The Companies (Amendment) Bill 2006

[Submitted by Mr. S. Narayanaswamy,
M.Com. AICWA. ACS
Chennai]

May 19, 2006

The Companies (Amendment ) Bill 2006, has been passed by the Rajya Sabha on 21.3.2006. The Said Bill also passed by the Lok Sabha on 15.5.2006. The Following are the salient features of the Bill.

1. The Provisions of the Companies Act, allow an individual to be a director of up to fifteen companies. Further the governance of the company is vested with the Directors. There is a need for individual identity of persons who are acting as directors of the companies. Hence a proviso has been added in the section 253 of the Companies Act, 1956, which states that no company shall appoint or re-appoint any individual as a director of the company, unless he has been allotted a Director Identification Number (DIN), under section 266B.
    

2. Section 266A, provides that within 60 days of the commencement of the Act, every director shall apply for DIN to the Central Government, in the prescribed form .
    

3. As per section 266 B, a time limit of one month has been prescribed from the receipt of application to allot DIN.
    

4. As per section 266C, individuals are prohibited to obtain a second DIN, and according to section 266D, every director shall communicate to the company about his DIN within one month from the receipt of DIN from the Government.
    

5. Further section 266E provides that the company shall inform the DIN of its directors, within one week to the Registrar of Companies.
    

6. Section 266F provides that it is obligatory to mention the DIN in all returns and documents required to be furnished under the Companies Act.
    

7. According to section 266G a penalty of Rs.5,000/- has been imposed plus another Rs.500/- per day where offences continues has also been prescribed.

For provisions relating to filing of applications, balance sheet, prospectus, return, declaration, memorandum of association, articles of association, particulars of charges, and any other documents required to be filed with the Registrar of Companies, and other offices of the Ministry of Company Affairs, inspection of documents etc, through electronic forms new sections 610B, 610C, 610C, 610D and 610E have also been inserted.

The filing and registration of documents is a statutory requirement under the various provisions of the Companies Act.

As per the provisions of section 610E, all the provisions of Information Technology Act, 2000 relating to the electronic records shall apply to the records and documents filed under the provisions of section 610B of the Companies Act.

The ministry has decided to implement a comprehensive e -governance system and programme to achieve efficient performance through the use of contemporary information technology and computers. The ministry has already proposed to implement the MCA 21 project that will provide, public, investors, corporate entities and other stake holders an easy and secure online access to the much needed corporate information, including filing of documents and public access to the information required to be in the public domain under the provisions of the Companies Act, at any time, and from any where.

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