What are the Consequences of Credit Card Defaulter

When you opt for a credit card, you sign up for various terms and conditions as laid out in the official joining documents by your bank/credit card issuer. One such condition states that you will pay all your credit card bills by the due date as listed on your credit card statement. If you fail to do so, your bank will send you warning/notices for 6 months on a regular basis.

Credit cards allow users to make purchases/transactions on credit, meaning that users can spend now and pay later. Banks/credit card issuing companies pay for your transactions for the time being and you have to repay the spent amount later. Now, when you fail to repay the spent amount in time (referred to as the credit card billing cycle), which comes to you as your credit card bill, you become a credit card defaulter.

Users become credit card defaulters when they fail to pay their credit card bills within the due time period for a long time. It is important to note that credit cardholders must also pay the minimum amount due. If the payment is not made for 6 months continuously, the credit card holder will be termed as a defaulter and his/her account will be immediately deactivated.

Well, even if you become a credit card defaulter, there is still some hope for you. To get back on track, you must bear the consequences of credit card defaulter and follow practices that will help you improve your credit score. This blog is a detailed guide for all this and much more. So, continue reading!

Reasons that can make you a Credit Card Defaulter

When you opt for a credit card, you sign up for various terms and conditions as laid out in the official joining documents by your bank/credit card issuer. One such condition states that you will pay all your credit card bills by the due date as listed on your credit card statement. If you fail to do so, your bank will send you warning/notices for 6 months on a regular basis.

FOLLOWING PROCEDURE IS TO BE FOLLOWED FOR SHIFTING OF REGISTERED OFFICE UNDER SECTION 12(5) READ WITH RULE 27 OF THE COMPANIES (INCORPORATION) RULES, 2014

1. Convene a Meeting of Board of Directors [As per section 173 & SS-1]
• Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
• Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
• Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolution
  • To consider the proposal of shifting of Registered Office of the Company outside the local limits of the city, town or village but within the same state and within the jurisdiction of same Registrar of Companies, subject to the approval of shareholders in the General Meeting or through Postal Ballot.
  • To fix day, date, time and venue for holding General Meeting of the Company.
  • To approve the draft notice of General Meeting or Postal Ballot along with explanatory statement annexed to the notice as per requirement of the Section 102 of the Companies Act, 2013.
  • To authorize the Director or Company Secretary to sign and issue notice of the General Meeting or Postal ballot and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
  • To delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to the proposed shifting.
• Listed Company shall submit the disclosure of Board Meeting within 24 hours from the conclusion of the Board Meeting and post the same on the website of the Company within 2 working days. [Regulation 30 & 46(3) of the SEBI (LODR) Regulations, 2015]
• Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]

1. Obtain Shareholders’ Approval
   A. By Convening a General Meeting, OR
   B. By Passing a Resolution by Postal Ballot. [Refer the Procedure for Passing of a Resolution by Postal Ballot]

    

   Convene General Meeting: (Section 96, 100 and SS-2)

• Notice of General Meeting shallbe given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
• Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
• Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
• Hold the General Meeting on fixed day and pass Special Resolution for change in the Registered Office of the Company and make relevant changes in the Memorandum of Association (MOA).
• Listed Companies shall disclose the proceedings of General Meeting to the Stock Exchange within 24 hours from the conclusion of General Meeting and same shall be posted on the website of the company within 2 working days. [Regulation 30 and 46(3) of the SEBI (LODR) Regulations, 2015]
• Listed Companies shall submit to the stock exchange the details of the voting results within two working days from the conclusion of the meeting and post the same on the website of the Company. [Regulation 44 of the SEBI (LODR) Regulations, 2015]
• Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].

1. Obtain Shareholders’ Approval
   A. By Convening a General Meeting, OR
   B. By Passing a Resolution by Postal Ballot. [Refer the Procedure for Passing of a Resolution by Postal Ballot]

    

   Convene General Meeting: (Section 96, 100 and SS-2)

   • Notice of General Meeting shallbe given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
   • Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
   • Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
   • Hold the General Meeting on fixed day and pass Special Resolution for change in the Registered Office of the Company and make relevant changes in the Memorandum of Association (MOA).
   • Listed Companies shall disclose the proceedings of General Meeting to the Stock Exchange within 24 hours from the conclusion of General Meeting and same shall be posted on the website of the company within 2 working days. [Regulation 30 and 46(3) of the SEBI (LODR) Regulations, 2015]
   • Listed Companies shall submit to the stock exchange the details of the voting results within two working days from the conclusion of the meeting and post the same on the website of the Company. [Regulation 44 of the SEBI (LODR) Regulations, 2015]
   • Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
2. File Form INC-22 with ROC
   Within 30 days of passing of Special Resolution, file notice of change of situation of the registered office and verification thereof in E-Form INC-22 with the Registrar along with the prescribed fee as per Companies [(Registration Offices & Fee) Rules 2014 along with following documents

    

   • Certified true copy of Special Resolution with Explanatory Statement
   • Copy of Altered Memorandum of Association
   • Registered document of the title of the premises in the name of the company

     OR

     Notarized copy of lease / rent agreement in the name of the company along with a copy of rent paid receipt not older than 1 month

   • Authorization from the owner or authorized occupant of the premises along with proof of ownership or occupancy authorization to use the premises as registered office

     OR

     NOC from director, if registered office is owned by the Director and not taken on lease by the Company

   • Copy of utility service bill like telephone, gas, electricity, etc. depicting the address of the registered office, not older than 2 months
   • The list of all other companies with their CIN, having the same unit/tenement/premises as their registered office address.
3. File Form MGT-14 with ROC
   File  Form MGT-14 with the ROC within 30 days of passing Special Resolution in General Meeting along with fee as specified in the Companies (Registration offices and fees) Rules, 2014 and with the following attachments
   • Certified True Copies of the Special Resolution passed along with Explanatory Statement.
   • Copy of the Notice of meeting sent to members along with all the annexure
   • Shorter Notice Consent Letters from the members in case the General Meeting was convened at shorter notice.
   • A printed copy of the Memorandum of Association and Article of Association
   • Copy of Attendance Sheet of General Meeting
   • Any other attachment as may be applicable.
4. On the approval of E-Form MGT-14 and E-Form INC-22, Registrar will record the change of the situation of the Registered Office.
5. Intimation to the Stock Exchanges [Regulation 30 and 46(3) of the SEBI (LODR) Regulation, 2015
   Every Listed Company shall inform the Stock Exchange (where the securities are listed) about the effective date of change of Registered Office of the Company within 24 hours from the registration of notice by ROC and the same shall be posted on the website of the Company within 2 working days.
6. Compliances after Approval from ROC for Change of Registered Office
   Company shall undertake the following actions after receiving approval from ROC

    

   • Company may optionally issue a general notice by way of an advertisement in newspaper(s) informing all members and other stakeholders, about the change of situation of the registered office of the Company.
   • Amend the address of Registered office of the Company on outside of every office, building etc. in which its business is carried on, in a conspicuous position and in legible letters. [Section 12(3)(a)]
   • Substitute the address printed on all business letters, letter heads, Billheads, Invoice Forms, Receipt Forms and all other official publications. [Section 12(3)(c)]
   • Update new address of registered office with all the Banks where Company is operating Bank Accounts.
   • File application with Income Tax Authority for updating the address of the Company in PAN and TAN.
   • Update the new address of the Company with the Basic Utility Service providers like Electricity providers, Telephone Internet connections in the name of the Company etc.
   • Update new address of the Company with various govt. authorities like Central Excise Authorities, Customs Authorities, Sales Tax Authorities and Service tax Department etc.
   • Update the new address of the registered office with the NSDL, CDSL & RTA as applicable.
7. File Necessary Amendment Application under following Acts
   • Goods and Services Act
   • Shops & Establishment Act
   • Factories Act
   • Foreign Exchange Management Act
   • Inter-State Migrant workmen Act
   • Private Security Agency Act
   • EPF
   • ESI
   • Other Labour Laws
   • Industry 

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