Central Government notifies eight more sections of Companies Act 2013

Central Government notifies eight more sections of Companies Act 2013

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The Central Government vide Notification dated 09.09.2016 has brought into force about eight more sections of the Companies Act 2013. The Notification can be found on the website of Ministry of Corporate Affairs and has been issued in exercise of the powers under Section 1(3) of the Companies Act 2013. These Sections shall come into force with effect from the date of the notification itself i.e. 09.09.2016.

The provisions that are now brought in force, are as follows:

Section 227: It deals with protection of privileged communication made to any legal adviser or a banker. It provides that a legal adviser or a banker shall not be required to disclose any ‘privileged communication’ or ‘any information as to the affairs of their customers’, made to them respectively, in their capacity as such.

Sections 242(1)(b), 242(2)(c), 242(2)(g) deal with the powers of Tribunal in dealing with complaints of oppression and mismanagement within a Company.

Section 246 reads as follows: “The provisions of sections 337 to 341 (both inclusive) shall apply mutatis mutandis, in relation to an application made to the Tribunal under section 241 or section 245

Section 337 to 341: These provisions deal with cases where a company is in the course of being wound up and have in engaged in fraudulent conduct, etc. It also deals with the penalties and powers of the Tribunal while handling complaints or assessing damages. These provisions shall come into force to the extent of their applicability to Section 246 of the Act.

 Section 337 deals with penalty for frauds in the case of companies being wound up.

Section 338 deals with liability of officers of the company where accounts were not properly kept. Whereas Section 339 deals with liability of the company in cases where the business of the company was being carried on with intent to defraud its creditors or any other persons by carrying on fraudulent business activities.

Section 340 deals with the power of the Tribunal to assess damages against directors, managers, etc.

Section 341 extends the power of Tribunals already existing under under Sections 339 and 340 also to partners or directors of Firms and Body Corporates.

The notification can be viewed here.

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