Category: 2019

BSDA

Happy Financial New Year

Zappy wishes you and your team a very happy financial new year. May this New Year, you achieve your desired Financial Milestones.

In this edition, we will be seeing about “Basic Services Demat Account” (BSDA) and it’s latest amendments. Our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST will follow the article.

CEO Saranya Deivasigamani,
CEO

BSDA

Since holding of demat account is beneficial to individual investors, SEBI initiated extensive consultations with all the stakeholders to address the concerns and suggestions with respect to cost of demat accounts especially from small individual investors.

The SEBI Board had taken decisions to extend the reach of IPOs for the benefit of retail investors. With a view to achieve wider financial inclusion, encourage holding of demat accounts and to reduce the cost of maintaining securities in demat accounts for retail individual investors, it has been decided that all depository participants (DPs) shall make available a “Basic Services Demat Account” (BSDA) with limited services and reduced costs. The details are provided in the circular dated August 27, 2012. In this edition, we will be seeing all about BSDA and it’s latest amendments.

The salient features of the BSDA are as follows:

a. Eligibility Criteria:

All the individuals who have or propose to have only one demat account where they are the sole or first holder shall be eligible to have a BSDA provided that the value of securities held in the demat account does not exceed Rupees Two Lakhs at any point of time. An individual can have only one BSDA in his/her name across all depositories.

b. Charges: 

The Annual Maintenance Charges (AMC) structure for BSDA shall be on a slab basis; if the value of holding is
(i)  upto INR. 50,000 there will be NIL AMC and

(ii) for value of holding from INR. 50,001 to INR. 200,000 AMC will be upto INR. 100

The value of holding shall be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds. If the value of holding in such BSDA exceeds the prescribed criteria at any date, the DPs may levy charges as applicable to regular accounts (non-BSDA) from that date onwards.

c. Transaction Statements:

Transaction statements shall be sent to the BO at the end of each quarter. If there are no transactions in any quarter, no transaction statement may be sent for that quarter.

d. Holding Statement:

One annual physical statement of holding shall be sent to the stated address of the BO in respect of accounts with no transaction and nil balance and for remaining accounts one annual statement of holding shall be sent in electronic or physical form as opted for by the BO.

e. Charges for statements: 

Electronic statements shall be provided free of cost. In case of physical statements, the DP shall provide at least two statements free of cost during the billing cycle. Additional physical statement may be charged at a fee not exceeding INR.25/- per statement.

Rationalisation of services with respect to  regular accounts: In order to reduce the cost of compliance of DPs, following rationalisation measures were decided for regular accounts:

a. Accounts with zero balance and nil transactions during the year:  The DPs shall send one physical statement of holding annually to such BOs and shall resume sending the transaction statement as and when there is a transaction in the account.

b. Accounts which become zero balance during the year:  For such accounts, no transaction statement may be sent for the duration when the balance remains nil. However, an annual statement of holding shall be sent to the BO.

c. Accounts with credit balance:  For accounts with credit balance but no transactions during the year, one statement of holding for the year shall be sent to the BO.

Latest Amendments

  1. SEBI vide   circulars CIR/MRD/DP/22/2012   dated   August   27,   2012 and CIR/MRD/DP/20/2015 dated December 11, 2015, introduced the facility of “Basic Services Demat Account” (BSDA) with limited services for eligible individuals with  the  objective  of  achieving  wider  financial  inclusion  and  to  encourage  holding  of demat accounts.
  2. In order to further boost participation in Debt Market and based on representation received from  market  participants, in  partial  modification  of  the  abovementioned SEBI  circulars, it  has  been  decided  to  revise  the structure of  charges for  debt securities  as defined  in SEBI  (Issue  and  Listing  of  Debt  Securities)  Regulations, 2008, as given below:
  3. No AMC shall be levied in case the value of holdings of debt securities is up to INR.  1  lakh  and a maximum  AMC of  INR. 100 shall be levied if the value  of  holdings  of debt  securities is between  INR.  1,00,001  and INR.2,00,000. And
  4. No AMC shall be  levied in  case  the  value  of  holdings  other  than debt securities is below INR. 50,000 and a maximum AMC of INR. 100 shall be levied  if  the  value  of holdings  other  than  debt  securities is between INR.50,001 and INR.2,00,000.
  5. This circular shall come into effect from June 01, 2019.
  6. The Depositories are advised to:-
  7. make amendments to  the  relevant  bye-laws,  rules  and  regulations  for  the implementation of the above decision as may be applicable / necessary; and
  8. communicate to SEBI,  the  status  of implementation  of  the  provisions  of  this circular by the DPs in the Monthly Development Report.
  9. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 and section 19 of the Depositories Act, 1996  to  protect  the  interest  of  investors  in  securities  and  to  promote  the development of, and to regulate, the securities market.

Legal Term

Vindicated

Show or prove to be right, reasonable, or justified.

NewsBites

MCA Updates

  • New version of form for incorporation—eForm INC-35 -AGILE
  • Extension of fees and last date for CRA-2, DIR-3-KYC.
  • Applicability of AS116, AS101

SEBI Updates

  • SEBI (Payment of Fees)(Amendment) Regulations, 2019. – Dated March 22, 2019.
  • Guidelines for BCP and DR of MIIs.
  • Empanelment of Insolvency Professionals (IPs) to be appointed as Administrator, remuneration and other incidental matters.
  • BSDA limit for securities.

RBI Updates

  • Revision on Establishment of Branch Office (BO) / Liaison Office (LO) / Project Office (PO) or any other place of business in India by foreign entities.

IT Updates

  • Income-tax (Second Amendment) Rules, 2019.

GST Updates

  • Advisory to GST Taxpayers on Invoice Series to be used wef 1st April, 2019

DPT-3

In Continuation with Feb Edition

As mentioned in our earlier edition, there are lots of amendments and reforms made by MCA in recent days. Out of which we have already seen 2 amendments in last edition. In this edition, we will be seeing one more amendments. It is about amendments in the  Companies (Acceptance of Deposits) Rules, 2014 along with our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

CEO Saranya Deivasigamani,

CEO

 DPT-3

MCA vide its notification dated 22nd January, 2019 notified Companies (Acceptance of Deposits) Amendment Rules, 2019, in which ‘sub–rule 3’ in Rule 16A is inserted to file e-form DPT-3 mandatorily for information of Loan to ROC. E-Form DPT-3 is required to be filed pursuant to section 73 read with rule 16 of the of the  Companies (Acceptance of Deposits) Rules, 2014 Accordingly, in order to protect and safeguard the interest of deposit holders or creditors of the Company, the Central Government in consultation with the Reserve Bank of India (RBI),  have notified in the Companies (Acceptance of Deposits) Amendment Rules, 2019 to amend the Companies (Acceptance of Deposits) Rules, 2014. Rule 16A (3) Every company other than Government Company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to 22nd January, 2019 (till the date of publication of this notification in the Official Gazette), as specified in Form DPT-3 within ninety days from the date of said publication of this notification along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014. KEY POINTS OF THE NEW NOTIFICATION AND ITS APPLICABILITY:-
  1. Applicability: – All Companies (Private, Public, OPC, etc.) except Government Companies are required to file DPT-3.
  2. Due Date: –One-time return in E-Form DPT-3 is required to be filed within 90 days of publication of this notification in Official Gazette (22nd January, 2019+ 90 days i.e. by 22nd April, 2019)
  3. Requirement: –Filling is required to be done for both secured & unsecured outstanding money/loan not considered deposits are mentioned below which are not treated as deposits as per Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014. DPT-3 needs to file in respect of these transactions.
  4. Initial Return: –The period which is covered for filing this return is from 01st April, 2014 till 22nd January, 2019. Also be filed in case the loan/money outstanding is taken from its holding/subsidiary or associate company.
  5. Filing Fees: –Fees shall be payable as per the Companies (Registration Offices and Fees) Rules,
Brief view of above notification:-
  1. The Concept of Deposit
Section 2(31) of CA, 13 defines the term ‘deposit’ in an inclusive manner which provides that any receipt of money by way of deposit or loan by a company shall be termed as deposit. An extension to this definition has been provided in Rule 2(1)(c). Further, Sections 73 to 76A of CA, 13 contain the provisions relating to acceptance of deposits from members by private companies and from persons other than members by public companies and the procedural requirements for the same have been prescribed by the ministry through the Rules. Therefore, the reporting requirement comes from the Rules. Rule 16 of the existing set of Rules requires filing of the return of deposits (e- form DPT-3) within 30th June every year by the companies accepting deposits. Apparently, till date, the reporting requirement was applicable only to those companies which have accepted money considered as deposits as per the definition. Therefore, the reporting by other companies was not required. However, the amendment is seemingly intending to include those other companies too within its purview.
  1. Eligibility
The amendment will hit almost all companies irrespective of the status thereof, i.e., Small Company, Public Company, Private Company, One Person Company. However, the same rules excludes a Government Companies, Non-Banking Financial Companies (NBFCs) NBFC from the reporting requirement.
  1. a) Paid-up share capital of which does not exceed Fifty Lakh Rupees or
  2. b) Turnover of which as per its last profit and loss account does not exceed Two Crore Rupees or such higher amount as may be prescribed which shall not be more than Twenty Crore. Provided that nothing in this Section shall apply to—
  3. A holding Company or a subsidiary company;
  4. A Company registered under Section 8; or
iii. A Company or body corporate governed by any special Act;
  1. Period of Return
The amendments require reporting of the following by the companies with the registrar:
  1. A one-time return which will give the details of the outstanding receipt of money or loan which have not been considered as deposits as per Rule 2(1)(c) of the Rules. For this, the period of such receipt of money or loan has to be considered from 1stApril 2014 till the date of publication of the notification in the gazette, i.e., 22nd January 2019 and which are outstanding as on the said date. The reporting has to be done within 90 days of the said publication.
  2. A periodic return which will give the details of particulars of transactions which are not considered as deposits as per Rule 2(1)(c) of the Rules within 30thJune of every year containing details as on 31st March.
  3. Exempted Transactions
Rule 2(1)(c) defines the term ‘deposit’ in an exclusive manner and enlists 19 transactions which are not treated as deposits. Below is the list of the items that are excluded from the term ‘deposit’ subject to the conditions/ exceptions mentioned thereunder-
  1. Amount received from central government, state government etc;
  2. Amount received from foreignx governments/ banks etc;
  3. Amount received as loan from banks, banking companies etc;
  4. Amount received as loan from Private Finance institutions (PFIs), any regional Financial Institutions or insurance companies or scheduled banks;
  5. Amount raised through issuance of commercial paper;
  6. Inter- corporate deposits;
  7. Amount received as subscription money for securities pending allotment;
  8. Amount received from directors/ relative of directors in case of a private company;
  9. Amount raised by issue of secured bonds/ debentures;
  10. Amount raised through issuance of unsecured listed NCDs;
  11. Non-interest bearing security deposit received from employees;
  12. Non-interest bearing amount held in trust;
  13. Advance from customers;
  14. Amount brought by the promoters;
  15. Any amount accepted by a Nidhi;
  16. Any amount received by way of subscription in respect of a chit;
  17. Any amount received by the company under any collective investment scheme;
  18. Amount received by start- up company by way of convertible note;
  19. Amount received from Alternate Investment Funds (AIFs), venture capital funds (VCFs) real estate investment trusts (REITs) etc.
  20. Consequences for non- reporting
If the company is non-compliant with the provisions of the law i.e. does not file DPT-3 and still accepts deposits then it shall: Do not forget to advise your eligible clients to file the One Time Return in e-form DPT-3 as soon as possible without waiting for the last date i.e. 22nd April, 2019

Legal Term

Ceveat
A warning or proviso of specific stipulations, conditions, or limitations.
NewsBites

MCA Updates

SEBI Updates

RBI Updates

Income Tax Updates

  • No major updates.

GST Updates

MSME Returns & ACTIVE Company Tag

BRAND NEW WEBSITE FOR ZAPPY

We have our new website for Zappy. Now you can search our articles by topic and check for any news archives. You are welcome to give us the feedback and suggest or give your articles to publish in our next ZappyNews. Mail us at ne********@za***********.com for any assistance. There are lots of amendments and reforms made by MCA in recent days. We will be seeing two of the amendments in this edition along with our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

CEO Saranya Deivasigamani,
CEO

MSME RETURNS & Active Company tag

MSME Returns

The Central Government vide notification number S.O.5622 (E), dated the 2nd November, 2018 has directed that all Companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed 45 (forty five) days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) (hereafter referred to as “Specified Companies”), shall submit a half yearly return to the Ministry of Corporate Affairs stating the following: (a) the amount of payment due; and (b) the reasons of the delay; And whereas, in exercise of power under section 405 of the Companies Act, 2013,(18 of 2013} the Central Government, considers it necessary to require “Specified Companies” to furnish above information under said section of the Act. In exercise of the powers conferred by section 405 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes an Order, namely the Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 which has come in to effect from the 22nd January, 2019. Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of deployment of the form i.e. 25th February, 2019. Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March. If your clients are dealing with MSME suppliers / vendors, rush out advising them to file the forms at the earliest.

ACTIVE Company Tagging

After having introduced KYC of directors of Companies in 2018, Ministry of Corporate Affairs (MCA) has introduced KYC of Companies by way of notification dated 21st February, 2019. The said notification shall be effective from 25th February, 2019. By way of above notification, MCA the amended the Companies (Incorporation) Rules, 2014 by insertion of Rule 25A. Every Company incorporated on or before 31st December 2017 is required to file e-Form ACTIVE (Active Company Tagging Identities and Verification) latest by 25th April, 2019. Any Company which has not filed its due financial statements under section 137 or due annual returns under section 92 or both with the Registrar shall be restricted from filing e-Form-ACTIVE unless such company is under management dispute and Registrar has recorded the same on the register. Also Companies have been struck off or are under process of striking off or liquidation or amalgamated or dissolved, as recorded in the register, shall not be required to file e-Form ACTIVE. In case of default in filing of e-Form ACTIVE, on or after 26th April, 2019 the status of the Company in MCA records shall be changed from Active to ACTIVE-non compliant and it shall attract penalties under Section 12(9) of Companies Act, 2013. Further, defaulting Company shall not be able to report the Corporate Actions to Registrar of Companies like i. SH-08 Changes in Authorised Capital ii. PAS-03 Change in Paid-up Capital iii. DIR-12 Changes in directors except cessation iv. INC-22 Change in registered office v. INC-28 Corporate Restructuring. Belated filing will attract an additional fees of Rupees Ten Thousand. In the e-form ACTIVE, the following details are required to be intimated to Registrar of Companies:
  • Address of registered office with photo of registered office also showing at least one Director/Key Managerial Personnel who will sign the e-Form ACTIVE.
  • Email ID of Company: Email ID shall be verified through One time password (OTP).
  • Number of Directors with list of directors as on date of filing of e-form.
  • Details of Auditors – Statutory and Cost Auditor.
  • Details of Managing Director, Chief Executive Officer or Manager or Wholetime Director, Chief Financial Officer and Company Secretary.
  • Details of annual returns filed for financial year 2017-18.
  • Photograph of registered office showing external building and inside office also needs to be attached to e-form.
For all Private or Public Limited Companies incorporated before December 2017 in your clientele, complete the Annual Filing and proceed with e-Form ACTIVE at the earliest. Remember Zappy on any help at the rush hour.

 Legal Term

Turpitude
Depraved or wicked behaviour or character.

NewsBites

MCA Updates

SEBI Updates

RBI Updates

Income Tax Updates

GST Updates

The Companies Ordinance, 2019

No Notification Updates

Hope this new year begun with all new excitements and prospects. In this edition, we will discuss about the new amendments to Companies Act, namely, The Companies (Amendment) Ordinance, 2019 which came into force on 2nd Day of November 2018. Accordingly, the Companies (Amendment) Ordinance, 2018 will cease to operate on the 21st day of January, 2019. Considering the length of the article, the Notification section will be missing in this edition.

CEO Saranya Deivasigamani,
CEO

THE COMPANIES (AMENDMENT) ORDINANCE, 2019

The Ministry of Law and Justice (Legislative Department) has issued the Companies (Amendment) Ordinance, 2019 to further amend the Companies Act, 2013, it shall be deemed to have come into force on the 2nd day of November, 2018. The Companies (Amendment) Bill, 2019 will replace the Companies (Amendment) Ordinance, 2018.
SN Amendments Comments
2 In section 2 of the Companies Act, 2013 (hereinafter referred to as the principal Act), in clause (41),— (a) The first proviso shall be substituted. (b) in the second proviso, for the words “Provided further that”, the words “Provided also that” shall be substituted. Now the Foreign Subsidiary Companies shall follow a different financial year for consolidation of accounts with the approval of Central Government.
10A After section 10 of the principal Act, section 10A shall be inserted, for:— Commencement of business, etc. 1. A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless a) The directors file a declaration within a period of 180 days. b) Company has filed its verification of registered office 2. On default, the Company shall be liable to a penalty of fifty thousand rupees and every officer shall be liable to a penalty of one thousand rupees for each day during such default. 3. If the declaration is not filed within 180 days, the Registrar has reasonable cause to believe the Company is not carrying on any business or operation and initiate removal of Company from register or companies.
12 In section 12 of the principal Act, after sub-section (8), the sub-section (9) shall be inserted. The Registrar may cause a physical verification of the registered office of the Company and initiate action for removal of the name of the Company.
14  In section 14 of the principal Act,— (i) in sub-section (1), the second proviso shall be substituted. (ii) in sub-section (2), the word “Tribunal”, the words “Central Government” shall be substituted. Conversion of Public to Private Company has to obtain Central Government Order by making application. Provided any application pending before Tribunal as of the date of the Ordinance shall be disposed by the Tribunal in accordance with the provisions applicable to it before commencement.
53 In section 53 of the principal Act, sub-section (3)shall be substituted. Penalty for not complying with the provisions shall extend upto amount equal to the amount raised through the issue of shares at a discount or five lakh rupees, whichever is less and the Company shall be liable to refund all monies received with interest at the rate of 12% p.a. from date of issue of such shares.
64 In section 64 of the principal Act, sub-section (2)shall be substituted. Officer in default of sub-section (1) shall be liable to a penalty of 1,000 each day during such default continues, or five lakh rupees whichever is less.
77 In section 77 of the principal Act, in sub-section (1), the first and second provisos shall be substituted. 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 Ordinance within a period of 300 days of such creation; or (b) in case of charges created on or after the commencement of the Ordinance within a period of 60 days of such creation, on payment of such additional fees as may be prescribed.
86  Section 86 of the principal Act shall be numbered as sub-section (1) thereof and after sub-section (1) as so numbered, sub-section (2) shall be inserted. Any wilfull false or incorrect information furnished knowingly to suppress material information required to be registered in accordance with the provisons of section 77 shall be liable for action under 447.
87 For section 87 of the principal Act shall be substituted. Rectification by Central Government in Register of charges. The Central Government on being satisfied 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, in any filing previously made to the Registrar with respect to any charge or modification thereof, 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 rectified.
90 In section 90 of the principal Act,— (i) sub-section (9) sub-section shall be substituted. The Aggrieved Company or the Person 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.
92 In section 92 of the principal Act, sub-section (5) shall be substituted. If any Company fails to file its annual return in time, such company and its every officer who is in default shall be liable to a penalty of 50,000 rupees and in case of continuing failure, with a further penalty of 100 rupees for each day during which such failure continues, subject to a maximum of five lakh rupees.
102 In section 102 of the principal Act, sub-section (5) shall be substituted. 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 50,000 rupees or five times the amount of benefit accruing to such person w.e.h.
105 In section 105 of the principal Act, in sub-section (3), for the words “punishable with fine which may extend to five thousand rupees”, the words “liable to a penalty of five thousand rupees” shall be substituted.
117 In section 117 of the principal Act, sub-section (2) shall be substituted. If any company fails to file the resolution or the agreement under sub-section (1) in time shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of 500 rupees for each day after the first during which such failure continues, subject to a maximum of 25  lakh rupees.
121 In section 121 of the principal Act, sub-section (3) shall be substituted. If the Company fails to file the report under sub­section (2) in time, it shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of 500 rupees for each day after the first during which such failure continues, subject to a maximum of 5 lakh rupees and every officer of the company who is in default shall be liable to a penalty which shall not be less than 25,000 rupees and in case of continuing failure, with a further penalty of 500 rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees.
137 In section 137 of the principal Act, in sub-section (3),— (a) for the words “punishable with fine”, the words “liable to a penalty” shall be substituted; (b) for the portion beginning with “punishable with imprisonment”, and ending with “five lakh rupees or with both”, the words “shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees” shall be substituted.
170 In section 140 of the principal Act, sub-section (3)shall be substituted. If the Auditor does not comply with the provisions of sub-section (2), he or it shall be liable to a penalty of 50,000 rupees or an amount equal to the remuneration of the auditor, w.e.l, and in case of continuing failure, with a further penalty of 500 rupees for each day after the first during which such failure continues, subject to a maximum of 5 lakh rupees.
157 In section 157 of the principal Act, sub-section (2) shall be substituted. If any Company fails to furnish the DIN under sub-section (1), it shall be liable to a penalty of 25,000 rupees and in case of continuing failure, with a further penalty of 100 rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees, and every officer of the company who is in default shall be liable to a penalty of not less than 25,000 rupees and case of continuing failure, with a further penalty of 100 rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees.
159 Section 159 of the principal Act, shall be substituted. Penalty for default of certain provisions If any individual or director of a Company makes any default in complying with any of the provisions of section 152, 155 and 156, they shall be liable to a penalty which may extend to 5,000 rupees and where the default is a continuing one, with a further penalty which may extend to 500 rupees for each day after the first during which such default continues.
164 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 sub­section (1) of section 165.”.
165 In section 165 of the principal Act, in sub-section (6). for the portion beginning with “punishable with fine” and ending with “contravention continues”, the words “liable to a penalty of five thousand rupees for each day after the first during which such contravention continues” shall be substituted.
191 In section 191 of the principal Act, sub-section (5) shall be substituted. Default Director shall be liable to a penalty of one lakh rupees.
197 In section 197 of the principal Act, (a) sub-section (7) shall be omitted; (b) sub-section (15), the following sub-section shall be substituted. 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 5 lakh rupees.
203 In section 203 of the principal Act, sub-section (5) shall be substituted. If any Company makes any default in complying with the provisions of this section, shall be liable to a penalty of 5 lakh rupees and every director and KMP of the Company who is in default shall be liable to a penalty of 50,000 rupees and where the default is a continuing one, with a further penalty of 1,000 rupees for each day after the first during which such default continues but not exceeding 5  lakh rupees.
238 In section 238 of the principal Act, in sub-section (3), for the words “punishable with fine which shall not be less than twenty-five thousand rupees but which may extend
157 case of continuing failure, with a further penalty of 100 rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees.
159 Section 159 of the principal Act, shall be substituted. Penalty for default of certain provisions If any individual or director of a Company makes any default in complying with any of the provisions of section 152, 155 and 156, they shall be liable to a penalty which may extend to 5,000 rupees and where the default is a continuing one, with a further penalty which may extend to 500 rupees for each day after the first during which such default continues.
164 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 sub­section (1) of section 165.”.
165 In section 165 of the principal Act, in sub-section (6). for the portion beginning with “punishable with fine” and ending with “contravention continues”, the words “liable to a penalty of five thousand rupees for each day after the first during which such contravention continues” shall be substituted.
191 In section 191 of the principal Act, sub-section (5) shall be substituted. Default Director shall be liable to a penalty of one lakh rupees.
197 In section 197 of the principal Act, (a) sub-section (7) shall be omitted; (b) sub-section (15), the following sub-section shall be substituted. 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 5 lakh rupees.
203 In section 203 of the principal Act, sub-section (5) shall be substituted. If any Company makes any default in complying with the provisions of this section, shall be liable to a penalty of 5 lakh rupees and every director and KMP of the Company who is in default shall be liable to a penalty of 50,000 rupees and where the default is a continuing one, with a further penalty of 1,000 rupees for each day after the first during which such default continues but not exceeding 5  lakh rupees.
238 In section 238 of the principal Act, in sub-section (3), for the words “punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees”, the words “liable to a penalty of one lakh rupees” shall be substituted.
248  In section 248 of the principal Act, in sub-section (1) (a) in clause (c), for the word and figures “section 455,”, the words and figures “section 455; or” shall be substituted; (b) after clause (c) and before the long line, clauses (d) and (e) shall be inserted. The Subscribers to the memorandum have not paid the subscription and a declaration to this effect has not been filed within 180 days of its incorporation under sub-section (1) of section 10A; or The Company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.
441 In section 441 of the principal Act,— (a) in sub-section (1), in clause (b), for the words “does not exceed five lakh rupees”, the words “does not exceed twenty-five lakh rupees” shall be substituted; (b) sub-section (6), shall be substituted. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable.
446B In section 446B of the principal Act, for the portion beginning with “punishable with fine” and ending with “specified in such sections”, the words “liable to a penalty which shall not be more than one half of the penalty specified in such sections” shall be substituted.
447 In section 447 of the principal Act, in the second proviso, for the words “twenty lakh rupees”, the words “fifty lakh rupees” shall be substituted.
454 In section 454 of the principal Act, — (i) sub-section (3), (4), (8) shall be substituted. (ii) for the words “does not pay the penalty”, the words, brackets and figures “fails to comply with the order made under sub-section (3) or sub­section (7), as the case may be,” shall be substituted. The penalties posed on the Company and Director has been extended to Company, Directors and Other parties.
454A After section 454 of the principal Act, the following section shall be inserted, namely:— 454A. Penalty for repeated default. Where a Company or an officer 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 3 years from the date of order imposing such penalty passed by the adjudicating officer or the RD, 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.
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