Key Changes Proposed in the India Companies Bill 2013

AJSH & Co. (Delhi, India) has created an overview of the recent changes to the India Companies Bill 2013. These changes will affect new company registrations and Chartered Accountants in India.

CHANGES RELATING TO INSPECTION, INQUIRY AND INVESTIGATIONS

  • Statutory status to SFIO proposed.
  • SFIO is given wide powers.
  • Stringent penalty provided for fraud related offences.
  • SFIO's report to be treated as report filed by Police Officer.
  • SFIO will have power to arrest in certain cases which at tract punishment for Fraud and person accused of such offence shall be released on bail subject to conditions as mentioned in the relevant provisions of this bill.
  • Protection of employees during investigation by the authority is provided.
  • During inquiry and investigation or on request of creditor having due of more than one lakh, the central government may by order direct that transfer, removal or disposal of funds, assets, properties of the company shall not take place during such period not exceeding three years or may put restrictions and conditions as deemed fit.
  • Foreign companies are also covered under the chapter.

CHANGES RELATING TO COMPROMISES AND ARRANGEMENTS

Simplified procedure for compromise or arrangement between two or more small companies or between holding and wholly owned subsidiaries introduced.

  • Cross-border mergers permitted with any foreign company with prior approval of RBI. Countries and rules to be notified by Central Government. Consideration can be in cash or in Depository receipts or partly in cash and partly in Depository receipts.
  • Objections to the compromise or arrangement shall be made only by persons holding not less than 10% of shareholding or having outstanding debt amounting to not less than 5% percent of total outstanding debt as per the latest audited financial statement.

Read the entire article on the AJSH & Co. website.