The Companies (Amendment) Act, 2015 of Parliament received the assent of the President on the 25th May, 2015, Now Company Act 2013 is amended as Under :
- No Requirement of minimum paid up Capital :
In section 2 of the Companies Act, 2013 (hereinafter referred to as the principal Act),—
(i) in clause (68), the words “of one lakh rupees or such higher paid-up share capital” shall be omitted;
(ii) in clause (71), in sub-clause (b), the words “of five lakh rupees or such higher paid-up capital,” shall be omitted.
- Having a Common Seal is not mandatory : In section 9 of the principal Act, the words “and a common seal” shall be omitted.
- Section 11 pertaining to Commencement of Business Certificate has been omitted : Section 11 of the principal Act, shall be omitted.
Section 11 of Company Act 2013:
(1) A company having a share capital shall not commence any business or exercise any borrowing powers unless—
(a) a declaration is filed by a director in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and the paid-up share capital of the company is not less than five lakh rupees in case of a public company and not less than one lakh rupees in case of a private company on the date of making of this declaration; and
(b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty which may extend to five thousand rupees and every officer who is in default shall be punishable with fine which may extend to one thousand rupees for every day during which the default continues.
(3) Where no declaration has been filed with the Registrar under clause (a) of subsection (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.
- Penalty for violation of provision regarding acceptance/invitation of deposits stipulated by inserting section 76A. Min penalty 1.00 Cr Max. 10.00 Cr :
Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the manner or the conditions prescribed under section 73 or section 76 or rules made thereunder or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made thereunder or such further time as may be allowed by the Tribunal under section 73,—
(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees; and
(b) every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both:
Provided that if it is proved that the officer of the company who is in default, has contravened such provisions knowingly or wilfully with the intention to deceive the company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.
- Dividend not to be given unless previous year losses / depreciation provided in previous year are set off from current year profits :
In section 123 of the principal Act, in sub-section (1), after the third proviso, the following proviso shall be inserted, namely:— “Provided also that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.”.
- Auditor to report fraud/ offence involving prescribed amount to Central Govt. if the amtount is below it reporting to be done to audit committee/ Board and disclosure in board report :In section 134 of the principal Act, in sub-section (3), after clause (c), the following clause shall be inserted, namely:—“(ca) details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government;”.In section 143 of the principal Act, for sub-section (12), the following sub-section shall be substituted, namely:—“(12) Notwithstanding anything contained in this section, if an auditor of a company in the course of the performance of his duties as auditor, has reason to believe that an offence of fraud involving such amount or amounts as may be prescribed, is being or has been committed in the company by its officers or employees, the auditor shall report the matter to the Central Government within such time and in such manner as may be prescribed:Provided that in case of a fraud involving lesser than the specified amount, the auditor shall report the matter to the audit committee constituted under section 177 or to the Board in other cases within such time and in such manner as may be prescribed: Provided further that the companies, whose auditors have reported frauds under this sub-section to the audit committee or the Board but not reported to the Central Government, shall disclose the details about such frauds in the Board’s report in such manner as may be prescribed.”.
- Concept of omnibus approval for Related Party Transaction by audit committee inserted in section 177 :In section 177 of the principal Act, in sub-section (4), in clause (iv), the following proviso shall be inserted, namely:— “Provided that the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the company subject to such conditions as may be prescribed;”.
- Exemption given under rules of section 185 regarding giving loans to Wholly Owned Subsidiary and subsidiary has been incorporated in section itself :In section 185 of the principal Act, in sub-section (1), in the proviso, after clause (b), the following clauses and proviso shall be inserted, namely:—”(c) any loan made by a holding company to its wholly owned subsidiary company or any guarantee given or security provided by a holding company in respect of any loan made to its wholly owned subsidiary company; or(d) any guarantee given or security provided by a holding company in respect of loan made by any bank or financial institution to its subsidiary company: Provided that the loans made under clauses(c) and (d) are utilised by the subsidiary company for its principal business activities.”.
- Only ordinary resolution will be required for related party transaction & No shareholder approval required. in case of Related Party Transactions between holding and Wholly owned subsidiary if accounts of subsidiary consolidated :
In section 188 of the principal Act,— (a) in sub-section (1),— (i) for the words “special resolution”, at both the places where they occur, the word “resolution” shall be substituted; (ii) after the third proviso, the following proviso shall be inserted, namely:— “
Provided also that the requirement of passing the resolution under first proviso shall not be applicable for transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.”; (b) in sub-section (3), for the words “special resolution”, the word “resolution” shall be substituted.