EoDB and Companies (Amendment) Bill 2016 Part 1
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Slide 1
EoDB vis--vis Companies Amendment Bill, 2016AGBiansSNAP SHOT
Total Proposed Amendment-87
Clarity in Practical Difficulties
Easing for OPC & Small Companies
Insertion of New Sections
Modification by way of Addition
Deletion of Section
EoDB vis--vis Companies Amendment Bill, 2016AGBiansPurpose of Amendment Bill, 2016Addressing difficulties in implementation owing to stringency of compliance requirements
Facilitating ease of doing business in order to promote growth with employment
Harmonization with accounting standards, SEBI Act, 1992 & the RBI Act, 1934 and regulations made there under
EoDB vis--vis Companies Amendment Bill, 2016AGBiansPurpose of Amendment Bill, 2016
Rectifying omissions & Inconsistencies in the Act
Carrying out amendments in the provisions relating to qualifications & Selection of Members of the NCLT and NCLAT in accordance with the direction of the supreme court
EoDB vis--vis Companies Amendment Bill, 2016AGBiansDeletion of Few S2 Clause 49- Interested Director
S 93- Return to be filed with Registrar in case Promoters stake Changes
EoDB vis--vis Companies Amendment Bill, 2016AGBiansInsertion/Substitution of Two Section S 3A- Member severally liable certain cases
Substituted S 90- Register of significant beneficial owners in a company
CHAPTER I PRELIMINARY EoDB vis--vis Companies Amendment Bill, 2016AGBians
SECTION 2 C6 Associate Company Control and Participation in Business Decision AddedEoDB vis--vis Companies Amendment Bill, 2016AGBiansDefinition of Joint venture Added
SECTION 2 C28 Cost Accountant EoDB vis--vis Companies Amendment Bill, 2016AGBiansAnd Holds Valid Certificate of Practice Added
SECTION 2 C30 Debenture EoDB vis--vis Companies Amendment Bill, 2016AGBians2 Exclusions Added
Instrument prescribed by CGInstruments mentioned in IIID of RBI Act
SECTION 2 C41 - Financial Year EoDB vis--vis Companies Amendment Bill, 2016AGBiansAssociate Company AddedNow Foreign Associate Company can also apply for having different FY
SECTION 2 C46 Holding Company EoDB vis--vis Companies Amendment Bill, 2016AGBiansCo. includes Body Corporate
SECTION 2 C49 Interested Director EoDB vis--vis Companies Amendment Bill, 2016AGBiansDeleted
SECTION 2 C51 KMP EoDB vis--vis Companies Amendment Bill, 2016AGBiansAdded Whole time employee till one level below Board designated as KMP
SECTION 2 C57 Net worth EoDB vis--vis Companies Amendment Bill, 2016AGBiansAdded Debit and Credit Balance of P & L
SECTION 2 C71 Public Company EoDB vis--vis Companies Amendment Bill, 2016AGBiansBoth condition should be fulfilled Not a private Co. has minimum paid up capital
Added AND
SECTION 2 C76 Related Party EoDB vis--vis Companies Amendment Bill, 2016AGBiansSubstituted Body Corporate for Company
Added Investing & Venturer Co.
SECTION 2 C85 Small Company EoDB vis--vis Companies Amendment Bill, 2016AGBiansIncreased
Paid up From 5 Cr. To 10crTurnover 20 Cr. To 100cr
SECTION 2 C87 Subsidiary Company EoDB vis--vis Companies Amendment Bill, 2016AGBiansSubstituted Total Voting power for Total share capital
Limit of upto 2 Layers removed
SECTION 2 C91 Turnover EoDB vis--vis Companies Amendment Bill, 2016AGBiansGross amount of Revenue Recognized instead of Realized
CHAPTER II INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 3A- Members severally liable certain cases
EoDB vis--vis Companies Amendment Bill, 2016AGBiansLiability ofmembers when the business is carried on for more than 6 months with members fewer than7 in case of public co. and fewer than 2 in case of private co.
S 4- Memorandum
EoDB vis--vis Companies Amendment Bill, 2016AGBiansNow its upto Company whether to state object or not
Name reservation up to 20 days instead of 60
Company Model Memorandum will available
S 7 Incorporation of Company
EoDB vis--vis Companies Amendment Bill, 2016AGBiansReplacement of requirement of Affidavit from 1st Subscribers and Directors with Self Declaration from them
S 12- Registered Office of Company
EoDB vis--vis Companies Amendment Bill, 2016AGBiansHave registered office within 30 days from date of incorporation instead of 15 days as specified earlier
Change of Situation shall be given to registered within 30 days instead of 15 days as specified earlier
S 21- Authentication of documents, proceedings and contracts
EoDB vis--vis Companies Amendment Bill, 2016AGBiansAllowed authentication by any employee duly authorized by the Board in addition to KMP & Officer
CHAPTER III PROSPECTUS AND ALLOTMENT OF SECURITIES EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 26- matters to be stated in prospectus
EoDB vis--vis Companies Amendment Bill, 2016AGBiansAdded Information & Reports on Financial informations specified by SEBI in consultation with CG
S 35- Civil Liability for mis-statements in Prospectus
EoDB vis--vis Companies Amendment Bill, 2016AGBiansExemption Added
Person Not liable if he believes on Report or Statement of an Expert
S 42 Offer or Invitation for subscription of securities on private placement EoDB vis--vis Companies Amendment Bill, 2016AGBiansSimplify the requirement of Private Placement
Separate Offer Letter
Reduced No. of Filing
Modify Penalty Provision
Sharpening the axe in the ForestAGBiansNOW ITS STORY TIME
CHAPTER IV SHARE CAPITAL AND DEBENTURES EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 47- Voting Rights
EoDB vis--vis Companies Amendment Bill, 2016AGBiansAdded Shall be subject to Section 188 (1)
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S 53- Prohibition on Issue of Shares at Discount
EoDB vis--vis Companies Amendment Bill, 2016AGBians Allowed Companies to issue shares at discount to its creditor subject to requirement of passing of SR.
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S 54- Issue of Sweat Equity Shares
EoDB vis--vis Companies Amendment Bill, 2016AGBiansRemove Restriction of 1 Year
Now Co. can issue sweat equity share right after commencement of its business
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S 62- Further Issue of Share Capital
EoDB vis--vis Companies Amendment Bill, 2016AGBians Wider Modes of Delivery any mode having proof of Delivery
Applicability of Chapter III in case of issue of securities under S 62(1)(c)
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CHAPTER V ACCEPTANCE OF DEPOSITS BY COMPANIES EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 73- Prohibition on Acceptance of Deposits from PublicEoDB vis--vis Companies Amendment Bill, 2016AGBians
Depositing 20 % instead of 15% of Maturity on 30th April every year
Done away with Deposit Insurance
Now deposit can be accepted after 5 years of default made good
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S 74- Repayment of Deposits etc accepted before commencement of this Act
EoDB vis--vis Companies Amendment Bill, 2016AGBiansNow Repayment of deposit accepted before this Act within 3 year instead of 1 Year earlier
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S 76A- Punishment for contravention of section 73 or section 76
EoDB vis--vis Companies Amendment Bill, 2016AGBiansEarlier Rupees 1Cr or
Added twice the amount of deposit accepted,
whichever is lower
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CHAPTER VI REGISTRATION OF CHARGES EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 77- Duty to register Charges etc
EoDB vis--vis Companies Amendment Bill, 2016AGBiansExemption Added
This section shall not apply on Charges Prescribed in consultation with RBI
S 82- Company to Report Satisfaction of Charge
EoDB vis--vis Companies Amendment Bill, 2016AGBiansAdded Additional fees can be paid up to 300 days
Lottery Ka TicketAGBiansNOW ITS STORY TIME
CHAPTER VII MANAGEMENT AND ADMINISTRATION EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 89- Declaration in respect of Beneficial Interest in any Share
EoDB vis--vis Companies Amendment Bill, 2016AGBiansDefinition of Beneficial Interest in a Share
S 90- Investigation of Beneficial Ownership of Shares in certain Cases
EoDB vis--vis Companies Amendment Bill, 2016AGBiansSubstituted
S 90- Register of significant beneficial owners in a company
S 92- Annual Return
EoDB vis--vis Companies Amendment Bill, 2016AGBians No need to disclose Indebtedness
Details of FIIs less now
Annual return extract shall not form part of Board Report
Disclosure of web address/ web Link of annual return in Board Report
CG provide abridged Form of Annual Return for OPC & small Co.
S 93- Return to be filed with Registrar in case promoters stake changes
EoDB vis--vis Companies Amendment Bill, 2016AGBiansDeleted
S 94- Place of Keeping and Inspection of Registers, Returns etc
EoDB vis--vis Companies Amendment Bill, 2016AGBiansAmbiguity removed - No Need of proposed SR in advance - in case of Place other than Registered Office
Extract of Index/Return/ Register cannot be taken
S 96- Annual General Meeting
EoDB vis--vis Companies Amendment Bill, 2016AGBiansProviso Added
AGM of Unlisted Company can be convened at any place in India with the approval of all shareholder in advance
S 100- Calling of Extraordinary General meeting
EoDB vis--vis Companies Amendment Bill, 2016AGBians Allowed
Wholly Owned Subsidiary of Foreign Co. to hold EGM outside India
S 101- Notice of Meeting
EoDB vis--vis Companies Amendment Bill, 2016AGBians General meeting may held at shorter notice if AGM Consent is given by 95% members entitled to vote
In case of any other meeting, consent is given by 95% of paid up share capital
S 110- Postal Ballot
EoDB vis--vis Companies Amendment Bill, 2016AGBiansCo. may transact an item, which is mandatorily required to be transacted through postal ballot, at GM also where the facility of electronic voting is provided by Co.
S 117- Resolution and Agreement to be Filed
EoDB vis--vis Companies Amendment Bill, 2016AGBians Exemption to Banking Co. from filing resolution mentioned u/s 179
For Co.- Min. Fine reduces to 1Lac from 5 Lac
For default in Officer- Min. Fine reduces to 50,000 from 1 Lac
CHAPTER VIII DECLARATION AND PAYMENT OF DIVIDEND EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 123
Declaration of Dividend
Added : Now Interim Dividend for FY can also be declared after the closure of FY till the date of AGM
Out of the Profits of quarter preceding the date of declaration of the interim dividend
EoDB vis--vis Companies Amendment Bill, 2016AGBians
CHAPTER IX ACCOUNTS OF COMPANIES EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 129- Financial Statements
CFS of all subsidiaries and Associate Co to be prepared in addition to Parent Co.
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 130- Re- opening of Accounts on Courts or Tribunals Orders
Earlier - No period prescribed for Re-opening.
Now - Accounts can be re-opened for 8 years or longer period as may be prescribed
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 132- Constitution of National Financial Reporting Authority
In case of firms-Penalty for Professional Mis-conduct decreased to Rs. 5 Lacs from Rs. 10 LacsEoDB vis--vis Companies Amendment Bill, 2016AGBians
S134 - Financial Statement, Boards Report etc.
Earlier CEO Signature only if he is a director
Now CEO Signature Mandatory - whether he is director or notEoDB vis--vis Companies Amendment Bill, 2016AGBians
S134 - Financial Statement, Boards Report etc.
Abridged Board Report for OPC and Small Companies may be prescribed in times to come power delegated to CGEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 135- Corporate Social Responsibility
Ambiguity resolved-immediately preceding the F.Y
No Independent Director - CSR Committee two or more directorsEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 136- Right of Member to Copies of audited Financial Statement
Added Copies of documents can be sent 21 days before the meeting if, agreed by 95% of the members
CFS of foreign subsidiary is placed on the website of the listed company
Copy of Financials of Subsidiary to be provided to all member who asksEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 137- Copy of Financial Statement to be filed with Registrar
Filing of unaudited financials of foreign subsidiaries, if not required to be audited under foreign LawsEoDB vis--vis Companies Amendment Bill, 2016AGBians
Thomas Edison & his MotherAGBians
NOW ITS STORY TIME
CHAPTER X AUDIT AND AUDITORSEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 139 - Appointment of Auditors
Ratification of auditor - Not required now
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S140- Removal, Resignation of Auditor and giving of Special Notice
Penalty for not filing resignation within 30 days lowered to Rs. 50,000 or the remuneration of the auditor, whichever is less
From Rs. 5Lacs
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 141- Eligibility, Qualifications and Disqualifications of Auditors
Relative now Defined for the Section relatively light definition - Inserted as Explanation
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 143- Powers and Duties of Auditors and Auditing Standards
Added Right to access records of Associate Co. also
Earlier Right to access records of only Subsidiary Co.
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 147- Punishment of Contravention
Revised Upper limit connecting it with multiple of fee received
4 times of Auditors Remuneration -unknowingly
8 times of the auditors remuneration - knowinglyEoDB vis--vis Companies Amendment Bill, 2016AGBians
S148- CG to prescribe audit of items of cost in respect of certain companies
Ambiguity removed by way of
CAiP to CA ICWAI to ICAI
EoDB vis--vis Companies Amendment Bill, 2016AGBians
CHAPTER XI APPOINTMENT AND QUALIFICATIONS OF DIRECTORSEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 149- Company to have Board of Directors
Resident Director limit of 182 days shall apply proportionately in case of newly incorporated Company
Independent Director - Pecuniary Relationship defined as transaction exceeding 10% of his total income or as may be prescribed
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 153 - Application for allotment of Director Identification Number
Empower CG to recognize any other Identification no. in place of DIN
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 160- Right of Persons other than retiring Directors to stand for Directorship
Deposit of Rs 1 lac not applicable in case Independent director Is recommended by Nomination and Remuneration Committee EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 161- Appointment of Additional Director, Alternate Director and Nominee Director
Ambiguity Removed
Added -- Director cannot become Alternate Director
Added Casual Vacancy shall also be approved subsequently by Members in next GM
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 164- Disqualifications for appointment of Director
Ambiguity RemovedAdded Director appointed in Defaulting Company shall not attain disqualification for 6 monthsEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 165- Number of Directorship
Explanation Added Now Excludes directorship of Dormant Companies
EoDB vis--vis Companies Amendment Bill, 2016AGBians
S 167- Vacation of Office of Director
Ambiguity Removed by addition
If director incurs any disqualification under S164(2), director shall vacate office in all companies other than the company in defaultEoDB vis--vis Companies Amendment Bill, 2016AGBians
S 168- Resignation of Director
Ease in case of Resigning - DIR-11 Becomes Optional Now required only in case of tussle with Company
EoDB vis--vis Companies Amendment Bill, 2016AGBians
Ajay Garg Team [email protected]
INTERMISSION
