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In the wake of changing business conditions, new companies act 2015 was rolled out and notable changes have been made in order to make a conducive business atmosphere, also key initiatives had been introduced to support investors.A brief gist of key changes to the amended new companies’ act 2015 is given below:

PAID-UP CAPITAL 2(68) & 2(71)

The Companies Act, 2013 defined a Private Limited Company as: ‘Private company’ means a company having aminimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed”.

This effectively meant that every private limited company in India must have a minimum paid-up capital (invested funds) of one lakh rupees irrespective of the authorized capital. 

But the Companies Amendment Act, 2015 removes the words “of one lakh rupees or such higher paid-up share capital” relating to Private limited company thereby necessitating that there is NO minimum capital requirement for starting a private limited company. Also the minimum paid up share capital of limited company of ‘five lakh rupees or such higher paid up capital have also been removed thereby ensuring that a public limited company can be commenced without a minimum capital of five lakh rupees.


Under the old act there was a prerogative that every registered company should obtain a commencement of business certificate before initiating its operations i.e. post incorporation but the new act had wiped the requirement of obtaining such commencement of business certificate

SEAL - 9/12/223

Earlier for providing various authorizations and attestations on behalf of the company, a common seal was mandatory now the said requirement was made optional since the new act came with a reservation such that the director’s signature is also acceptable in lieu of common seal of the company. This insertion also caters the requirement that the companies share certificate is valid and legal if it bears the signature of either directors


Until the new companies amendment act 2015, all the Board Resolutions executed by the Company had to be filedwith the Ministry of Corporate Affairs, since they are public documents and the same can be accessed by paying requisite fee from MCA. But in order to protect the confidentiality of the organization a new clause had been included in the amended act 2015 which states that the “provided that no person shall be entitled under section 399 (right to electronically inspect any document filed with ROC)to inspect or obtain copies of such resolutions” has been inserted.  This clearly states that such public documents are no longer accessible and available to public


The Companies Amendment Act, 2015 has clearly stated 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. Thus companies having losses or negative reserves cannot declare dividends.


The new Companies amended Act 2015, has clearly stated that if any auditor of a company in the course of the performance of his duties as an auditor, has the reason to believe that an offence of fraud involving such amount or amounts (as 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. 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.Further that the companies whose auditors have reported frauds to the Audit Committee or the Board but not reported to the Central Government, shall disclose the details about such frauds in the Board Report in the prescribed manner.


Earlier the company can grant loan to its managing or whole-time director under two conditions: 

a) As a part of the conditions of service extended by the company to all its employees or pursuant to any scheme approved by the members by a special resolution;

b) Company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.

Now the new amended act saw addition of another two provisions:

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

(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 loansmade under clauses (c) and (d) are utilized by the subsidiary company for its principal business activities."


The other notable changes is given below in nutshell:

a. New insertion of section 76A ‘Prescribing specific punishment for deposits accepted’ and to deal with defaults in repayment of depositors (in lieu of protecting depositor’s interests)

b. Empowering Audit committee to give standalone (omnibus) approvals for related party transactions annually

c. Substituting ‘Ordinary’ resolution in place of ‘Special’ resolution for approval of related party transactions by non-related shareholders

d. Bail restrictions to apply only for offences relating to fraud u/s 447 (Fraud in relation of affairs of companyor body corporate)

e. For speedy disposal of cases, the new act amended sec 435 & 436 such that ‘Special courts to try only those offences which carry imprisonment of two years or more’.


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