TAMIL NADU

GOVERNMENT GAZETTE

PUBLISHED BY AUTHORITY

No. 1]

CHENNAI, WEDNESDAY, JANUARY 2, 2019

Margazhi 18, Vilambi, Thiruvalluvar Aandu – 2049

Part IV—Section 4

CENTRAL ACTS AND ORDINANCES

[ 1 ]

1-IV-4-1

[Regd. No. TN/CCN/467/2012-14.

GOVERNMENT OF TAMIL NADU

[R. Dis. No. 197/2009.

2019

[Price: Rs. 3.20 Paise.

Short title and

commence-

ment.

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 2nd November, 2018 / Kartika 11, 1940 (Saka) .

The following Central Ordinance promulgated by the President of India is hereby

re-published for general Information:—

THE COMPANIES (AMENDMENT) ORDINANCE, 2018

No. 9 OF 2018

Promulgated by the President in the Sixty-ninth Year of the Republic of India.

An Ordinance further to amend the Companies Act, 2013.

WHEREAS Parliament is not in session and the President is satisﬁ ed that circumstances

exist which render it necessary for him to take immediate action;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of

the Constitution, the President is pleased to promulgate the following Ordinance:-

(1) This Ordinance may be called the Companies (Amendment) Ordinance, 2018.

(2) It shall come into force at once.

In section 2 of the Companies Act, 2013 (hereinafter referred to as the principal

Act), in clause (41),-

(a) for the ﬁ rst proviso, the following provisos shall be substituted, namely:-

“Provided that where a company or body corporate, which is a holding company

or a subsidiary or associate company of a company incorporated outside India and is required

to follow a diﬀ erent ﬁ nancial year for consolidation of its accounts outside India, the Central

Government may, on an application made by that company or body corporate in such form

and manner as may be prescribed, allow any period as its ﬁ nancial year, whether or not that

period is a year:

Amendment of

section 2.

TAMIL NADU GOVERNMENT GAZETTE

[Part IV—Sec. 4

Provided further that any application pending before the Tribunal as on the date of

commencement of the Companies (Amendment) Ordinance, 2018, shall be disposed of by

the Tribunal in accordance with the provisions applicable to it before such commencement.”;

(b) in the second proviso, for the words “Provided further that”, the words “Provided

also that” shall be substituted.

After section 10 of the principal Act, the following section shall be inserted,

namely:-

“10A.(1) A company incorporated after the commencement of the Companies

(Amendment) Ordinance, 2018 and having a share capital shall not commence any business

or exercise any borrowing powers unless-

(a) a declaration is ﬂ ied by a director within a period of one hundred and

eighty days of the date of incorporation of the company in such form and veriﬁ ed in such

manner as may be prescribed, with the Registrar that every subscriber to the memorandum

has paid the value of the shares agreed to be taken by him on the date of making of such

declaration; and

(b) the company has ﬂ ied with the Registrar a veriﬁ cation of its registered

oﬃ ce as provided in sub -section (2) of Section 12.

(2) If any default is made in complying with the requirements of this section, the

company shall be liable to a penalty of ﬁ fty thousand rupees and every oﬃ cer who is in default

shall be liable to a penalty of one thousand rupees for each day during which such default

continues but not exceeding an amount of one lakh rupees.

(3) Where no declaration has been ﬁ led with the Registrar under clause (a) of

sub-section (1) within a period of one hundred and eighty days of the date of incorporation

of the company and the Registrar has reasonable cause to believe that the company is

not carrying on any business or operations, he may, without prejudice to the provisions of

sub-section (2), initiate action for the removal of the name of the company from the register of

companies under Chapter XVIII.

In section 12 of the principal Act, after sub-section (8), the following sub-section

shall be inserted, namely:-

“(9) If the Registrar has reasonable cause to believe that the company is not

carrying on any business or operations, he may cause a physical veriﬁ cation of the registered

oﬃ ce of the company in such manner as may be prescribed and if any default is found to be

made in complying with the requirements of sub-section (1), he may without prejudice to the

provisions of sub-section (8), initiate action for the removal of the name of the company from

the register of companies under Chapter XVIII.”.

In section 14 of the principal Act,-

(i)

in sub-section (1), for the second proviso, the following provisos shall be

substituted, namely:-

“Provided further that any alteration having the eﬀ ect of conversion of a public

company into a private company shall not be valid unless it is approved by an order of the

Central Government on an application made in such form and manner as may be prescribed:

Provided also that any application pending before the Tribunal, as on the date

of commencement of the Companies (Amendment) Ordinance, 2018, shall be disposed of by

the Tribunal in accordance with the provisions applicable to it before such commencement.”;

(ii)

in sub-section (2), for the word “Tribunal”, the words “Central Government”

shall be substituted.

In Section 53 of the principal Act, for sub-section (3), the following sub-section shall

be substituted, namely:-

“(3) Where any company fails to comply with the provisions of this section, such

company and every oﬃ cer who is in default shall be liable to a penalty which may extend to

an amount equal to the amount raised through the issue of shares a discount or ﬁ ve lakh

rupees, whichever is less, and the company shall also be liable to refund all monies received

with interest at the rate of twelve per cent. per annum from the date of issue of such shares to

the persons to whom such shares have been issued.”.

Insertion of new

section 10A.

Commence-

ment of

business, etc.

Amendment of

section 12.

Amendment of

section 14.

Amendment of

section 53.

Jan. 2, 2019]

TAMIL NADU GOVERNMENT GAZETTE

In section 64 of the principal Act, for sub-section (2), the following sub-section shall

be substituted, namely:-

“(2) Where any company fails to comply with the provisions of sub-section (1), such

company and every oﬃ cer who is in default shall be liable to a penalty of one thousand rupees

for each day during which such default continues, or ﬁ ve lakh rupees whichever is less.”.

In section 77 of the principal Act, in sub-section (1), for the ﬁ rst and second provisos,

the following provisos shall be substituted, namely:-

“Provided that the Registrar may, on an application by the company, allow such

registration to be made-

(a) in case of charges created before the commencement of the Companies

(Amendment) Ordinance, 2018, within a period of three hundred days of such creation; or

(b) in case of charges created on or after the commencement of the

Companies (Amendment) Ordinance, 2018, within a period of sixty days of such creation,

on payment of such additional fees as may be prescribed:

Provided further that if the registration is not made within the period speciﬁ ed-

(a) in clause (a) to the ﬁ rst proviso, the registration of the charge shall. be made

within six months from the date of commencement of the Companies (Amendment) Ordinance,

2018, on payment of such additional fees as may be prescribed and diﬀ erent fees may be

prescribed for diﬀ erent classes of companies;

(b) in clause (b) to the ﬁ rst proviso, the Registrar may, on an application, allow

such registration to be made within a further period of sixty days after payment of such

advalorem fees as may be prescribed.”.

Section 86 of the principal Act shall be numbered as sub-section (1) thereof and

after sub-section (1) as so numbered, the following sub-section shall be inserted, namely:-

“(2) If any person wilfully furnishes any false or incorrect information or knowingly

suppresses any material information, required to be registered in accordance with the

provisions of Section 77, he shall be liable for action under section 447.”.

10. For Section 87 of the principal Act, the following section shall be substituted,

namely:-

“87. The Central Government on being satisﬁ ed that -

(a) the omission to give intimation to the Registrar of the payment or

satisfaction of a charge, within the time required under this Chapter; or

(b) the omission or misstatement of any particulars with respect to any such

charge or modiﬁ cation or with respect to any memorandum of satisfaction or other entry made

in pursuance of Section 82 or Section 83,

was accidental or due to inadvertence or some other suﬃ cient cause or it is not of a nature to

prejudice the position of creditors or shareholders of the company, it may, on the application

of the company or any person interested and on such terms and conditions as the Central

Government deems just and expedient, direct that the time for the giving of intimation of

payment or satisfaction shall be extended or, as the case may require, that the omission or

misstatement shall be rectiﬁ ed.”.

11. In section 90 of the principal Act,-

(i)

for sub-section (9), the following sub-section shall be substituted, namely:-

“(9) The company or the person aggrieved by the order of the Tribunal may

make an application to the Tribunal for relaxation or lifting of the restrictions placed under

sub-section (8), within a period of one year from the date of such order:

Amendment of

section 64.

Amendment of

section 77.

Amendment of

section 86.

Substitution of

new section

for section 87.

Rectiﬁ cation

by Central

Government

in Register of

charges.

Amendment of

section 90.

TAMIL NADU GOVERNMENT GAZETTE

[Part IV—Sec. 4

Provided that if no such application has been ﬁ led within a period of one year from the

date of the order under sub-section (8), such shares shall be transferred to the authority

constituted under sub-section (5) of section 125, in such manner as may be prescribed;

(ii)

in sub-section (10),-

(a) after the word “punishable”, the words “with imprisonment for a term

which may extend to one year or” shall be inserted;

(b) after the words “ten lakh rupees”, the words “or with both” shall be

inserted.

12. In section 92 of the principal Act, for sub-section (5), the following sub-section shall

be substituted, namely:-

“(5) If any company fails to ﬁ le its annual return under sub-section (4), before the

expiry of the period speciﬁ ed therein, such company and its every oﬃ cer who is in default shall

be liable to a penalty of ﬁ fty thousand rupees and in case of continuing failure, with further

penalty of one hundred rupees for each day during which such failure continues, subject to a

maximum of ﬁ ve lakh rupees.”.

13. In section 102 of the principal Act, for sub-section (5), the following sub-section shall

be substituted, namely:-

“(5) Without prejudice to the provisions of sub-section (4), if any default is made

in complying with the provisions of this section, every promoter, director, manager or other

key managerial personnel of the company who is in default shall be liable to a penalty of

ﬁ fty thousand rupees or ﬁ ve times the amount of beneﬁ t accruing to the promoter, director,

manager or other key managerial personnel or any of his relatives, whichever is higher.”.

14. In section 105 of the principal Act, in sub-section (3), for the words “punishable with

ﬁ ne which may extend to ﬁ ve thousand rupees”, the words “liable to a penalty of ﬁ ve thousand

rupees” shall be substituted.

15. In section 117 of the principal Act, for sub-section (2), the following sub-section shall

be substituted, namely:-

“(2) If any company fails to ﬁ le the resolution or the agreement under sub-section (1)

before the expiry of the period speciﬁ ed therein, such company shall be liable to a penalty of

one lakh rupees and in case of continuing failure, with further penalty of ﬁ ve hundred rupees

for each day after the ﬁ rst during which such failure continues, subject to a maximum of

twenty-ﬁ ve lakh rupees and every oﬃ cer of the company who is in default including liquidator

of the company, if any, shall be liable to a penalty of ﬁ fty thousand rupees and in case of

continuing failure, with further penalty of ﬁ ve hundred rupees for each day after the ﬁ rst during

which such failure continues, subject to a maximum of ﬁ ve lakh rupees.”.

16. In section 121 of the principal Act, for sub-section (3), the following sub-section

shall be substituted, namely:-

“(3) If the company fails to ﬁ le the report under sub-section (2) before the expiry of

the period speciﬁ ed therein, such company shall be liable to a penalty of one lakh rupees and

in case of continuing failure, with further penalty of ﬁ ve hundred rupees for each day after the

ﬁ rst during which such failure continues, subject to a maximum of ﬁ ve lakh rupees and every

oﬃ cer of the company who is in default shall be liable to a penalty which shall not be less

than twenty-ﬁ ve thousand rupees and in case of continuing failure, with further penalty of ﬁ ve

hundred rupees for each day after the ﬁ rst during which such failure continues, subject to a

maximum of one lakh rupees.”.

17. In section 137 of the principal Act, in sub-section (3),-

(a) for the words “punishable with ﬁ ne”, the words “liable to a penalty” shall be

substituted;

(b) for the words “punishable with imprisonment for a term which may extend to

six months or with ﬁ ne which shall not be less than one lakh rupees but which may extend to

ﬁ ve lakh rupees or with both”, the words “shall be liable to a penalty of one lakh rupees and

in case of continuing failure, with further penalty of one hundred rupees for each day after the

ﬁ rst during which such failure continues, subject to a maximum of ﬁ ve lakh rupees” shall be

substituted.

Amendment of

section 92.

Amendment of

section 102.

Amendment of

section 105.

Amendment of

section 117.

Amendment of

section 121.

Amendment of

section 137.

Jan. 2, 2019]

TAMIL NADU GOVERNMENT GAZETTE

18. In section 140 of the principal Act, for sub-section (3), the following sub-section shall

be substituted, namely:-

“(3) If the auditor does not comply with the provisions of sub-section (2), he or it

shall be liable to a penalty of ﬁ fty thousand rupees or an amount equal to the remuneration

of the auditor, whichever is less, and in case of continuing failure, with further penalty of ﬁ ve

hundred rupees for each day after the ﬁ rst during which such failure continues, subject

to a maximum of ﬁ ve lakh rupees.”.

19. In section 157 of the principal Act, for sub-section (2), the following sub-section shall

be substituted, namely:-

“(2) If any company fails to furnish the Director Identiﬁ cation Number under

sub-section (1), such company shall be liable to a penalty of twenty-ﬁ ve thousand rupees and

in case of continuing failure, with further penalty of one hundred rupees for each day after the

ﬁ rst during which such failure continues, subject to a maximum of one lakh rupees, and every

oﬃ cer of the company who is in default shall be liable to a penalty of not less than twenty-ﬁ ve

thousand rupees and in case of continuing failure, with further penalty of one hundred rupees

for each day after the ﬁ rst during which such failure continues, subject to a maximum of one

lakh rupees.”.

20. For section 159 of the principal Act, the following section shall be substituted,

namely:-

“159. If any individual or director of a company makes any default in complying with

any of the provisions of section 152, section 155 and section 156, such individual or director of

the company shall be liable to a penalty which may extend to ﬁ fty thousand rupees and where

the default is a continuing one, with a further penalty which may extend to ﬁ ve hundred rupees

for each day after the ﬁ rst during which such default continues.”.

21. In section 164 of the principal Act, in sub-section (1), after clause (h), the following

clause shall be inserted, namely:-

“(i) he has not complied with the provisions of sub -section (1) of section 165.”.

22. In section 165 of the principal Act, in sub-section (6), for the portion beginning with

“punishable with ﬁ ne” and ending with “contravention continues”, the words “liable to a penalty

of ﬁ ve thousand rupees for each day after the ﬁ rst during which such contravention continues”

shall be substituted.

23. In section 191 of the principal Act, for sub-section (5), the following sub-section shall

be substituted, namely:-

“(5) If a director of the company makes any default in complying with the provisions

of this section, such director shall be liable to a penalty of one lakh rupees.”.

24. In section 197 of the principal Act,-

(a) sub-section (7) shall be omitted;

(b) for sub-section (15), the following sub-section shall be substituted, namely:-

“(15) If any person makes any default in complying with the provisions of this

section, he shall be liable to a penalty of one lakh rupees and where any default has been

made by a company, the company shall be liable to a penalty of ﬁ ve lakh rupees.”.

25. In section 203 of the principal Act, for sub-section (5), the following sub-section shall

be substituted, namely:-

“(5) If any company makes any default in complying with the provisions of this

section, such company shall be liable to a penalty of ﬁ ve lakh rupees and every director and

key managerial personnel of the company who is in default shall be liable to a penalty of

ﬁ fty thousand rupees and where the default is a continuing one, with a further penalty of

one thousand rupees for each day after the ﬁ rst during which such default continues but not

exceeding ﬁ ve lakh rupees.”.

Amendment

of section

140.

Amendment of

section 157.

Substitution of

new section

for section

159.

Penalty for

default

of certain

provisions.

Amendment of

section 164.

Amendment of

section 165.

Amendment of

section 191.

Amendment of

section 197.

Amendment of

section 203.

TAMIL NADU GOVERNMENT GAZETTE

[Part IV—Sec. 4

26. In section 238 of the principal Act, in sub-section (3), for the words “punishable with

ﬁ ne which shall not be less than twenty-ﬁ ve thousand rupees but which may extend to ﬁ ve

lakh rupees”, the words “liable to a penalty of one lakh rupees” shall be substituted.

27. In section 248 of the principal Act, in sub-section (1),-

(a) in clause (c), for the word and ﬁ gures “section 455,”, the words and ﬁ gures

“section 455; or” shall be substituted;

(b) after clause (c) and before the long line, the following clauses shall be

inserted, namely:-

“(d) the subscribers to the memorandum have not paid the subscription which

they had undertaken to pay at the time of incorporation of a company and a declaration to

this eﬀ ect has not been ﬁ led within one hundred and eighty days of its incorporation under

sub -section (1) of section 10A; or

(e) the company is not carrying on any business or operations, as revealed

after the physical veriﬁ cation carried out under sub-section (9) of section 12.”.

28. In section 441 of the principal Act,-

(a) in sub-section (1), in clause (b), for the words “does not exceed ﬁ ve lakh

rupees”, the words “does not exceed twenty-ﬁ ve lakh rupees” shall be substituted;

(b) for sub-section (6), the following sub-section shall be substituted, namely:-

“(6) Notwithstanding anything contained in the Code of Criminal Procedure,

1973, any oﬀ ence which is punishable under this Act with imprisonment only or with

imprisonment and also with ﬁ ne shall not be compoundable.”.

29. In section 446B of the principal Act, for the portion beginning with “punishable with

ﬁ ne” and ending with “speciﬁ ed in such sections”, the words “liable to a penalty which shall not

be more than one half of the penalty speciﬁ ed in such sections” shall be substituted.

30. In section 447 of the principal Act, in the second proviso, for the words ‘’twenty lakh

rupees”, the words “ﬁ fty lakh rupees” shall be substituted.

31. In section 454 of the principal Act,-

(i)

for sub-section (3), the following sub-section shall be substituted, namely: -

“(3) The adjudicating oﬃ cer may, by an order-

(a) impose the penalty on the company, the oﬃ cer who is in default, or

any other person, as the case may be, stating therein any non-compliance or default under

the relevant provisions of this Act; and

(b) direct such company, or oﬃ cer who is in default, or any other person,

as the case may be, to rectify the default, wherever he considers ﬁ t.”;

(ii)

in sub-section (8), -

(a) in clause (i), for the words “does not pay the penalty imposed by the

adjudicating oﬃ cer or the Regional Director”, the words, brackets and ﬁ gures “fails to

comply with the order made under sub-section (3) or sub-section (7), as the case may be,”

shall be substituted;

(b) in clause (ii), for the words “does not pay the penalty”, the words, brackets

and ﬁ gures “fails to comply with the order made under sub-section (3) or sub-section (7), as

the case may be,” shall be substituted.

Amendment of

section 238.

Amendment of

section 248.

Amendment of

section 441.

Amendment of

section 446B.

Amendment of

section 447.

Amendment of

section 454.

2 of 1974.

Jan. 2, 2019]

TAMIL NADU GOVERNMENT GAZETTE

32. After section 454 of the principal Act, the following section shall be inserted,

namely:-

“454A. Where a company or an oﬃ cer of a company or any other person having

already been subjected to penalty for default under any provisions of this Act, again commits

such default within a period of three years from the date of order imposing such penalty

passed by the adjudicating oﬃ cer or the Regional Director, as the case may be, it or he shall

be liable for the second or subsequent defaults for an amount equal to twice the amount of

penalty provided for such default under the relevant provisions of this Act.”.

Rඉඕ Nඉගඐ K඗ඞඑඖඌ,

President.

Dක. G. Nඉකඉඡඉඖඉ Rඉඒඝ,

Secretary to the Government of India.

(Re-published by Order of the Governor)

K. RAVIKUMAR,

Additional Secretary to Government,

Law Department.

Insertion of a

new section

454A.

Penalty for

repeated

default

PRINTED AND PUBLISHED BY THE DIRECTOR OF STATIONERY AND PRINTING, CHENNAI

ON BEHALF OF THE GOVERNMENT OF TAMIL NADU