The Companies (Amendment) Bill, 2017 introduced in Lok Sabha on 16th March, 2016 as the Companies (Amendment) Bill, 2016, was referred to Standing Committee. The government after considering the suggestions of the Committee gave notice of amendment as approved by the Cabinet to the Lok Sabha. The Lok Sabha has passed the Company (Amendment) Bill, 2017 on 27th July, 2017.
Major Amendment proposed in Companies Amendment Bill, 2017 are as follow:
A. Definition of Related Party [Section 2(76)]: A explanation added after clause (viii)
Investing Company or the Venture Company: means a body corporate whose investment in the Company would result in the Company becoming an associate Company of the body Corporate.
B. Section 4(5)(i) – Memorandum:
Alteration in Period of reservation of Name: As per Amendment Bill, the name shall be preserved for the following period:
C. Section76A–Punishment for contravention in section 73-760:
Non compoundable Offence: By alteration in Amendment Bill, 2017 “every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years AND with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both”
Now the word “OR” between fine and imprisonment substituted by the word “AND” due to which this offence under section 73-76 are non-compoundable .
D. Removal of reference of Section 403 from the Many Sections:
|Section||Language of the Act, 2013|
|89||Declaration in respect of beneficial interest in any share|
|92 (4)||Annual Return|
|117 (1)||Resolution & agreement to be filed|
|121 (2) (3)||Report of Annual General Meeting|
|137 (1), (2)||Copy of financial statement to be filed with Registrar|
|157(1)||Company to inform DIN to Registrar|
Major Impact of this Amendment Bill is relating to removal of reference of Section 403 from the above mentioned all the section, effect of which Companies have to file the forms with registrar within time period mentioned in particular section.
E. Section 92(4) (5) Annual Return:Removal of Word “within the time prescribed under Section 403”
Removal of reference of Section 403:Due to this amendment Companies shall be required to file the Annual Return within 60 day of AGM from 61st day it shall be considered as default. Now the additional time period of 270 days removed from this sub section.
In case of company fails to file Annual return within 60 days of AGM Company and the officer shall be liable to fine from the 61st day itself.
F. Section 137(1),(2) Financial statement:Removal of Word “within the time prescribed under Section 403”
Removal of reference of Section 403:Due to this amendment Companies shall be required to file the Financial Statement within 30 day of AGM from 31st day it shall be considered as default. Now the additional time period of 270 days removed from this sub section.
In case of company fails to file Financial Statement within 30 days of AGM Company and the officer shall be liable to fine from the 31st day itself.
G. Section 196(3) Appointment of MD/ WTD / Manager:Insertion of new proviso in Section 196(3)(a)
Provided further that where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the Company, the appointment of the person who has attained the age of 75 years may be made.
As per new proviso, if no special resolution is passed in the GM for appointment of a person MD who have attained age of 75 years then Company can pass the Ordinary Resolution + taken Central Government approval can appoint such person as MD.
H. Section 374 Obligation of Companies Registered under this Act:New proviso inserted after clause (d)
Provided that upon registration as a Company under this part a limited liability partnership incorporated under the LLP Act, 2008 shall be deemed to have been dissolved under that without any further act or deed
As per the proviso, on conversion of LLP into Company under this Act, Status of LLP shall be dissolved from the LLP Act, 2008 and no need of any further act or deed under LLP Act.
I. Section 403 Fee for Filing:in sub-section (1), for the first and second provisos, the following provisos shall be substituted:
Effect of new proviso:
HIGHER ADDITIONAL FEES:New concept of higher additional fees has been introduced. As per this proviso
Due to above mention proviso if company fails to file any form with in time prescribed under its specific section and company made the default TWO or “MORE OCCASION” then additional fees for filing of from shall be “TWICE of ADDITIONAL FEES”.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at email@example.com)
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