KEY AMENDMENTS TO COMPANIES ACT, 2015:
No requirement of Common Seal:
- Not mandatory to have common seal in the company
- In such a case, documents shall either be signed by 2 Directors, or
1 Director and Company Secretary, jointly
No need of Certificate of Commencement of business:
- No need of Certificate of Commencement of Business for the starting the operations
- These can be commenced right after company is incorporated
No bar on minimum share capital:
- Companies incorporated after the effective date is notified, there will be no limit on minimum share capital in case of Private and Public Company
- Regardless the above, Government has power to specify minimum share capital through rules which will be known at the time of notification
No Public inspection of certain Board Resolutions:
- Certain Board Resolutions will not be available for inspection by general public
Establishment of Special Courts:
- Setting up the Special Courts for trial of offences under Companies Act, 2013
- Cases having criminal punishment of two years or more will be referred to Special Courts.
Related Party Transaction (RPT):
- Omnibus approval for RPT to be routed through Audit Committee
- Shareholder’s approval replaced by more than 50% majority, instead of 75% majority, as specified earlier
- No shareholder approval required, in case transactions are between Holding and Subsidiary Company, subject to preparation of consolidated accounts and approval of the same by shareholders.
Granting of Loan/Guarantee/ Security, by Holding Company to support principal business of its Subsidiary:
- Holding Company can now grant loan to wholly owned subsidiary company, subject to limits as prescribed
- Holding Company can give guarantee/ security in respect of any loan given to its wholly owned subsidiary, subject to limits as prescribed
- Holding Company can give guarantee/ security in respect of loan given by any public financial institution to its wholly owned subsidiary, subject to limits as prescribed
Declaration of Dividend:
- Company shall not declare any dividend, till the time, losses carried over along with unadjusted depreciation, that was not provided in earlier year(s), are settled in entirety against current profits of the Company.
Reporting of Fraud:
- Auditor to report to Central Government, any fraud committed by any employees of the Company, as per the threshold defined in the Rule
- Auditor to report to Audit Committee or Board, for any fraud committed, which is below the threshold limit as defined in the Rule
- Board Report shall also disclose the details of fraud as reported to Audit Committee or Board, in addition to the frauds reported to Central Government
Revision of penalty for non-payment of Deposits:
- Company shall be punishable with fine between INR 10 million to INR 100 million, in event of non-payment of Deposits
- Every officer-in-default shall be punishable with imprisonment upto 7 years or with fine upto INR 20 million, or both
- Wilful contravention of the provision will be regarded equal to Fraud
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