Effective
provisions of Companies (Amendment) Act, 2017
w.e.f. 09th
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
|
|
************************************************************************************************
This
is 1st 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.
************************************************************************************************
