Madras High Court sets aside the ROC’s order for disqualifying Private Directors.

Madras High Court sets aside the ROC’s order for disqualifying Private Directors.

Context : Section  164(2)(a) of Companies Act, 2013 sated that Directors of Company will disqualify if Company has not filed financial statements or annual returns for any continuous period of 3 Financial Years.

Section 164 enforced with effect from 01.04.2014

Matters:

The Madras High Court has set aside the disqualification of directors of private companies by the Registrar of Companies for non-filing of financial statements for a period of three continuous financial years.

The directors were disqualified under Section 164(2)(a) of the Companies Act, 2013. The court said that since Section 164 came into effect from April 1, 2014, the respondents(ROC) cannot disqualify the petitioners for the financial years 2013-14, 2014-15, 2015-16, as it would tantamount to giving retrospective effect.

The Section says that if the financial statements are not filed for three continuous financial years, then the director can be disqualified. However, if Section 2(41), which defines ‘financial year’ is taken into account, then the first financial year would end on 31.3.2015, the second financial year on 31.3.2016 and the third on 31.3.2017.

Principle of Natural justice

Petitioners had contended that even though the Section did not contemplate a show-cause notice before taking any action, since the disqualification had civil consequences, the principle of natural justice had to be adhered to.

Benami Transactions (Prohibition) Amendment Act, 2016

Context: The prosecution of accused persons in almost 100 confirmed cases instituted under the Benami Transactions (Prohibition) Act has been scuttled as the special courts meant for the purpose have not yet been set up across the country.

What’s the issue?

The Act provides that the Central government, in consultation with the Chief Justice of the respective High Courts, will establish special courts through notification. Such Courts are to be constituted to ensure that the trials are conducted “as expeditiously as possible”.

However, the required special courts have not been set up yet. Therefore, despite the fact that investigations in almost 100 cases have been completed by the I-T Department in different States, including confirmation of attachment of properties by the Adjudicating Authority, the prosecution of accused persons has not started.

  

About the Benami Act:

The Benami Transactions (Prohibition) Amendment Act, 2016, designed to curb black money and passed by parliament in August, came into effect on November 1, 2016. The new law amends the 1988 Benami Transactions Act.

Highlights of the Act:

·         The law provides for up to seven years’ imprisonment and fine for those indulging in such transactions.

·         The law prohibits recovery of the property held Benami from benamdar by the real owner. As per the Act, properties held Benami are liable for confiscation by the government, without payment of compensation.

·         An appellate mechanism has been provided under the act, in the form of an adjudicating authority and appellate tribunal.

·         According to the government, the four authorities who will conduct inquiries or investigations are the Initiating Officer, Approving Authority, Administrator and Adjudicating Authority.

What is Benami transaction?

A Benami transaction is one where a property is held by one person and the amount for it is paid by another person. Therefore, in a Benami transaction, the name of the person who paid the money is not mentioned. Directly or indirectly, the Benami transaction is done to benefit the one who pays.

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This is nothing but knowledge sharing initiative of author among the professional and not intend to accost any one in any manner or for any other purpose whatsoever. Source has been taken from the “ The Hindu” Whereas deep care has been taken by author to ensure the correctness and completeness of the information provided.

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Procedure for Change of email and mobile number of the authorized signatory Under GST

Press release dated 14th Of June, 2018 by Central Board of Indirect Tax & Customs.

Change of email and mobile number of the authorized signatory by taxpayers with
assistance from the jurisdictional tax officer.

Keeping in mind of Plenty of Complaints are being received from taxpayers that the intermediaries who were authorized by them to apply for registration on their behalf had used their own email and mobile number during the process.  Intermediaries do arbitrary work and denied to share the user credentials with the taxpayer on whose behalf they had done the registration in the first place and the taxpayer is at their mercy.

With a view to address this difficulty of the taxpayer, a functionality to update email and mobile number of the authorized signatory is available in the GST System. The email and mobile number can be updated by the concerned Jurisdictional tax authority of the taxpayer as per the following procedure:

Steps to be followed:-

1. Taxpayer is required to approach the concerned jurisdictional Tax Officer to get the
password for the GSTIN allotted to the business.

Jurisdiction can be checked through Search Taxpayer option available on www.gst.gov.in . Allotted jurisdiction is displayed in red text.

2. Taxpayer would be required to provide valid documents to the tax officer as proof of his/her dentity and to validate the business details related to his GSTIN.

3. Tax officer will check if the said person is added as a Stakeholder or Authorized Signatory for that GSTIN in the system.

4. Tax officer will upload necessary proof on the GST Portal in support to authenticate the activity.

5. Tax officer will enter the new email address and mobile phone number provided by the Taxpayer.

6. After upload of document, Tax officer will reset the password for the GSTIN in the system.

7. Username and Temporary password reset will be communicated to the email address as
entered by the Tax Officer.
8. Taxpayer need to login on GST Portal https://www.gst.gov.in/ using the First time login link.

9. After first time login with the Username and Temporary password that was emailed to him, system would prompt the taxpayer to change username and password. The said username and password can now be used by the taxpayer.

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Source: www.cbic.gov.in 

Insolvency and Bankruptcy Code Ordinance, 2018

Venerable President of India Ram Nath Kovind on 6^th June, 2018 has assented to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.

Important Point of Ordinance

Its provide relief to home buyers by recognizing their status as financial creditors by giving them due representation in the Committee of Creditors and make them an integral part of the decision making process.

It will also enable home buyers to invoke Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 against errant developers. Section 7 allows financial creditors to file application seeking Insolvency Resolutions process.

It also empowers the Central Government to allow further exemptions or modifications with respect to the MSME in public interest because MSME consider as backbone of Indian Economy and biggest employment generator.

Withdrawal of application after its admission under IBC 2016  would be permissible only with the approval of the Committee of Creditors with 90 percent of the voting share.  Furthermore, such withdrawal will only be permissible before publication of notice inviting Expressions of Interest (EoI).  In other words, there can be no withdrawal once the commercial process of EoIs and bids commences. Separately, the Regulations will bring in further clarity by laying down mandatory timelines, processes and procedures for corporate insolvency resolution process.  Some of the specific issues that would be addressed include non-entertainment of late bids, no negotiation with the late bidders and a well laid down procedure for maximizing value of assets.

Now for all major decision such as approval of Resolution Plan, Extension of CIRP period etc, voting threshold has been brought down to 66 percent from 75%.  Further, in order to facilitate the corporate debtor to continue as a going concern during the CIRP, the voting threshold for routine decisions has been reduced to 51%.

The Ordinance provides for a minimum one-year grace period for the successful resolution applicant to fulfill various statutory obligations required under different laws.  This would go a long way in enabling the new management to successfully implement the resolution plan.

Ordinance a succinct:

Promulgation of ordinance by president is not a discretionary power, and he can promulgate or withdraw an ordinance only on the advice of the council of ministers headed by the prime minister.

Article 123 of the Constitution empowers the President to promulgate ordinances during the recess of Parliament.

Recess of Parliament means when both the Houses of Parliament are not in session or when either of the two Houses of Parliament is not in session. An ordinance can also be issued when only one House is in session because a law can be passed by both the Houses and not by one House alone. An ordinance made when both the Houses are in session is void.

Some Interesting fact about Ordinance

In Cooper case 1970 the SC held that President satisfaction can be questioned in a court on the ground of malafide. (The 38th Constitutional Amendment Act of 1975 made the Presidents satisfaction final and conclusive and beyond judicial review. But, this provision was deleted by the 44th Constitutional Amendment Act of 1978. Thus, the Presidents satisfaction is justiciable on the ground of malafide.)

This means that the decision of the President to issue an ordinance can be questioned in a court on the ground that the President has prorogued one House or both Houses of Parliament deliberately with a view to promulgate an ordinance on a controversial subject, so as to bypass the parliamentary decision.

Every ordinance issued by the President during the recess of Parliament must be laid before both the Houses of Parliament when it reassembles. If the ordinance is approved by both the Houses, it becomes an act. If Parliament takes no action at all, the ordinance ceases to operate on the expiry of six weeks from the reassemble of Parliament.

The ordinance may also cease to operate even earlier than the prescribed six weeks, if both the Houses of Parliament pass resolutions disapproving it.

Maximum life of an ordinance can be six months and six weeks, in case of non-approval by the Parliament (six months being the maximum gap between the two sessions of Parliament).

If an ordinance is allowed to lapse without being placed before Parliament, then the acts done and completed under it, before it ceases to operate, remain fully valid and effective.

Ordinance may come into force from a back date. It may modify or repeal any act of Parliament or another ordinance. It can alter or amend a tax law also. However, it cannot be issued to amend the Constitution.

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This is nothing but knowledge sharing initiative of author among the professional and not intend to accost any one in any manner or for any other purpose whatsoever.

Foreign Investment limits in listed Indian Companies

Foreign Investment limits in listed Indian companies

Foreign Investment in India is regulated in terms of clause (b) of sub-section 3 of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (FEMA) read with Foreign Exchange Management (Transfer or Issue of a Security by a Person resident Outside India) Regulations, 2017 issued vide Notification No. FEMA 20(R)/2017-RB dated November 7, 2017. FEMA prescribes the various foreign investment limits in listed Indian companies. These include the aggregate FPI limit, the aggregate NRI limit and the sectoral cap. The RBI Master Direction (FED Master Direction No. 11/2017-18) dated January 04, 2018 provides a compilation of the instructions issued on Foreign Investment in India and its related aspects under FEMA.

As per FEMA, the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI has decided to put in place a new system for monitoring the foreign investment limits. The architecture of the new system has been explained in Annexure A.

The depositories (NSDL and CDSL) shall put in place the necessary infrastructure and IT systems for operationalizing the monitoring mechanism described at Annexure A. The Stock Exchanges (BSE, NSE and MSEI) shall also put in place the necessary infrastructure and IT systems for disseminating information on the available investment headroom in respect of listed Indian companies. 

The depositories shall issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The system for collecting this data from the companies shall  go live on the date of the issuance of this circular. The companies shall provide the necessary data (details of which have been mentioned in Annexure A) to the depositories latest by April 30, 2018.

The new system for monitoring foreign investment limits in listed Indian companies shall be made operational on May 01, 2018. The existing mechanism for monitoring the foreign investment limits shall be done away with once the new system is operationalized. RBI shall issue the necessary guidelines in this regard.

This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992.

A copy of this circular is available at the web page “Circulars” on our website www.sebi.gov.in. Custodians are requested to bring the contents of this circular to the notice of their FPI clients.

Annexure A

Architecture of the System for Monitoring Foreign Investment Limits in listed Indian companies

Housing of the System

1. The system for monitoring the foreign investment limits in listed Indian companies shall be implemented and housed at the depositories (NSDL and CDSL).

Designated Depository

2. A Designated Depository is a depository which has been appointed by an Indian company to facilitate the monitoring of the foreign investment limits of that company. As defined at Regulation 2(xxiii) of FEMA, the term ‘Indian company’ means a company incorporated in India and registered under the Companies Act, 2013.

3. The Designated Depository shall act as a lead depository and the other depository shall act as a feed depository.

Company Master

4. The company shall appoint any one depository as its Designated Depository for the purpose of monitoring the foreign investment limit.

5. The stock exchanges (BSE, NSE and MSEI) shall provide the data on the paid-up equity capital of an Indian company to its Designated Depository. This data shall include the paid-up equity capital of the company on a fully diluted basis. As defined at Regulation 2(xvii) of FEMA, the term “fully diluted basis” means the total number of shares that would be outstanding if all possible sources of conversion are exercised.

6. The depositories shall provide an interface wherein the company shall provide the following information to its Designated Depository:

i. Company Identification Number (CIN)

ii. Name

iii. Date of incorporation

iv. PAN number

v. Applicable Sector

vi. Applicable Sectoral Cap

vii. Permissible Aggregate Limit for investment by FPIs

viii. Permissible Aggregate Limit for investment by NRIs

ix. Details of shares held by FPI, NRIs and other foreign investors, on repatriable basis, in demat as well as in physical form

x. Details of indirect foreign investment which are held in both demat and physical form

xi. Details of demat accounts of Indian companies making indirect foreign investment in the capital of the company

xii. Whether the Indian company that has total foreign investment in it , is either not owned and not controlled by resident Indian Citizens or is owned or controlled by person’s resident outside India 

xiii. ISIN-wise details of the downstream investment in other Indian companies

The information provided by the companies shall be stored in a Company Master database. The Designated Depository, if required, may seek additional information from the company for the purpose of monitoring the foreign investment limits. The companies shall ensure that in case of any corporate action, the necessary modification is reflected immediately in the Company Master database.

7. In the event of any change in any of the details pertaining to the company, such as increase/decrease of the aggregate FPI/NRI limits or the sectoral cap or a change of the sector of the company, etc. the company shall inform such changes along with the supporting documentation to its Designated Depository. Such documentation may include:

i. Board of Directors resolution approving the increase/decrease

ii. General body resolution approving the increase/decrease

iii. Company Secretary certificate for compliance with FEMA, 1999

Reporting of trades

8. At present, as per SEBI guidelines, the custodians are reporting confirmed trades of their FPI clients to the depositories on a T+1 basis. This reporting shall continue and the data shall be the basis of calculating FPI investments/holding in Indian companies.

9. With respect to NRI (repatriable) trades, Authorized Dealer (AD) Banks shall report the transactions of their NRI clients to the depositories. The AD Banks shall be guided by the circulars issued by RBI in this regard.

Activation of a Red Flag Alert

10. The monitoring of the foreign investment limits shall be based on the paid-up equity capital of the company on a fully diluted basis to ensure that all foreign investments are in compliance with the foreign investment limits.

11. A red flag shall be activated whenever the foreign investment within 3% or less than 3% of the aggregate NRI/FPI limits or the sectoral cap. This shall be done as follows :Aggregate NRI investment limit in the company

11.1. The system shall calculate the percentage of NRI holdings in the company and the investment headroom available as at the end of the day with respect to the aggregate NRI investment limit

11.2. If the available headroom is 3% or less than 3% of the aggregate NRI investment limit, a red flag shall be activated for that company.

11.3. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the red flag has been activated, on their respective websites.

11.4. The data on the available investment headroom shall be updated on a daily end-of-day basis as long as the red flag is activated. Aggregate FPI investment limit of the company

11.5. The system shall calculate the percentage of FPI holding in the company and the investment headroom available as at the end of the day with respect to the aggregate FPI investment limit

11.6. If the available headroom is 3% or less than 3% of the aggregate FPI investment limit, a red flag shall be activated for that company.

11.7. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the red flag has been activated, on their respective websites.

11.8. The data on the available investment headroom shall be updated on a daily end-of-day basis as long as the red flag is activated.Sectoral cap of the company.

11.9. The system shall calculate the total foreign investment in the company by adding the aggregate NRI investment on the stock exchange, the aggregate FPI investment in the company and other foreign investment as provided by the company in the company master.

11.10. If the total foreign investment in a company is within 3% or less than 3% of the sectoral cap, then a red flag shall be activated for that company.

11.11. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the red flag has been activated, on their respective websites.

11.12. The data on the available investment headroom shall be updated on a daily end-of-day basis as long as the red flag is activated.

12. The depositories shall inform the exchanges about the activation of the red flag for the identified scrip. The exchanges shall issue the necessary circulars/public notifications on their respective websites. Once a red flag has been activated for a given scrip, the foreign investors shall take a conscious decision to trade in the shares of the scrip, with a clear understanding that in the event of a breach of the aggregate NRI/FPI limits or the sectoral cap, the foreign investors shall be liable to disinvest the excess holding within five trading days from the date of settlement of the trades.

Breach of foreign investment limits

13. Once the aggregate NRI/FPI investment limits or the sectoral cap for a given company have been breached, the depositories shall inform the exchanges about the breach. The exchanges shall issue the necessary circulars/public notifications on their respective websites and shall halt all further purchases by :

13.1. FPIs, if the aggregate FPI limit is breached

13.2. NRIs, if the aggregate NRI limit is breached

13.3. All foreign investors, if the sectoral cap is breached

14. In the event of a breach of the sectoral cap/aggregate FPI limit/aggregate NRI limit, the foreign investors shall divest their excess holding within 5 trading days from the date of settlement of the trades, by selling shares only to domestic investors.

Method of disinvestment

15. The proportionate disinvestment methodology shall be followed for disinvestment of the excess shares so as to bring the foreign investment in a company within permissible limits. In this method, depending on the limit being breached, the disinvestment of the breached quantity shall be uniformly spread across all foreign Investors/FPIs/NRIs which are net buyers of the shares of the scrip on the day of the breach. The foreign investors are required to disinvest the excess quantity by selling them only to domestic investors, within 5 trading days of the date of settlement of the trades that caused the breach.

As can be observed from the above table, the foreign investors/FPIs/NRIs which are required to disinvest shall be identified and shall be informed of the excess quantity that they are required to disinvest.

16. In the case of FPIs which have been identified for disinvestment of excess holding, the depositories shall issue the necessary instructions to the custodians of these FPIs for disinvestment of the excess holding within 5 trading days of the date of settlement of the trades.

17. In the case of NRIs which have been identified for disinvestment of excess holding, the depositories shall issue the necessary instructions to the Authorized Dealer (AD) Banks for disinvestment of the excess holding within 5 trading days of the date of settlement of the trades.

18. The depositories shall utilize the FPI trade data provided by the custodians, post custodial confirmation, on T+1 day, where T is the trade date. The breach of investment limits (if any) shall be detected at the end of T+1 day and therefore, the announcement pertaining to the breach shall be made at the end of T+1 day. The foreign investors who have purchased the shares of the scrip during the trading hours on T+1 day shall also be given a time period of 5 trading days from the date of settlement of such trades, to disinvest the holding accruing from the aforesaid purchase trades. In other words, the purchase trades of such foreign investors which have taken place of T+1 day, shall be settled on T+3 day and thereafter a time period from T+4 day to T+8 day shall be available to them to disinvest their entire holding arising from purchases on T+1 day.

19. If T+1 is a settlement holiday, then the custodial confirmation of the trade executed on T day shall be done on T+2 day and the subsequent settlement of the trade on T+3 day.

20. In the event the foreign shareholding in a company comes within permissible limit during the time period for disinvestment, on account of sale by other FPI or other group of FPIs, the original FPIs, which have been advised to disinvest, would still have to do so within the disinvestment time period, irrespective of the fresh availability of an investment headroom during the disinvestment time period.

21. There shall be no annulment of the trades which have been executed on the trading platform of the stock exchanges and which are in breach of the sectoral caps/aggregate FPI limits/aggregate NRI limits.

Failure to disinvest within 5 trading days

22. If a breach of the investment limits has taken place on account of the FPIs and the identified FPIs have failed to disinvest within 5 trading days, then necessary action shall be taken by SEBI against the FPIs.

Fees

23. The Designated Depository shall levy reasonable fee/charges on the company towards development, ongoing maintenance and monitoring costs at an agreed upon frequency.

Source: www.sebi.gov.in

This is nothing but knowledge sharing initiative of author among the professional and not intend to accost any one in any manner or for any other purpose whatsoever. Content has been taken from www.sebi.gov.in.

Effective provisions of Companies (Amendment) Act, 2017

Effective provisions of Companies (Amendment) Act, 2017

w.e.f. 09^th Feb, 2018

PART-1

Sr. No	Section	Companies Act, 2013	Companies (Amendment) Act, 2017
1	Section 2(28)	“cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);	Change in Definition of Cost Accountant "Cost Accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;
2	Section 2(30)	“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;	Definition of Debenture excluded the following. (a)   the instruments referred to in Chapter III-D of the Reserve Bank of India Act, 1934; and (b)   such other instrument, as may be prescribed by the Central Government in consultation with the Reserve Bank of India, issued by a company,
3	Section 2(41)	“financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year.	in the first proviso, after the word "subsidiary", the words "or associate company" shall be inserted Effect: Associate company of a company incorporated outside India can also apply to Tribunal for a different financial year.
4	Section 2(46)	“Holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies.	For the definition of Holding Company the expression company will include any body corporate.
5	Section 2(49)		The term definition of Independent Director has been deleted.
6	Section 2(51)	“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 (v) Such other officer as may be prescribed.	For definition of Key Managerial Personnel such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board has been included.
7	Section 2(57)	“net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;	Now debit and credit balance of Profit and Loss account shall be included for the purpose of calculation of Net Worth.
8	Section 2(71)	Definition of Public Company “public company” means a company which— (a) is not a private company; (b) has a minimum paid-up share capital, as may be prescribed: Note:- Words “of five lakh rupees or such higher paid-up capital” omitted by the Companies (Amendment) Act, 2015,  notified on 26th May, 2015, with effect from 29th May 2015.    Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ;	In sub-clause (a), after the word "company; the word "and" shall be inserted. Effect- It will provide more clarification that a public company must satisfy both the conditions mention in sub section.
9	Section 2(72)	Definition of Public Financial Institutions	According to this Act, CG may notify other institutions which has been established or constituted by or under any central or state act other than Companies Act, 2013/1956 or previous law with the consultation of RBI consider as Public Financial Institutions
10	Section 2(76)	Definition of Related Party Sub clause VIII has been replaced	(viii) any body corporate which is— (A) a holding, subsidiary or an associate company of such company; (B) a subsidiary of a 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 the 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.
11	Section 2(85)	Definition of Small Company Limit for determination of Small Company has been increased.	Maximum Paid up Sahre Capital has been increased from 5 Crore to 10 Crore Rupees and Turnover increased from 20 Crore to 100 Crore Rs. For the words "as per its last profit and loss account", the words"as per profit and loss account for the immediately preceding financialyear" shall be substituted
12	Section 2(91)	Definition of Turnover “Turnover” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year	"Turnover" means the gross amount of revenue recognised in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year
13	Section 3A (New Provisions) This provisions was mention in the Companies Act, 1956 but it was not mention in Companies Act, 2013		Members of the Company will severally liable in certain cases. 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 therefor."
14	Amendment of Section 7	INC-9 omitted A Declaration 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
15	Amendment of section 12	Now A company shall, on and from the 30 Days (instead of 15 D) 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. 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 Registrar within 30 Days (instead of 15 D) of the change, who shall record the same
16	Section 21 Authentication of documents, proceedings and contracts	(a) A document or proceeding requiring authentication by a company; or (b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an "an officer or employee of the company" (Instead of officer only) of the company duly authorised by the Board in this behalf.
17	Section 35. Civil liability for mis-statements in prospectus	Provide relive to Directors, promoters etc. as regards to every misleading statement purported to be made by an expert or contained in what purports to be a copy of or an extract from a report or valuation of an expert, it was a correct and fair representation of the statement, or a correct copy of, or a correct and fair extract from, the report or valuation; and he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it and that the said person had given the consent required by sub-section (5) of section 26 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment there under.”.
18	Section 47 Voting Right	Whereas a member who is a related party can’t vote on a resolutions which is passed under section 188 of the Act, it is clarify that the right of every member holding equity share to vote on all resolutions placed before the meeting would be subject to subsection 1 of section 188 of the Act.
19	Section 53 Prohibition of Issue of share at Discount.	Ø  the words "discounted price", the word "discount" shall be substituted Ø  a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949."
20	Section 62 Further issue of Share Capital	Now letter of offer can be dispatched through courier also.
21	Section 76 A Punishment for contravention of section 73 or section 76 of the Companies Act, 2013	The fine for contravention has been changed to rupees “one crore to one crore rupees or twice the amount of deposit accepted by the company, whichever is lower” Punishment has been changed from seven years or with fine to seven years and with fine. It means offence became Non-Compoundable.
22	Section 100 Calling of an EGM	New proviso has been inserted in sub section 1 of section 100 of the Companies Act, 2013 that is an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.
23	Section 101 Notice of Meeting	New proviso has been substituted : A general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto— (i)                  in the case of an Annual General Meeting, by not less than Ninty-Five percent of the members entitled to vote thereat; and (ii)                in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five percent 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 Ninty-Five percent of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub-section in respect of the former resolution or resolutions and not in respect of the latter. Note: erstwhile for conducting AGM or EGM at shorter Notice consent of 95 % of members entitled to vote at the meeting was required.
24	Section 110 Postal Ballot	Any item of business required to be transacted by means of postal ballot under clause (a), may be transacted at a general meeting by a company which is required to provide the facility to members to vote by electronic means under section 108. Means: Item which is mandatorily required to transact through Postal Ballot may also transacted through E voting. Item: Rule 22 of the Companies (Management and Administration) Rules, 2014 a.       Alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum; b.      Alteration of articles of association in relation to insertion or removal of provisions which, under sub-section (68) of section 2, are required to be included in the articles of a company in order to constitute it a private company; c.       Change in place of registered office outside the local limits of any city, town or village as specified in sub-section (5) of section 12; d.      Change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under sub-section (8) of section 13; e.      Issue of shares with differential rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43; f.        Variation in the rights attached to a class of shares or debentures or other securities as specified under section 48; g.       Buy-back of shares by a company under sub-section (1) of section 68; h.      Election of a director under section 151 of the Act; i.         Sale of the whole or substantially the whole of an undertaking of a company as specified under sub-clause (a) of sub-section (1) of section 180; j.        Giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186

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This is 1^st part of Effective provisions of Companies (Amendment) Act, 2017 second and last will publish soon. This is nothing but knowledge sharing initiative of author among the professional and not intend to accost any one in any manner or for any other purpose whatsoever. Whereas deep care has been taken by author to ensure the correctness and completeness of the information provided.

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