All are aware that on the pretext of ease of doing business in India, some amendments were proposed to the Companies Act, 2013 and the said amendments were approved by the Union Cabinet on 02.12.2014.
The said Amendment Bill was placed in the Lower house (Lok Sabha) of the Parliament and the same was approved on 17. 12.2014, and the Upper House (Rajya Sabha)approved the said Amendment Bill on 13.05.2015. The Amendment Bill received the assent of theHon’ble President on 25.05.2015, and notified in the Gazette on the 26.05.2015.
Since, not all the provisions for which amendments have been made in the Amendment Act, have been notified, the Central Government has vide commencement notification Dated:29.05.2015, had notified 29.05.2015, as the appointed date for coming in to force of the Sections 1 to 12, 15 to 23 of the said Amendment Act.
The Amendments under the Companies (Amendment) Act, 2015, predominantly hover over the aspect of “ease of doing business”. Subsequent to the coming in to force of the Amendment Act, the Central Government has also altered the relevant Rules and has notified the relevant Amendment rules, pursuant to the Amendment Act.
A couple of amendments in the Amendment Act, are for incorporating some provisions, which were erroneously left out in the respective provisions of the Companies Act, 2013, but included in the Rules framed thereunder the respective section.
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
1 |
Amendment to Section 2 (68), (71) and Section 11 |
2 and 4 |
Section2(68), (71)– As per the definition, a Private Company to have a minimum paid-up capital of Rs.1 Lakh and Public Company to have minimum paid-up capital of Rs.5 lakhs. |
Section 2 (68), (71) - Deletion of the requirement as to Minimum Capital i.e., Rs. 1 Lakh for Private Companies and Rs. 5 Lakhs for Public Companies. |
Now a company can be incorporated with paid-up capital of Rs.1/-, may be. |
Section 11 – Declaration as to receipt of the minimum paid-up capital from the subscribers. |
Section 11 – Omitted. |
No requirement of filing commencement of business declaration. |
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
2 |
Amendment to sections 9, 12, 22, 46 and 223. |
3, 5, 6, 7 and 18 |
Section-9-Company to have Common Seal. Section-12-Company to have its name engraved in legible characters on its seal; Section-22-Execution of Bills of Exchange, authorisation to execute under the Common Seal. Section-46-Issue of Certificates (Share/Debenture) to be issued under the Common seal of the Company. Section -223-nspectors report to be authenticated by the Common Seal of the Company. |
Amendment as to making commonseal optional, and consequential changes for authorisation for execution of documents for companies having no Common Seal. i.e., authorisation shall be made by Two Directors or 1 Director and 1 CS, if the Company has CS |
|
3 |
Insertion of new Section 76 A |
8 |
No section |
Section – 76 A - Punishment for deposits acceptedin violation of the provisions of the said Act; |
Penalty: On Company: |
To refund the deposit with interest +Fine not less than Rs.1 Cr and upto Rs. 10 Cr. On every Officer: |
|||||
7 years imprisonment or fine not less than Rs. 25 Lakhs and upto Rs. 2 crores or with both + if proved that punishment if the violation is committed knowingly, under Section 447. |
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
4 |
Amendment to Section 117 (3) (g) |
9 |
117 (3) (g) – Resolutions passed in pursuance of Section 179 (3) are to be filed with the Registrar of Companies. |
Amendment to prohibit public inspection of Board resolutions filed in the Registry. |
Board Resolution cannot to be inspected by others. Further, the many items as prescribed under the relevant rules have also been considerably Omitted by the relevant amendment Rules |
5 |
Amendment to sub- section (1) of section 123 |
10 |
No proviso in the Principal Act |
Amendment to include provisions for writing off past losses/depreciation before declaring dividend for the year |
Erroneously missed out in the Principal Act, but was given as an amendment to the relevant rules made under the section. |
6 |
Amendment to sub- section (6) of section 124 |
11 |
Section 124 (6) - All shares in respect of which unpaid or unclaimed dividend has been transferred under sub-section (5) shall also be transferred by the company in the name of Investor Education and Protection Fund along with a Statement. |
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; Amendment so as to rectify the requirement of transferring equity shares for which unclaimed/unpaid dividend has been transferred to the Investors Education and Protection Fund even though subsequent dividend(s) has been claimed and paid. |
|
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
7 |
Amendment to sub-section (3) of section 134 and sub- section (12) of section 143 |
12 and 13 |
134 (3)(ca) – New provision – Details as to the frauds as reported by the Auditor to be included in the Directors report. 143 (12) – reporting of Fraud by the Auditor |
Disclosures to be made in the Board's Report; Alteration to incorporate enabling provisions to prescribe thresholds beyond which fraud shall be reported to the Central Government. Below the threshold, it will be reported by the Auditor to the Audit Committee. |
Some relief to the Auditors. |
8 |
Amendment to clause (iv) of sub-section (4) of section 177 |
14 |
New proviso to Section 177 (4) (iv) – giving powers to Audit Committee. |
Inclusion of proviso, empowering Audit Committee to give omnibus approvals for Related party transactions on annual basis, subject to conditions as may be prescribed. |
|
9 |
Amendment to Section 185 of |
15 |
New sub-sections 185 (1) (c) & (d) – These subsections were earlier included in the rules |
Alteration to provide for exemption for loans/ guarantees/securities by a Company to its wholly owned subsidiaries and guarantees/securities given by a company to its subsidiaries for the loans availed by it from Banks/FI. |
|
|
|
|
|
|
|
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
10 |
Amendment to sub-section (1) of section 188 |
16 |
188 (1) – Requirement of prior approval of the members by way of special resolution for transactions with the related party. 188 (3) – Requirement of special resolution for transaction by the Director or employee with the Company. |
Alteration for replacing 'special resolution' with 'resolution' for approval of Related party transactions by non‑ related shareholders; to exempt relatedparty transactions between holding companies and wholly owned subsidiaries (WOS) whose accounts are consolidated. Relaxed to ordinary resolution. |
|
11 |
Amendment to sub-section (6) of section 212 |
17 |
212 (6) – Releasing of accused on bail. Many sections were covered |
Alteration to remove the repetition of sections, which attract punishment for fraud under Section 447 |
|
12 |
Amendment to Sub-Section (1) of Section 248 |
19 |
248 (1)-Power of Registrar to remove the name of the Company from the Register of Companies |
Alteration as to removal of Clause (b) of Subsection (1) of Section 248- As to receipt of minimum subscription and filing of commencement of business with ROC. |
|
13 |
Amendment to sub-section (4) of section 419 |
20 |
419 (4)-Powers of the president of the NCLT to constitute benches for disposal of cases as to rehabilitation, restructuring, reviving or winding up of companies |
Alteration as to deletion of the word Winding-up, so as to enable the, taking‑ up cases relating to winding-up by 2‑ member Bench instead of a 3-member or a larger Bench. |
|
Sl. No |
Section(s) under the CA, 2013,amended |
Section No. in theAmendment Act |
Existing provision in the Section/Clause in the CA, 2013 |
Amendment relating to |
Remarks/Comments |
14 |
Amendments to sections 435 and 436 |
21 and 22 |
435 (1) – establishment of special courts for trial of offences. 436 (1) – Offences trailable by Special Courts |
Earlier no limit was mentioned in the respective sections, now, the amendment provides for Special Courts to try only offences carrying imprisonment of two years or more. And 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. |
|
15 |
Amendment to Section 462 |
23 |
462 – Power of Central Government to exempt certain class of companies from provisions of the Act. |
Amendment to Sub-Section (2) of Section 462, as to the manner of placing the notifications issued by the CG pursuant to Section sub-section (1). The content of Sub-section has been altered and divided in to new Sub-Section (3) & (4). |
|
This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.