| SECTIONS | AMENDED PROVISIONS | BL View |
| Insertion of section 3A
(Members shall be personally liable) |
Personal liability of members in case where number of members in a company is reduced from minimum statutory requirement. (For instance below 2 in case of Private company and below 7 in case of Public Company)
Effective from 09.02.2018 |
This Provisions was there in Companies Act, 1956 but was missing in Companies Act, 2013. |
| Section 12
(Situation of Registered Office) |
Every Company shall have, within 30 days of its incorporation, Registered Office.
Effective from 27.07.2018 |
Earlier it was 15 days instead of 30 days. More relaxation has been given. |
| Section 21
(Authentication of documents, proceedings or contracts) |
Not only KMPs but also the employees of the company can also be authorized to authenticate the documents on behalf of the company.
Effective from 09.02.2018 |
Aim is to
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| Section 42
(Private Placement) |
Though the entire section has been substituted but major changes are: – • Return of allotment has to be filed within 15 days instead of 30 days. • Money received under the private placement shall not be utilized unless the return of allotment is filed with the ROC. • Private Placement offer letter shall not contain any right of renunciation. Effective from 07.08.2018
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Rationalization of Private Placement. |
| Section 139 (Appointment of Auditor) |
Now no annual ratification is required at annual general meeting of members for the continuity of an Auditor.
Effective from 07.05.2018 |
Aim is to remove the unnecessary compliances |
| Section 185
(Loan to Directors) |
The entire section has been substituted.
Now, Company can give loan to or provide security in connection with loan taken by a person in whom the director is interested subject to the approval of members by way of special resolution. However, Loan to Effective from 07.05.2018 |
Rationalization in the provisions of providing loan to directors.
Earlier the provisions were restricting the company from giving loan to or provide security in connection with loan taken by any person in whom the directors are interested. |
| Section 186 (Loans and Investment by company) |
• Now employees have been excluded from the ambit of this section. • It is proposed that shareholders’ approval will not be required where a loan or guarantee is given or where a security has been provided by a company to its wholly owned subsidiary company or a joint venture company, or acquisition is made by a holding company, by way of subscription, purchase or otherwise of, the securities of its wholly owned subsidiary company. Effective from 07.05.2018
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These changes have given more relaxation to the companies in giving loan/guarantee or providing security to its WOS/JV.
Now company can give loan or guarantee or provide security to any of its employees without complying the provisions of this section.
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| Section 195- (Prohibition on Insider trading of securities) | This section has been omitted
Effective from 09.02.2018 |
Reason for omitting: These provisions were no longer required in the companies Act as the same is being governed by SEBI Regulations which are more stringent than the Companies Act. |
| Section 197- (Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits) | Now the Requirement of taking approval from Central Government where the total managerial remuneration exceeds 11% of the net profits of the company has been done away with.
Effective from 12.09.2018 |
Aim is to provide more relaxation to the Indian companies in giving remuneration as per their own requirement. |
| Section 403 (Fee for filing) |
Where the company fails to file its Financial Statements u/s 137 and Annual Returns u/s 92 within the time prescribed then additional fees of Rs.100 per day shall be payable.
Effective from 07.05.2018 |
Aim is to establish good governance by filing of financials/annual returns within time prescribed under the relevant sections. In other words earlier it was liberal but now has become more stringent provision. |
KEY AMENDMENTS IN COMPANIES ACT, 2013 AFTER COMPANIES (AMENDMENT) ACT, 2017
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