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Stringent Provisions- screws tightened
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Posted on:
25/01/2014
One of the focuses of the new Act has been to ensure better compliances by the Companies and its promoters and directors along with safeguarding the investors' interest. To achieve this objective, the new Act provides for more stringent provisions in the form of plugging the loop holes of the existing Act, increased penalties,stricter time lines etc. Broadly the new Act provides for following changes:
- In case of contravention of the provisions of the Act , the penalties have been
made more stringent in form of increasing the amount of monetary penalties and providing
for compulsory imprisonment in grave cases thus making them non-compoundable.
- The time period for filling of documents with the Registrar of Companies under various
provision is reduced to 15 days, as opposed 30 days provided in the Companies Act
1956
- The scope of Act has been increased from governance of only shares and debentures
to all types of securities.
- In case of frauds, apart from the Company or its Director and management, even the
professionals and experts rendering independent services to the Company are to be
held liable.
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