of allotment and 1 month in case of transfer and transmission of shares as per section 56 of the Companies Act2013.  The quorum of public Co. will now depend on the no. of members i.e. atleast 5 members personally peresnt in case of 1000 members.  Any Change in registered office of the company is required to be intimated to ROC within 15 days instead of 30 days by filing Form 18 and appointment of a Managing Director in a public company is required to be intimated to ROC within 60 days instead of 90 Days by filing form 25C.  Now, CG Approval will be required instead of approval of CLB for changing registered office of the company from one state to another as per section 13(7) of the Companies Act2013.  No CG approval will be required for conversion of private co. into one person company or public company and also for conversion of one person company into private company as per section 14 of the Companies Act2013, However Approval of tribunal will be required instead of CG for conversion of public co. into private company.

33.  As per new section 251, in case if it is found that closure of the co. is to defraud the creditors or any other person will be liable to be punished for fraud u/s 447.  Now, as per sec-441, no offences can be compounded if it  exceeds fine amount of Rs. 5 Lacs,  if investigation against the offence has been initiated or pending.  If the offence is punishable with imprisonment.  As per sec-466, the CLB shall stand dissolved on the constitution of the tribunal and the Appellate Tribunal.

34.  No public companies are required to hold statutory Meeting and to prepare statutory report after its commencement of business as per section 165 of Companies Act 1956.  Public Companies are not required to take certificate of commencement of business, however a declaration is required to be filed as in case of private co.  Requirement of preparation of compliance certificate have been finished.  No CG Approval is required any more for conversion of private limited co. into public limited co.