COMPANIES (AMENDMENT) ACT 2015 – AMENDMENTS AT A GLANCE
COMPANIES (AMENDMENT) ACT 2015 – AMENDMENTS AT A GLANCE
In a move to reduce compliance, to attract the new investment and for ease of doing business government has made following amendments.
Companies (Amendment) Act 2015 – Amendments at a glance…..
This Act shall come into force on 26th May, 2015
Details Of Amendment: The proposed amendments deal with related party transactions, fraud reporting by auditors, public inspection of Board resolutions, responsibilities of audit committee, restrictions on bail, making common seal optional, requirement for minimum paid-up share capital, strength of benches for hearing winding up cases, jurisdiction of special courts to try offences).
Sr. No. | SECTION | PREVIOUSLY | NOW |
1 | 2(68) | Private Company required “Minimum Paid up Share Capital of Rs 100,000/-“ |
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2 | 2(71) | Public Company required “Minimum Paid up Share Capital of Rs 500,000/-“ |
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3 | 9, 12 and 223 | Affixation of Common Seal is Mandatory |
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4 | 11 | Commencement of Business |
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5 | 22 | Execution of Bills of Exchange |
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6 | 46 | Issue of Share Certificate(46(1): A share certificate issue under the common seal of Company (Clause substituted) |
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7 | 76A | This was not in the Act. |
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8 | 117(3)(g) | Public can inspect the form MGT-14 filed by the Companies as per section 179(3) for the Board Resolution. |
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9 | 123(1) | This was not in the Act. |
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10 | 124(6) | “Unpaid or unclaimed dividend has been transferred under sub-section (5) Substituted |
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11 | 134(3) | Not Earlier in the Act. |
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12 | 143(12) | The Act requires that if the auditor of a company has reason to believe that an offence of fraud has been committed against the company, by its employees, he must report the matter to the central government within a time period and in a manner prescribed |
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13 | 117(4)(iv) | Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall inter alia include (iv) approval or any subsequent modification of transaction of the Company with Related Party. | After 117(4 (iv) following proviso added: Provided that the Audit Committee may make omnibus approval for related party transaction proposed to be entered into by the company subject to such conditions as may be prescribed”. |
14 | 185 | Not Earlier in the Act. Bare Act Language of Section 185(1)(b): A company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loan an interest in charged at a rate not less than the bank rate declared by the RBI. | After clause (b) Sub Section (1) of Section 185 following clause and provison added:
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15 | 188(1) | Earlier Special Resolution was required. (As per the previous system, the companies with a paid up capital of Rs 10 crore or more were required to get shareholders’ nod through a special resolution in case of related party transactions) | For the word “Special Resolution” the word “Resolution” is substituted under the Act. Now Ordinary resolution will work. |
16 | 188(1) | Not Earlier in the Act. | Not required to follow provision of Section 188. After the third provison of Section 188(1) the following provison inserted:Provided also that that the requirement of passing the resolution under the first provison shall not be applicable for transactions entered between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and have been placed before the shareholders for their approval. |
17 | 212(6) | Investigation into affairs of Company by Serious Fraud Investigation office. Here provided Bail restriction for many sections. | The bail restrictions to apply only for offence relating to fraud u/s 447 |
18 | 419(4) | In Section 419(4) winding up was mentioned. | The word WINDING UP shall be omitted. |
19 | 435 | Establishment of Special Courts Establishment of Special Courts. The Central Govt. may for the purpose of providing speedy (Trial of offences under this Act), established or designate as many Special Courts as may be necessary. | For the Words “Trial of Offences under This Act”, The words “Trial of offences punishable under this Act with imprisonment of 2 years or more” is substituted. After Sub Clause (1) the following proviso is inserted:“Provided that all other offences shall be tried, as the case may be by a metropolitan Magistrate or a Judicial Magistrate of the first class having jurisdiction to try any offence under this Act or under any pervious Company Law. |
20 | 436 | Offence exercised by special courts Section 436(1)(a) | For the words “all offences under this Act”, the words, brackets and figures “all offences specified under sub-section (1) of section 435″ shall be substituted Section 435(1) given below: |
21 | 462 | Subsection (2,3 and 4 of Section 462) shall be substituted. | Substituted language of Section 462(2),(3) and (4) given below: |
- “Section 76A: Punishment for contravention of section 73 or section 76:
Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the matter or the conditions prescribed under section 73 or section 76 or rules made there under or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made there under or such further time as may be allowed by the Tribunal under Section 73,-
(a) The company shall, in addition to the payment of the amount t 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.
Provided that if it is proved that the officer of the company who is in default, has contravened such provisions Knowingly or wilfully with the intention to deceive the company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.”
- “Section 435 (1): Establishment of Special Courts:
The Central Govt. may for the purpose of providing speedy (Trial of offences punishable under this Act with imprisonment with 2 years or more” is substituted), established or designate as many Special Courts as may be necessary.
“Provided that all other offences shall be tried, as the case may be by a metropolitan Magistrate or a Judicial Magistrate of the first class having jurisdiction to try any offence under this Act or under any previous Company Law.
- “Section 462: Power to exempt class or classes of companies from provisions of this Act:
462(2): A copy of every notification proposed to be issued under sub-section(1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of 30 days, and if, both Houses agree in disapproving the issue of notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified from as may be agreed upon by both the Houses.
462(3): In reckoning any such period of 30 days as is referred to in sub-section (2), no account shall be taken of any period during which the House referred to in sub-section(2) is prorogued or adjourned for more than for consecutive days.
462(4): The copies of every notification issued under this section shall, as soon as may be after it has been issued, be laid before each House of Parliament.
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