DIRECTORS and promoters who are knowingly party to any wrong doing would be personally liable for all or any of the liability of the firm, according to the rules being framed from the overhauled Companies Act. The rules deal with the procedural aspects of the law, which mainly cover the unlimited liability of director/promoter, issue of shares at premium, discount, sweat equity, attributes of independent directors and appointment of a small shareholders director.

It also says that while issuing shares at a discount, if the maximum rates of discount as specified in a resolution exceed 10% the firm should obtain government’s approval. These shares are to be issued within two months after it is sanctioned Companies can issue shares at a discount only after completing a year of operations. The sanction of issue of shares at discount shall be filed with the registrar in a month, failing which; the order would not take effect.

The rules also lay down conditions for issuing sweat equity. For this, a resolution has to be passed in a general meeting.