MCA's commencement notification dated 9th Feb 2018

Ministry of Corporate Affairs (MCA) vide its commencement notification dated 09/02/2018 appointed 09/02/2018 as the date on which following 44 amendments by Companies (Amendment) Act, 2017 shall come into force :

1. Section 2: Amendment in Definitions except amendment made in the definition of associated company and subsidiary company.

2. Section 3: Amendment in section 3 by inserting Section 3A providing members severally liable in certain case.

3. Section 21: Documents can be authenticated by officer or employee of the company.

4. Section 35: Civil Liability for mis-statement in prospectus (Ground of Defense for experts in case of misstatement in prospectus inserted)

5. Section 47: Voting rights

6. Section 53: Prohibition on issue of shares at discount (Shares can be issued at discount to creditors for converting debt into shares.)

7. Section 62: Further issue of share capital. (Inserting courier as the mode of dispatch of notice).

8. Section 76A: Amendment in penalty for the contravention of provision of Deposit.

9. Section 100: Calling of EGM (EGM of a company, other than wholly owned subsidiary of the company incorporated outside India, shall be held at a place within India.)

10. Section 101: Amendment regarding notice of General meeting on shorter notice.

11. Section 110: Postal Ballot (Business by postal ballot may be transacted by electronic means).

12. Section 123: Declaration of dividend (provisions regarding declaration of interim dividend has been amended)

13. Section 130: Re-opening of accounts at Court’s/Tribunal’s order (Books of accounts can be reopened u/s 130 for not more than eight years of immediately preceding the current year)

14. Section 132: Amendment in the provisions of Constitution of NFRA

15. Section 136: Right of member to copies of audited financial statement (if copies are sent less than 21 days before the meeting, they shall be deemed to be duly sent if approved by majority members holding atleast 95% shares)

16. Section 140: Removal, resignation of auditor and giving of notice (In case of non-filing of ADT-3 by resigning auditor, he shall be punishable with Rs.50K or remuneration of the auditor whichever is less)

17. Section 141: Eligibility, Qualification and disqualification of auditors

18. Section 143: Powers and duties of auditors and auditing standards (Auditor can have access of records of all subsidiaries and associates companies)

19. Section 147: Amendment in the penalty for contravention of provisions of audit under Section 139 to Section 146.

20. Section 148: Cost audit (now cost audit can also be conducted by Cost Accountant not holding COP)

21. Section 152: Appointment of directors

22. Section 153: Application for allotment of DIN ( CG may prescribe any other identification which shall be treated as DIN)

23. Section 160: Right of persons other than retiring directors to stand for directorship (deposit of amount is not required for appointment of independent director or director recommended by Nomination and remuneration committee or by board if there is no such committee)

24. Section 161: Amendment in the provisions of alternate director and director in casual vacancy.

25. Section 165: Number of Directorship (for reckoning number of companies, dormant companies shall not be included)

26. Section 180(1)(c ): Borrowing to be borrowed together with money already borrow shall not exceed paid up capital, free reserves and security premium without passing special resolution.

27. Section 184(4) & (5): Disclosure of Director (Penalty provision of director contravening this section and non applicability of Section 184 have been amended)

28. Section 188: Related Party Transaction (Regarding voting rights of related party, such provision shall not apply to a company in which majority of members, in numbers are related party)

29. Section 194: Omitted (Prohibition on forward dealing in securities of company by director or KMP)

30. Section 195: Omitted (Prohibition on insider trading of securities)

31. Section 223: Inspector’s Report (A copy of inspection report may be obtained by members, creditors or any other concerned person by making an application to CG)

32. Section 236: Purchase of Minority Shareholding (the word transferor company is substituted with the word ‘company whose shares are being transferred’ in sub-section (3), (4) and (5))

33. Section 247: Valuation by registered valuers (Registered valuers should not have direct or indirect interest during the period of 3 years before his appointment or 3 years after the valuation).

34. Section 379: Applicability of Act to Foreign companies (Section 380 to 386 and Section 390 and Section 393 shall apply to all foreign companies)

35. Section 384: Debentures, annual return, registration of charges, books of accounts and their inspection (Provision of CSR u/s 135 shall be applicable on foreign companies)

36. Section 391: Application of section 34 to 36 and Chapter XX to foreign companies (provisions of winding up shall be applicable on foreign companies if they have raised money through issue of securities which have not been repaid or redeemed)

37. Section 409: Amendment in qualification of President and members of Tribunal

38. Section 411: Amendment in qualification of Chairperson and Members of Appellate Tribunal

39. Section 412: Amendment in the provision of Selection of members of Tribunal and Appellate Tribunal.

40. Section 441: Compounding of Certain offence (Word 'with fine' only substituted with "not being an offence punishable with imprisonment only, or punishable with imprisonment and also with fine)

41. Section 446A: After Section 446, section 446 A inserted providing factors for determining level of punishment.

42. Section 446B: New Section 446 B is inserted providing lesser penalties for OPCs and small companies.

43. Section 447: Punishment for fraud (Quantum of amount involved in fraud is introduced and penalty for fraud lesser than the specified quantum of amount is also inserted)

44. Section 458: Delegation by CG of its powers and functions (Proviso to section 458(1) regarding insider trading and forward contracts has been omitted)

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CS Peer mehboob 
on 13 February 2018
Published in Corporate Law
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