This Bill shall be called Companies Amendment Bill, 2017, enacted in the 68th year of the Republic of India.

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.

Gist of the Amendment made in Companies Amendment Bill, 2016 and further amendment suggested in Companies Act, 2013 are summarized below:-

Section Companies Act, 2013 Companies Amendment Bill, 2016 Companies Amendment Bill, 2017
2(72) Public Financial Institution

Provided that no institution shall be so notified unless—

(A) it has been established or constituted by or under any Central or State Act; or

No such Amendment Public Financial Institution

Provided that no institution shall be so notified unless—

(A) it has been established or constituted by or under any Central or State Act other than this Act or the previous Company Law or

2(76) Related Party

(viii) any company which is—

(A) a holding, subsidiary or an associate company of such company; or

(B) a subsidiary of a holding company to which it is also a subsidiary

Clause (viii) substituted as follow:-

(viii) anybody corporate which is—

(A) a holding, subsidiary or an associate company of such company; or

(B) a subsidiary of a holding company to which it is also a subsidiary;

(c) an investing company or the venturer of a company

Clause (viii) substituted as follow:-

(viii) anybody corporate which is—

(A) a holding, subsidiary or an associate company of such company; or

(B) a subsidiary of a holding company to which it is also a subsidiary;

(c) an investing company or the venturer of The company

Explanation: 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.

2(87) Subsidiary Company

Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed

Explanation: (d) “layer” in relation to a holding company means its subsidiary or subsidiaries

This Bill proposed “OMISSION” of Proviso and clause (d) of explanation. This Act states that there is no change in proviso and explanation they will continue as it is.

So the proposal of Amendment Bill, 2016 amended by the Bill, 2017.

4(5)(i) Memorandum

Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application

Memorandum

Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of twenty days from the date of the approval

Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of twenty days from the date of the approval or such other period as may be prescribed;

Provided that in case of an application for reservation of name or for change of its name by an existing company, the registrar may reserve the name for a period of 60 days from the date of approval.

26 Prospectus In sub section 1 clause a and b shall be omitted In sub section 1 clause a, b and d shall be omitted
76(A) Punishment for contravention of section 73 or section 76

(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees; and

(b) every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both

(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees or twice the amount of deposit accepted by the Company whichever is lowerbut which may extend to ten crore rupees; and

(b) no change in clause b

(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees or twice the amount of deposit accepted by the Company whichever is lowerbut which may extend to ten crore rupees; and

(b) 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

89 Declaration in respect of beneficial interest in any share:

55(6) Where any declaration under this section is made to a company, the company shall make a note of such declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed, within the time specified under section 403.

(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified under the first proviso to sub-section (1) of section 403,

Amendment given in the Bill is still continuing with the amendment given in Bill, 2017 as mentioned in next Column. From both the Sub sections (6) & (7) the word “with in the time specified in section 403” or “under the first proviso to sub-section (1) of section 403” shall be omitted.

Under Bill, 2017 there is no time limit as per section 403 for both the proviso.

92(1) Annual Return

 

In sub section (1) a new proviso is INSERTED:

Provided further that the Central Government may prescribe abridged form of annual return for One Person Company and small company

Provided further that the Central Government may prescribe abridged form of annual return for One Person Company, small company and such other class or classes of Companies as may be prescribed
92(4) Annual Return

Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403

No Amendment by the Bill, 2016. Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403
92(5) Annual Return

If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both

No Amendment by the Bill, 2016. If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both
101 (1) Notice of Meeting

Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting

FULL PROVISO SUBSTITUTED by new proviso.

Provided that a GM may be called after giving shorter notice than that specified in this sub-section if consent, in writing by electronic mode, is accorded thereto-

(ii) in the case of any other GM, by member of the Company-

(a) holding, if the company has share capital, not less than 90% of such part of the paid up share capital of the company aw gives a right to vote at GM

(a) holding, if the company has share capital, majority in number of members entitled to vote and who represent not less than 90% of such part of the paid up share capital of the company aw gives a right to vote at GM
117(1) Resolution & agreement to be filed

(1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403

No Amendment by the Bill, 2016. (1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed within the time specified under section 403
121(2) (3) Report of Annual General Meeting

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The company shall file with the Registrar a copy of the report referred to in sub- section (1) within thirty days of the conclusion of the annual general meeting with such fees as may be prescribed, or with such additional fees as may be prescribed, within the time as specified, under section 403

If the company fails to file the report under sub-section (2) before the expiry of the period specified under section 403 with additional fee,………………..

No Amendment by the Bill, 2016. The company shall file with the Registrar a copy of the report referred to in sub- section (1) within thirty days of the conclusion of the annual general meeting with such fees as may be prescribed, or with such additional fees as may be prescribed, within the time as specified, under section 403

 

If the company fails to file the report under sub-section (2) before the expiry of the period specified under section 403 with additional fee,………………..

123 Dividend:

dividend shall be declared or paid by a company for any financial year except—

(a) out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2), or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with the provisions of that sub-section and remaining undistributed, or out of both; or

No Amendment by the Bill, 2016. Dividend shall be declared or paid by a company for any financial year except—

(a) out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section

(2), or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with the provisions of that sub-section and remaining undistributed, or out of both;or

The word OR omitted

123(1) Declaration of Dividend NEW INSERTION Provided that in computing profits any amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded; or;
129(3) Financial Statement

Provided that the company shall also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiary or subsidiaries in such form as may be prescribed

No Amendment by the Bill, 2016. Provided that the company shall also attach along with its financial statement, a separate statement containing the  Salient features of the financial statement of its subsidiary or subsidiaries and associate Company or Companies in such form as may be prescribed
132(5) Constitution of National Financial Reporting Authority

Any person aggrieved by any order of the National Financial Reporting Authority issued under clause (c) of sub-section (4), may prefer an appeal before the Appellate Authority constituted under sub-section (6) in such manner as may be prescribed

No Amendment by the Bill, 2016. Any person aggrieved by any order of the National Financial Reporting Authority issued under clause (c) of sub-section (4), may prefer an appeal before the Appellate Authority constituted under sub-section (6) in such manner as may be prescribed The appellate Tribunal in such manner and on payment of such fee as may be prescribed’
132(6),(7),(8) Complete sub sections (6), (7) and (8) of 132 shall be OMITTED.
136 (1) Right of members to copies of audited financial statement In the first proviso, for the words “provided that”, the following shall be substituted, namely:

Provided that if the copies of the documents are sent less than 21 days before the date of meeting, they shall, notwithstanding that fact, be deemed to have been duly send if it is so agreed by 95% of the members entitled to vote at the meeting

Provided that if the copies of the documents are sent less than 21 days before the date of meeting, they shall, notwithstanding that fact, be deemed to have been duly send if it is so agreed by 95% of the members entitled to vote at the meeting

Members-

(a). holding if the company has a share capital, majority in number entitled to vote and who represent not less than 95% of such part of the paid up share capital of the Company as gives a right to vote at the meeting; or

(b). having, if the company has no share capital, not less than 90% of total voting power excercisable at the meeting.

137(1) (2) Copy of financial statement to be filed with Registrar:

A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403:

No Amendment by the Bill, 2016. Copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403:
141(3) Eligibility, qualification and disqualification of Auditor new explanation added in clause (d) This explanation OMITTED by this clause.
157(1) (2) Company to inform Din to Registrar

Every company shall, within fifteen days of the receipt of intimation under section 156, furnish the Director Identification Number of all its directors to the Registrar or any other officer or authority as may be specified by the Central Government with such fees as may be prescribed or with such additional fees as may be prescribed within the time specified under section 403 and every such intimation shall be furnished in such form and manner as may be prescribed

(2) If a company fails to furnish Director Identification Number under sub-section (1), before the expiry of the period specified under section 403 with additional fee…………….

No Amendment by the Bill, 2016. Company to inform Din to Registrar

Every company shall, within fifteen days of the receipt of intimation under section 156, furnish the Director Identification Number of all its directors to the Registrar or any other officer or authority as may be specified by the Central Government with such fees as may be prescribed or with such additional fees as may be prescribed within the time specified under section 403and every such intimation shall be furnished in such form and manner as may be prescribed

(2) If a company fails to furnish Director Identification Number under sub-section (1), before the expiry of the period specified under section 403 with additional fee…………….

160(1) Right of persons other than retiring directors to stand for directorship Insertion of NEW PROVISO

Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the NRC. If any, constitute under sub-section (1) of section 178

Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the NRC. If any, constitute under sub-section (1) of section 178 or a director recommended by the Board of Directors of the Company, in the case of Company not required to constitute NRC.
185(4) Loan to Director This section is COMPLETELY SUBSTITUTED by the Amendment bill, 2016.

Sub – section 4 states about the penalty, fine if any company contravene the provisions of section 185.

Sub section 4 of Amendment Bill, 2016 shall be SUBSTITUTED by new sub section 4
186(1) Loan and investment by Company

(1) Without prejudice to the provisions contained in this Act, a company shall unless otherwise prescribed, make investment through not more than two layers of investment companies:

Provided that the provisions of this sub-section shall not affect,—

(i) a company from acquiring any other company incorporated in a country outside India if such other company has investment subsidiaries beyond two layers as per the laws of such country;

(ii) a subsidiary company from having any investment subsidiary for the purposes of meeting the requirements under any law or under any rule or regulation framed under any law for the time being in force

This Sub section completely OMITTED. Sub section shall be on place as it is.

NO OMISSION.

196 (3) No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who —

(a) is below the age of twenty-one years or has attained the age of seventy years:

Provided that appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;

No Amendment by the Bill, 2016. NEW PROVISO INSERTED:

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.

197(1) Remuneration to Managerial Personnel

The total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent. of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the directors shall not be deducted from the gross profits:

New Proviso added in section 196(1) after second proviso. Such proviso shall be SUBSTITUTED as follow:

Provided also that, where the company has defaulted in payment of dues to any bank or public financial institution or non-convertibles debentures holders or any other secured creditors”……………..

198(3) Calculation of Profit

In making the computation aforesaid, credit shall not be given for the following sums, namely:—

(a) profits, by way of premium on shares or debentures of the company, which are issued or sold by the company;

In making the computation aforesaid, credit shall not be given for the following sums, namely:—

(a) profits, by way of premium on shares or debentures of the company, which are issued or sold by the company unless the company is an investment company as referred to in the Explanation to Section 186

In making the computation aforesaid, credit shall not be given for the following sums, namely:—

(a) profits, by way of premium on shares or debentures of the company, which are issued or sold by the company unless the company is an investment company as referred to in clause (a) the Explanation to Section 186

New Clause (f)

Any amount representing unrealized gains, notional gains or revaluation of assets.

374(d) Obligation of Companies Registered under this Act, No Amendment by the Bill, 2016. Proviso added 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 At without any further act or deed.

391(2) Application of sections 34 to 36 and Chapter XX.

(2) The provisions of Chapter XX shall apply mutatis mutandis for closure of the place of business of a foreign company in India as if it were a company incorporated in India.

No Amendment by the Bill, 2016. Sub section 2 shall be substituted as follow:

(2) subject to the provisions of section 376, the provisions of Chapter XX shall apply mutatis mutandis for closure of the place of business of a foreign Company in India, as if it were a Company incorporated in Inida in case such foreign Company has raised monies through offer or issue of Securities under this chapter which have not been repaid or redeemed.

403(1)

 

MAJOR IMPACT

Fee for Filing:

Provided that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision for such submission, filing, registering or recording, within a period of two hundred and seventy days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed:

Provided further that any such document, fact or information may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the first time specified in first proviso on payment of fee and additional fee specified under this section

No Amendment by the Bill, 2016. INSERTION of new proviso.

EFFECT OF NEW PROVISO:

• If Company fails to file Annual Return u/s 92 and Financial statement u/s 137 within time prescribed under their specific sections “without prejudice to any other legal action or liability under this act,” it may be submitted by payment of additional fees “which shall not be less than INR 100/- (Rupees Hundred) per day” and different amount may be prescribed for different classes of Companies.

• If company fails to file any other documents, facts, information etc other than section 92 and 137 “without prejudice to any other legal action or liability under this act,” it may be submitted by payment of additional fees as may be prescribed.

 

HIGHER ADDITIONAL FEES:New concept of higher additional fees has been introduced. As per this proviso ;

– Where there is default on Two or More occasions in submitting, filling, registering, recorded of documents,

– without prejudice to any other legal action or liability under this act,

– may be file with “Higher Addition Fees”

– as may be prescribed and

– which shall not be lesser than twice the additional fee provided under first and second 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”.

403(2) Where a company fails or commits any default to submit, file, register or record any document, fact or information under sub-section (1) before the expiry of the period specified in the first proviso to that sub-section with additional fee, the company and the officers of the company who are in default, shall, without prejudice to the liability for payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default No Amendment by the Bill, 2016. Sub section 2 shall be SUBSTITUTED as follow:

Where a Company fails or commits any default to submit, file register or record any document, fact or information under sub section (1) before the expiry of the period specified in the relevant section, the company and the officers of the Company who are in default, shall without prejudice to the liability for the payment of fees and additional fee, be liable for the penalty or punishment provided under the Act for such failure or default:

410 Constitution of Appellate Tribunal

The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, an Appellate Tribunal to be known as the National Company Law Appellate Tribunal consisting of a chairperson and such number of Judicial and Technical Members, not exceeding eleven, as the Central Government may deem fit, to be appointed by it by notification, for hearing appeals against the orders of the Tribunal

No Amendment by the Bill, 2016. The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, an Appellate Tribunal to be known as the National Company Law Appellate Tribunal consisting of a chairperson and such number of Judicial and Technical Members, not exceeding eleven, as the Central Government may deem fit, to be appointed by it by notification, for hearing appeals against the orders of the Tribunal or National Financial Reporting Authority.
458(1) Delegation by Central Government of its powers and functions

Provided that the powers to enforce the provisions contained in section 194 and section 195 relating to forward dealing and insider trading shall be delegated to Securities and Exchange Board for listed companies or the companies which intend to get their securities listed and in such case, any officer authorised by the Securities and Exchange Board shall have the power to file a complaint in the court of competent jurisdiction

No Amendment by the Bill, 2016. This proviso shall be OMITTED:

Provided that the powers to enforce the provisions contained in section 194 and section 195 relating to forward dealing and insider trading shall be delegated to Securities and Exchange Board for listed companies or the companies which intend to get their securities listed and in such case, any officer authorised by the Securities and Exchange Board shall have the power to file a complaint in the court of competent jurisdiction

(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

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3 responses to “Summary Of Companies Amendment Bill, 2017 as passed by Lok Sabha”

  1. Srinivasulu Bhattaram says:

    (continued from my previous post)
    If you can”t post the entire article as a PDF, keep in cloud and post only the link…so that overheads
    [and the cost associated with it] may be minimal

  2. Srinivasulu Bhattaram says:

    It will be quite comfortable if you post a PDF also, which is device independent and you will not get reposing requests, like the previous one.

  3. Vishal Shah says:

    Third column of the table is not fully visible. It is the column where the new ammendments brought by Companies Bill 2017 are mentioned. Could you please repost it after editing so that it is clearly visible?

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