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MINISTRY OF CORPORATE AFFAIRS
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.


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MINISTRY OF CORPORATE AFFAIRS
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.
  


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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.

 
Secrtion-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".

 
Sec tion-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.

 
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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;

 
(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.”

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This blog is Created by CA Anil Kumar Jain.