SUMMARY OF COMPANIES AMENDMENT BILL, 2017
SUMMARY
OF COMPANIES AMENDMENT BILL, 2017
This Bill shall be called Companies Amendment Bill, 2017,
enacted in the 68th year of the Republic of India.
The Companies (Amendment) Bill,
2017 introduced in Lok Sabha on 16th March, 2016 as the Companies
(Amendment) Bill, 2016, was referred to Standing Committee. The government
after considering the suggestions of the Committee gave notice of amendment as
approved by the Cabinet to the Lok Sabha. The Lok Sabha has passed the Company
(Amendment) Bill, 2017 on 27th July, 2017.
Geist of
the Amendment made in Companies Amendment Bill, 2016 and further amendment
suggested in Companies Act, 2013 are summarized below:
Section
|
Companies Act, 2013
|
Companies Amendment
Bill, 2016
|
Companies Amendment Bill,
2017
|
2(72)
|
Public
Financial Institution
Provided that no institution shall be so notified unless—
(A) it has been established or constituted
by or under any Central or State Act; or
|
No such Amendment
|
Public Financial Institution
Provided that no institution shall be so
notified unless—
(A) it has been established or constituted
by or under any Central or State Act other than this Act
or the previous Company Law or
|
2(76)
|
Related Party
(viii) any company which is—
(A) a holding, subsidiary or an associate
company of such company; or
(B) a subsidiary of a holding company to
which it is also a subsidiary
|
Clause (viii) substituted as follow:-
(viii) anybody corporate which is—
(A) a holding, subsidiary or an associate
company of such company; or
(B) a subsidiary of a holding company to
which it is also a subsidiary;
(c) an investing company or the venturer of
a company
|
Clause (viii) substituted as follow:-
(viii) anybody corporate which is—
(A) a holding, subsidiary or an associate
company of such company; or
(B) a subsidiary of a holding company to
which it is also a subsidiary;
(c) an investing company or the venturer of
The company
Explanation: Investing
Company or the Venture Company: means a body corporate whose investment in
the Company would result in the Company becoming an associate Company of the
body Corporate.
|
2(87)
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Subsidiary
Company
Provided
that such class or
classes of holding companies as may be prescribed shall not have layers of subsidiaries
beyond such numbers as may be prescribed
Explanation: (d) “layer” in relation to a
holding company means its subsidiary or subsidiaries
|
This Bill proposed “OMISSION” of
Proviso and clause (d) of explanation.
|
This Act states that there is no change in proviso and
explanation they will continue as it is.
So the proposal of Amendment Bill, 2016
amended by the Bill, 2017.
|
4(5)(i)
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Memorandum
Upon receipt of an application under
sub-section (4), the Registrar may, on the basis of information and documents
furnished along with the application, reserve the name for a period of sixty
days from the date of the application
|
Memorandum
Upon receipt of an application under
sub-section (4), the Registrar may, on the basis of information and documents
furnished along with the application, reserve the name for a period of twenty days
from the date of the approval
|
Upon receipt of an application under
sub-section (4), the Registrar may, on the basis of information and documents
furnished along with the application, reserve the name for a period of twenty
days from the date of the approval or such
other period as may be prescribed;
Provided that in case of an application for reservation of
name or for change of its name by an existing company, the registrar may
reserve the name for a period of 60 days from the date of approval.
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26
|
Prospectus
|
In sub section 1 clause a and b shall be omitted
|
In sub section 1 clause a, b
and d shall be omitted
|
76(A)
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Punishment
for contra-vention of section 73 or section 76
(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
|
(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 or twice the amount of
deposit accepted by the Company whichever is lower but which may
extend to ten crore rupees; and
(b) no change in
clause b
|
(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 or twice the amount of
deposit accepted by the Company whichever is lower 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 AND with fine which shall not be less than twenty-five lakh rupees but
which may extend to two crore rupees,
|
89
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Declaration in respect of beneficial interest in any
share:
55(6)
Where any declaration under this section is made to a company, the company
shall make a note of such declaration in the register concerned and shall
file, within thirty days from the date of receipt of declaration by it, a
return in the prescribed form with the Registrar in respect of such
declaration with such fees or additional fees as may be prescribed, within
the time specified under section 403.
(7) If a company,
required to file a return under sub-section (6), fails to do so before the
expiry of the time specified under the first proviso to sub-section (1) of
section 403,
|
Amendment given in the Bill is still continuing with
the amendment given in Bill, 2017 as mentioned in next Colum.
|
From both the Sub sections (6) & (7) the word “with
in the time specified in section 403” or “under the first proviso to
sub-section (1) of section 403” shall be omitted.
Under Bill, 2017 there is no time limit as
per section 403 for both the proviso.
|
92(1)
|
Annual
Return
|
In sub section (1) a new proviso is INSERTED:
Provided further that the Central Government may
prescribe abridged form of annual return for One Person Company and small
company
|
Provided further that the Central Government may
prescribe abridged form of annual return for One Person Company, small
company and such other class or classes of Companies as may be
prescribed
|
92(4)
|
Annual Return
Every company shall file with the Registrar a copy of
the annual return, within sixty days from the date on which the annual
general meeting is held or where no annual general meeting is held in any
year within sixty days from the date on which the annual general meeting
should have been held together with the statement specifying the reasons for
not holding the annual general meeting, with such fees or additional fees as
may be prescribed, within the time as specified, under section 403
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No Amendment by the Bill, 2016.
|
Every company shall file with the Registrar a copy of
the annual return, within sixty days from the date on which the annual
general meeting is held or where no annual general meeting is held in any
year within sixty days from the date on which the annual general meeting
should have been held together with the statement specifying the reasons for
not holding the annual general meeting, with such fees or additional fees as
may be prescribed,
|
92(5)
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Annual Return
If a company fails to file its annual return under
sub-section (4), before the expiry of the period specified under section 403
with additional fee, the company shall be punishable with fine which shall
not be less than fifty thousand rupees but which may extend to five lakhs
rupees and every officer of the company who is in default shall be punishable
with imprisonment for a term which may extend to six months or with fine
which shall not be less than fifty thousand rupees but which may extend to
five lakh rupees, or with both
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No Amendment
by the Bill, 2016.
|
If a company fails to file its annual return under
sub-section (4), before the expiry of the period specified
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101 (1)
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Notice of Meeting
Provided that a general meeting may be called after
giving a shorter notice if consent is given in writing or by electronic mode
by not less than ninety-five per cent. of the members entitled to vote at
such meeting
|
FULL PROVISO SUBSTITUTED by new proviso.
Provided that a GM may be called after giving shorter
notice than that specified in this sub-section if consent, in writing by electronic
mode, is accoded thereto-
(ii) in the case of any other GM, by member of the
Company-
(a)
holding, if the company
has share capital, not less than 90% of such part of the paid
up share capital of the company aw gives a right to vote at GM
|
(a)
holding, if the company
has share capital, majority in number of members entitled to vote and who
represent not less than 90% of such part of the
paid up share capital of the company aw gives a right to vote at GM
|
117(1)
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Resolution & agreement to be filed
(1) A copy of every
resolution or any agreement, in respect of matters specified in sub-section
(3) together with the explanatory statement under section 102, if any,
annexed to the notice calling the meeting in which the resolution is
proposed, shall be filed with the Registrar within thirty days of the passing
or making thereof in such manner and with such fees as may be prescribed within the time specified under section
403
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No Amendment
by the Bill, 2016.
|
(1) A copy of every
resolution or any agreement, in respect of matters specified in sub-section
(3) together with the explanatory statement under section 102, if any,
annexed to the notice calling the meeting in which the resolution is
proposed, shall be filed with the Registrar within thirty days of the passing
or making thereof in such manner and with such fees as may be prescribed
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121(2) (3)
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Report of Annual General
Meeting
The company shall
file with the Registrar a copy of the report referred to in sub- section (1)
within thirty days of the conclusion of the annual general meeting with such
fees as may be prescribed, or with such additional fees as may be prescribed,
within the time as specified,
under section 403
If the company
fails to file the report under sub-section (2) before the expiry of the
period specified under section 403 with additional fee,………………..
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No Amendment by the Bill, 2016.
|
The company shall
file with the Registrar a copy of the report referred to in sub- section (1)
within thirty days of the conclusion of the annual general meeting with such
fees as may be prescribed, or with such additional fees as may be prescribed,
If the company
fails to file the report under sub-section (2) before the expiry of the
period specified
|
123
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Dividend:
dividend shall be declared or paid by a company for any
financial year except—
(a) out of the profits of the company for that year
arrived at after providing for depreciation in accordance with the provisions
of sub-section (2), or out of the profits of the company for any previous
financial year or years arrived at after providing for depreciation in
accordance with the provisions of that sub-section and remaining
undistributed, or out of both; or
|
No Amendment
by the Bill, 2016.
|
Dividend shall be declared or paid by a company for any
financial year except—
(a) out of the profits of the company for that year
arrived at after providing for depreciation in accordance with the provisions
of sub-section
(2), or out of
the profits of the company for any previous financial year or years arrived
at after providing for depreciation in accordance with the provisions of that
sub-section and remaining undistributed, or out of both;
The
word OR omitted
|
123(1)
|
Declaration of Dividend
|
NEW INSERTION
|
Provided
that in computing profits any amount representing unrealized gains, notional
gains or revaluation of assets and any change in carrying amount of an asset
or of a liability on measurement of the asset or the liability at fair value
shall be excluded; or;
|
129(3)
|
Financial Statement
Provided that the company shall also attach along with
its financial statement, a separate statement containing the salient features
of the financial statement of its subsidiary or subsidiaries in such form as
may be prescribed
|
No Amendment
by the Bill, 2016.
|
Provided that the company shall also attach along with
its financial statement, a separate statement containing the Sfact
alient features of the financial statement of its
subsidiary or subsidiaries and
associate Company or Companies in
such form as may be prescribed
|
132(5)
|
Constitution of National
Financial Reporting Authority
Any person aggrieved by any order of the National
Financial Reporting Authority issued under clause (c) of sub-section (4), may
prefer an appeal before the Appellate Authority constituted under sub-section
(6) in such manner as may be prescribed
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No Amendment by the Bill, 2016.
|
Any person aggrieved by any order of the National
Financial Reporting Authority issued under clause (c) of sub-section (4), may
prefer an appeal before
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132(6),(7),(8)
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|
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Complete sub sections (6), (7) and (8) of 132 shall be OMITTED.
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136 (1)
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Right of members to copies of audited financial
statement
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In the first proviso, for the words “provided that”,
the following shall be substituted, namely:
Provided that if the copies of the documents are sent
less than 21 days before the date of meeting, they shall, notwithstanding
that fact, be deemed to have been duly send if it is so agreed by 95% of the
members entitled to vote at the meeting
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Provided that if the copies of the documents are sent
less than 21 days before the date of meeting, they shall, notwithstanding
that fact, be deemed to have been duly send if it is so agreed by
Members-
(a).
holding if the company has a share capital, majority in number entitled to
vote and who represent not less than 95% 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 90% of total
voting powr exercisable at the meeting.
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137(1) (2)
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Copy of
financial statement to be filed with Registrar:
A copy of the financial statements, including consolidated
financial statement, if any, along with all the documents which are required
to be or attached to such financial statements under this Act, duly adopted
at the annual general meeting of the company, shall be filed with the
Registrar within thirty days of the date of annual general meeting in such
manner, with such fees or additional fees as may be prescribed within the
time specified under section 403:
|
No Amendment
by the Bill, 2016.
|
Copy of the financial statements, including
consolidated financial statement, if any, along with all the documents which
are required to be or attached to such financial statements under this Act,
duly adopted at the annual general meeting of the company, shall be filed
with the Registrar within thirty days of the date of annual general meeting
in such manner, with such fees or additional fees as may be prescribed
|
141(3)
|
Eligibility, qualification and disqualification of
Auditor
|
new explanation added in
clause (d)
|
This explanation OMITTED by this clause.
|
157(1) (2)
|
Company to inform Din to Registrar
Every company shall, within fifteen days of the receipt
of intimation under section 156, furnish the Director Identification Number
of all its directors to the Registrar or any other officer or authority as
may be specified by the Central Government with such fees as may be
prescribed or with such additional fees as may be prescribed within the time
specified under section 403 and every such intimation shall be furnished in
such form and manner as may be prescribed
(2) If a company
fails to furnish Director Identification Number under sub-section (1), before
the expiry of the period specified under section 403 with additional
fee…………….
|
No Amendment
by the Bill, 2016.
|
Company to inform Din to Registrar
Every company shall, within fifteen days of the receipt
of intimation under section 156, furnish the Director Identification Number
of all its directors to the Registrar or any other officer or authority as
may be specified by the Central Government with such fees as may be
prescribed or with such additional fees as may be prescribed
(2) If a company
fails to furnish Director Identification Number under sub-section (1),
|
160(1)
|
Right of persons other than retiring directors to stand
for directorship
|
Insertion of NEW PROVISO
Provided that requirements of deposit of amount shall
not apply in case of appointment of an independent director or a director
recommended by the NRC. If any, constitute under sub-section (1) of section
178
|
Provided that requirements of deposit of amount shall
not apply in case of appointment of an independent director or a director
recommended by the NRC. If any, constitute under sub-section (1) of section
178 or a director recommended by the Board of Directors of the
Company, in the case of Company not required to constitute NRC.
|
185(4)
|
Loan
to Director
|
This section is COMPLETELY
SUBSTITUTED by the Amendment bill, 2016.
Sub – section 4 states about the penalty, fine if any
company contravene the provisions of section 185.
|
Sub section 4 of Amendment Bill, 2016 shall
be SUBSTITUTED by new sub section 4
|
186(1)
|
Loan and investment by
Company
(1) Without prejudice to the
provisions contained in this Act, a company shall unless otherwise
prescribed, make investment through not more than two layers of investment
companies:
Provided that the provisions of this sub-section shall not
affect,—
(i) a company from acquiring
any other company incorporated in a country outside India if such other
company has investment subsidiaries beyond two layers as per the laws of such
country;
(ii) a subsidiary
company from having any investment subsidiary for the purposes of meeting the
requirements under any law or under any rule or regulation framed under any
law for the time being in force
|
This Sub section completely OMITTED.
|
Sub section shall be on place as it is.
NO OMISSION.
|
196 (3)
|
No company shall
appoint or continue the employment of any person as managing director,
whole-time director or manager who —
(a) is below the
age of twenty-one years or has attained the age of seventy years:
Provided that
appointment of a person who has attained the age of seventy years may be made
by passing a special resolution in which case the explanatory statement
annexed to the notice for such motion shall indicate the justification for
appointing such person;
|
No Amendment
by the Bill, 2016.
|
NEW PROVISO
INSERTED:
Provided
further that where no such special resolution is passed but votes cast in
favour of the motion exceed the votes, if any, cast against the motion and
the Central Government is satisfied, on an application made by the Board,
that such appointment is most beneficial to the Company, the appointment of
the person who has attained the age of 75 years may be made.
|
197(1)
|
Remuneration to Managerial Personnel
The total
managerial remuneration payable by a public company, to its directors,
including managing director and whole-time director, and its manager in
respect of any financial year shall not exceed eleven per cent. of the net
profits of that company for that financial year computed in the manner laid
down in section 198 except that the remuneration of the directors shall not
be deducted from the gross profits:
|
New Proviso added in section 196(1) after
second proviso.
|
Such proviso shall be SUBSTITUTED as follow:
Provided
also that, where the company has defaulted in payment of dues to any bank or
public financial institution or non-convertibles debentures holders or any
other secured creditors”……………..
|
198(3)
|
Calculation of Profit
In making the computation aforesaid, credit shall
not be given for the following sums, namely:—
(a) profits, by way
of premium on shares or debentures of the company, which are issued or sold by the company;
|
In making the computation aforesaid, credit shall
not be given for the following sums, namely:—
(a) profits, by way
of premium on shares or debentures of the company, which are issued or sold by the company unless the company is
an investment company as referred to in the Explanation to Section 186
|
In making the computation aforesaid, credit shall
not be given for the following sums, namely:—
(a) profits, by way
of premium on shares or debentures of the company, which are issued or sold by the company unless the company
is an investment company as referred to in clause (a) the Explanation to
Section 186
New Clause (f)
Any
amount representing unrealized gains, notional gains or revaluation of
assets.
|
374(d)
|
Obligation of Companies Registered under this Act,
|
No Amendment by the Bill, 2016.
|
Proviso added after clause (d)
Provided
that upon registration as a Company under this part a limited liability
partnership incorporated under the LLP Act, 2008 shall be deemed to have been
dissolved under that At without any further act or deed.
|
391(2)
|
Application of sections 34 to 36 and
Chapter XX.
(2) The provisions of Chapter XX shall apply mutatis
mutandis for closure of the place of business of a foreign company in India
as if it were a company incorporated in India.
|
No Amendment
by the Bill, 2016.
|
Sub section 2 shall be substituted as follow:
(2)
subject to the provisions of section 376, the provisions of Chapter XX shall
apply mutatis mutandis for closure of the place of business of a foreign
Company in India, as if it were a Company incorporated in Inida in case such
foreign Company has raised monies through offer or issue of Securities under
this chapter which have not been repaid or redeemed.
|
403(1)
MAJOR IMPACT
|
Fee for Filing:
Provided that
any document, fact or information may be submitted, filed, registered or
recorded, after the time specified in relevant provision for such submission,
filing, registering or recording, within a period of two hundred and seventy
days from the date by which it should have been submitted, filed, registered
or recorded, as the case may be, on payment of such additional fee as may be
prescribed:
Provided
further that any such document, fact or information may, without
prejudice to any other legal action or liability under the Act, be also
submitted, filed, registered or recorded, after the first time specified in
first proviso on payment of fee and additional fee specified under this
section
|
No Amendment by the Bill, 2016.
|
INSERTION of new
proviso.
EFFECT
OF NEW PROVISO:
·
If Company fails to file Annual Return u/s
92 and Financial statement u/s 137 within time prescribed under their
specific sections “without prejudice to any other legal action or liability
under this act,” it may be submitted by payment of additional fees “which shall not be less than INR 100/- (Rupees Hundred) per
day” and different amount may be prescribed for different
classes of Companies.
·
If
company fails to file any other documents, facts, information etc other than
section 92 and 137 “without prejudice to any other legal
action or liability under this act,” it may be submitted by payment of
additional fees as may be prescribed.
HIGHER ADDITIONA FEES: New concept of
higher additional fees has been introduced. As per this proviso ;
-
Where
there is default on Two or More
occasions in submitting, filling, registering, recorded of
documents,
-
without prejudice to any other legal action
or liability under this act,
-
may be file with “Higher Addition Fees”
-
as may be prescribed and
-
which shall not be lesser than “twice the
additional fee provided under first and second proviso”
-
Due to above mention
proviso if company fails to file any form with in time prescribed under its
specific section and company made the default TWO or “MORE OCCASION” then additional fees for filing of from shall be “TWICE of ADDITIONAL FEES”.
|
403(2)
|
Where a company
fails or commits any default to submit, file, register or record any
document, fact or information under sub-section (1) before the expiry of the
period specified in the first proviso to that sub-section with additional
fee, the company and the officers of the company who are in default, shall,
without prejudice to the liability for payment of fee and additional fee, be
liable for the penalty or punishment provided under this Act for such failure
or default
|
No Amendment
by the Bill, 2016.
|
Sub section 2 shall be SUBSTITUTED as follow:
Where a
Company fails or commits any default to submit, file register or record any
document, fact or information under sub section (1) before the expiry of the
period specified in the relevant section, the company and the officers of the
Company who are in default, shall without prejudice to the liability for the
payment of fees and additional fee, be liable for the penalty or punishment
provided under the Act for such failure or default:
|
410
|
Constitution of Appellate Tribunal
The Central
Government shall, by notification, constitute, with effect from such date as
may be specified therein, an Appellate Tribunal to be known as the National
Company Law Appellate Tribunal consisting of a chairperson and such number of
Judicial and Technical Members, not exceeding eleven, as the Central
Government may deem fit, to be appointed by it by notification, for hearing
appeals against the orders of the Tribunal
|
No Amendment by the Bill, 2016.
|
The Central
Government shall, by notification, constitute, with effect from such date as
may be specified therein, an Appellate Tribunal to be known as the National
Company Law Appellate Tribunal consisting of a chairperson and such number of
Judicial and Technical Members, not exceeding eleven, as the Central
Government may deem fit, to be appointed by it by notification, for hearing
appeals against the orders
of the Tribunal or National Financial Reporting Authority.
|
458(1)
|
Delegation
by Central Government of its powers and functions
Provided that the powers to
enforce the provisions contained in section 194 and section 195 relating to
forward dealing and insider trading shall be delegated to Securities and
Exchange Board for listed companies or the companies which intend to get
their securities listed and in such case, any officer authorised by the
Securities and Exchange Board shall have the power to file a complaint in the
court of competent jurisdiction
|
No Amendment
by the Bill, 2016.
|
This proviso shall be OMITTED:
Provided that the powers to enforce the
provisions contained in section 194 and section 195 relating to forward
dealing and insider trading shall be delegated to Securities and Exchange
Board for listed companies or the companies which intend to get their
securities listed and in such case, any officer authorised by the Securities
and Exchange Board shall have the power to file a complaint in the court of
competent jurisdiction
|

Very Informative and well defined Companies act 2013 procedure
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