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CompaniesAct.in: Graduated Stringent Provisions- screws tightened CompaniesAct.in
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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:

  1. 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.
  2. 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
  3. The scope of Act has been increased from governance of only shares and debentures to all types of securities.
  4. 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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