THE COMPANIES (AMENDMENT) ACT, 2015
New Delhi: The RAJYA SABHA
on 13th
May 2015 passed the Companies
(Amendment) Bill, 2014, which provides for severe punishment for those raising
illegal deposits from the public.
The LOK SABHA in 2014 passed the Companies (Amendment)
Bill, 2014, after Corporate Affairs Minister Arun Jaitley told the house
that some of the original provisions were only posing hurdles to doing business
in the country.
The Companies (Amendment) Bill
received the assent of the President on the 25th May, 2015 and
published in official Gazette of India on 26th May, 2015 and became
“THE COMPANIES (AMENDMENT) ACT, 2015.
Provisions of Point 1 to 12 and 15 to
23 shall come into force from 29thg May, 2015.
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.
The
Cabinet, chaired by Prime Minister Narendra Modi, had approved the 23 proposed
changes in various provisions of the new Companies Act, 2013, which came into
force with effect from April 1, 2014.
SECTION
|
EARLIER
PROVISION
|
PROVISIONS
AFTER AMENDMENT
|
2 (68)
|
Private Company required “Minimum Paid up Share Capital
of Rs 100,000/-“
|
No requirement of Minimum Paid Up Capital.
|
2 (71)
|
Public Company required “Minimum Paid up Share Capital of
Rs 500,000/-“
|
No requirement of Minimum Paid Up Capital.
|
9, 12 and 223
|
Affixation of Common Seal is
Mandatory
|
Use of Common Seal is now
optional. (Not Mandatory)
|
11
|
Commencement of Business
|
No requirement of Commencement
of Business Certificate.
Such section shall be omitted.
|
22
|
Execution of Bills of Exchange
|
Use of Common Seal is now
optional. (Not Mandatory)
If company doesn’t have common
seal the authorization under sub section (2) of Section 22 shall be made by
two director or by a director and the Company Secretary, wherever the company
has appointed a Company Secretary.
|
46
|
Issue of Share Certificate
(46(1): A share certificate issue under the common seal
of Company
{Clause substituted)
|
Use of Common Seal is now
optional. (Not Mandatory)
If company doesn’t have common
seal then signed by two Directors or by a director and Company secretary (if
any)
|
76A
|
This was not in the Act.
|
New Section 76A inserted after
Section 76 for punishment for deposits accepted in violation of the
provisions of the said Act.
(Bare Act Language of Section
76A given at the end)
|
117(3)(g)
|
Public can inspect the form MGT-14 filed by the Companies
as per section 179(3) for the Board Resolution.
|
Public can’t inspects form MGT-14 filed for the purposes
mention in section 179(3).
{MGT-14 (filed for purpose of Section 179(3), Board
Resolution) will not available for public inspection on MCA portal.}
|
123(1)
|
This was not in the Act.
|
After the third proviso of
123(1), the following proviso is inserted.
Proviso, No company shall
declare dividend unless carried over previous losses and depreciation not
provided in previous year or years are set off against profit of the company
for the current year.
|
124(6)
|
“Unpaid or unclaimed dividend
has been transferred under sub-section (5) Substituted
|
(i) for
the words, brackets and figure “unpaid or unclaimed dividend has been
transferred under sub-section (5) shall also be”, the words “dividend has not
been paid or claimed for seven consecutive years or more
(ii) after
the proviso, the following explanation shall be inserted, namely:—
“Explanation.—
In case any dividend is paid or claimed for any year during the said period
of seven consecutive years, the share shall not be transferred to Investor
Education and Protection Fund.’’.
|
134(3)
|
Not Earlier in the Act.
|
After Clause “c” following
clause (ca) is inserted:
Details in respect of frauds
reported by auditors under sub-section (12) of section 143 “other than
those which are reportable to the Central Government”
|
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
|
Notwithstanding anything
contained in this section, if any auditor of a company in the course of the
performance of his duties as auditor, has reason to believe that an offence
of fraud involving such amount or amounts as may be prescribed, is being or
has been committed in the company by its officers or employees, the
auditor shall report the matter to the central government within such time
and in such manner as may be prescribed:
Provided that in case of a fraud
involving lesser than the specified amount, the auditor shall report the
matter to the audit committee constituted under section 177 or to the Board
in other cases within such time and in such manner as may be prescribed:
Provided further that the
companies whose auditors have reported frauds under subsection 12 to the
Audit Committee or the Board but not reported to the Central Government,
shall disclosed details about such frauds in the Board
Report in such manner as may be prescribed.
|
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”
|
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 proviso added:
(c) Any loan made by a Holding
Company to its Wholly own Subsidiary Company or any guarantee given or
security provided by a Holding Company in respect of any loan made to its
wholly own subsidiary Company,
(d) Any guarantee given or
security provided by a Holding Company in respect of Loan made by any Bank or
financial institution to its subsidiary Company
Provided that the loan made
under clauses (c) and (d) are utilized by the subsidiary company for its principal
business activity.
|
188(1)
|
Earlier Special Resolution was
required. If company cross the threshold limit.)
|
For the word “Special
Resolution” the word “Resolution” is substituted under the Act.
Now Ordinary resolution will
work.
|
188(1)
|
Not Earlier in the Act.
|
Not required to follow
provision of Section 188. After the third proviso of Section 188(1) the
following proviso inserted:
Provided also that that the
requirement of passing the resolution under the first proviso 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
|
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;
|
419(4)
|
In Section 419(4) winding up
was mentioned
|
The word WINDING UP shall be
omitted.
|
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 with 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.
|
436
|
Offence Triable 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.
|
462
|
Subsection {2,3 and 4 of
Section 462) shall be substituted.
|
Substituted language of Section 462(2),(3) and (4)
given below.
|
“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 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 willfully 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.”
“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 pervious Company Law.“
462:
Power to exempt class or classes of
companies from provisions of this Act:
(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.
(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.
(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:.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at
csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this document have been
prepared on the basis of relevant provisions and as per the information
existing at the time of the preparation. The observations of the author are personal view and the authors do not take
responsibility of the same and this cannot be quoted before any authority
without the written
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