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    Companies Amendment Bill 2016- part 3

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

    45

    Section  152

    46

    Amendment of sub-section (3) and (4) of section 152 of the

    Welcome amendment, allowing to

     

     

    Appointment

    of

     

    Act to provide any other identification number, as may be

    have a prescribed Identification

     

     

    Directors

     

     

    prescribed,  to  be  recognised  as  Director  Identification

    number as DIN, and a separate DIN

     

     

     

     

     

    Number, and a person may hold such identification number in

    need not be obtained.

     

     

     

     

     

    place of DIN.

     

     

     

     

     

     

     

     

     

    46

    Section 153 –

     

    47

    Insertion of a proviso to section 153 of the Act, enabling the

    Welcome amendment, allowing to

     

     

    Application for

     

     

    Central Government to recognise any other identification

    have a prescribed Identification

     

     

    Allotment of DIN

     

    number to be treated as DIN, and any person possessing such

    number as DIN, thereby removing

     

     

     

     

     

    Identification Number need not obtain a DIN under the

    the requirement for applying a

     

     

     

     

     

    section.

    separate DIN.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    47

    Section 160 –

     

    48

     

    Welcome amendment, exempting

     

     

    Right of Persons Other

     

    Insertion of a proviso to sub-section (1) of Section 160 of the

    the requirement of deposit of

     

     

    than Retiring

    Directors

     

    Act of the Act,exempting the requirement as to deposit of

    money in respect of independent

     

     

    to Stand for Directorship

     

    Rs.1,00,000/-,  in  connection  with  appointment  of

    directors or directors nominated

     

     

     

     

     

    independent directors or directors nominated by nomination

    by nomination and remuneration

     

     

     

     

     

    and remuneration committee.

    committee.

     

     

     

     

     

     

     

     

     

     

     

    Vide exemption notification Dt:05.06.2015, the provisions of

     

     

     

     

     

     

    Section 160 are not applicable to Private Companies.

     

     

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

    No.

    2013, amended

     

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

    48

    S e c t i o n

    1 6 1

    -

    49

    Amendment of sub-section (2) of Section 161 of the Act,

    Amendment to remove

     

    A p p o i n t m e n t

    o f

     

    restricting an existing Director in the Company, from being

    ambiguity.

     

    Additional

    Director,

     

    appointed as an Alternate director for other Director.

     

     

    Alternate Director and

     

     

     

     

    Nominee Director

     

     

    Amendment of Sub-section (4) of Section 161 of the Act, to

    Welcome  Amendment,  and

     

     

     

     

     

    delete the word “In case of a Public Company”, thereby

    ease of operations.

     

     

     

     

     

    allowing the Board of all companies to fill casual vacancy and

     

     

     

     

     

     

    obtain approval for the said appointment, in the immediate

     

     

     

     

     

     

    next annual generalmeeting.

     

     

     

     

     

     

     

     

    49

    S e c t i o n

    1 6 4

    50

    Insertion of a proviso to sub-section (2) of section 164 of the

    W e l c o m e  a m e n d m e n t

     

    Disqualifications

    for

     

    Act  to  provide  for  non-applicability  of  disqualification

    providing relief to the directors

     

    appointment of Director

     

    provisions, for period of 6 months from the date of

    who get appointed as Director

     

     

     

     

     

    appointment, to a director, who is appointed, as a director in a

    in  Company under defaulting

     

     

     

     

     

    company, which is in default of non-filing of financial

    status.

     

     

     

     

     

    statements or annual return or failure to repay the deposit.

     

     

     

     

     

     

    Substitution of a new proviso in place of the existing proviso

     

     

     

     

     

     

    to provide that the clauses (d), (e) and (g) of sub-section (3) of

     

     

     

     

     

     

    section 164 of the Act, shall continue to apply even if appeal

     

     

     

     

     

     

    or petition is filed.

     

     

     

     

     

     

     

     

    50

    Section 165 –

     

     

    51

    Insertion of an Explanation to sub-section (1) of Section 165

    Welcome amendment.

     

    Number of Directorships

     

    of the Act, to exclude the directorship in dormant companies

     

     

     

     

     

     

    from the limit of directorships of 20 Companies.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

    51

    Section 167 –

    52

    Insertion of a proviso to Clause (a) of sub-section (1) of section

    Amendment to remove

     

     

    Vacation  of  office  of

     

    167 of the Act, to provide that in case a director incurs any of

    ambiguity.

     

     

    Director

     

    disqualifications under section 164 (2), he shall vacate office

     

     

     

     

     

    incompanies other than the company which is in default.

     

     

     

     

     

    Substitution of the proviso to Clause (f) of sub-section (1) of

    W e l c o m e  a m e n d m e n t ,

     

     

     

     

    section 167 of the Act to provide the time frame/criteria from

    providing relief in cases where

     

     

     

     

    which vacation of office of director shall take place, in case of

    appeal  is  made  against  the

     

     

     

     

    orders referred to in clauses (e) and (f)

    order.

     

     

     

     

     

     

     

    52

    Section 168 –

    53

    Amendment of proviso to Sub-section (1) of Section 168 of

    Welcome amendment, thereby

     

     

    Resignation of Director

     

    the  Act,  thereby making  the  requirement  of  filing  of

    making  the  filing  of  form

     

     

     

     

    Resignation letter by the Director with the Registrar of

    optional on the part of the

     

     

     

     

    Companies, optional.

    Resigning Director.

     

     

     

     

     

     

     

    53

    Section – 173 – Meetings

    54

    Insertion of a proviso to sub-section (2) of Section 173 of the

    Welcome amendment, thereby

     

     

    of the Board

     

    Act to allow participation of directors on certain items at

    enabling  the  directors  who

     

     

     

     

    Board meetings through video conferencing or other audio

    cannot be present physically to

     

     

     

     

    visual means if there is requisite quorum is present at the

    participate in the meeting and

     

     

     

     

    meeting through physical presence of directors.

    be part of the decision making.

     

     

     

     

     

     

     

    54

    Section 177–

    55

    Amendment to Sub-section (1) of Section 177 of the Act, to

    Welcome  Amendment  to

     

     

    Audit Committee

     

    replace the words “Every Listed Company” with words “Every

    remove ambiguity and ease of

     

     

     

     

    Listed Public Company”, thereby making the applicability of

    operations.

     

     

     

     

    the Section only to listed public companies and other

     

     

     

     

     

    companies as prescribed under the rules.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

    Insertion of new provisos in clause (iv) of sub-section (4) of

     

     

     

     

     

    Section 177 of the Act, relating to authorities/powers to the

     

     

     

     

     

    Audit committees, such as (i) ratification of transactions

     

     

     

     

     

    entered in to by the Directors with the company, neither

     

     

     

     

     

    without approval of the Audit Committee and involving

     

     

     

     

     

    amount not exceeding Rs.1 Crore rupees, not the said

     

     

     

     

     

    transaction is ratified by the Audit Committee, within 3

     

     

     

     

     

    months of transaction, (ii) consequences of non-ratification

     

     

     

     

     

    and  (iii)  exemption  from  obtaining  approval  of  audit

     

     

     

     

     

    committee for to related party transactions between holding

     

     

     

     

     

    compan yand its wholly owned subsidiary, other than those

     

     

     

     

     

    covered under Section 188

     

     

     

     

     

     

     

     

    55

    Section 178 -

    56

    Amendment to Sub-section (1) of Section 178 of the Act, to

    Welcome  Amendment  to

     

    replace the words “Every Listed Company” with words “Every

    remove ambiguity and ease of

     

     

    Nomination and

     

     

    Remuneration

     

    Listed Public Company”, thereby making the applicability of

    operations.

     

     

    Committee and

     

    the Section only to listed public companies and other

     

     

     

    Stakeholders

     

    companies as prescribed under the rules.

     

     

     

    Relationship Committee

     

     

     

     

     

     

     

    Amendment of Sub-section (2) of Section 178 of the Act, that

    Welcome Amendment for ease

     

     

     

     

    instead of the Committee carrying out evaluation of every

    of operations.

     

     

     

     

    director’s  performance,  the  Committee  will  specify

     

     

     

     

     

    methodology for effective evaluation of performance of

     

     

     

     

     

    Board and committees and individual directors, and the said

     

     

     

     

     

    performance evaluation to be carried out either by the Board,

     

     

     

     

     

    Nomination  and  Remuneration  Committee  or  an

     

     

     

     

     

    Independent external agency.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Insertion of Proviso to Clause (c)of Sub-section (4) of Section

    D i s c l o s u re

    re q u i re m e nt

     

     

     

     

    178, to provide that the policy framed by the Nomination and

    included.

     

     

     

     

     

    Remuneration  Committee,  relating  to   criteria  for

     

     

     

     

     

     

    determining  qualifications,  positive  attributes  and

     

     

     

     

     

     

    independence of a director and recommend to the Board a

     

     

     

     

     

     

    policy, relating to the remuneration for the directors, key

     

     

     

     

     

     

    managerial personnel and other employees, shall be placed

     

     

     

     

     

     

    on the website of the Company, if any, and the salient features

     

     

     

     

     

     

    policy and changes therein, if any, along with the web address

     

     

     

     

     

     

    of the policy, if any, shall be disclosed in the Board's report.

     

     

     

     

     

     

    Amendment of proviso to Sub-section (8) of Section 178 for

    Amendment to remove error in

     

     

     

     

    substituting the words “inability to resolve or consider any

    wording

     

     

     

     

     

    grievance" in place of "non-consideration of resolution of any

     

     

     

     

     

     

    grievance".

     

     

     

     

     

     

     

     

     

     

    56

    Section 180 -

    57

    Amendment to item (c) of sub-section (1) of Section 180 of

    Amendment

    to  maintain

     

     

    Restrictions on Powers of

     

    the Act, to substitute for the words "paid-up share capital,

    uniformity

     

     

     

    Board.

     

    free reserves and securities premium", in place of "paid-up

     

     

     

     

     

     

    share capital and free reserves", i.e., to include securities

     

     

     

     

     

     

    premium, thereby making the requirement of obtaining

     

     

     

     

     

     

    consent from the members of the company, only for the

     

     

     

     

     

     

    cases, where the proposed borrowings, will be in excess of its

     

     

     

     

     

     

    paid-up share capital, free reserves and securities premium.

     

     

     

     

     

     

    Note: This section is does not apply to a Private Company, by

     

     

     

     

     

     

    virtue of the exemption notification Dt:05.06.2015.

     

     

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

    57

    Section 184 –

    58

    Amendment to Sub-section (4) of Section 184 of the Act, to

    Since there is no minimum fine

     

     

    Disclosure of Interest by

     

    remove the minimum fine of Rs.50,000/-, for contravention

    slab, the penalty levied can be

     

     

    Director

     

    by the Director of the provisions i.e., failure to disclose his

    upto Rs.1 Lakh.

     

     

     

     

     

     

    interest in general and/or in particular with reference to a

     

     

     

     

     

     

     

    contract

     

     

     

     

     

     

     

    Amendment to Clause (b) of sub-section(5) of Section 184 of

    Amendment to remove

     

     

     

     

     

    the Act, to provide for non-applicability of the provisions of

    ambiguity

     

     

     

     

     

     

    this section, relating to the transactions between Companies

     

     

     

     

     

     

     

    and body Corporates, where any of the directors of the one

     

     

     

     

     

     

     

    company or body corporate or two or more of them together

     

     

     

     

     

     

     

    holds or hold not more than two per cent. of the paid-up

     

     

     

     

     

     

     

    share capital in the other company or the body corporate,

     

     

     

     

     

     

     

    which was inadvertently left out.

     

     

     

     

     

     

     

     

     

     

     

    58

    Section 185 -

    59

    Amendment to substitute the existing Section 185 of the Act,

    V E R Y  M U C H

    R E Q U I R E D

     

     

    Loan to Directors, etc

     

    with a new section with following provisions:

    A M E N D M E N T

    W e l c o m e

     

     

     

     

     

    substitution  /Amendment  to

     

     

     

     

    èSub-section (1): To prohibit giving loans, advances, etc.,

    provide  for  relief  to  group

     

     

     

     

    to directors of the company or its holding company or any

    companies/Companies

    with

     

     

     

     

    partner of such director or any firm in which such director

    common directors to provide

     

     

     

     

    or relative is a partner.

    l o a n s /g u a ra n t e e s

    a f t e r

     

     

     

     

    èSub-section (2): It allows a company to give loan or

    compliance of the provisions.

     

     

     

     

     

     

     

     

     

     

     

    guarantee or provide security to any person in whom any

     

     

     

     

     

     

     

    of the director is interested subject to passing of special

     

     

     

     

     

     

     

    resolution by the company and utilisation of loans by the

     

     

     

     

     

     

     

    borrowing company for its principal business activities.

     

     

     

     

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    It provides for an explanation for term any person in whom

     

     

     

     

     

     

    any of the director is interested.

     

     

     

     

     

     

    èSub-section (3): Provides for certain situations to which

     

     

     

     

     

     

    the provisions of Sub-section (1) & (2)are not applicable.

     

     

     

     

     

     

    èSub-section (4): Penalties for non-compliance. (penalties

     

     

     

     

     

     

    remain the same as in the old Section)

     

     

     

     

     

     

     

     

     

     

    59

    Section 186 -

    60

    Omission of Sub-section(1) of Section 186 of the Act, relating

     

     

     

     

    Loan and Investment by

     

    to the  restriction on layers of investment companies i.e.,2

     

     

     

     

    Company

     

    Layers. Thereby investment can be done through more than

     

     

     

     

     

     

    two layers of investment companies.

    Welcome  Amendment

    to

     

     

     

     

     

     

     

     

    Insertion of an explanation to Sub-section (2), that for the

    provide ease of operations.

     

     

     

     

     

    purpose of the sub-section,  the word "person"does not

     

     

     

     

     

     

    include any individual who is in the employment of the

     

     

     

     

     

     

    company.

     

     

     

     

     

     

    Amendment to substitute the existing sub-section (3) of

    Welcome  Amendment

    to

     

     

     

     

    Section 186 of the Act, with a new sub-section, to include

    provide ease of operations.

     

     

     

     

     

    aggregate  of  loan  and  investments  so  far  made  and

     

     

     

     

     

     

    guarantees, securities so far provided to all other bodies

     

     

     

     

     

     

    corporate along with the investment, loan, guarantee or

     

     

     

     

     

     

    security proposed to be made or given by the Board for the

     

     

     

     

     

     

    purpose of calculating the limits of loans and investments.

     

     

     

     

     

     

    Requirement  of  prior  Special  resolution  for

     

     

     

     

     

     

    investment/loans/securities beyond the limits.

     

     

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

    Inclusion of a proviso to sub-section (3), to exempt the

    Welcome Amendment to

     

     

     

     

    requirement of passing a special resolution at general

    provide ease of operations.

     

     

     

     

    meeting, in cases where a loan or guarantee is given or where

     

     

     

     

     

    a security has been provided by a company to its wholly

     

     

     

     

     

    owned subsidiary companyor a joint venture company, or

     

     

     

     

     

    acquisition is made by a holding company of the securities of

     

     

     

     

     

    its wholly owned subsidiary company.   A further proviso

     

     

     

     

     

    provides for the disclosure of the said details in the Financial

     

     

     

     

     

    statement of the Company

     

     

     

     

     

    Amendment to substitute the existing sub-section (11) of

     

     

     

     

     

    Section 186 of the Actto rephrase the provisions.

     

     

     

     

     

    Amendment of Clause (a) of the explanation provided to the

    Amendment to provide for

     

     

     

     

    section,  relating  to  “investment  company”,  to  include

    clarity.

     

     

     

     

    clarification to the existing explanation to provide for

     

     

     

     

     

    criteria/cases, as to when the company will be deemed to be a

     

     

     

     

     

    company principally engaged in the business of acquisition of

     

     

     

     

     

    shares, debentures or other securities.

     

     

     

     

     

     

     

     

    60

    Section 188 –

    61

    Insertion of a new proviso (3rd one) after the existing second

    Welcome Amendment to

     

     

    R e l a t e d  P a r t y

     

    proviso to sub-section (1) of Section 188, to provide that the

    provide ease of operations.

     

     

    Transactions

     

    provisions of 2nd proviso to Section 188(1) shall not apply to a

     

     

     

     

     

    company in which 90 % or more members in numbers are

     

     

     

     

     

    relatives of promoters or related parties.

     

     

     

     

     

     

     

     

    Sl.

    Section(s) under the CA,

    Clause No. in the

    Proposed amendment relating to

    Remarks/Comments/Penalty

     

    No.

    2013, amended

    Amendment Bill

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Amendment of Sub-section (3) of Section 188 of the Act, to

    Amendment

    to  provide

    for

     

     

     

     

     

    provide that any transaction entered into by a director or any

    clarity.

     

     

     

     

     

     

     

    other employee, without obtaining the consent of the Board

     

     

     

     

     

     

     

     

    or approval by are solution in the general meeting under sub-

     

     

     

     

     

     

     

     

    section (1) and if it is not ratified by the Board or, as the case

     

     

     

     

     

     

     

     

    may be, by the shareholders at a meeting within three

     

     

     

     

     

     

     

     

    months shall be voidable at the option of the Board or

     

     

     

     

     

     

     

     

    shareholders, as the case may be

     

     

     

     

     

     

     

     

     

     

     

     

     

    61

    S e c t i o n

    1 9 4  -

    62

    Amendment to Omit Section 194 of the Act relating to

    Amendment

    proposed  to

    be

     

     

    Prohibition on Forward

     

    prohibition on forward dealings in securities of company by

    made, since the same is covered

     

     

    Dealings in

    Securities

     

    director or key managerial personnel

    under other enactment, and the

     

     

    of Company by Director

     

     

    Companies Act, cannot have a

     

     

    or  key  Managerial

     

     

    control over the same.

     

     

     

    Personnel

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    62

    Section 195 -

     

    63

    Amendment to Omit Section 195 of the Act which provides

    Amendment

    proposed  to

    be

     

     

    Prohibition

    on  Insider

     

    for prohibition on Insider Trading of Securities.

    made, since the same is covered

     

     

    Trading of Securities

     

     

    under other enactment, and the

     

     

     

     

     

     

    Companies Act, cannot have a

     

     

     

     

     

     

    control over the same.

     

     

     

     

     

     

     

     

     

     

     

     

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