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The Companies (Amendment) Bill, 2014 had been passed by the Lok Sabha on December 17, 2014, by Rajya sabha on May 13, 2015, received the president assent on May 25, 2015 and published in the Official Gazette of India on May 26,2015.

The Companies (Amendment) Act, 2015 shall come into force w.e.f May 26, 2015, although MCA issued notification that the provision of section 1 to 12 and 15 to 23 of the Companies Act, 2015 shall come into force w.e.f May 29, 2015.

S.N.

SECTION/SUB-SECTION OF COMPANIES ACT,2013

PROVISIONS OF The COMPANIES ACT,2013

PROVISIONS OF The COMPANIES (Amendment) ACT,2015

REMARKS/IMPORTANT POINTS

1.

Section 2(68)

“Private company” means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed.

The Minimum Paid up capital criteria has been omitted. Now, a        

“Private company” means a company having a minimum paid-up share capital as may be prescribed.

Now for a private company there is no requirement of minimum paid up share capital of Rs. 100,000/-

2.

Section 2(71)(b)

“Public company” means a company which has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed.

The Minimum Paid up capital criteria has been omitted. Now, a

“Public company” means a company which has a minimum paid-up share capital, as may be prescribed.

Now for a public   company there is no requirement of minimum paid up share capital of Rs. 500,000/-

3.

Section 9

Common seal is necessary to acquire, hold and dispose of property, movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name.

The word common seal appear in the section 9 shall be omitted. Hence Common Seal is no more mandatorily required.

 Common seal has become optional.

4.

Section 11

For commencement of Business a declaration is required to be file with ROC that every subscriber to the memorandum has paid the   value of the shares agreed to be taken by him.

No need to file any

Declaration.

Section 11 of Companies Act, 2013 is omitted

5.

Section 12(3)(b)

Every company shall have its name engraved in legible characters on its seal (Common seal)

Every company shall have its name engraved in legible characters on its seal, if any.

Common seal has become optional.

6.

Section 22(2)

A company may, by writing under its common seal, authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India.

A company may, by writing under its common seal, if any, authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India.

Insertion of new proviso:

Provided that in case a company does not have a common seal, the authorisation under this sub-section shall be made by two directors or by a director and the Company Secretary, wherever the Company has appointed a Company Secretary.

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7.

Section 22(3)

A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the effect as if it were made under its common seal.

For the word “have the effect as if it were made under its common seal” took place under section 22(3) shall be omitted.

Now a deed signed on behalf of the Company shall be bind even if there is no Common Seal of the Company is embossed.

8.

Section 46(1)

A certificate, issued under the common seal of the company, specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares.

A certificate issued under the common seal, if any, of the Company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary, specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares.

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9.

Section 76A

Section 76A was not under the Companies Act, 2013.

If a company makes any default in repayment of deposits or any interest due thereon, the Company shall liable to pay additional fine which may extend to upto 10 crores rupees.

                        and

Every officer who is in default shall be punishable with imprisonment which may extend to seven years or fine which may extend to two crore rupees, or both.

This section is newly inserted which makes the deposit rules more strict.

10.

Section 117(3)(g)

Inspection of MGT-14 filed by companies was allowed.

The word “and” at the end of section 117(3)(g) shall be omitted.

After clause g of sub-section 3 of section 117 the following proviso shall be inserted, namely;

 “Provided that no person shall be entitled under section 399 to inspect or obtain copies of such resolutions.”

Public can’t inspect form MGT-14 filed for against the section 179(3).

11.

Section 123(1)

No provision was regarding setting off of previous year losses and depreciation for declaration of dividend.

After the third proviso of section 123(1), the following proviso shall be inserted:

“Provided also that 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.”

A company cannot declare dividend unless previous years losses and depreciation is set off.

12.

Section 124(6)

All shares in respect of which unpaid or unclaimed dividend has been transferred under sub-section 5 of section 123 shall also be transferred by the company in the name of     Investor Education and protection Fund.

All shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the company in the name of Investor Education and protection Fund.

 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.   

  •  

13.

Section 134(3) (ca)

Earlier Not was under the Act.

Insertion of new clause after clause c of sub-section 3 of section 134:

“(ca) 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;”

Now the Board in its report has to disclose any fraud as reported by the auditor under Section 143 (12) other than those reported to Central Government

14.

Section 143(12)

If an auditor during his audit period has reason to believe that an offence involving fraud is being or has been committed against the company by officers or employee of the Company, he shall immediately report the matter to the Central Government within such time and in such manner as may be prescribed (under rule 12 of the Companies [Audit & Auditors] Rules, 2014).

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 to report to the Central Government, shall disclosed details about such frauds in the Board Report in such manner as may be prescribed.

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15.

Section 177(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:

 approval or any subsequent modification of transaction of the Company with Related Party

Insertion of new proviso after section 177(4)(iv):

“Provided that the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the company subject to such conditions as may be prescribed.”

With insertion of this proviso a Company can take several approvals for related party transactions under one resolution.

16.

Section 185(1)(c) and (d)

Earlier Not was under the Act.

Section 185(1)(c):

“any loan made by a holding company to its wholly owned subsidiary company or any guarantee given or security provided by a holding company in respect of any loan made to its wholly owned subsidiary company.”

Section 185(1)(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 loans made under clauses (c) and (d) are utilised by the subsidiary company for its principal business activities.

Loan made by made holding company to its wholly owned subsidiary is exempted from the purview of section 185,

Provided such loan are utilised by subsidiary for its principal business activities.

17.

First proviso to Section 188(1)

Second proviso to section 188(1)

First proviso:

Provided that no contract or arrangement, in the case of a company having a paid up share capital of Rs.  Crore or more or transaction exceeding the sums prescribed under rule 15 of the Companies (Meeting of Board and it powers) Rules, 2014, shall be entered into except with the prior approval of the shareholders by passing of special resolution.

Second proviso:

Provided further that no member of the Company shall vote on such special resolution, to approve any contract or arrangement which may b e entered into by the company, if such member is a related party.

For the words "special resolution", where they occur in the left hand side, the word "resolution" shall be substituted. This means a company can enter into related party transaction by passing an Ordinary Resolution instead of Special Resolution earlier.

Now for entering into contract or arrangement, in the case of a company having a paid up share capital of Rs.  Crore or more or transaction exceeding the sums prescribed under rule 15 of the Companies (Meeting of Board and it powers) Rules, 2014, Ordinary Resolution will suffice.

18.

Fourth  proviso to section 188(1)

Not was earlier in the act

Insertion of new proviso after the third proviso of section 188(1):

Provided also that the requirement of passing the “resolution” under first proviso of section 188(1) shall not be applicable for transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the

Shareholders at the general meeting for approval.

Requirement of passing the ordinary resolution will not  be required in case of a transaction entered into between holding company and its wholly owned subsidiary provided the their accounts are consolidated.

19.

Section 188(1)(3)

Any contract or arrangement entered into by the director or employee, without obtaining the consent of the Board or approval of the shareholder by way of special resolution in the general meeting under sub-section 1 of section 188 and if it not ratified by the board or shareholder as the case may be at a meeting within 3 month from the date when the contract or arrangement was entered, such contract or arrangement shall be voidable at the option of the board.

Now for entering into the transaction as specified in the left hand side “ordinary resolution” will be require.

No more special resolution will be require for entering into transaction by the persons specified in the section 188(3). 

20.

Section 223(4)(a)

The report of any inspector appointed under the chapter XIV of the Companies Act, 2013 i.e. Inspection, Enquiry and investigation:

The report of any inspector appointed under this chapter shall be authenticated either-

  1. by the seal of the Company whose affairs have been investigated; or
  2. by a certificate of a public officer having a custody of the report, as provided under section 76 of the Indian Evidence Act, 1872.

For the words appeared in the left hand side "by the seal", the words "by the seal, if any," shall be substituted.

Common seal has become optional.

21.

Section 248(1)(a)

Where the Registrar (RoC) has reasonable cause  to believe that-

“a company has failed to commence its business within one year of its incorporation.”

After the word ‘incorporation’ take place in the left hand side, the word ‘or’ shall be inserted.

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22.

Section 248(1)(b)

Where the Registrar (RoC) has reasonable cause  to believe that-

“the subscriber to the memorandum have not the subscription whey they had undertaken to pay within a period of one hundred and eighty days from the date of incorporation of a company and a declaration under sub-section 1 of section 11 to this effect has not been filled within one hundred and eighty days of its incorporation.

Omission of clause b of sub-section 1 of section 248.

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23.

Section 419(4) `

The president shall, for the purpose of any case relating to rehabilitation, restructuring, reviving or winding up, of companies, constitute one or more special benches consisting of three or more members, majority necessarily being of judicial members.

The word “winding up” in the Section shall be omitted.

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24.

Section 435(1)

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.”

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25.

Section 436(1)(a)

All offences under this Act shall be triable only by the Special Court established  or designat-

ed for the area in which the registered office of the Company in relation to which the offence is committed or where there are more Special Courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned.   

For the words "all offences under this Act", the word “all offences specified under Sub-section (1) of section 435" shall be substituted.

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26.

Section 462

Subsection (2, 3 and 4 of Section 462) shall be substituted.

Section 462(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 thirty 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 form as may be agreed upon by both the Houses.

Section 462(3):

In reckoning any such period of thirty days as is referred to in sub-section (2), no account shall be taken of any period during which the House referred to in subsection (2) is prorogued or adjourned for more than four consecutive days.

Section 462(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.

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Thanks & Regards
CS Manohar Mishra

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