prpri Companies Amendment Act, 2017: Notification dated 5th & 6th July 2018 Companies Amendment Act, 2017: Notification dated 5th & 6th July 2018

What’s notified – Companies Amendment Act, 2017 – Notification dated 5th and 6th July 2018

Ministry of Corporate affairs has recently issued two notifications  dated 5th & 6th July 2018 by which it has made few provisions of Companies Amendment Act, 2017 applicable from 5th July 2018 and few are  notified to be effective from 15th August 2018. Relevant Notification can be accessed at the following link:-

Section 15,16,75 & 76 of Companies Amendment (Act) 2017 Applicable from 15.08.2018

Section 20 of Companies Amendment (Act) 2017 Applicable from 05.07.2018

A brief summary of these Sections is as follows:-

Sec.No Title Summary Effective from
20 Company to report satisfaction of charge (1) A company shall give intimation to the Registrar in the prescribed form, of the payment or satisfaction in full of any charge registered under this Chapter within a period of thirty days from the date of such payment or satisfaction and the provisions of sub-section (1) of section 77 shall, as far as may be, apply to an intimation given under this section. (Substituted with)

Provided that the Registrar may, on an application by the company or the charge holder, allow such intimation of payment or satisfaction to be made within a period of three hundred days of such payment or satisfaction on payment of such additional fees as may be prescribed.

Amendment: A charge satisfaction form can be filed within a period of 300 days subject to payment of additional fees.
5th July 2018
15 Prohibition on acceptance of deposits from public (i) for clause (c), the following clause shall be substituted, namely:—

(c) depositing such sum which shall not be less than fifteen per cent. of the amount of its deposits maturing during a financial year and the financial year next following, and kept in a scheduled bank in a separate bank account to be called as deposit repayment reserve account;

Substituted as: (c) depositing, on or before the thirtieth day of April each year, such sum which shall not be less than twenty percent of the amount of its deposits maturing during the following financial year and kept in a scheduled bank in a separate bank account to be called deposit repayment reserve account;

(d) providing such deposit insurance in such manner and to such extent as may be prescribed;

(e) certifying that the company has not committed any default in the repayment of deposits accepted either before or after the commencement of this Act or payment of interest on such deposits such deposits and where a default had occurred, the company made good the default and a period of five years had lapsed since the date of making good the default;

Amendment: The conditions for acceptance of deposits has been modified to the extent of

a) 20% of the amount of deposits maturing the following FY shall be deposited in the deposit repayment reserve (DRR) account by 30th of April of that year.

Ex: Deposits maturing during FY 31st March, 2020 of INR 1,00,000/-, 20% of INR 1,00,000/- shall be deposited before 30th April 2019 in DRR A/c.

b) Deposit Insurance is deleted.

c) If at all company defaults in repayment of deposits and after making good the loss, a period 5 years have elapsed, the company is eligible to raise deposits once more.

15th August 2018
16 Repayment of deposits

 

In section 74, in sub-section (1), for clause (b), the following clause shall be substituted, namely:—

“(b) repay within one year from such commencement or from the date on which such payments are due, whichever is earlier  three years from such commencement or on or before expiry of the period for which the deposits were accepted, whichever is earlier:

Provided that renewal of any such deposits shall be done in accordance with the provisions of Chapter V and the rules made thereunder.”

Amendment: Repayment of deposits accepted before the commencement of the CA 2013 to be repaid within 3 years from 1st April 2014 or before the expiry of term of deposit. However, such deposit may be renewed as per provisions of CA 2013.
15th August 2018
75 Companies capable of being registered In section 366 of the principal Act, in sub-section (2),—(i) for the words “seven or more members”, the words “two or more members” shall be substituted;

(ii) in the proviso, after clause (vi), the following clause shall be inserted, namely:—

“(vii) a company with less than seven members shall register as a private company.”

Amendment: Any company formed under any act of parliament or before commencement of this Act or otherwise duly constituted according to any other law may register under this Act with two or more members, the limit have been reduced from seven to two. Further, any such companies with members less than seven shall register as Private Company.
15th August 2018
76 Obligations of companies registering under this Part In section 374 of the principal Act, after clause (d), the following proviso shall be inserted, namely:—

“Provided that upon registration as a company under this Part a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 shall be deemed to have been dissolved under that Act without any further act or deed.”

Amendment: The insertion of provision clarifies that an LLP converted into Company stand dissolve on conversion.
15th August 2018

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