Companies (Amendment) Act 2020: Section 5 Effective from October 30, 2023
The Central Government has issued a notification dated the 30th of October, 2023, appointing this date as the effective date for the provisions of section 5 of the Companies (Amendment) Act, 2020.
This amendment is aimed at providing public companies with the flexibility to list their securities on foreign stock exchanges and includes provisions for exemptions by the Central Government. Section 5 amends section 23 of the Companies Act, 2013. The key amendments introduced by Section 5 are as follows:
Amendment of Section 23 of the Companies Act, 2013
In Section 23 of the principal Act, after sub-section (2) and before the Explanation, the following sub-sections shall be inserted:
(3) – Listing on Foreign Stock Exchanges
- Certain classes of public companies are now allowed to issue specific classes of securities for the purpose of listing on permitted stock exchanges in permissible foreign jurisdictions or other jurisdictions, as may be prescribed.
(4) – Exemptions by Central Government
- The Central Government may, by notification, exempt any class or classes of public companies referred to in sub-section (3) from any of the provisions of this Chapter, Chapter IV, section 89, section 90, or section 127. A copy of each such notification shall be laid before both Houses of Parliament as soon as possible after its issuance.
Extract of Section 5 of Companies (Amendment) Act, 2020
5. Amendment of section 23 of Companies Act, 2013.
In section 23 of the principal Act, after sub-section (2) and before the Explanation, the following sub-sections shall be inserted, namely:—
“(3) Such class of public companies may issue such class of securities for the purposes of listing on permitted stock exchanges in permissible foreign jurisdictions or such other jurisdictions, as may be prescribed.
(4) The Central Government may, by notification, exempt any class or classes of public companies referred to in sub-section (3) from any of the provisions of this Chapter, Chapter IV, section 89, section 90 or section 127 and a copy of every such notification shall, as soon as may be after it is issued, be laid before both Houses of Parliament.”.
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 30th October, 2023
S.O. 4744(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government hereby appoints the 30th day of October, 2023 as the date on which the provisions of section 5 of the said Act shall come into force.
[F. No. 1 /3 /2020-CL.I]
INDER DEEP SINGH DHARIWAl, Jt. Secy.
