An analysis of the important provisions of the Companies Bill, 2011

The Companies Bill 2011 contains 29 Chapters, 7 Schedules, 470 clauses as against the Companies Bill, 2009 which consists of 426 clauses under 28 chapters and the Companies Act, 1956 which consists of 658 sections under 13 Parts and 15 schedules.

The Bill applies to the whole of India and is also applicable to certain companies or Bodies corporate governed by Special Acts 

• A very substantial part of the Bill will be in form of rules, which will be prescribed separately.

• The Government of India, has the power to notify different provision of the Act at different point of time.

• The Financial Year of any Company can be only from April-March and only certain Companies complying with certain conditions can have a different financial year with The approval of Tribunal. Under the Companies Act 1956, there was no restriction on the period of financial year.

• The maximum number of members, which a Private Company can have, is increased from 50, as provided in the Companies Act 1956 (and Companies Bill 2009), to 200 (except in case of One Person Company).

• The scope of “officer who is in default” has been broadened. The share transfer agents, registrars and merchant bankers to the issue or transfer related to issue of shares & Chief Financial Officer are also brought under its ambit. Directors who are aware of the default by way of participation in board meeting or receiving the minutes without objecting to the same will also be included in this category even if company has Managing Director /Whole Time Director / other Key Managerial Personnel.

• Defaults of procedural nature to be penalized by levy of monetary penalties by adjudicating officers not below level of Registrar. Appeals against such orders will lie with designated higher authorities.

This Article has been Authored by: CA Venkatesh Repala. He can be reached at: venkat6repala@gmail.com