The Companies (Amendment) Bill, 2020 was introduced in Lok Sabha by the Minister for Corporate Affairs, Ms. Nirmala Sitharaman, on March 17, 2020.The Bill get passed by Lok Sabha on Sep 19, 2020

The Union Corporate Affairs Minister Nirmala Sitharaman moved the Companies (Amendment) Bill, 2020 for passing in the Upper House (Rajya Sabha) on September 22, 2020 stating the various amendments and on the same Day Bill was passed by Rajya Sabha. Highlights of amendments under Companies (Amendment) Bill, 2020 as analysed by Institute of Company Secretaries of India (ICSI) is as follows:-

Clause No. of the Bill Section of the Act and
Title
Proposed Amendment
Clause 2 Definition of Listed company clause (52) of section 2 To insert a new proviso that enables the Central Government to exclude certain class of companies,which have listed or intend to list such class of securities, as may be prescribed in consultation with SEBI, from the definition of listed companies.
Clause 3 Formation of Companies with Charitable Objects, etc sub-section (11) of section 8 To omit the punishment of imprisonment in relation to an officer who is in default for the offence mentioned therein.
Clause 4 Rectification of Name of Company clause (b) of sub-section (1) of section 16 sub-section (3) of section 16 To reduce the time limit of compliance of change in name of company in case of
resemblance of name to a registered trade mark from six months to three months for the direction provided by the Central Government in the provision.The amendment proposes to provide for allotment of a new name to the company by the Central Government, in case the company is in non-compliance of section 16(1) of the Act. The amendment proposes deletion ofimposing fine for non-compliance for such default.
Clause 5 Public Offer and Private Placement To insert new sub-sections (3) and (4) in section 23 To allow a class of public companies to list certain class of securities on stock exchanges in permissible foreign jurisdictions.

To empower the Central Government to exempt, by notification, any class or classes of public companies referred to in above
inserted section from any of the provisions of Chapter III, Chapter IV, section 89, section 90 or section 127 of the Act.

Clause 6 Matters to be Stated in Prospectus sub-section (9) of section 26 To omit the punishment of imprisonment in relation to every person who is knowingly a party to the issue of prospectus in contravention of the said section.
Clause 7 Securities to be Dealt
with in Stock Exchanges
sub-section (5) of section 40
To remove punishment of imprisonment in case of any default in complying with the provisions of the said section.
Clause 8 Variation of Shareholders’ Rights. omit sub-section (5) of section 48 To remove the penal provisions in case of any default in complying with said section.
Clause 9 Transfer and Transmission of Securities sub-section (6) of section 56 To amend subsection thereby imposing penalty in place of fineof rupees fifty thousand for company and its officers in default in case of failure to comply with sub-sections (1) to (5).
Clause

10

Rectification of Register of Members to omit sub-section (5) of section 59 To remove the penal provisions in case of any default in complying with the order of the Tribunal under the said section
Clause

11

Further Issue of Share Capital sub-clause (i) of clause (a) of sub-section (1) of section 62 To enable the Central Government to provide by rules, such days lesser than fifteen for deeming the decline of the offer made under the said provision.

The amendment reduces the range oftime limit from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.

Clause

12

Notice to be given to Registrar for Alteration of Share Capital sub-section (2) of section 64 To modify the amount of penalty provided therein in case of default made in complying with sub-section (1).
Clause

13

Reduction of Share
Capital
to omit sub-section (11) of section 66
To remove the penal provisions in case of any default in complying with sub-section (4) relating to publication of order of
confirmation of the reduction of share capital by the Tribunal in such manner as the
Tribunal may direct.
Clause 14 Power of Company to Purchase its Own Securities sub-section (11) of section 68 To omit the punishment of imprisonment in relation to an officer of the company who is in default for the offence specified therein.
Clause

15

Debentures to omit sub-section (11) of section 71 To remove the penal provisions in case of any default by officer of the company in complying with the order of the Tribunal under the said section.
Clause

16

Punishment for Contravention to substitute sub-section (1) of section 86 To omit the punishment of imprisonment in relation to an officer of the company who is in defaultandreducedpenalty in place of fine, in case of failure to comply with the provisions of Chapter VI of the Act.
Clause

17

Register of Members, etc to substitute sub-section (5) of section 88 of the Act To reducepenalty in place of fine, in case of failure to comply with the provisions of sub-sections (1) and (2).
Clause

18

Declaration in Respect of Beneficial Interest in any Share to substitute sub-sections (5) and (7) and insert sub- section (11)insection 89 To provide for penalty in place of fine, for failure in making a declaration or in filing of a return, as the case may be, under sub-sections (1), (2), (3) or (6).

To insert a new sub-section (11) to enable the Central Government to notify a class or classes of persons who shall be unconditionally or subject to such conditions, as may be specified in such notification, be exempted from complying with the said section, except sub-section (10).

Clause

19

Register of significant beneficial owners in a
company
to substitute sub-sections (10) and (11) of section 90
To provide for penalty in place of fine, for failure in making a declaration, maintaining register, filing of information, or taking necessary steps, as the case may be, in sub-sections (1), (2), (4) or (4A).
Clause

20

Annual Return to amend sub-section (5) and (6) of section 92 To modify the amount of penalty provided therein in case of default made in complying sub-section (4) of the said section as per amendment to sub-section (5).

A PCS certifying annual return not in conformity with the section or rules made thereunder shall be liable to a penalty in place of fine of two lakh rupees as per amendment to sub-section (6).

Clause

21

Proxies sub-section (5) of section 105 To reduce penalty in place of fine in case, invitations for proxies are issued at expense of the company.
Clause

22

Resolutions and Agreements to be Filedto substitute sub-section (2) and amend sub-section (3) of section 117 To modify the amount of penalty for company and its officers in default for failure to complywith sub section (1) of said section.

To substitute the second proviso to clause (g) of sub-section (3) of the said section to enable the Central Government to exempt any class of non-banking financial companies
registered under Chapter IIIB of Reserve Bank of India Act, 1934 and any class of housing finance companies registered under the National Housing Bank Act, 1987 from filing of resolutions passed to grant loans or give guarantees or to provide security in respect of loans under clause (f) of sub-section (3) of section 179 of the Act in the ordinary course of their business.

Clause

23

Unpaid Dividend Account.

to substitute sub-section (7) of section 124

To modifypenalty in place of fine for company and its officers in default for failure to comply with the provisions of the said section.
Clause

24

Books of Account, etc., to be kept by Company sub-section (6) of section 128 To omit the punishment of imprisonment in relation to an officer who is in default for the offence mentioned therein.
Clause

25

Periodical financial results Insertion of a new section 129A To empower the Central Government to
provide by rules such class or classes ofunlisted companies to prepare periodical financial results of the company, audit or limited review thereof and their filing with Registrar within thirty days from the end of that period as specified in the rules.
Clause

26

Financial Statement,
Board’s Report, etc
to substitute sub-section(8) of section 134
To reduce penalty in place of fine on the company and its officer in default andomit the punishment of imprisonment in relation to its officers in default in case of failure in complying with said section.
Clause 27 Corporate Social
Responsibility
sub-section (5) of section 135to substitute sub-section (7) of the said section to insert a new subsection (9)
Proviso inserted thereto to allow companies, which have spent an amount in excess of the requirement provided under the said sub­section, to set off such excess amount out of their obligation in the succeeding financial years in such manner as may be provided by rules.

To provide that if a company defaults in complying with sub-sections (5) or (6) of the said section, such company and every officer of such company who is in default shall be liable to a penalty in place of fine.

To provide that the requirement of constitution of Corporate Social Responsibility Committee shall not be applicable, in case the amount required to be spent under sub-section (5) of the said section does not exceed fifty lakh rupees.

Clause

28

Copy of Financial Statement to be Filed with Registrar sub-section (3) of section 137 To modify the amount of penalty in case of default made in complying with sub-section (1) or sub-section (2) of the said section.
Clause

29

Removal, Resignation of Auditor and Giving of Special Notice sub-section (3) of section 140 To modify the amount of penalty, in case of default made in complying with sub-section (2) of the said section by the auditor
Clause

30

Powers and Duties of Auditors and Auditing
Standards
to substitute sub-section (15) of section 143
To modify penalty in place of fine on an auditor, cost accountant or company secretary in practice who fail to comply with sub-section (12) of the said section. Specific penalties proposed for listed and unlisted companies.
Clause

31

Punishment for
Contravention
sub-section (1) and (2) of section 147
To omit the punishment of imprisonment in relation to an officer who is in default for the offence mentioned therein.

To omit the reference of section 143
mentioned in sub-section (2).

Clause

32

Company to have Board of Directors sub-section (9) of section 149 To insert a new proviso in sub-section (9) which provides that an independent director may receive remuneration, if a company has no profits or inadequate profits in accordance with Schedule V of the Act.
Clause

33

Number of Directorships to substitute sub-section (6) of section 165 To modify the amount of penalty, in case of a default committed under the said section.
Clause

34

Vacation of Office of
Director
to amend sub-section (2) of section 167
To omit the punishment of imprisonment for the offence mentioned therein.
Clause

35

Punishment to substitute section 172 To modify penalty in place of fine, in case of default in complying with the provisions of Chapter XI of the Act for which no specific punishment or penalty has been provided.
Clause

36

Nomination and
Remuneration Committee and Stakeholders Relationship Committee
sub-section (8) of section 178
To modify penalty in place of fine and omit the punishment of imprisonment in relation to an officer of the company in case of any default in compliance with sections 177.
Clause

37

Disclosure of Interest by Director sub-section (4) of section 184 To reduce penalty in place of fine in case of default of sub-sections (1) and (2) and deletion of provision for imprisonment.
Clause

38

Investments of Company to be Held in its Own Name to substitute sub-section (4) of section 187 To reduce penalty in place of fine in case of default by a company or officer of the company in complying with the provisions of the said section and deletion of provision for imprisonment.
Clause

39

Related Party
Transactions
clause (i) and (ii) of sub­section (5) of section 188
To replace the punishment for imprisonment or fine with penalty and to amend clause (ii) of the said sub-section for penalty.
Clause

40

Overall Maximum
Managerial Remuneration and Managerial Remuneration in Case of Absence or Inadequacy of Profits
sub-section (3) of section 197
To make provision that if a company fails to make profits or makes inadequate profits in a financial year, any non-executive director of such company, including an independent director, shall be paid remuneration in accordance with Schedule V of the Act.
Clause

41

Secretarial Audit for
Bigger Companies
sub-section (4) of section 204
To reduce penalty in place of fine for contravention of the provisions of the said section.
Clause

42

Merger and Amalgamation of Companies.

to substitute sub-section (8) of section 232

To modify penalty in place of fine and deletion of provision for imprisonment on failure to comply with sub-section (5) of the said section.
Clause

43

Powers of Tribunal sub-section (8) of section 242 To omit the punishment of imprisonment in relation to an officer in default for the offence mentioned therein.
Clause 44 Consequence of Termination or Modification of Certain Agreements sub-section (2) of section 243 To omit the punishment of imprisonment in relation to an officer in default for the offence mentioned therein.
Clause

45

Valuation by Registered Valuers sub-section (3) of section 247 To reduce penalty in place of fine and deletion of provision for imprisonment of the valuer in case of contravention of the section.
Clause

46

Promoters, Directors, etc., to Cooperate with Company Liquidator.

to substitute sub-section (2) of section 284 to insert a new sub-section (3)

Deletion of provision for imprisonment for failing to discharge obligations under sub-section (1).

To provide that when a person required to assist a Company Liquidator under sub‑
section (1) of the section does not do so, then the Company Liquidator may make an application to the Tribunal for necessary
directions

To provide that the Tribunal may direct such person to comply with the directions of the Company Liquidator.

Clause

47

Dissolution of Company by Tribunal.

to substitute sub-section
(3) of section 302 to omit sub-section (4)

To provide that the Tribunal shall forward a copy of the order of dissolution to the Registrar, and direct the Company Liquidator to also forward such copy to the Registrar, who shall record in the register relating to the company a minute of the dissolution of the company.

Penal provision on Company Liquidator making a default in forwarding a copy of the order to Registrar is omitted.

Clause

48

Prosecution of Delinquent Officers and Members of Company to omit sub-section (6) of section 342 Omission of penal provision if a person fails or neglects to give assistance required by sub-section (5).
Clause

49

Disposal of Books and Papers of Company sub-section (4) of section 347 Omitting the punishment for imprisonment in relation to a person for the offence mentioned therein.
Clause

50

Information as to
Pending Liquidations
to substitute sub-section (6) of section 348 to omit sub-section (7).
Deletion of provision for fine and imprisonment. To provide that if a Company Liquidator, who is an Insolvency Professional, is in default in complying with the provisions of the section, the default will be a contravention of the Insolvency and Bankruptcy Code, 2016, and the rules and regulations made thereunder.
Clause

51

Powers of Tribunal to Declare Dissolution of
Company Void.
to substitute sub-section
(2) of section 356
Penal provision relating to making a default in forwarding a copy of the order to Registrar is omitted.

To provide that the Tribunal shall forward a copy of the order to the Registrar, and direct the Company Liquidator or the person on whose application such order was made to also file a certified copy of the order with the Registrar within thirty days of the order.

Clause

52

To insert a new Chapter Chapter XXIA Producer Companies To insert chapter relating to Producer Companies on similar lines as provided in the Companies Act, 1956.
Clause

53

Application of Act to
Foreign Companies.
to omit the proviso to sub­section (1) of section 379
Omitted.
Clause

54

Punishment for
Contravention
section 392
To omit the punishment of imprisonment in relation to an officer who is in default for the offence mentioned therein.
Clause

55

Exemptions under this Chapter

to insert a new section
393A

To empower the Central Government to exempt any class of foreign companies or companies incorporated or to be incorporated outside India, from any of the provisions of Chapter XXII of the Act by notification to be laid before both Houses of Parliament.
Clause

56

Fee for Filing, etc to substitute the third proviso to sub-section (1) of section 403 To provide that where there is a default on two or more occasions in submitting, filing, registering or recording of prescribed documents the same shall be done on payment of such higher additional fee as may be provided by rules.
Clause

57

Power of Central Government to Direct Companies to Furnish
Information or Statistics.
to substitute sub-section
(4) of section 405
To provide for payment of penalty in place of fine in case a company fails to comply with an order made under sub-section (1) or sub-section (3) of the said section, or furnishes any incorrect information and omission of provision of imprisonment of the officer in default.
Clause

58

Constitution of Appellate Tribunal. section 410 Removing the restriction on the number of Judicial and Technical members that the Central Government may appoint in the
Appellate Tribunal.
Clause

59

Benches of Appellate Tribunal to insert a new section
418A
To provide for constitution of Benches of the Appellate Tribunal to exercise powers of the Appellate Tribunal and related provisions.
Clause

60

Establishment of Special Courts sub-section (1) of section 435 To provide that the offence under section 452 of the Act shall be excluded from the applicability of section 435 of the Act.
Clause

61

Compounding of Certain Offences to substitute sub-section (5) of section 441 To provide that if any officer or employee of the company fails to comply with the order of Tribunal or Regional Director or any other officer authorised by the Central Government the maximum amount of fine shall be twice the amount provided in the corresponding section in which the punishment for such offence is provided and deletion of provision for imprisonment.
Clause

62

Lesser penalties for certain companies to substitute section 446B To provide for payment of lessor penalty by a start-up company, Producer Company, One Person Company or small company on failure to comply with provisions of the Act which attract penalties.
Clause

63

Punishment Where No Specific Penalty or
Punishment is Provided
section 450
To provide for penalty in place of fine in case where a company or any officer of a company or any other person makes contraventions of any provision of the Act for which no penalty or punishment is provided elsewhere in the Act.
Clause

64

Punishment for Wrongful Withholding of Property to insert a proviso in sub- section (2) of section 452 To provide that the imprisonment of officer or employee of the company specified under the said sub-section shall not be ordered in case of wrongful possession or withholding of a dwelling unit is concerned and such officer or employee has not received certain statutory dues from the company.
Clause

65

Adjudication of Penalties

sub-section (3) of section 454

To insert a new proviso to provide that no penalty shall be imposed when such default relates to non-compliance of sub-section (4) of section 92 or sub-section (1) or sub-section (2) of section 137 and has been rectified either prior to, or within thirty days of, the issue of the notice by the adjudicating officer.
Clause

66

Repeal of Certain
Enactments and Savings
to omit the first proviso to sub-section (1) of section 465
Proviso relating to Producer Companies is omitted.

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