Companies (Amendment) Ordinance, 2018
Companies (Amendment) Ordinance, 2018 with effect from 02nd November 2018.
Companies (Amendment) Ordinance, 2018 amends 31 Provisions of Companies Act,
2013.
The recommendation of the Union Cabinet for promulgation of the Companies Amendment (Ordinance), 2018 has been assented to by the President of India. The Ordinance, which has been promulgated today, is based on the recommendations of the Committee appointed by the Government to review offences under the Companies Act, 2013.
The twin objectives of the Ordinance are promotion of Ease of Doing Business along with better corporate compliance. The main amendments are as under;
(i) Shifting of jurisdiction of 16 types of corporate offences from the special
courts to in-house adjudication, which is expected to reduce the case load of
Special Courts by over 60%, thereby enabling them to concentrate on serious
corporate offences. With this amendment the scope of in-house adjudication has
gone up from 18 Sections at present to 34 Sections of the Act.
(ii) The penalty for small companies and one person companies has been reduced to
half of that applicable to normal companies.
(iii) Instituting a transparent and technology driven in-house adjudication
mechanism on an online platform and publication of the orders on the website.
(iv) Strengthening in-house adjudication mechanism by necessitating a concomitant
order for making good the default at the time of levying penalty, to achieve the
ultimate aim of achieving better compliance.
(v) Declogging the NCLT by:
a) enlarging the pecuniary jurisdiction of Regional Director by enhancing the
limit up to Rs. 25 Lakh as against earlier limit of Rs. 5 Lakh under Section 441
of the Act;
b) vesting in the Central Government the power to approve the alteration in the
financial year of a company under section 2(41); and
c) vesting the Central Government the power to approve cases of conversion of
public companies into private companies.
(vi) Recommendations related to corporate compliance and corporate governance
include re-introduction of declaration of commencement of business provision to
better tackle the menace of ‘shell companies’; greater disclosures with respect
to public deposits; greater accountability with respect to filing documents
related to creation, modification and satisfaction of charges; non-maintenance
of registered office to trigger de-registration process; and holding of
directorships beyond permissible limits to trigger disqualification of such
directors. Text of Companies (Amendment) Ordinance, 2018 is as follows:-
THE COMPANIES (AMENDMENT) ORDINANCE, 2018
1. Short title and commencement.
(1) This Ordinance may be called the Companies (Amendment) Ordinance, 2018.
(2) It shall come into force at once.
2. Amendment of section 2.
In section 2 of the Companies Act, 2013 (hereinafter referred to as the
principal Act), in clause (41),—
(a) for the first proviso, the following provisos shall be substituted, namely:—
“Provided that where a company or body corporate, which is a holding company or
a subsidiary or associate company of a company incorporated outside India and is
required to follow a different financial year for consolidation of its accounts
outside India, the Central Government may, on an application made by that
company or body corporate in such form and manner as may be prescribed, allow
any period as its financial year, whether or not that period is a year:
Provided further that any application pending before the Tribunal as on the date
of commencement of the Companies (Amendment) Ordinance, 2018, shall be disposed
of by the Tribunal in accordance with the provisions applicable to it before
such commencement”;
(b) in the second proviso, for the words “Provided further that”, the words “Provided also that” shall be substituted.
(b) in the second proviso, for the words “Provided further that”, the words “Provided also that” shall be substituted.
3. Insertion of new section 10A.
After section 10 of the principal Act, the following section shall be inserted,
namely:—
Commencement of business etc.
“10A.(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless—
“10A.(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless—
(a) a declaration is filed by a director within a period of one hundred and
eighty days of the date of incorporation of the company in such form and
verified in such manner as may be prescribed, with the Registrar that every
subscriber to the memorandum has paid the value of the shares agreed to be taken
by him on the date of making of such declaration; and
(b) the company has filed with the Registrar a verification of its registered
office as provided in sub-¬section (2) of section 12.
(2) If any default is made in complying with the requirements of this section,
the company shall be liable to a penalty of fifty thousand rupees and every
officer who is in default shall be liable to a penalty of one thousand rupees
for each day during which such default continues but not exceeding an amount of
one lakh rupees.
(3) Where no declaration has been filed with the Registrar under clause (a) of
sub-section (1) within a period of one hundred and eighty days of the date of
incorporation of the company and the Registrar has reasonable cause to believe
that the company is not carrying on any business or operations, he may, without
prejudice to the provisions of sub-section (2), initiate action for the removal
of the name of the company from the register of companies under Chapter XVIII.
4. Amendment of Section 12.
In section 12 of the principal Act, after sub-section (8), the following
sub-section shall be inserted, namely:—
“(9) If the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed and if any default is found to be made in complying with the requirements of sub-section (1), he may without prejudice to the provisions of sub-section (8), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.”.
“(9) If the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed and if any default is found to be made in complying with the requirements of sub-section (1), he may without prejudice to the provisions of sub-section (8), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.”.
5. Amendment of section 14.
In section 14 of the principal Act,—
In section 14 of the principal Act,—
(i) in sub-section (1), for the second proviso, the following provisos shall be
substituted, namely:—
“Provided further that any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed:
Provided also that any application pending before the Tribunal, as on the date of commencement of the Companies (Amendment) Ordinance, 2018, shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.”;
“Provided further that any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed:
Provided also that any application pending before the Tribunal, as on the date of commencement of the Companies (Amendment) Ordinance, 2018, shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.”;
(ii) in sub-section (2), for the word “Tribunal”, the words “Central Government”
shall be substituted.
6. Amendment of section 53.
In section 53 of the principal Act, for sub-section (3), the following
sub-section shall be substituted, namely:—
“(3) Where any company fails to comply with the provisions of this section, such
company and every officer who is in default shall be liable to a penalty which
may extend to an amount equal to the amount raised through the issue of shares
at a discount or five lakh rupees, whichever is less, and the company shall also
be liable to refund all monies received with interest at the rate of twelve per
cent. per annum from the date of issue of such shares to the persons to whom
such shares have been issued.”.
7. Amendment of section 64.
In section 64 of the principal Act, for sub-section (2), the following
sub-section shall be substituted, namely:—
“(2) Where any company fails to comply with the provisions of sub-section (1),
such company and every officer who is in default shall be liable to a penalty of
one thousand rupees for each day during which such default continues, or five
lakh rupees whichever is less.”.
8. Amendment of section 77.
In section 77 of the principal Act, in sub-section (1), for the first and second
provisos, the following provisos shall be substituted, namely:—
“Provided that the Registrar may, on an application by the company, allow such
registration to be made—
(a) in case of charges created before the commencement of the Companies
(Amendment) Ordinance, 2018, within a period of three hundred days of such
creation; or
(b) in case of charges created on or after the commencement of the Companies
(Amendment) Ordinance, 2018, within a period of sixty days of such creation, on
payment of such additional fees as may be prescribed:
Provided further that if the registration is not made within the period
specified—
(a) in clause (a) to the first proviso, the registration of the charge shall be
made within six months from the date of commencement of the Companies
(Amendment) Ordinance, 2018, on payment of such additional fees as may be
prescribed and different fees may be prescribed for different classes of
companies;
(b) in clause (b) to the first proviso, the Registrar may, on an application,
allow such registration to be made within a further period of sixty days after
payment of such advalorem fees as may be prescribed.”.
9. Amendment of section 86.
Section 86 of the principal Act shall be numbered as sub-¬section (1) thereof
and after sub-section (1) as so numbered, the following sub-section shall be
inserted, namely:—
“(2) If any person wilfully furnishes any false or incorrect information or
knowingly suppresses any material information, required to be registered in
accordance with the provisions of section 77, he shall be liable for action
under section 447.”.
10. substitution of new section for section 87.
For section 87 of the principal Act, the following section shall be substituted,
namely:—
Rectification by Central Government in Register of charges.
“87. The Central Government on being satisfied that —
(a) the omission to give intimation to the Registrar of the payment or
satisfaction of a charge, within the time required under this Chapter; or
(b) the omission or misstatement of any particulars with respect to any such
charge or modification or with respect to any memorandum of satisfaction or
other entry made in pursuance of section 82 or section 83, was accidental or due
to inadvertence or some other sufficient cause or it is not of a nature to
prejudice the position of creditors or shareholders of the company, it may, on
the application of the company or any person interested and on such terms and
conditions as the Central Government deems just and expedient, direct that the
time for the giving of intimation of payment or satisfaction shall be extended
or, as the case may require, that the omission or misstatement shall be
rectified.”.
11. Amendment of section 90.
In section 90 of the principal Act,—
(i) for sub-section (9), the following sub-section shall be substituted,
namely:—
“(9) The company or the person aggrieved by the order of the Tribunal may make
an application to the Tribunal for relaxation or lifting of the restrictions
placed under sub-section (8), within a period of one year from the date of such
order:
Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed;
Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed;
(ii) in sub-section (10),—
(a) after the word “punishable”, the words “with imprisonment for a term which
may extend to one year or” shall be inserted;
(b) after the words “ten lakh rupees”, the words “or with both” shall be
inserted.
12. Amendment of section 92.
In section 92 of the principal Act, for sub-section (5), the following
sub-section shall be substituted, namely:—
“(5) If any company fails to file its annual return under sub-section (4),
before the expiry of the period specified therein, such company and its every
officer who is in default shall be liable to a penalty of fifty thousand rupees
and in case of continuing failure, with further penalty of one hundred rupees
for each day during which such failure continues, subject to a maximum of five
lakh rupees.”.
13. Amendment of section 102.
In section 102 of the principal Act, for sub-section (5), the following
sub-section shall be substituted, namely:—
“(5) Without prejudice to the provisions of sub-section (4), if any default is
made in complying with the provisions of this section, every promoter, director,
manager or other key managerial personnel of the company who is in default shall
be liable to a penalty of fifty thousand rupees or five times the amount of
benefit accruing to the promoter, director, manager or other key managerial
personnel or any of his relatives, whichever is higher.”.
14. Amendment of section 105.
In section 105 of the principal Act, in sub-section (3), for the words
“punishable with fine which may extend to five thousand rupees”, the words
“liable to a penalty of five thousand rupees” shall be substituted.
15. Amendment of section 117.
In section 117 of the principal Act, for sub-section (2), the following
sub-section shall be substituted, namely:—
“(2) If any company fails to file the resolution or the agreement under
sub-section (1) before the expiry of the period specified therein, such company
shall be liable to a penalty of one lakh rupees and in case of continuing
failure, with further penalty of five hundred rupees for each day after the
first during which such failure continues, subject to a maximum of twenty-five
lakh rupees and every officer of the company who is in default including
liquidator of the company, if any, shall be liable to a penalty of fifty
thousand rupees and in case of continuing failure, with further penalty of five
hundred rupees for each day after the first during which such failure continues,
subject to a maximum of five lakh rupees.”.
16. Amendment of section 121.
In section 121 of the principal Act, for sub-section (3), Amendment of the
following sub-section shall be substituted, namely:—
“(3) If the company fails to file the report under sub-¬section (2) before the
expiry of the period specified therein, such company shall be liable to a
penalty of one lakh rupees and in case of continuing failure, with further
penalty of five hundred rupees for each day after the first during which such
failure continues, subject to a maximum of five lakh rupees and every officer of
the company who is in default shall be liable to a penalty which shall not be
less than twenty-five thousand rupees and in case of continuing failure, with
further penalty of five hundred rupees for each day after the first during which
such failure continues, subject to a maximum of one lakh rupees.”.
17. Amendment of section 137.
In section 137 of the principal Act, in sub-section (3),—
(a) for the words “punishable with fine”, the words “liable to a penalty” shall
be substituted;
(b) for the words “punishable with imprisonment for a term which may extend to
six months or with fine which shall not be less than one lakh rupees but which
may extend to five lakh rupees or with both”, the words “shall be liable to a
penalty of one lakh rupees and in case of continuing failure, with further
penalty of one hundred rupees for each day after the first during which such
failure continues, subject to a maximum of five lakh rupees” shall be
substituted.
18. Amendment of section 140.
In section 140 of the principal Act, for sub-section (3), the following
sub-section shall be substituted, namely:—
“(3) If the auditor does not comply with the provisions of sub-section (2), he
or it shall be liable to a penalty of fifty thousand rupees or an amount equal
to the remuneration of the auditor, whichever is less, and in case of continuing
failure, with further penalty of five hundred rupees for each day after the
first during which such failure continues, subject to a maximum of five lakh
rupees.”.
19. Amendment of section 157.
In section 157 of the principal Act, for sub-section (2), the following
sub-section shall be substituted, namely:—
“(2) If any company fails to furnish the Director Identification Number under
sub-section (1), such company shall be liable to a penalty of twenty-five
thousand rupees and in case of continuing failure, with further penalty of one
hundred rupees for each day after the first during which such failure continues,
subject to a maximum of one lakh rupees, and every officer of the company who is
in default shall be liable to a penalty of not less than twenty-five thousand
rupees and in case of continuing failure, with further penalty of one hundred
rupees for each day after the first during which such failure continues, subject
to a maximum of one lakh rupees.”.
20. Amendment of section 159.
For section 159 of the principal Act, the following section shall be
substituted, namely:—
Penalty for default of certain Provision
“159. If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be liable to a penalty which may extend to fifty thousand rupees and where the default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.”.
“159. If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be liable to a penalty which may extend to fifty thousand rupees and where the default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.”.
21. Amendment of section 164.
In section 164 of the principal Act, in sub-section (1), after clause (h), the
following clause shall be inserted, namely:—
“(i) he has not complied with the provisions of sub-section (1) of section
165.”.
22. Amendment of section 165.
In section 165 of the principal Act, in sub-section (6), for the portion
beginning with “punishable with fine” and ending with
“contravention continues”, the words “liable to a penalty of five thousand
rupees for each day after the first during which such contravention continues”
shall be substituted.
23. Amendment of section 191.
In section 191 of the principal Act, for sub-section (5), the following
sub-section shall be substituted, namely:—
“(5) If a director of the company makes any default in complying with the
provisions of this section, such director shall be liable to a penalty of one
lakh rupees.”.
24. Amendment of section 197.
In section 197 of the principal Act,—
(a) sub-section (7) shall be omitted;
(b) for sub-section (15), the following sub-section shall be substituted,
namely:—
“(15) If any person makes any default in complying with the provisions of this
section, he shall be liable to a penalty of one lakh rupees and where any
default has been made by a company, the company shall be liable to a penalty of
five lakh rupees.”.
25. Amendment of section 203.
In section 203 of the principal Act, for sub-section (5), the following
sub-section shall be substituted, namely:—
“(5) If any company makes any default in complying with the provisions of this
section, such company shall be liable to a penalty of five lakh rupees and every
director and key managerial personnel of the company who is in default shall be
liable to a penalty of fifty thousand rupees and where the default is a
continuing one, with a further penalty of one thousand rupees for each day after
the first during which such default continues but not exceeding five lakh
rupees.”.
26. Amendment of section 238.
In section 238 of the principal Act, in sub-section (3), for the words
“punishable with fine which shall not be less than twenty-five thousand rupees
but which may extend to five lakh rupees”, the words “liable to a penalty of one
lakh rupees” shall be substituted.
27. Amendment of section 248.
In section 248 of the principal Act, in sub-section (1), — Amendment of section
248.
(a) in clause (c), for the word and figures “section 455,”, the words and
figures “section 455; or” shall be substituted;
(b) after clause (c) and before the long line, the following clauses shall be
inserted, namely:—
“(d) the subscribers to the memorandum have not paid the subscription which they
had undertaken to pay at the time of incorporation of a company and a
declaration to this effect has not been filed within one hundred and eighty days
of its incorporation under sub¬section (1) of section 10A; or
(e) the company is not carrying on any business or operations, as revealed after
the physical verification carried out under sub-section (9) of section 12.”.
28. Amendment of section 441.
In section 441 of the principal Act,—
(a) in sub-section (1), in clause (b), for the words “does not exceed five lakh
rupees”, the words “does not exceed twenty-five lakh rupees” shall be
substituted;
(b) for sub-section (6), the following sub-section shall be substituted,
namely:—
“(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
any offence which is punishable under this Act with imprisonment only or with
imprisonment and also with fine shall not be compoundable.”.
29. Amendment of section 446B.
In section 446B of the principal Act, for the portion beginning with “punishable
with fine” and ending with “specified in such sections”, the words “liable to a
penalty which shall not be more than one half of the penalty specified in such
sections” shall be substituted.
30. Amendment of section 447.
In section 447 of the principal Act, in the second proviso, for the words
“twenty lakh rupees”, the words “fifty lakh rupees” shall be substituted.
31. Amendment of section 454.
In section 454 of the principal Act, —
(i) for sub-section (3), the following sub-section shall be substituted, namely:
—
“(3) The adjudicating officer may, by an order—
(a) impose the penalty on the company, the officer who is in default, or any
other person, as the case may be, stating therein any non-compliance or default
under the relevant provisions of this Act; and
(b) direct such company, or officer who is in default, or any other person, as
the case may be, to rectify the default, wherever he considers fit.”;
(ii) in sub-section (8), —
(a) in clause (i), for the words “does not pay the penalty imposed by the
adjudicating officer or the Regional Director”, the words, brackets and figures
“fails to comply with the order made under sub-section (3) or sub-section (7),
as the case may be,” shall be substituted;
(b) in clause (ii), for the words “does not pay the penalty”, the words,
brackets and figures “fails to comply with the order made under sub-section (3)
or sub-section (7), as the case may be,” shall be substituted.
32. Insertion of a new section 454A.
After section 454 of the principal Act, the following section shall be inserted, namely:—
Penalty for repeated default -“454A. Where a company or an officer of a company or any other person having already been subjected to penalty for default under any provisions of this Act, again commits such default within a period of three years from the date of order imposing such penalty passed by the adjudicating officer or the Regional Director, as the case may be, it or he shall be liable for the second or subsequent defaults for an amount equal to twice the amount of penalty provided for such default under the relevant provisions of this Act.”.
After section 454 of the principal Act, the following section shall be inserted, namely:—
Penalty for repeated default -“454A. Where a company or an officer of a company or any other person having already been subjected to penalty for default under any provisions of this Act, again commits such default within a period of three years from the date of order imposing such penalty passed by the adjudicating officer or the Regional Director, as the case may be, it or he shall be liable for the second or subsequent defaults for an amount equal to twice the amount of penalty provided for such default under the relevant provisions of this Act.”.
------------------------------------------------
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 30th March, 2017
NOTIFICATION
New Delhi, the 30th March, 2017
G.S.R. 307(E).—In exercise of powers conferred by section 143 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Audit and Auditors) Rules, 2014, namely:—
1. (1) These rules may be called the Companies (Audit and Auditors) Amendment Rules, 2017.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Audit and Auditors) Rules, 2014, in rule 11, after clause
(c), the following clause shall be inserted, namely:—
“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”.
[F. No. 1/33/2013-CL-V-(Vol.I)] AMARDEEP SINGH BHATIA, Jt. Secy.
G.S.R. 308(E).—In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following further amendments to Schedule III of the said Act with effect from the date of publication of this notification in the Official Gazette, namely:-
2. In the Companies Act, 2013 (hereinafter referred to as the principal Act), in Schedule III, in Division I, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘W’, the following clause shall be inserted namely:-
“X. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the Table below:-
Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.
3. In the principal Act, in Schedule III, in Division II, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘J’, the following clause shall be inserted namely:-
“K. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 as provided in the Table below:-
Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”. [F. No. 17/62/2015-CL-V (Vol.I)]
AMARDEEP S. BHATIA, Jt. Secy.
-----------------------------------------------“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”.
[F. No. 1/33/2013-CL-V-(Vol.I)] AMARDEEP SINGH BHATIA, Jt. Secy.
------------------------------------------------
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 30th March, 2017
NOTIFICATION
New Delhi, the 30th March, 2017
G.S.R. 308(E).—In exercise of the powers conferred by sub-section (1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following further amendments to Schedule III of the said Act with effect from the date of publication of this notification in the Official Gazette, namely:-
2. In the Companies Act, 2013 (hereinafter referred to as the principal Act), in Schedule III, in Division I, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘W’, the following clause shall be inserted namely:-
“X. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 as provided in the Table below:-
| SBNs | Other denomination notes | Total | |
| Closing cash in hand as on 08.11.2016 | |||
| (+) Permitted receipts | |||
| (-) Permitted payments | |||
| (-) Amount deposited in Banks | |||
| Closing cash in hand as on 30.12.2016 |
Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”.
3. In the principal Act, in Schedule III, in Division II, in Part I under the heading “General instructions for preparation of Balance Sheet” in paragraph 6, after clause ‘J’, the following clause shall be inserted namely:-
“K. Every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 as provided in the Table below:-
| SBNs | Other denomination notes | Total | |
| Closing cash in hand as on 08.11.2016 | |||
| (+) Permitted receipts | |||
| (-) Permitted payments | |||
| (-) Amount deposited in Banks | |||
| Closing cash in hand as on 30.12.2016 |
Explanation : For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”. [F. No. 17/62/2015-CL-V (Vol.I)]
AMARDEEP S. BHATIA, Jt. Secy.
The Companies (Amendment) Bill, 2016
Amended Section(s)
|
Omitted Section(s)
|
New Section(s)
|
Substitution of Section(s)
|
2 – Definitions
|
93 – Return to be filled with Registrar in case promoters’ stake changes
|
3A – Members severally liable in certain cases
|
90 – Investigation of beneficial ownership of shares in certain cases
|
4 – Memorandum
|
194 – Prohibition on forward dealings in securities of company by director
or a key managerial personnel
|
446A – Factors for determining level of punishment
|
406 – Power to modify Act in its application to Nidhis
|
7(1)(c)- Incorporation of Companies
|
195 – Prohibition on insider trading of securities
|
446B – Lesser penalties for one person companies and small companies
|
42 – Offer or invitation for subscription of securities on private
placement
|
12 – Registered office of Companies
|
|||
21 – Authentication of documents, proceeding and contracts
|
|||
26(1) – Matters to be stated in prospectus
|
|||
35(2)(b) – Civil liability for misstatement in prospectus
|
|||
47(1) – Voting Rights
|
|||
53 – Prohibition on issue of shares at discount
|
|||
54(1)(c) – Issue of sweat equity shares
|
|||
62 – Further issue of share capital
|
|||
73(2) – Prohibition on acceptance of deposits from public
|
|||
74(1)(b) – Repayment of deposits, etc., accepted before commencement of
this act
|
|||
76A(a) – Punishment for contravention of sections 73 and 76
|
|||
77(1) – Duty to register charges, etc.
|
|||
78 – Application for registration of charges
|
|||
82(1) – Company to report satisfaction of charges
|
|||
89(9) – Declaration in respect of beneficial ownership of any share
|
|||
92 – Annual Report
|
|||
94 – Place of keeping and inspection of registers, returns, etc.
|
|||
96(2) – Annual general meeting
|
|||
100(1) – Calling of extraordinary general meeting
|
|||
101(1) – Notice of meeting
|
|||
110(1) – Postal Ballot
|
|||
117 – Resolutions and agreements to be filed
|
|||
123(3) – Declaration of dividend
|
|||
129(3) – Financial Statements
|
|||
130 – Re-opening of accounts on Court’s or Tribunal’s orders
|
|||
132(4)(c)(A) – Constitution of National Financial Reporting Authority
|
|||
134 – Financial Statement, Board’s Report, etc.
|
|||
135 – Corporate Social Responsibility
|
|||
136 – Rights of members to copies of audited financial Statement
|
|||
137(1) – Copy of financial statement to be filed with Registrar
|
|||
139(1) – Appointment of auditors
|
|||
140(3) – Removal, Resignation of auditor and giving of special notice
|
|||
141(3) – Eligibility, qualification and disqualification of auditors
|
|||
143 – Powers and Duties of auditors and auditing standards
|
|||
147 – Punishment for contravention
|
|||
148 – Central Government to specify audit of items of cost in respect of
certain companies
|
|||
149 – Company to have Board of Directors
|
|||
152 – Appointment of Directors
|
|||
153 – Application for allotment for director Identification Number
|
|||
160(1) – Right of person other than retiring director to stand for
directorship
|
|||
161 – Appointment of additional director, alternate director and nominee
director
|
|||
164 – Disqualifications for appointment of directors
|
|||
165(1) – Number of Directorship
|
|||
167(1) – Vacation of office director
|
|||
168(1) – Resignation of director
|
|||
173(2) – Meeting of board of directors
|
|||
177 -Audit committee
|
|||
178 – Nomination and remuneration Committee and Stakeholders Relationship
Committee
|
|||
180(1) -Restriction of power of Board
|
|||
184 – Disclosure of interest by director
|
|||
185 – Loan to directors, etc.
|
|||
186 – Loan and investment by company
|
|||
188 – Related party transactions
|
|||
196(4) – Appointment of managing director, whole time director or manager
|
|||
197 – Overall maximum managerial remuneration and managerial remuneration
in case of absence or inadequacy of profits
|
|||
198 – Calculation of profits
|
|||
200 – Central Government or company to fix limit with regard to
remuneration
|
|||
201 – Forms of, and procedure in relation to certain application
|
|||
216(1) - Investigation of ownership of companies
|
|||
223(3) – Inspector’s Report
|
|||
236 – Purchase of minority share holding
|
|||
247 – Valuation by registered valuer
|
|||
366(2) – Companies capable of being registered
|
|||
379 – Application of Act to foreign companies
|
|||
384 – Debentures, annual return, registration of charges, books of account
and their inspection
|
|||
403 – Fee for filing etc.
|
|||
409(3) – Qualification of President and Members of Tribunal
|
|||
411(3) – Qualification of Chairperson and Members of Appellate Tribunal
|
|||
412(2) – Selection of Members of Tribunal and Appellate Tribunal
|
|||
435 – Establishment of special courts
|
|||
438 – Application of code of proceedings before a special court
|
|||
439 – Offences to be non-cognizable
|
|||
440 – Transitional Provisions
|
|||
441 – Compounding of certain offences
|
|||
447 – Punishment for fraud
|
Explanation:
Section-2
Amendment under section 2 of the Companies Act, 2013 modify the definitions of
associate company, cost accountant, debentures, financial year, holding
company, key managerial personnel, net worth, related party, small company,
subsidiary company and turnover, and omit the definition of interested
director.
Section-3A
Insertion of new section 3A to provide for liability of members when the
business is carried on for more than six months with members fewer than seven
in case of public companies and fewer than two in case of private companies.
Section-4
Amendment under sub-section (1) of section 4 of the Act to allow companies an
unrestricted object clause, to engage in any lawful act or activity for the
time being in force. It also proposes to amend sub-section (5) to modify the
period of validity of a name reserved. The clause also seeks to insert new
sub-sections (6A) and (6B) w.r.t. model memorandum.
Section-7
Amendment under sub-section (1) of section 7 of the Act to replace requirement
of affidavit from first subscribers and directors with declarations from them
with reference to incorporation of company.
Section-12
Amendment under sub-section (1) of section 12 of the Act to provide for a
company to have its registered office withing thirty day from the date of
incorporation. Further it also seeks to enhance the time limit provided under
sub-section (4) of section 12 for registering change in registered office to
thirty days.
Section-21
Amendment under section 21 of the Act to allow authorisations on the signature
of any employee of the company duly authorised by the Board, with respect to
authentication of documents, proceedings and contracts, in addition to key
managerial personnel and officers already provided in the section.
Section-26
Amendment under sub-section (1) of section 26 of the Act to provide that
contents of the prospectus with respect to information and reports on
financial information shall be specified by SEBI in consultation with Central
Government. The clause also provides for applicability of existing
requirements on such matters specified by SEBI.
Section-35
Amendment under section 35 of the Act to hold experts liable for statements
made by them and provides a defence to the directors who relied upon such
statements.
Section-42
Substitution of section 42 of the Act the proposed provisions seek to simplify
the requirements with reference to private placements such as doing away with
separate offer letter, reduced number of filings, etc. This clause also seeks
to modify penalty provisions for contravention of this section. It also seeks
to provide for restrictions on utilisation of moneys raised through private
placement unless allotment is made and return of allotment is filed with the
registry.
Section-47
Amendment under sub-section (1) of section 47 of the Act and seeks to provide
that provisions of section 47 shall also be subject to sub-section (1) of
section 188 of the Act.
Section-53
Amendment under section 53 of the Act to replace the words “discounted price”
with the word “discount” and also to allow companies to issue shares at
discount to its creditors when debt is converted into shares in pursuance of
any statutory resolution plan or debt restructuring scheme in accordance with
guidelines or directions or regulations specified by Reserve Bank of India
under the Banking Regulation Act, 1949, Reserve Bank of India Act 1934.
Further issue of shares would continue to require approval of shareholders
through a special resolution.
Section-54
Amendment under section 54 of the Act to remove the restriction under clause
(c) of sub-section (1) which requires company to make issue only after one
year has elapsed from the date of commencement of its business.
Section-62
Amendment under section 62 of the Act to provide wider modes of delivery with
respect to despatch of notice of offer for rights issue and to provide for
applicability of provisions of Chapter III in case of issue of securities
under section 62(1)(c).
Section-73
Amendment under section 73 of the Act to omit requirement relating to deposit
insurance and provide that deposit repayment reserve shall not be less than
twenty percent. of the amount of deposits maturing during the following
financial year. This clause also seeks to provide for acceptance of deposits
by companies, if the default is made good and five years have lapsed since
then.
Section-74
Amendment under section 74 of the Act to provide that deposits accepted under
Companies Act, 1956 shall be repaid within 3 years from the commencement of
the original section 74 of the Companies Act, 2013 or on or before expiry of
the period for which deposits were accepted whichever is earlier.
Section-76A
Amendment under section 76A of the Act to provide that minimum fine for
failure in repayment of deposits and interest thereon shall be rupees one
crore or twice the amount of deposit accepted, whichever is lower.
Section-77
Amendment under sub-section (1) of section 77 of the Act to provide that such
section shall not apply to certain charges, as may be prescribed by Central
Government in consultant with the Reserve Bank of India.
Section-78
Amendment under section 78 of the Act to provide clarity that the person in
whose favour the charge has been created can file the charge on the expiry of
thirty days from creation of charge where a company fails to file so.
Section-82
Amendment under sub-section (1) of section 82 of the Act to provide the
timelines for filing of satisfaction of charge on the lines of timelines
provided for registration of charge under section 77.
Section-89
Amendment under section 89 of the Act to include the definition of "beneficial
interest in a share".
Section-90
Substitution of section 90 of the Act to provide that a declaration is to be
given to the company by every individual acting alone or together or through
one or more person including a trust and persons resident outside India, who
holds beneficial interest of not less than twenty-five per cent or other
prescribed percentage in shares of a company or the right to exercise or the
actual exercising of significant influence or control under clause (27) of
section 2 of the Act (to be called as significant beneficial owner). Further
the significant beneficial owner shall while making the declaration specify
the nature of interest and other particulars in prescribed manner and time to
the company. It also seeks to empower the Central Government to specify class
or classes or persons who shall not be required to make the said declaration.
Further company shall maintain and keep available for inspection, by any
member of the company, a register of significant beneficial owners. Further
company shall file a return of significant beneficial owners of the company
and changes therein with the Registrar. This clause also provides that company
may give notice to any person whom the company knows or believes to be a
significant beneficial owner of the company or who has knowledge of the
identity of a significant beneficial owner or another person likely to have
such knowledge or who has been a significant beneficial owner of the company
at any time during the immediately preceding three years. Further, if the
person fails to give information required by the notice, the company shall
apply to the Tribunal within a period of fifteen days for an order. The
Tribunal may make an order restricting the rights attached with the shares in
question. If any person fails to make a declaration, he shall be punishable
with fine. Similarly, where a company fails to maintain the register or file
the return, the company and every officer of the company in default shall be
punishable with fine.
Section-92
Amendment under section 92 of the Act to omit the requirement of sub-section
(3) with respect to extract of annual return forming as part of Board's report
and provide disclosure of web address/web-link of the annual return in Board's
report. It also seeks to omit requirement of clause (c) of sub-section (1)
regarding disclosure of indebtedness, and modify clause (j) of that
sub-section regarding disclosure of names, addresses, countries of
incorporation, registration and percentage of shareholding of Foreign
Institutional Investors. Further it also seeks to insert a new proviso in
sub-section (1) to provide that Central Government may provide abridged form
of Annual Return for one person companies and small companies.
Section-93
Omission of section 93 relating to return to be filed with respect to change
in promoters' and top 10 shareholders' stake.
Section-94
Amendment under section 94 of the Act to restrict inspection of certain
personal information, which would be prescribed through Rules, in the register
of members. It also seeks to do away with filing of special resolution in
advance with Registrar of Companies for keeping of the registers and returns
at a place other than the registered office of the company.
Section-96
Amendment under section 96 of the Act to enable unlisted companies to convene
Annual General Meeting at any place in India with the approval of all
shareholders obtained in advance.
Section-100
Amendment under section 100 of the Act to allow the wholly owned subsidiary of
company incorporated outside India to hold its extra ordinary general meeting
outside India.
Section-101
Amendment under section 101 of the Act to provide that general meeting may be
held at a shorter notice if in case of an Annual General Meeting consent is
given by not less than ninety-five percent of the members entitled to vote and
in case of other general meetings consent is given by members holding not less
than 95% of paid-up share capital.
Section-110
Amendment under section 110 of the Act to provide that the company may
transact an item, which is mandatorily required to be transacted through
postal ballot, at a general meeting also where the facility of electronic
voting is provided by the company.
Section-117
Amendment under section 117 of the Act to reduce the minimum that can be
imposed for non-compliance with the provisions of the section. It also seeks
to provide exemption to banking companies from filing resolutions with respect
to grant of loans, giving of guarantee or providing of security in respect of
loans in the ordinary course of its business. The clause also seeks to omit
clause (e) of sub-section (3) of the section as the requirement under the
clause is already covered in clause (a).
Section-123
Amendment under section 123 of the Act to provide clarity, to allow
declaration of interim dividend for a financial year from the profits of the
said year or from brought forward surplus in the profit and loss account. It
also provides clarity that interim dividend can be declared during the period
from closure of financial year till date of Annual General Meeting and in such
case in addition to profits referred above, the profit generated up to quarter
prior to declaration of dividend may be used.
Section-129
Amendment under sub-section (3) of section 129 of the Act to provide that a
company having subsidiary (ies) shall prepare Consolidated Financial
Statements in the same form and manner as that of its own in accordance with
applicable accounting standards. It also seeks to retain two earlier provisos.
Section-130
Amendment under section 130 of the Act to provide that in addition to
authorities already specified, any other person concerned shall be given
notice before passing an order for re-opening of accounts. It also seeks to
provide that order for reopening of accounts can be made upto eight years
unless there is a specific direction under section 128(5) from the Central
Government for longer period.
Section-132
Amendment under section 132 of the Act to reduce the minimum fine under
sub-section (4) in respect of professional or other misconduct from rupees ten
lakhs to rupees five lakhs.
Section-134
Amendment under section 134 of the Act to provide that the Chief executive
officer shall sign financial statements irrespective of whether he is a
director or not. It seeks to modify the disclosure requirements with respect
to annual return and polices in respect of remuneration and CSR. It also seeks
to empower Central Government to prescribe abridged Board's report for small
company and one person company.
Section-135
Amendment under section 135 of the Act to allow composition of CSR committee
with two or more directors in case the company is not required to appoint
independent director under section 149. Further it also seeks to empower the
Central Government to prescribe sums which shall not be included for
calculating 'net profit' of a company under section 135. It also seeks to
modify sub-section (3) of the section to refer to subjects in Schedule VII
within which CSR activities could be taken up by an eligible company.
Section-136
Amendment under sub-section (1) of section 136 to provide that copies of
audited financial statements and other documents can be sent at shorter notice
if ninety five percent of members entitled to vote at the meeting agree for
the same. It also seeks to rationalise the requirements with respect to
financial statements of foreign subsidiaries of a listed company subject to
conditions.
Section-137
Amendment under section 137 of the Act to enable filing of unaudited financial
statements of foreign subsidiaries which is not required to get its accounts
audited.
Section-139
Amendment under section 139 of the Act to do away with the requirements of
annual ratification by members with respect to appointment of auditors.
Section-140
Amendment under section 140 of the Act to reduce the penalty with respect to
failure to file resignation by auditor to fifty thousand rupees or the
remuneration of auditors whichever is less.
Section-141
Amendment under clause (d) of sub-section (3) of section 141 of the Act to
insert an explanation to clarify the meaning of relative with reference to
eligibility for appointment of auditors. It also seeks to amend clause (i) of
sub-section (3) for harmonisation with section 144 in respect of providing of
certain non-audit services.
Section-143
Amendment under sub-section (1) of section 143 of the Act to cover associate
companies along with subsidiary companies with respect to right of auditors to
have access to accounts and records. It also seeks to provide that auditors
shall report on internal financial control systems with reference to financial
statements. It also seeks to amend sub-section (14) to replace cost accountant
in practice with cost accountant.
Section-147
Amendment under section 147 of the Act to revise quantum of fine. It also
restricts the liability of auditor for damages to the shareholders or
creditors of the company instead of any other person. It also seeks that in
case of criminal liability of any audit firm the concerned partners only shall
be liable.
Section-148
Amendment under section 148 of the Act to substitute the words 'cost
accountant in practice' with the words 'cost accountant' and also to
substitute the words 'Institute of Cost and Works Accountants of India' with
the words 'Institute of Cost Accountants of India'.
Section-149
Amendment under section 149 of the Act to provide for easier requirements with
respect to appointment of resident director. It also seeks to specify limits
with respect to pecuniary relationship of a director with respect to
eligibility of a director to be appointed as an independent director. It also
seeks to specify the scope of restriction on pecuniary relationship entered
into by a relative.
Section-152
Amendment under sub-section (3) and (4) of section 152 of the Act to provide
that in addition to Director Identification Number, a director may hold any
other identification number prescribed by Central Government under section
153.
Section-153
Amendment under section 153 of the Act to empower Central Government to
recognise any other identification number to be treated as director
identification number.
Section-160
Amendment under section 160 of the Act to provide that the requirement of
deposit of rupees one lakh with respect to nomination of directors shall not
be applicable in case of appointment of independent directors or directors
nominated by nomination and remuneration committee.
Section-161
Amendment under section 161 of the Act to restrict a person from being
appointed as an alternate director if he is holding directorship in the same
company. It also seeks to enable the filling up of causal vacancy of the
director by the board in case of private company as well. It also seeks to
provide for approval in the next annual general meeting held.
Section-164
Amendment under section 164 of the Act to provide that the disqualification
for appointment of director, with respect to non-filing of financial
statements or annual return or failure to repay the deposit by a company in
which he is to be appointed, shall not apply for a period of six months from
the date of his appointment. It proposes to modify proviso to sub-section (3)
regarding certain disqualifications to continue to apply even if appeal or
petition is filed.
Section-165
Amendment under section 165 of the Act to exclude directorship in dormant
companies from the limit of directorships of twenty companies.
Section-167
Amendment under section 167 of the Act to provide that in case a director
incurs any of disqualifications under section 164 (2), he shall vacate office
in companies other than the company which is in default. It also seeks to
amend section 167 with respect to appeal against conviction order.
Section-168
Amendment under section 168 of the Act to provide that the requirement for
forwarding of copy of resignation by director to the Registrar shall be
optional.
Section-173
Amendment under section 173 of the Act by inserting a proviso to allow
participation of directors on certain items at Board meetings through video
conferencing or other audio visual means if there is quorum through physical
presence of directors.
Section-177
Amendment under section 177 of the Act to substitute words listed companies
with words public companies. This clause also seeks to insert a proviso to
provide for ratification by audit committee of transactions involving amount
not exceeding one crore rupees within 3 months of transaction, consequences of
non-ratification, exemption from approval of audit committee to related party
transactions between holding company and its wholly owned subsidiary, other
than those covered under Section 188, etc.
Section-178
Amendment under section 178 of the Act to substitute the words listed
companies with the words listed public companies. It also seeks to provide
that committee will specify methodology for effective evaluation of
performance of Board and committees and individual directors either by the
Board, nomination and remuneration committee or an independent external agency
and for its review. This clause also seeks to provide that company shall place
the remuneration policy on its website and will disclose salient features of
such policy with web address in the Board's report, etc.
Section-180
Amendment under section 180 of the Act to include securities premium along
with paid-up share capital and free reserves for calculation of upper limits
on borrowing powers of the Board.
Section-184
Amendment under section 184 of the Act to omit the cap of minimum penalty with
respect to failure by directors to disclose interest. It also seeks to include
body corporates under the ambit of sub-section (5) in certain cases.
Section-185
Amendment under section 185 of the Act to limit the prohibition on loans,
advances, etc., to directors of the company or its holding company or any
partner of such director or any firm in which such director or relative is a
partner. It also allows a company to give loan or guarantee or provide
security to any person in whom any of the director is interested subject to
passing of special resolution by the company and utilisation of loans by the
borrowing company for its principal business activities.
Section-186
Amendment under section 186 of the Act by deleting the restrictions on layers
of investment companies. It also seeks to provide for aggregation of loan and
investments so far made and guarantees so far provided, for the purpose of
calculating the limits of loans and investments. It also provides to exclude
employees from the word “person” used in sub-section (2). Further it also
seeks to provide that requirement of passing a special resolution at general
meeting shall not be necessary where a loan or guarantee is given or where a
security has been provided by a company to its wholly owned subsidiary company
or a joint venture company, or acquisition is made by a holding company of the
securities of its wholly owned subsidiary company. Further it also seeks to
clarify when the company will be deemed to be principally engaged in the
business of acquisition of shares, debentures or other securities.
Section-188
Amendment under section 188 of the Act to provide that second proviso to
section 188 (1) shall not apply to a company in which ninety per cent. or more
members in numbers are relatives of promoters or related parties. It also
seeks to provide that non-ratification of transaction shall be voidable at the
option of the Board or shareholders, as the case may be.
Section-194
Omission of section 194 of the Act relating to prohibition on forward dealings
in securities of company by director or key managerial personnel.
Section-195
Omission of section 195 of the Act which provides for prohibition on insider
trading of securities.
Section-196
Amendment under section 196 of the Act to provide that approval of Central
Government shall be required on matters in Part I of Schedule V.
Section-197
Amendment under section 197 of the Act to do away with requirement of
obtaining approval of Central Government and to require special resolution for
payment of managerial remuneration in excess of prescribed limits. It also
seeks to provide that prior approval of bank or public financial institution
or non-convertible debenture holder or secured creditor shall be obtained
where any term loan is subsisting, before approval of shareholders. It also
requires auditor of the company in his report under section 143 to make a
statement as to whether the remuneration paid by the company is accordance
with the provisions of section 197.
Section-198
Amendment under section 198 of the Act to provide that requirement of not
giving credit for profits on sale of shares or debentures for calculation of
profit shall not apply to investment companies.
Section-200
Amendment under section 200 of the Act to omit the words "Central Government".
Section-201
Amendment under section 201 of the Act as a consequential change to amendment
made section 196.
Section-216
Amendment under section 216 of the Act to provide that Central Government may
appoint inspectors for determining true persons who have or had beneficial
interest in shares of a company or who are or have been beneficial owners or
significant beneficial owner of the company.
Section-223
Amendment under section 223 of the Act to provide that copy of inspectors
report shall be made available only to members, creditors or any other person
whose interest is likely to be affected.
Section-236
Amendment under section 236 of the Act to substitute the words 'transferor
company' with the words 'company whose shares are being transferred' for
providing clarity.
Section-247
Amendment under section 247 of the Act to provide that registered valuer shall
not undertake valuation of any asset in which he has direct or indirect
interest three years before appointment as valuer or three years after
valuation of assets.
Section-366
Amendment under section 247 of the Act to provide that registered valuer shall
not undertake valuation of any asset in which he has direct or indirect
interest three years before appointment as valuer or three years after
valuation of assets.
Section-379
Amendment under section 379 of the Act to bring clarity with respect to
applicability of provisions of the Act to foreign companies.
Section-384
Amendment under section 384 of the Act to bring clarity on applicability of
section 135 to foreign companies.
Section-403
Amendment under section 403 of Act to bring more clarity with respect to late
filings of documents under sections 89, 92, 117, 121, 137 and 157 and defaults
in filings, consequences, etc.
Section-406
Substitution of section 406 of the Act regarding a declaration of mutual
benefit societies and with Nidhi companies.
Section-409
Amendment under section 409 of the Act to provide for eligibility for
technical members with Supreme Court directions with respect to constitution
of National Company Law Tribunal.
Section-411
Amendment under section 411 of the Act to provide for eligibility for
technical members with Supreme Court directives with respect to qualifications
of Technical Member of National Company Law Appellate Tribunal.
Section-412
Amendment under section 412 of the Act to align with Supreme Court directions
with respect to constitution of Selection Committee.
Section-435
Amendment under section 435 of the Act to include appointment of Metropolitan
Magistrate or a Judicial Magistrate of the First Class by Central Government
in Special Court in case of offences punishable under the Act with
imprisonment of not more than two years.
Section-438
Amendment under section 438 of the Act as a consequence of amendments to
section 435.
Section-439
Amendment under section 439 of the Act to include member along with
shareholders in respect of complaint with respect to taking cognizance of
offences under the Act by the Court.
Section-440
Amendment under section 440 of the Act to provide that till the time a Special
Court is established, the trial of offences shall be continued with Court of
Session or Court of Metropolitan Magistrate or a Judicial Magistrate of the
First Class.
Section-441
Amendment under section 441 of the Act to enable Tribunal to compound offences
punishable with fine only or with fine or imprisonment or both.
Section-446A
Insertion of two new sections (446A & 446B) with respect to factors for
determining the level of punishment and for lesser penalties for one person
companies and small companies.
Section-447
Amendment under section 447 of the Act to bring thresholds with respect to
compounding provisions relating to fraud without imprisonment.
-------------------------------------------------
The Companies (Amendment) Act, 2015
Amended Section(s)
|
Omitted Section(s)
|
New Section(s)
|
2(68) - Private Company
|
11 – Commencement of business, etc.
|
76(A) – Acceptance of Deposits from public by certain Companies
|
2(71)(b ) - Public Company
|
||
9 - Effect Of Registration
|
||
12(3)(b) – Registered Office Of Company
|
||
22(2) – Execution Of Bills Of Exchange, etc.
|
||
22(3) – Execution Of Bills Of Exchange, etc
|
||
46(1) – Certificate Of Shares
|
||
117(3)(g) – Resolutions and Agreements to be Filed
|
||
123(1) – Declaration of Dividend
|
||
124(6) – Unpaid Dividend Account
|
||
134(3)(c) – Financial Statement, Board’s report, etc
|
||
143(12) – Powers and Duties of Auditor and Auditing Standards
|
||
177(4)(iv) – Audit Committee
|
||
185(1)(b) – Loan to Directors, etc
|
||
188(1) – Related Party Transactions
|
||
212(6) – Investigation into affairs of Company by Serious Fraud
Investigation Office
|
||
223(4)(a) – Inspector’s Report
|
||
248(1) – Power of Registrar to remove name of Company from Register of
Companies
|
||
419(4) – Benches of Tribunal
|
||
435(1) – Establishment of Special Courts
|
||
436(1)(a) – Offences triable by Special Courts
|
||
462(2) – Power to exempt class or classes of Companies from Provisions of
this Act
|
Explanation:
Section-2
In section 2 of the Companies Act, 2013 (hereinafter referred to as the
principal Act),—
(i) In clause (68), the words “of one lakh rupees or such higher paid-up share
capital” shall be omitted;
(ii) In clause (71), in sub-clause (b), the words “of five lakh rupees or such
higher paid-up capital,” shall be omitted.
Section-9
In section 9 of the principal Act, the words “and a common seal” shall be
omitted.
Section-11
Section 11 of the principal Act, shall be omitted.
Section-12
In section 12 of the principal Act, in sub-section (3), for clause (b), the
following clause shall be substituted, namely:—
“(b) Have its name engraved in legible characters on its seal, if any;”.
Section-22
In section 22 of the principal Act,—
(i) In sub-section (2),—
(a) For the words “under its common seal”, the words “under its common seal, if any,” shall be substituted;
(b) The following proviso shall be inserted, namely:—
“Provided that in case a company does not have a common seal, the
authorisation under this sub-section shall be made by two directors or by a
director and the Company Secretary, wherever the company has appointed a
Company Secretary.”;
(ii) In sub-section (3), the words ‘‘and have the effect as if it were made
under its common seal” shall be omitted.
Section-46
In section 46 of the principal Act, in sub-section (1), for the words “issued
under the common seal of the company”, the words “issued under the common
seal, if any, of the company or signed by two directors or by a director and
the Company Secretary, wherever the company has appointed a Company Secretary”
shall be substituted.
Section-76
After section 76 of the principal Act, the following section shall be
inserted, namely:—
“76A. Where a company accepts or invites or allows or causes any other person
to accept or invite on its behalf any deposit in contravention of the manner
or the conditions prescribed under section 73 or section 76 or rules made
there under or if a company fails to repay the deposit or part thereof or any
interest due thereon within the time specified under section 73 or section 76
or rules made there under or such further time as may be allowed by the
Tribunal under section 73,—
(a) the company shall, in addition to the payment of the amount of deposit or
part thereof and the interest due, be punishable with fine which shall not be
less than one crore rupees but which may extend to ten crore rupees; and
(b) Every officer of the company who is in default shall be punishable with
imprisonment which may extend to seven years or with fine which shall not be
less than twenty-five lakh rupees but which may extend to two crore rupees, or
with both:
Provided that if it is proved that the officer of the company who is in
default, has contravened such provisions knowingly or wilfully with the
intention to deceive the company or its shareholders or depositors or
creditors or tax authorities, he shall be liable for action under section
447.”.
Section-117
In section 117 of the principal Act, in sub-section (3),—
(i) in clause (g), the word ‘‘and’’ occuring at the end shall be omitted;
(ii) After clause (g), the following proviso shall be inserted, namely:—
“Provided that no person shall be entitled under section 399 to inspect or
obtain copies of such resolutions; and”.
Section-123
In section 123 of the principal Act, in sub-section (1), after the third
proviso, the following proviso shall be inserted, namely:—
“Provided also that no company shall declare dividend unless carried over
previous losses and depreciation not provided in previous year or years are
set off against profit of the company for the current year.”.
Section-124
In section 124 of the principal Act, in sub-section (6),—
(I) for the words, brackets and figure “unpaid or unclaimed dividend has been
transferred under sub-section (5) shall also be”, the words “dividend has not
been paid or claimed for seven consecutive years or more shall be” shall be
substituted;
(ii) After the proviso, the following Explanation shall be inserted, namely:—
“Explanation.—For the removal of doubts, it is hereby clarified that in case
any dividend is paid or claimed for any year during the said period of seven
consecutive years, the share shall not be transferred to Investor Education
and Protection Fund.’’.
Section-134
In section 134 of the principal Act, in sub-section (3), after clause (c), the
following clause shall be inserted, namely:—
“(ca) details in respect of frauds reported by auditors under sub-section (12)
of section 143 other than those which are reportable to the Central
Government;”.
Section-143
In section 143 of the principal Act, for sub-section (12), the following
sub-section shall be substituted, namely:—
“(12) Notwithstanding anything contained in this section, if an auditor of a
company in the course of the performance of his duties as auditor, has reason
to believe that an offence of fraud involving such amount or amounts as may be
prescribed, is being or has been committed in the company by its officers or
employees, the auditor shall report the matter to the Central Government
within such time and in such manner as may be prescribed:
Provided that in case of a fraud involving lesser than the specified amount,
the auditor shall report the matter to the audit committee constituted under
section 177 or to the Board in other cases within such time and in such manner
as may be prescribed:
Provided further that the companies, whose auditors have reported frauds under
this sub-section to the audit committee or the Board but not reported to the
Central Government, shall disclose the details about such frauds in the
Board's report in such manner as may be prescribed.”.
Section-177
In section 177 of the principal Act, in sub-section (4), in clause (iv), the
following proviso shall be inserted, namely:—
"Provided that the Audit Committee may make omnibus approval for related party
transactions proposed to be entered into by the company subject to such
conditions as may be prescribed;".
Section-185
In section 185 of the principal Act, in sub-section (1), in the proviso, after
clause (b), the following clauses and proviso shall be inserted, namely:—
"(c) any loan made by a holding company to its wholly owned subsidiary company
or any guarantee given or security provided by a holding company in respect of
any loan made to its wholly owned subsidiary company; or
(d) any guarantee given or security provided by a holding company in respect
of loan made by any bank or financial institution to its subsidiary company:
Provided that the loans made under clauses (c) and (d) are utilised by the
subsidiary company for its principal business activities.".
Section-188
In section 188 of the principal Act,—
(a) In sub-section (1),—
(i) for the words "special resolution", at both the places where they occur, the word "resolution" shall be substituted;
(i) for the words "special resolution", at both the places where they occur, the word "resolution" shall be substituted;
(ii) After the third proviso, the following proviso shall be inserted,
namely:—
"Provided also that the requirement of passing the resolution under first
proviso shall not be applicable for transactions entered into between a
holding company and its wholly owned subsidiary whose accounts are
consolidated with such holding company and placed before the shareholders at
the general meeting for approval.";
(b) in sub-section (3), for the words "special resolution", the word
"resolution" shall be substituted.
Section-212
In section 212 of the principal Act, in sub-section (6), for the words,
brackets and figures "the offences covered under sub-sections (5) and (6) of
section 7, section 34, section 36, sub-section (1) of section 38, sub-section
(5) of section 46, sub-section (7) of section 56, sub-section (10) of section
66, sub-section (5) of section 140, sub-section (4) of section 206, section
213, section 229, sub-section (1) of section 251, sub-section (3) of section
339 and section 448 which attract the punishment for fraud provided in section
447", the words and figures "offence covered under section 447" shall be
substituted.
Section-223
In section 223 of the principal Act, in sub-section (4), in clause (a), for
the words "by the seal", the words "by the seal, if any," shall be
substituted.
Section-248
In section 248 of the principal Act, in sub-section (1),—
(i) In clause (a), after the word ‘incorporation’, the word ‘or’ shall be
inserted;
(ii) Clause (b) shall be omitted.
Section-419
In section 419 of the principal Act, in sub-section (4), the words "or winding
up" shall be omitted.
Section-435
In section 435 of the principal Act, in sub-section (1),—
(I) for the words "trial of offences under this Act", the words "trial of
offences punishable under this Act with imprisonment of two years or more"
shall be substituted;
(ii) The following proviso shall be inserted, namely:—
"Provided that all other offences shall be tried, as the case may be, by a
Metropolitan Magistrate or a Judicial Magistrate of the First Class having
jurisdiction to try any offence under this Act or under any previous company
law.".
Section-436
In section 436 of the principal Act, in sub-section (1), in clause (a), for
the words "all offences under this Act", the words, brackets and figures "all
offences specified under sub-section (1) of section 435" shall be substituted.
Section-462
In section 462 of the principal Act, for sub-section (2), the following
sub-sections shall be substituted, namely:—
‘‘(2) A copy of every notification proposed to be issued under sub-section
(1), shall be laid in draft before each House of Parliament, while it is in
session, for a total period of thirty days, and if, both Houses agree in
disapproving the issue of notification or both Houses agree in making any
modification in the notification, the notification shall not be issued or, as
the case may be, shall be issued only in such modified form as may be agreed
upon by both the Houses.
(3)
In reckoning any such period of thirty days as is referred to in sub-section
(2), no account shall be taken of any period during which the House referred
to in subsection (2) is prorogued or adjourned for more than four consecutive
days.
(4) The copies of every notification issued under this section shall, as soon
as may be after it has been issued, be laid before each House of Parliament.”
---------------------------------------
No comments:
Post a Comment