AMENDMENT COMPANIES ACT, 2013 – JUNE – JULY, 2017
AMENDMENT COMPANIES ACT, 2013 – JUNE – JULY, 2017
SHORT SUMMARY:
In this Flash editorial, the author referring
amendment (i.e. in Rules, Sections, Circulars, Notifications) issued by
Ministry of Corporate Affairs in the Month of June – July, 2017.
This is
article no. 246 of the series of editorials written by the author on corporate
laws
{Including
Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.
AMENDMENT DATED 13th JULY, 2017
AMENDMENT - I
Ministry of Corporate Affairs (MCA) vide
Notification dated 13th July, 2017 hereby amends its Notification
No. G.S.R. 583(E) dated 13th
June, 2017.
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Section
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Earlier
(13.06.2017 Notification)
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After
Amendment
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143(3)(i)
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Clause (i) shall not be applicable to private Companies which is:
·
One Person Company; or
·
Small Company; or
·
has turnover less than Rs. 50 Crores as
per latest audited financial statement; or
·
has aggregate borrowings from banks or
financial institutions or anybody corporate at any point of time during the
financial year less then Rs. 25 Crore
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Clause (i) shall not be applicable to private Companies which is:
·
One Person Company; or
·
Small Company; or
·
has turnover less than Rs. 50 Crores as
per latest audited financial statement; and
·
has aggregate borrowings from banks or
financial institutions or anybody corporate at any point of time during the
financial year less then Rs. 25 Crore
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AMENDMENT – II
Ministry of Corporate Affairs (MCA) vide
Notification dated 13th
July, 2017 hereby amended Companies (Meetings of Board and its Powers)
Rules, 2014. The amended rules may be called as Companies (Meetings and Board and its powers) Second Amendment Rules,
2017:-
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Rule
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Earlier
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After
Amendment
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3(3)(e)
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The
notice of the meeting shall be sent to all the directors in accordance with
the provisions of sub-section (3) of section 173 of the Act;
(e) The
director, who desire, to participate may intimate his intention of
participation through the electronic mode at the beginning of the calendar
year and such declaration shall be valid for one calendar year
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(e) The
director, who desire, to participate may intimate his intention of
participation through the electronic mode at the beginning of the calendar
year and such declaration shall be valid for
one year.
Provided that such declaration shall not debar him from
participation in the meeting in person in which case he shall intimate the
Company sufficiently in advance of his intention to participate in person.
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3(11)(e)
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(a) At the end of discussion on each agenda
item, the Chairperson of the meeting shall announce the summary of the
decision taken on such item along with names of the directors, if any, who
dissented from the decision taken by majority.
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(a) At the end of discussion on each agenda
item, the Chairperson of the meeting shall announce the summary of the
decision taken on such item along with names of the directors, if any, who
dissented from the decision taken by majority and
the draft minutes by the Company till the confirmation of the draft minutes
in accordance with sub-rule(12)
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6
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The Board of directors of
every listed companies and the following classes of companies shall
constitute an Audit Committee and a Nomination and Remuneration Committee of
the Board-
(i) all public companies
with a paid up capital of ten crore rupees or more;
(ii) all public companies
having turnover of one hundred crore rupees or more;
(iii) all public
companies, having in aggregate, outstanding loans or borrowings or debentures
or deposits exceeding fifty crore rupees or more.
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Rule
6 and the provisos has been substituted by the following:
The
Board of directors of every listed
Company and a Company covered under Rule 4 of the Companies (Appointment and
Qualification of Directors) Rules, 2014 shall constitute an ‘Audit Committee’
and a “Nomination and Remuneration Committee of the Board”.
Limits
given in Rule 4 are as follow:
The following class or
classes of companies:
(i) the Public
Companies having paid up share capital of ten crore rupees or more; or
(ii) the Public
Companies having turnover of one hundred crore rupees or more; or
(iii) the Public
Companies which have, in aggregate, outstanding loans, debentures and
deposits, exceeding fifty crore rupees:
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AMENDMENT DATED 5th JULY, 2017
AMENDMENT - III
Ministry of Corporate Affairs (MCA) vide
Notification dated 5th July,
2017 hereby amended SCHEDULE IV of
The Companies Act, 2013.
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Paragraph
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Earlier
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After
Amendment
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III,
in sub-Para (12)
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The
independent directors shall-
(12)
acting
within his authority, assist in protecting the legitimate
interests of the company, shareholders and its employees
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The
independent directors shall-
(12)
acting within their authority, assist
in protecting the legitimate interests of the company, shareholders and its
employees
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VI,
in sub-Para (2)
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VI. Resignation or removal:
(2)
An independent director who resigns or is removed from the Board of the
company shall be replaced by a new independent director within a period of
not more than one hundred and eighty days from the date of such
resignation or removal, as the case may be.
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VI. Resignation or removal:
(2)
An independent director who resigns or is removed from the Board of the
company shall be replaced by a new independent director within THREE MONTH from
the date of such resignation or removal, as the case may be.
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III,
in sub-Para (1)
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VII. Separate meetings:
(1)
The independent directors of the company shall hold at least one meeting in a year,
without the attendance of non-independent directors and members of management
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VII. Separate meetings:
(1)
The independent directors of the company shall hold at least one meeting in a financial year, without the
attendance of non-independent directors and members of management
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VIII
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VIII. Evaluation mechanism:
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After Para VIII new Note is added i.e.:
“Note: The provisions of sub-paragraph (2) and (7) of
paragraph II, paragraph IV, paragraph V, clauses (a) and (b) of sub-paragraph
(3) of paragraph VII and paragraph VIII shall not apply in the case of a Government company as defined
under clause (45) of section 2 of the Companies Act, 2013 (18 of 2013),
if the requirements in respect of matters specified in these paragraphs are
specified by the concerned Ministries or Departments of the Central
Government or as the case may be, the State Governments and such requirements
are complied with by the Government companies
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AMENDMENT - IV
Ministry of Corporate Affairs (MCA) vides
Notification dated 5th July,
2017 hereby amended Companies (Appointment and Qualification of
Directors) Rules, 2014. The
amended rules may be called as Companies (Appointment
and Qualification of Directors) Amendment Rules, 2017:-
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Rule
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Earlier
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After
Amendment
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4
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Rule 4 shall be numbered as sub-rule (1) and after
sub-rule (1) as so renumbered, Sub Rule 2 shall be inserted in the:
4 Sub Rule (1): The
following class or classes of companies shall have at least two directors as
independent directors -
(i)
the Public Companies having paid up share capital of ten crore rupees or
more; or
(ii)
the Public Companies having turnover of one hundred crore rupees or more; or
(iii)
the Public Companies which have, in aggregate, outstanding loans, debentures
and deposits, exceeding fifty crore rupees: ………….
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Sub Rule (2) added after Sub Rule
(1)
(2) The following classes of
unlisted public company shall not be covered under sub-rule (1), namely:-
(a) a joint venture;
(b) a wholly owned subsidiary; and
(c) a dormant company as defined
under section 455 of the Act.”
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AMENDMENT - V
Ministry of Corporate Affairs (MCA) vides
Notification dated 5th July,
2017 hereby amended National Company Law Tribunal Rules, 2014.
The amended rules may be called as National Company Law Tribunal Amendment Rules, 2017:-
The Ministry has Issued Rules on 5th
July, 2017 in relation to filing of application u/s 252(3) for Restoration of Name of Company in the records of the
MCA.
Full
fledge article on the same has been published separately on the below given
link: http://www.csdiveshgoyal.info/2017/07/process-revival-of-struck-companies.html
AMENDMENT - VI
Ministry of Corporate Affairs (MCA) vides
Notification dated 22nd
June, 2017 hereby amended Companies (Audit and Auditors) Rules, 2017.
The amended rules may be called as Companies (Audit and Auditors) Rules, 2017:-
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Rule
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Earlier
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After
Amendment
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5 Clause (b)
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5.
Class of Companies.-
For
the purposes of sub-section (2) of section 139, the class of companies shall
mean the following classes of companies excluding one person companies and
small companies:-
(b)
all private limited companies having paid up share capital of rupees Twenty crore
or more;
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5. Class of Companies.-
For
the purposes of sub-section (2) of section 139, the class of companies shall
mean the following classes of companies excluding one person companies and
small companies:-
(b)
all private limited companies having paid up share capital of rupees Fifty crore
or more;
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AMENDMENT - VII
Previously,
Ministry of Corporate Affairs by notification No. G.S.R. 464(E),
G.S.R. 463(E)
and G.S.R. 466(E)
dated 5th June, 2017 have give several exemptions to Government,
Private, Section-8 Companies. Via Notification dated 13th June, 2017
MCA has added more exemptions by amending the notification dated 5th
June, 2015:-
Full
fledge article on the same has been published separately on the below given
link:
(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.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH
THE USE OF THE INFORMATION.
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