Most of the Sections of the COMPANIES AMENDMENT ACT, 2017 are NOW APPLICABLE. In this Article the Author has made an attempt to SIMPLIFY the TOP 23 NEW & AMENDED Provisions of the Companies Act, 2013 by the COMPANIES AMENDMENT ACT, 2017.
| SL NO. | SECTION NAME | SECTION NO. | SIMPLIFIED PROVISIONS / AMENDMENTS |
| 1. | NAME AVAILABILITY | 4(5)(i)
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For New Companies NAME APPLIED shall be Available for 20 Days & For Existing Co. 60 Days. |
| 2. | CHANGE IN REG OFF. | 12(1)
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Companies to Notify the ROC in 30 days IN CASE OF ANY CHANGE IN REG. OFFICE.
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| 3. | FORMATION OF COMPANY | 3A
(New) |
If at any time the number of members of a company is reduced below the minimum prescribed and the company carries on business for more than six months.
Every member of the Company shall be PERSONALLY LIABLE FOR DEBTS DURING THAT PERIOD. |
| 4. | FINANCIAL STATEMENT (FS) |
129(3) |
1. THE CFS of the company WILL INCLUDE FINANCIAL STATEMENT (FS) OF ITS SUBSIDIARIES AND ASSOCIATES. 2. Listed company to place on its website, separate audited accounts of its each subsidiary. 3. FORGN SUBS: If No Audit applicable in that Country Place the UN-AUDITED FS for consolidation. |
| 5. | FINANCIAL STATEMENT & BOARD REPORT | 134(1) | 1. CEO SHALL SIGN THE FS of the Company IRRESPECTIVE OF THE FACT IF THE CEO IS DIRECTOR IN COMPANY OR NOT.
2. NO MGT – 9 REQUIRED IN BOARD REPORT. PLACE IT ON WEBSITE AND GIVE LINK IN ANNUAL REPORT (AR). 3. CG TO PRESCRIBE A SIMPLER BOARD REPORT FORMAT FOR OPC & SMALL CO. |
| 6. | CSR | 135(1) | 1. CO. HAVING : Net Worth: Rs. 500 crs. Turn Over: Rs. 1000 Crs. Net Profit: Rs. 5 Crs. DURING THE IMMEDIATELY PRECEDING FINANCIAL YEAR SHALL CONSTITUTE A CSR COMMITTEE.
2. IN CASE CO. IS NOT REQUIRED TO HAVE INDEPENDENT DIRECTOR COMMITTEE SHALL HAVE 2 OR MORE DIR.
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| 7. | RIGHT OF MEMBERS TO RECV. FIN. STATEMENTS. | 136(1) | CO. CAN SEND AUDITED FS. TO MEMBERS <21 DAYS, IF MEMBERS WITH 95% VOTING RIGHTS (VR) AGREE TO IT. |
| 8. | Ratification of Auditors | 139 | RATIFICATION OF AUDITORS EVERY YEAR AT AGM. NOW REMOVED. |
| 9. | COMPANY INC. | 7 | FIRST DIR. / MEM. TO GIVE A “self declaration” INSTEAD OF ‘affidavit’ REGARDING conviction. |
| 10. | ANNUAL RETURN | 92(1) | DETAILS OF INDEBTEDNESS IN AR – OMITTED. |
| 11. | GENERAL MEETING | 100 | Unlisted company may hold its AGM / EGM anywhere in India if consented by all members in writing or in electronic mode. |
| 12. | DIR- APPOINT | 160 | The requirement of deposit of rupees one lakh with respect to nomination of directors REMOVED FOR ID & DIR. NOMINATED BY NRC. |
| 13. | PLACE OF KEEPING REGISTER/RETURNS | 94(1) | FILING OF SR in advance in respect of members approval for keeping register/returns at any other place in India then REG. OFF. – REMOVED. |
| 14. | Penal Provisions | 1. 76A, 132, 140, 147 and 180 amended to reduce the penal provisions.
2. Two new sections for determining the OPC and small companies are inserted. 3. In case of professional or other misconduct on the part of the auditor / auditor firm, the NFRA has the power to impose penalty. |
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| 15. | U.A.I.N. | 153 | INTRODUCTION OF U.A.I.N. – Universally Accepted Identification Number. ITS SIMILAR TO D.I.N.
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| 16. | MANAGERIAL REMUNERATION | 197(1) | 1. The requirement of approval of the CG for Managerial Remuneration, above the prescribed limits (even exceeding 11% of net profits) has been REMOVED.
2. SR by shareholders in general meeting will be sufficient. 3. CG APPROVAL ONLY NEEDED IF PART – 1 OF SCH. V NOT COMPLIED WITH. 4. AUD. REPORT TO INCLUDE: Payment of remuneration in conformity with the provisions of the Act.
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| 17. | FOREIGN COMPANIES | 379 | 1. Foreign companies having INCIDENTAL TRANSACTIONS through electronic mode ARE EXEMPTED FROM REGISTERING AND COMPLIANCE REGIME.
2. Branch, Liaison or Project Offices established by foreign company in India NEEDS REGN. IN INDIA. |
| 18. | FEE FOR FILING | 403 | 1. Additional filing fees structure proposed to be brought in line with the LLP.
2. 270 days shelter removed. 3. FS & Annual Return WOULD BE FILED with delayed filing fees of Rs. 100/- per day. NOTE: In case of subsequent 2 or more defaults in submission of forms, higher fees may be prescribed. |
| 19. | PVT. PLACEMENT | 42 | 1. The Private Placement process is simplified.
2. PVT. PLACEMENT TO COVER ALL SORT OF ISSUE EXCEPT RIGHT ISSUE. 3. Condensed format of private placement offer letter and application form to be made available. 4. Companies would be allowed to make offer of multiple security instruments simultaneously. 5. Penalty to be altered as: Twice the amount involved or 2 Crores whichever is lower. 6. PAS – 3 to be filed in 15 DAYS OF ALLOTMENT. (Time limit altered). |
| 20. | Def of Associate Co. | 2(6) | Major Change: The existing provision of “at least 20% total share capital” amended.
Ø Significant influence shall now include: Ø Control through total voting power only & not just by holding Sh. Capital Ø OR Control of or participation in business decisions under an agreement. Ø Agreement is essential element to establish control. Ø Term JV clarified – covers all partner of JV. |
| 21. | Financial year | 2(41) | Associate company of a company if incorporated outside India CAN ALSO APPLY TO THE TRIBUNAL FOR A DIFFERENT FINANCIAL YEAR. |
| 22. | Def. of KMP | 2(51) | KMP MAY NOW ALSO INCLUDE: Officer not more than one level below the directors who is in whole time employment and designated as KMP by the Board.
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| 23. | Def of Subsidiary Co. | 2 (87) | Company where the holding company controls the composition of the Board of Directors or exercises or controls more than one-half of the TOTAL VOTING POWER either on its own or together with one or more of its subsidiary companies.
Previously it was based on ― total share capital. |
Disclaimer: This document has been prepared is for Educational Purpose only. Every effort has been made to avoid errors. Under no circumstances the Author shall be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document. Readers are expected to go through the BARE ACTS before acting.
Author: CS RAHUL HARSH is a Company Secretary from Kolkata and working with the Renowned Peerless Group of Companies, Kolkata. He may be reached at csrahulharsh@gmail.com / 9804179372
Dear Sir
if A, B, C companies are merging with D Company in F.Y 2017-18 & A company is having net worth of more than 250 Crores and less than 500 crores for which Ind AS is applicable from 1.4.2017. After merger whether D company has to follow Ind AS or Indian GAAP for preparing its financial statements for the year f.y. 2017-18???
OFFHAND
‘simplified’ ?!
The author has to be thanked for making an attempt to, if not ‘simplify’ (for, that is a function given unto/power vested in lawmakers/ with help of the bureaucracy located in the ‘South Block’), to enable anyone concerned to know what it is all about, to the ‘best of his knowledge and belief’. What really sad is that, by any standard or judgment, the 2013 new Code , as criticized in eminent legal circles, for valid reasons, has proven a half-hearted /-baked legislation in recent times. In the result, repetitive visits/revisits becomes inevitable to keep on making amendments, with no finality whatsoever ?!
Can a pvt ltd company give loans to its directors if yes then what is the limit upto which the loan could be given