Companies Amendment Bill 2016-(Part 4)

Contributed by CS D V K Phanindra

Sl.

Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

63

Section – 196 –

64

Amendment to Section (4) of Section 196 of the Act, to

Welcome amendment.  The scope

Appointment of

provide that approval of Central Government shall

be

of approval of Central Government

Managing Director,

required on matters specified in “Part I of Schedule V”.

is proposed to be restricted to Part-I

of the Schedule-V only.

64

Section – 197 –

65

Amendment to the 1st proviso to Sub-section (1) section 197 of the

Welcome Amendment, and ease of

Overall Maximum

Act, to remove the requirement of obtaining approval of Central

operations.

Managerial

Government, for payment of remuneration and amendment to 2nd

proviso  to

sub-section

(1)  of  Section  197,  to

include

the

Remuneration and

requirement

of special

resolution for payment of

managerial

Managerial

remuneration in respect of the payment of limits for the limits

Remuneration in Case

prescribed therein.

of Absence or

Inadequacy of Profits

Further to include a new proviso after the 2nd proviso to sub-

Welcome  Amendment  in  the

section (1) of Section 197, relating to obtaining of priorapproval of

interest of all the stakeholders.

bank or public financial institution, in case of any term loan is

subsisting or the company is defaulted in payment of dues to non-

convertible debenture holder or secured creditor, before obtaining

the approval of shareholders, for payment of remuneration to the

Directors.

Amendment to Sub-section (3) of Section 197, for deleting the

Welcome Amendment, and ease of

requirement as to obtaining of Central Government approval, in

operations.

case the Company is not able to comply with the provisions of

Schedule-V, in case of payment of remuneration due to lack of

profits or inadequate profits.

Sl.

Section(s) under the CA,

Clause No. in the

Remarks/Comments/Penalty

No.

2013, amended

Proposed amendment relating to

Amendment Bill

Sl.

Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

65

Section – 198 –

66

Amendment to Clause (a) of Sub-section (3) of Section 198 of

Amendment to remove

Calculation of Profits

the Act to exclude Investment Companies [As per the

ambiguity.

Explanation given in Section 186] from the requirement of not

giving credit for profits on sale of shares or debentures for

calculation of profit.

Amendment to remove

Amendment to Clause (l) of sub-section (4) of Section 198 of

ambiguity.

the Act, to omit the words “which begins at or after the

commencement of this Act”.

66

Section – 200 –

67

Amendment to Section 200 of the Act to omit the words

Amendment in tune with the

Central Government or

“Central Government or”, since the requirement of obtaining

amendments made to Section

Company to Fix Limit with

the  approval  from  Central  Government  under  Section

196 & 197

Regard to Remuneration

196(except  for  appointment  of  MD/WTD/Manager  in

variation with the provisions of Part-I of Schedule-V)& 197, is

omitted.  Accordingly, the Company alone can fix the limit

with regard to the remuneration payable to the Directors.

67

Section – 201 –

68

Amendment to Section 201 of the Act as a consequential

Amendment in tune with the

Forms of, and Procedure

change to amendment made section 196, thereby limiting the

amendments made to Section

in  Relation  to,  Certain

purpose of making application in MR-2, for the purpose of

196

Applications

appointment of MD/WTD/Manager in variation with the

provisions of Part-I of Schedule-V.

68

Section – 216 –

69

Amendment to sub-section (1) Section 216 of the Act to insert

Amendment for better

Investigation of

a clause (c) to provide for  Central Government to appoint

transparency in the company

Ownership of Company

inspectors for determining true persons who have or had

management.

beneficiali nterest in shares of a company or who are or have

been beneficial owners or significant beneficial owner of the

company.

Sl.

Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

69

Section – 223 –

70

Amendment to Sub-section (3) of Section 223 of the Act so as

Welcome

Amendment

to

Inspector’s Report

to include, as to provide that the members, creditors or any

remove ambiguity, as to there

other person whose interest is likely to be affected, can apply

was no provision in the principal

for copy of inspectors report.

act, as to who can apply for a

copy of the Inspector’s Report.

70

Section – 236 –

71

Amendment to Sub-section (4), (5) & (6) of section 236 of the

Amendment to provide clarity.

Purchase of Minority

Act to substitute the words ‘transferor company’ with the

Shareholding (Section

words ‘company whose shares are being transferred’ for

not yet notified)

providing clarity

71

Section – 247 –

72

Amendment to Clause (d) of sub-section (2) of Section 247 of

A m e n d m e n t

t o

p r o v i d e

Valuation by Registered

the Act to provide that a registered valuer shall not undertake

ambiguity, as in the principal

Valuers. (Section not yet

valuation of any asset in which he has direct or indirect

act, there was no limit or period

notified)

interest three years before appointment as valuer or three

provided for the disqualification

years after valuation of assets.

for valuing the assets.

72

Section–366–

73

Amendment to Sub-Section (2) of Section 366of the Act

Welcome Amendment for ease

Companies Capable of

reducing the general requirement of number of members for

of operations.

Lot

of small

Being Registered

conversions of partnership firms, etc. into companies from

partnership  firms

with  2

seven or more to two or more members.

partners  can

be

directly

converted in to private limited

Insertion of a new clause (vi) to the proviso to Sub-section (2)

c o m p a n y,

w i t h o u t

t h e

of Section 366, to provide that  where the number of

requirement re-constitution of

members are less than seven members the conversion would

the firm for admission of new

be into a private company

partners.

Sl.

Section(s) under the CA,

Clause No. in the

Proposed amendment relating to

Remarks/Comments/Penalty

No.

2013, amended

Amendment Bill

73

Section –379 –

74

Amendment to Section 379 of the Act, thereby re-numbering

Amendment to provide clarity.

Application of Act to

the existing section as Sub-section (2) and inserting a sub-

Foreign Companies.

section (1 to provide that the provisions of Section 380 to 386

and sections 392 and 393 of the Act, shall apply to all foreign

companies, and  a proviso giving power to the

Central

Government,  to  except  certain  companies  from  the

applicability of the provisions by way of an order, and copy of

every such order shall, as soon as may be after it is made, be

laid before both Houses of Parliament.