55 Key Take Away - THE COMPANIES (AMENDMENT) BILL, 2020 - Series 460
Key Take Away -
THE COMPANIES (AMENDMENT) BILL, 2020
A. Object of this bill is
·
To decriminalize some provisions of the
Act, based on their gravity;
·
To amend
various provisions of the Act to decriminalise
minor procedural or technical lapses under the provisions of the said Act,
into civil wrong
·
To constant Endeavor
of the Government to facilitate Greater Ease
of Living of Law abiding corporate;
· To provide
greater ease of living to corporate through certain other amendments to the
Act
B. Key Amendments by Companies
(Amendment Bill), 2020
·
to
decriminalise certain offences under the Act in case of defaults which can be
determined objectively and which otherwise lack any element of fraud or do not involve
larger public interest;
·
to empower the
Central Government to exclude, in consultation with the Securities and Exchange
Board, certain class of companies from the definition of" listed
company", mainly for listing of debt securities;
·
to clarify the
jurisdiction of trial court on the basis of place of commission of offence
under section 452 of the Act for wrongful withholding of property of a company
by its officers or employees, as the case may be;
·
to incorporate
a new Chapter XXIA in the Act relating to Producer Companies, which was earlier
part of the Companies Act, 1956;
·
to set up
Benches of the National Company Law Appellate Tribunal;
· to make
provisions for allowing payment of adequate remuneration to nonexecutive directors
in case of inadequacy of profits, by aligning the same with the provisions for
remuneration to executive directors in such cases;
·
to relax
provisions relating to charging of higher additional fees for default on two or
more occasions in submitting, filing, registering or recording any document, fact
or information as provided in section 403;
·
to extend
applicability of section 446B, relating to lesser penalties for small companies
and one person companies, to all provisions of the Act which attract monetary
penalties and also extend the same benefit to Producer Companies and start-ups;
·
to exempt any
class of persons from complying with the requirements of section 89 relating to
declaration of beneficial interest in shares and exempt any class of foreign
companies or companies incorporated outside India from the provisions of Chapter
XXII relating to companies incorporated outside India;
·
to reduce
timelines for applying for rights issues so as to speed up such issues under
section 62;
·
to extend
exemptions to certain classes of non-banking financial companies and housing
finance companies from filing certain resolutions under section 117;
·
to provide
that the companies which have Corporate Social Responsibility spending
obligation up to fifty lakh rupees shall not be required to constitute the Corporate
Social Responsibility Committee and to allow eligible companies under section
135 to set off any amount spent in excess of their Corporate Social Responsibility
spending obligation in a particular financial year towards such obligation in
subsequent financial years;
·
to provide for
a window within which penalties shall not be levied for delay in filing annual
returns and financial statements in certain cases;
·
to provide for
specified classes of unlisted companies to prepare and file their periodical
financial results;
·
to allow
direct listing of securities by Indian companies in permissible foreign jurisdictions
as per rules to be prescribed.
C. Other Amendments in
Brief:
1)
Related to Penalty/
Fine/ Imprisonment: Out of 66 amendment approx 45 amendments
are relating to amendment in penalty clause of Sections like:
·
Some subsections of penalty has been omitted
·
Many places imprisonment substituted with
penalty
·
Some places penalty/ fine decreased etc.
2) Section 129A – New Section - Periodical Financial Result:
The Central Government may, require such class or classes
of unlisted companies, as may be prescribed,—
(a) to prepare the
financial results of the company on such periodical
basis and in such form as may be prescribed;
(b) to obtain approval of
the Board of Directors and complete audit or limited review of such periodical
financial results in such manner as may be prescribed; and
(c)
file a copy with the
Registrar within a period of thirty days of completion of the relevant period with such fees as may
be prescribed.".
Purpose/
Effect: Purpose of insertion
of this section is to empower Central Government to provide by rules such class
or classes of unlisted companies to prepare periodical financial results of the
company, audit or limited review thereof and their filing with Registrar within
thirty days from the end of that period as specified in the rules.
3)
Corporate Social
Responsibility Section 135:
in
sub-section (5), after the second proviso, the following proviso shall be inserted,
namely:—
"Provided also
that if the company spends an amount in excess of the requirements provided
under this sub-section, such company may set off such excess amount against the
requirement to spend under this sub-section for such number of succeeding
financial years and in such manner, as may be prescribed."
Purpose/ Effect: Purpose to allow
companies, which have spent an amount in excess of the requirement provided
under the said sub-section, to set off such excess amount out of their obligation
in the succeeding financial years in such manner as may be provided by rules.
4)
Independent Director
Section 149:
In
section 149 of the principal Act, in sub-section (9), the following proviso
shall
be
inserted, namely:—
"Provided
that if a company has no profits or its profits are inadequate, an independent
director may receive remuneration, exclusive of any fees payable under sub-section
(5) of section 197, in accordance with the provisions of Schedule V.".
Purpose/ Effect: a new
proviso which provides that an independent director may receive remuneration,
if a company has no profits or inadequate profits in accordance with Schedule V
of the Act.
5)
Remuneration to
Directors- section 197:
(3) Notwithstanding anything contained in
sub-sections (1) and (2), but subject to the provisions of Schedule V, if, in any financial year, a company has no
profits or its profits are inadequate, the company shall not pay to its
directors, including any managing or wholetime director or manager or any other
non-executive director, including an independent director, by way of
remuneration any sum exclusive of any fees payable to directors under
sub-section (5) hereunder except in accordance with the provisions of Schedule V .
Purpose/ Effect:
Purpose if a company fails to make profits or makes inadequate profits in a
financial year, any non-executive director of such company, including an
independent director, shall be paid remuneration in accordance with Schedule V
of the Act
6)
Right Issue of Shares
section 62:
The offer
shall be made by notice specifying the number of shares offered and limiting a
time not being less than fifteen days “or such lesser
number of days as may be prescribed” and not exceeding thirty days
from the date of the offer within which the offer, if not accepted, shall be
deemed to have been declined;]
7)
Section 117(3)(g):
in
sub-section (3), in clause (g), for the second proviso, the following proviso shall be substituted, namely:—
"Provided
further that nothing contained in this clause shall apply in respect of a
resolution passed to grant loans, or give guarantee or provide security in
respect of loans under clause (f) of sub-section (3) of section 179 in the
ordinary course of its business by,—
(a) a banking company;
(b) any class of non-banking financial company registered
under Chapter IIIB of the Reserve Bank of India Act, 1934, as may be prescribed
in consultation with the Reserve Bank of India;
(c) any class of housing
finance company registered under the National Housing Bank Act, 1987, as may be
prescribed in consultation with the National Housing Bank; and.".
8) Producer Company – Chapter XXIA
Provisions of Producer Company added after Section 378 as 378A to 378ZU.
Purpose/
Effect: to insert a new Chapter as Chapter XXIA relating to Producer
Companies on similar lines as provided in the Companies Act, 1956.
(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
Great share!
ReplyDeleteI love this bucket list and you know you're right. sand blasting machine manufacturer. We all have the same amount of hours in a day so put them to good use. We all have to start somewhere and your plan is perfect. I understand the way of the attractive to the customer with the products sand blasting machine.
Sand blasting machines like shot blasting machine, sand blasting machine, and grit blasting machines, Wood Working Machinery Dust Extraction unit, Abrasive Blasting Media and various others. Keep it works and share with us your latest information. My time will come but I know I'm on the right path.
They are similar to small communities that you own - check them out if you haven't already. It's all got a lot better than before!t. Value that list of thousands but I'll get there.
Thanks for sharing. Have a nice week ahead.
Visit at : www.gritblast.co.in
Also check
portable shot blasting machine
portable sand blasting machine
sand blasting cabinet
grit blasting cabinet
shot blasting cabinet
Regards,
Ankit Manawat.
Nice post! Such bills do help many companies to regulate their internal business proceedings. On the other hand, Human Resource Management need to look into some important aspects such as key employee definition 2020. This will ensure that HRM personnel carryout nondiscrimination testing for Health Reimbursement Arrangement Plans.
ReplyDelete