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The Companies (Amendment) Act,2017

The Companies (Amendment) Act,2017. FCS Rajiv Bajaj Central Council Member-ICSI Sr. Associate Director –Panasonic AVC Networks. Bear Act Language. Insertion of new section 3A.

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The Companies (Amendment) Act,2017

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  1. The Companies (Amendment) Act,2017 FCS Rajiv Bajaj Central Council Member-ICSI Sr. Associate Director –Panasonic AVC Networks

  2. Bear Act Language

  3. Insertion of new section 3A • "3A.If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.".

  4. Amendment of section 4(5) Old Provision New Provision Sec-4 (5) "(i) Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of twenty days from the date of approval or such other period as may be prescribed: Provided that in case of an application for reservation of name or for change of its name by an existing company, the Registrar may reserve the name for a period of sixty days from the date of approval.". • Sec-4(5) (i) Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty daysfrom the date of the application

  5. Amendment of section 7(1)(c) Old Provision New Provision a declaration from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief • an affidavitfrom each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief

  6. Amendment of section 12. Old Provision New Provision (1) A company shall, within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it (4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same. • (1) A company shall, on and from the fifteenth day of its incorporationand at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it • (4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.

  7. Amendment of section 21 Old Provision New Provision Save as otherwise provided in this Act,— (a) a document or proceeding requiring authentication by a company; or (b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an officer or employee of the company duly authorised by the Board in this behalf. Save as otherwise provided in this Act,— (a) a document or proceeding requiring authentication by a company; or (b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an officer of the company duly authorized by the Board in this behalf.

  8. Amendment of section 26 Old Provision New Provision (1) Every prospectus issued by or on behalf of a public company either with reference to its formation or subsequently, or by or on behalf of any person who is or has been engaged or interested in the formation of a public company, shall be dated and signed and shallstate such information and set out such reports on financial information as may be specified by the Securities and Exchange Board in consultation with the Central Government Provided that until the Securities and Exchange Board specifies the information and reports on financial information under this sub-section, the regulations made by the Securities and Exchange Board under the Securities and Exchange Board of India Act, 1992, in respect of such financial information or reports on financial information shall apply (ii) clauses (a), (b) and (d) shall be omitted. • (1) Every prospectus issued by or on behalf of a public company either with reference to its formation or subsequently, or by or on behalf of any person who is or has been engaged or interested in the formation of a public company, shall be dated and signed and shall—

  9. Amendment of section 35 • Sec-35(2) "(c) that, as regards every misleading statement purported to be made by an expert or contained in what purports to be a copy of or an extract from a report or valuation of an expert, it was a correct and fair representation of the statement, or a correct copy of, or a correct and fair extract from, the report or valuation ; and he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it and that the said person had given the consent required by sub-section (5) of section 26 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant's knowledge, before allotment thereunder.".

  10. Amendment of section 47(1) Old Provision New Provision (1) Subject to the provisions of section 43, sub-section (2) of section 50 and sub-section (1) of section 188,— (a) every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company; and (b) his voting right on a poll shall be in proportion to his share in the paid-up equity share capital of the company. • (1) Subject to the provisions of section 43 and sub-section (2) of section 50,— (a) every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company; and (b) his voting right on a poll shall be in proportion to his share in the paid-up equity share capital of the company.

  11. Amendment of section 53 Old Provision New Provision (2) Any share issued by a company at a discount shall be void. (2A) Notwithstanding anything contained in sub-sections (1) and (2), a company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by the Reserve Bank of India under the Reserve Bank of India Act, 1934 or the Banking (Regulation) Act, 1949. • (2) Any share issued by a company at a discounted price shall be void.

  12. Amendment of section 54 • (1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely:— • (c) not less than one year has, at the date of such issue, elapsed since the date on which the company had commenced business; and

  13. SUMMARIZED EXPLANATION OF ABOVE SECTIONS

  14. The Companies (Amendment) Act, 2017 Members Severally Liable In Certain Cases(sec. 3A Of The Act) I. If Number Of Member Falls Below - 7 In Case Of A Public Co. - 2 In Case Of A Private Co. Ii. Business Carried On For More Than 6 Months Iii. Members Severally Liable For Whole Of The Debts Of The Co. Iv. Members Can Be Severally Sued

  15. The Companies (Amendment) Act, 2017 Reservation Of Name [Sec. 4(5) Of The Act)

  16. The Companies (Amendment) Act, 2017 Declaration [Sec. 7(1)(c) Of The Act)DeclarationInstead Of Affidavit - By Subscribers To M/A & - By First Directors

  17. The Companies (Amendment) Act, 2017 Intimation Of Regd. Office [Sec. 12(1) & (4)]Intimation Within 30 Days Instead Of 15 Days In Form INC-22 - From The Date Of Incorporation - From The Date Of Change Of Regd. Office

  18. The Companies (Amendment) Act, 2017 Authentication Of Documents,proceedings & Contract[Sec. 21 Of The Act] I. Requisite Documents/Proceedings Or Contract Ii. In Addition To KMP Or Officer Iii. Can Be Signed By Employee Authorised By The Board

  19. The Companies (Amendment) Act, 2017 Format Of Prospectus [Sec. 26 Of The Act] Prospectus To Be In The Format As Prescribed By SEBI In Consultation With CG And Not As Per The Act.

  20. The Companies (Amendment) Act, 2017 Civil Liability For Mistatement In The Prospectus [Section 35 Of The Act] A Person Not Liable For Misstatement In Prospectus If - He Had Reasonable Ground To Believe In The Truthfulness Of The Statement - Statement Made By The Competent Person - The Person Making Statement Did Not Withdraw Consent

  21. Private Placement [Sec. 42 Of The Act]Major Changes I. Private Placement Can Be Made Ii. Only To The Persons Identified By The Board Iii. Not Exceeding 50 Or Higher No. As Prescribed [200 Persons As Per Rule 14 Of The Companies (Prospectus And Allotment Of Securities)rules, 2014] Excluding - Qualified Institutional Buyers (QIB) - To The Employees Under ESOP Iv. In One Financial Year Otherwise It Would Be Deemed To Be Public Offer And Has To Be Listed

  22. The Companies (Amendment) Act, 2017 Voting Rights [Sec. 47 (1) Of The Act] Voting Right Subject To - Section 188(1) Of The Act - Relating To Prohibition On - Voting By Related Party Member

  23. The Companies (Amendment) Act, 2017 Prohibition On Issue Of Shares At Discount [Sec. 53 Of The Act] Generally A Company Can Not Issue Shares At A DiscountExceptions (I) Sweat Equity On The Conditions U/S 54 Of The Act (Ii) Issue Of Shares At A Discount To The Creditors In Case Of A Conversion Of Debt Into Equity Pursuant To -Statutory Resolution Plan -Debt Restructuring Scheme In Accordance With Guidelines/ Directions/Regulations Of RBI

  24. The Companies (Amendment) Act, 2017 Issue Of Sweat Equity Shares [Sec. 54 Of The Act] Restriction Of Issue Of Sweat Equity Within One Year Of The Commencement Of Business Done Away.Further Issue Of Shares [Sec. 54 Of The Act] I. Provisions Of Chapter III (Prospectus And Allotment Of Securities) To Apply - To Further Issue Of Shares To Any Person - By Special Resolution - On The Basis Of Valuation By Registered Valuers - Pursuant To Section 62(1)(b) II. Notice To Members Can Be Sent Also Through - Courier Or - Any Other Mode Of Having Proof Of Delivery

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