THE COMPANIES (AMENDMENT) BILL, 2015 - A BILL to amend the Companies Act, 2013.

[Deepak Aggarwal]

Proposed Amendments in Companies Act, 2013

(Changes are suggested on industry demand / to facilitate ease of doing business / to remove difficulties / to mitigate inadvertent left out provisions in Companies Act, 2013)

• Elimination of minimum paid up share capital requirement - In case of Private and Public company by amendment in clauses (68), (71) of section 2 and section 11 of the said Act.
• Common seal now make optional - By amendment in sections 9, 12, 22, 46 and 223 of the said Act for making common seal optional, and consequential changes for authorisation for execution of documents.
• Punishment for violation to accept deposit – By insertion a new section 76A to provide for punishment for deposits accepted in violation of the provisions of the said Act.
• Prohibition on public inspection of Board resolutions – By amendment in clause (g) of sub-section (3) of section 117  to prohibit public inspection of Board resolutions filed in the Registry.
• Mandatory requirement to set-off past losses / depreciation before declaring dividend – By amendment sub-section (1) of section 123  of the said Act to include provisions for writing off past losses/depreciation before declaring dividend for the year.
• Rectification in requirement of transferring equity shares for which unclaimed dividend transferred to IEPF – By amendment in sub-section (6) of section 124  of the said Act for rectifying the requirement of transferring equity shares for which unclaimed/unpaid dividend has been transferred to the Investors Education and Protection Fund even though subsequent dividend(s) has been claimed.
• Threshold limit for reporting of Fraud to CG – By amendment in sub-section (3) of section 134 and sub-section (12) of section 143 of the said Act to incorporate enabling provisions to prescribe thresholds beyond which fraud shall be reported to the Central Government (below the threshold, it will be reported to the Audit Committee). Disclosures for the latter category also to be made in the Board’s Report.
• Related party Transactions – By amendment in clause (iv) of sub-section (4) of section 177  of the said Act to provide provision empowering Audit Committee to give omnibus approvals for related party transactions on annual basis.
• Loan / Guarantees given by Holding company to Subsidiaries exempt from requirement of section 185– By amendment in section 185 of the said Act to provide for exemption under section 185 (Loans to Directors) provided for loans to wholly owned subsidiaries and guarantees/securities on loans taken from banks by subsidiaries.
• Change in resolution type from special to ordinary for approval of related party transactions – By amendment in sub-section (1) of section 188 of the said Act for replacing ‘special resolution’ with ‘resolution’ for approval of related party transactions by non-related shareholders.
• Exemption from approval of related party transactions between holding and wholly owned subsidiaries – By amendment in sub-section (1) of section 188 of the said Act to exempt related party transactions between holding companies and wholly owned subsidiaries (WOS) from the requirement of approval of non-related shareholders.
• Bail restrictions only for Fraud u/s 447 – By amendment in sub-section (6) of section 212 of the said Act to provide for bail restrictions to apply only for offence relating to fraud u/s 447;
• Change in bench size from 3 member to 2 member for hearing winding up cases – By amendment in sub-section (4) of section 419 of the said Act to provide for winding up cases to be heard by 2-member Bench instead of a 3-member Bench.
• Special Courts to try only offences carrying imprisonment of > 2 year – By amendment in sections 435 and 436 of the said Act to provide for that Special Courts to try only offences carrying imprisonment of two years or more.