Companies Amendment Act 2017-Summary of Sec and Rules notified on May 7th 2018

Section reference of Companies Act, 2013

Section reference of Companies Amendment Act, 2017

Amended Sections/Sub-sections /Clauses / Provisos

Section 2- Clause 6 and 87

Section 2- Clause (i) and (xiii)- Definitions

(i) Joint Venture defined in Explanation

(xiii) total share capital substituted with total voting power

Section 26-Matters to be stated in prospectus

Section 8

Sub-section (1) following word inserted:

state such information and set out such reports on financial information as may be specified by the Securities and Exchange Board in consultation with the Central Government.

Proviso added after Sub Section (1)

Provided that until the Securities and Exchange Board specifies the information and reports on financial information under this sub-section, the regulations made by the Securities and Exchange

Board under the Securities and Exchange Board

of India Act, 1992, in respect of such financial information or reports on financial information shall apply/ clause (a) (b) (d) omitted

Section 54-Issue of Sweat Equity Shares

Section-13

Subsection 1 clause (c) shall be omitted

Section 77-Duty to register Charges

Section 18

4th Proviso added after sub section 1:

Provided also that this section shall not apply to such charges as may be prescribed in consultation with the Reserve Bank of India.

Section 78-Application for registration of charge

Section 19

In place of register the charge within the period specified in section 77, register the charge within the period of thirty days referred to in sub- section (1) of section 77 substituted

Section 89-Declaration in respect of beneficial interest in any share

Section 21 (i) and (ii)

Sub section (6) within the time specified under section 403 omitted Sub section (7) under the first proviso to sub- section (1) of section 403 the word "therein" substituted

Section 92-Annual Return

Section 23 (iii) and (iv)

sub-section (4) within the time as specified, under section 403 omitted sub-section (5) under section 403 with additional fees the word "therein" substituted

Section 117-Resolution and agreements to be filed

Section 30

Complete section notified- reference of Section 403 wherever appearing in section 117 omitted

Section 121-Report on annual general meeting

Section 31

Complete section notified

Section 129- Financial Statement

Section 33

Clause 3- 'Associate Companies' also added for consolidation of financials

Section 137- Copy of Financial Statement to be filed with Registrar

Section 39

"within the time specified under section 403" omitted- wherever appearing in the Section 137

Section 139- Appointment of Auditors

Section 40

Proviso regarding ratification of the appointment the Auditor at every Annual General Meeting-omitted

Section 149-

Section 46

Sub-section (3) completely Substituted

Sub-section (6) (c) words "pecuniary relationship", the words "pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten per cent. of his total income or such amount as may be prescribed," substituted

Sub-section (6) (d) completely substituted Sub-section 6 (e) (i) proviso added:

Provided that in case of a relative who is an employee, the restriction under this clause shall not apply for his employment during preceding three financial years.

Section 157-

Section 49

Sub-section (1), the words and figures, "within the time specified under section 403" omitted

Sub-section (2), the words and figures, "before the expiry of the period specified under section 403 with additional fee" omitted

Section 164-

Disqualification for appointment of Director

Section 52

Sub-section (2) proviso added: Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment

Sub-section (3) proviso added: Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification.

Section 167- Vacation of office of Director

Section 54

In Sub-section (1) (a) proviso added:

Provided that where he incurs disqualification under sub-section (2) of section 164, the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section.

In Sub-section (1) (f) proviso added:

Provided that the office shall not be vacated by the director in case of orders referred to in clauses (e) and (f) -

(i) for thirty days from the date of conviction or order of disqualification;

(ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed of; or

(iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed of.

Section 168- Resignation of Director

Section 55

Sub-section (1), in the proviso, for the words, "director shall also forward", the words "director may also forward" shall be substituted- Making the filing of form DIR-11 voluntary

Section 173- Meetings of the Board

Section 56

In Sub-section (2) second proviso added: Provided further that where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means in such meeting on any matter specified under the first proviso.

Section 177-Audit Committee

Section 57

Sub-section (1) "every listed company", the words "every listed public company" substituted.

Sub-section (4) following provisos added:

Provided further that in case of transaction, other than transactions referred to in section 188, and where Audit Committee does not approve the transaction, it shall make its recommendations to the Board.

Provided also that in case any transaction involving any amount not exceeding one crore rupees is entered into by a director or officer of the company without obtaining the approval of the Audit Committee and it is not ratified by the Audit Committee within three months from the date of the transaction, such transaction shall be voidable at the option of the Audit Committee and if the transaction is with the related party to any director or is authorized by any other director, the director concerned shall indemnify the company against any loss incurred by it.

Provided also that the provisions of this clause shall not apply to a transaction, other than a transaction referred to in section 188, between a holding company and its wholly owned subsidiary company.

Section 178- Nomination and Remuneration Committee and Stakeholders Relationship Committee

Section 58

Sub-section (1) "every listed company", the words "every listed public company" substituted.

Sub-section (2), the words "shall carry out evaluation of every director's performance", the words "shall specify the manner for effective evaluation of performance of Board, its committees and individual directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance" shall be substituted.

Sub-section (4), in clause (c), for the proviso, the following proviso substituted: -

Provided that such policy shall be placed on the website of the company, if any, and the salient features of the policy and changes therein, if any, along with the web address of the policy, if any, shall be disclosed in the Board's report.

Sub-section (8), in the proviso, for the words "non-consideration of resolution of any  grievance", the words "inability to resolve or consider any grievance" shall be substituted.

Complete section notified- Loans to person/companies in which Director of the Company is interested allowed with the approval of members by way of special resolution.

(ii) made in shares allotted in pursuance of clause (a) of sub-section (1) of section 62 or in shares allotted in pursuance of rights issues made by a body corporate;

(iii) made, in respect of investment or lending activities, by a non-banking financial company registered under Chapter III-B of the Reserve Bank of India Act, 1934 and whose principal business is acquisition of securities in the Explanation, in clause (a), after the words "other securities" the following words inserted,

and a company will be deemed to be principally engaged in the business of acquisition of shares, debentures or other securities, if its assets in the form of investment in shares, debentures or other securities constitute not less than fifty per cent. of its total assets, or if its income derived from investment business constitutes not less than fifty per cent. as a proportion of its gross income.

Section 403-Fee for filing

First Proviso to clause (i) of Section 80 and clause (ii) of section 80;

Sub-section (1) first and provisos substituted:

Provided that where any document, fact or information required to be submitted, filed, registered or recorded, as the case may be, under section 92 or 137 is not submitted, filed, registered or recorded, as the case may be, within the period provided in those sections, without prejudice to any other legal action or liability under this Act, it may be submitted, filed, registered or recorded, as the case may be, after expiry of the period so provided in those sections, on payment of such additional fee as may be prescribed, which shall not be less than one hundred rupees per day and different amounts may be prescribed for different classes of companies.

Provided further that where the document, fact or information, as the case may be, in cases other than referred to in the first proviso, is not submitted, filed, registered or recorded, as the case may be, within the period provided in the relevant section, it may, without prejudice to any other legal action or liability under this Act, be submitted, filed, registered or recorded as the case may be, on payment of such additional fee as may be prescribed and different fees may be prescribed for different classes of companies.

Provided also that where there is default on two or more occasions in submitting, filing,

registering or recording of the document, fact or

information, it may, without prejudice to any other legal action or liability under this Act, be submitted, filed, registered or recorded, as the case may be, on payment of a higher additional fee, as may be prescribed and which shall not be lesser than twice the additional fee provided under the first or the second proviso as applicable.

Sub-section (2) substituted:

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 fee and additional fee, be liable for the penalty or punishment provided under this Act for such

failure or default.

Section 410- Constitution of Appellate Tribunal

Section 83

for the words "orders of the Tribunal", the

words "orders of the Tribunal or of the National Financial Reporting Authority" shall be

substituted.

Section 435- Establishment

of Special Courts

Section 86

Sub-section 1 and 2 completely substituted

Section 438- Application of Code to proceedings before Special Court

Section 87

for the words "deemed to be a Court of Session", the words "deemed to be a Court of Session or the court of Metropolitan Magistrate or a Judicial Magistrate of the First Class, as the case

may be" substituted

Section 439-Offence to be

non-cognizable

Section 88

sub-section (2), after the words "a shareholder",

the words "or a member" inserted.

Section 440-Transitional Provisions

Section 89

for the words "Court of Session", at both the places, the words "Court of Session or the Court of Metropolitan Magistrate or a Judicial Magistrate of the First Class, as the case may

be" substituted

Rules notified on May 07, 2018

Current Rule

Amended Rule

The Companies (Specification of Definitions Details) Amendment Rules, 2018

Rule 2- definitions

Rule 2(1) (r)-Total Share Capital- omitted

The Companies (prospectus and Allotment of Securities) Amendment Rules, 2018

Rule 3- Information to be stated in the Prospectus

Rule 4- Reports to be set out it Prospectus

Rule 5-Other matters and

Omitted Rule 3 to 6

reports to be stated in prospectus

The Companies (share capital and Debentures) second Amendment Rules,

2018

Rule 8-Issue of Sweat Equity

Rule 8 (1) Explanation to (i) (a)- words for at least last one year'- omitted

The Companies (Audit and Auditors)

Amendment Rules, 2018

Rule-3-Manner and procedure of selection and appointment of auditors

Rule 3-Explanation omitted, proviso to sub rule 7 omitted

Rule 9-Liability to devolve on concerned partners only

Rule 9- omitted

Rule 10A- Internal Financial Controls System

Rule 10A- 'adequate internal financial

controls system', the words "internal financial controls with reference to financial statements' shall be substituted

Rule 14-

Remuneration of Cost Auditor

Rule 14-a(i) and b- 'who is a cost accountant in practice', the words

'who is a cost accountant' shall be substituted

The Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018

Rule 5- Qualification of Independent Director

Inserted Rule 5(2) : None of the relatives of an independent director, for the purposes of sub- clauses (ii) and (iii) of clause (d) of sub-section (6) of section 149,-

(i) is indebted to the company, its holding, subsidiary or

associate company or their promoters, or directors; or

(ii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company

for an amount of fifty lakhs rupees, at any time during the two immediately preceding financial years or during the current financial year.

The Companies (Meetings of Board and its Powers) Amendment Rules, 2018

Rule 4- Matter not to be dealt with in a meeting through video conferencing or other audio visual means

Proviso inserted after Rule 4- Provided that where there is quorum presence in a meeting through physical of directors, any other director may participate conferencing through video or other audio visual means.

Rule 6-Every listed company substituted with 'Every listed Public Company'

Rule 6-

Committees of the Board

Rule 13- Sub rule 1 and explanation to it omitted

Rule-13-Special

Resolution

The Companies (Registration offices and Fees Second Amendment Rules, 2018

Rule 10- Procedure on receipt of any application or form or document electronically

Rule 10 (3)-proviso- Provided that Registrar shall allow fifteen days, time for re-submission in case of reservation of a name through web service -RUN for rectifications of defects if any.

Annexure, in item I (Fee for filing under section 403 of the Companies Act,2013: Additional fees quantum has been revised. Major revision is in the forms required to be filed under Section 92 or 137. For the delay beyond period as mentioned in 92(4) or 137(1) of the Act, an additional fees of Rs. 100/- day will be levied

w.e.f July 1, 2018.

Section reference of Companies Act, 2013

Section reference of Companies

Amendment Act, 2017

Section 7- Incorporation of Company

Section 5

Section 12-Registered Office of Company

Section 6

Section 42-Offer or invitation for subscription of securities on private placement

Section 10

Section 73-Prohibition on acceptance of deposits from public

Section 15

Section 74-Repayment of deposits, etc., accepted before commencement of this Act

Section 16

Section 82-Company to report satisfaction of charge

Section 20

Section 89 (in parts)- Declaration in respect of beneficial interest in any share

Section 21

Section 90-Investigation of beneficial ownership of shares in certain cases

Section 22

Section 92 (in parts)- Annual return

Section 23

Section 93- Return to be filed with Registrar in case promoters' stake

changes

Section 24

Section 94-Place of keeping and inspection of registers, returns, etc.

Section 25

Section 96-Annual general meeting

Section 26

Section 101-Notice of Meeting

Section 28

Section 134-Financial statement, Board's report, etc.

Section 36

Section 135-Corporate Social Responsibility

Section 37

Section 194-Prohibition on forward dealings in securities of company by director or key managerial personnel

Section 64

Section 196-Appointment of managing director, whole

Section 66

Section 197- Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

Section 67

Section 198-Calculation of profits

Section 68

Section 200-Central Government or company to fix limit with regard to remuneration

Section 69

Section 201- Forms of, and procedure in relation to, certain applications

Section 70

Section 216-Investigation of ownership of company

Section 71

Section 366-Companies capable of being registered

Section 75

Section 374-Obligations of companies registering under this Part

Section 76

Section 403 (in parts)- Fee for filing, etc.

Section 80

Section 406-Power to modify Act in its application to Nidhis

Section 81