COMPARATIVE ANALYSIS AND EFFECT OF COMPANIES (AMENDMENT) BILL, 2017

SERIES - I

COMPARATIVE ANALYSIS AND EFFECT OF COMPANIES (AMENDMENT) BILL, 2017

Section	Companies Act, 2013	Companies (Amendment) Bill, 2017	Effect
2(6)	Definition of Associates Company: The expression “Significant influence” means control of at least 20% of total share capital, or business decisions under an agreement.	The expression “Significant influence means control of at least 20% of total voting power, or control of or participation in business decisions under an agreement. Now Joint Venture is defined under said bill; “Joint Venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.	1.. Only by holding of 20%  share capital of another company is not sufficient for making an associate company. 2. Now a company make another company as an associate company in spite of holding of less than 20% of share capital in another company, if he hold shares in another company as per provisions of section 43(a)(ii) read with Rule 4 of Companies (Share Capital and Debenture) Rules,2014,
2(30)	Definition of Debenture: Debenture includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not.	Now a new proviso will be add after said definition:  “ Provided that--- (a). The instruments referred to in Chapter III-D of the RBI Act, 1934; and (b). Such other instrument, as may be prescribed by the central government in consultation with the RBI issue by a company shall not be treated as debenture;	Instrument referred in Chapter III-D of RBI Act, 1934— 1.       Derivative 2.       Money market Instrument 3.       Securities etc. Shall not be treated as deposit.
2(49)	Definition of Interested Director	Omitted
2(51)	Definition of KMP “key managerial personnel”, in relation to a company, means— (i) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; and(omitted) (v) such other officer as may be prescribed;	For sub clause (v) the following sub clauses shall be substituted; (v). Such other officer, not more than one level below the directors who is in whole time employment, designated as KMP by the Board; and (vi) such other officer as may be prescribed
2(76)	Definition of Related Party “related party”, with reference to a company, means— (i) a director or his relative;  (ii) a key managerial personnel or his relative; (iii) a firm, in which a director, manager or his relative is a partner; (iv) a private company in which a director or manager is a member or director; (v) a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital; (vi) any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; (vii) any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity; (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; (ix) such other person as may be prescribed;	For sub clause (viii), the following sub clauses shall be substituted; Any body corporate which is— A.. a holding, subsidiary or an associate company of such company; B. a subsidiary of holding company to which it is also a subsidiary; Or C. an investing company or the venturer of the company Explanation: for the purpose of this clause the investing company  or venturer of a company means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.
2(85)	Definition of Small Company ‘‘small company’’ means a company, other than a public company,— (i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or (ii) turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees: Provided that nothing in this clause shall apply to— (A) a holding company or a subsidiary company; (B) a company registered under section 8; or (C) a company or body corporate governed by any special Act;	In sub clause (i) for the word “5 Crore” rupees the word “10 Crore” rupees shall be substituted. (b) in sub-clause (ii),— (A) for the words "as per its last profit and loss account", the words "as per profit and loss account for the immediately preceding financial year" shall be substituted; (B) for the words "twenty crore rupees", the words "one hundred crore rupees" shall be substituted;
2(87)	Definition of Subsidiary Company “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies: 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.—For the purposes of this clause,— (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression “company” includes any body corporate; (d) “layer” in relation to a holding company means its subsidiary or subsidiaries;	in clause (87), in sub-clause (ii), for the words “total share capital”, the words “total voting power” shall be substituted;
3		Insertion of new section 3A. If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued there for.".
4	Reservation of Name of Company: (i) 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.	In section 4 of the principal Act, in sub-section (5), for clause (i), the following shall be substituted, namely:— "(i) Upon recepit 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 20 Days from the date of approval or such other period as may be presecribed: 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 sixty days from the date of approval.".	Now name of Company will be reserved only for 20 days in place of 60 days.
7	Incorporation of Company Section 7(1)(c) stated as: an affidavit from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;	for the words "an affidavit", the words "a declaration" shall be substituted	After come into effect of Company Amendment Bill , 2017, INC -9 shall not be required to file with ROC for incorporation of Company.
12	A company shall, on and from the 15 day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Sub section 4 sated as: Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Reigistrar within fifteen days of the change, who shall record the same.	In section 12 of the principal Act,— (i) in sub-section (1), for the words "on and from the fifteenth day of its incorporation", the words " within thirty days of its incorporation" shall be substituted; (ii) in sub-section (4), for the words "within fifteen days", the words "within thirty days" shall be substituted.

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