Top 30 Highlights of Companies Amendment Act,2017

The Companies Amendment Act 2017, was first introduced in 2016 and was then referred to the Standing Committee for its examination. Committee after its examination and after receiving suggestions and views from professional Bodies etc. adopted its report on 30th November, 2016.

The Companies Amendment Bill, 2017 was then passed by Lok Sabha and Rajya Sabha on 27^th July, 2017 and 19^th December,2017 respectively and  then presented to President for his consent.

After receiving consent of President and clearing all the above mentioned stages finally the Companies Amendment Bill, 2017 became Companies Amendment Act,2017 through notification of official Gazette on 03^rd January, 2018.

The reason of introducing Companies Amendment Bill, 2017 was to solve difficulties in implementations owing to stringent compliance requirements.

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Following are the major 30 changes of Companies Amendment Act, 2017 which made the compliance requirement easy and user friendly:

1. From now onwards Director shall not be disqualified under section 164 (2) of Companies Act, 2013 for a period of six months from the date of his appointment.
2. After this amendment any number provided by Central Government can be treated as DIN.
3. Associate Company of a Company incorporated outside India from now onwards can apply to Tribunal for a different Financial Year.
4. For Incorporation of a Company “Declarations” will be required instead of “Affidavits”.
5. Along with Directors and KMP, any employee of the Company can authenticate the Documents.
6. Annual Return extracts i.e. MGT-9 can now be placed on the website.
7. Form MGT-14 with respect to 180 (1) (a) (c) is no more required to file with ROC.
8. Filing of Form DIR-11 i.e Resignation of Director is now optional.
9. Form MGT-10 with respect to change in promoters and 10 top ten shareholders shareholding is not required to file with ROC.
10. Central Government approval is no more required for payment of remuneration in excess of 11% of net profits. It means it can be passed by passing Ordinary Resolution.
11. Annual General Meeting of Unlisted Company may be held at any place in India if the consent is received in advance from all the members.
12. New format for Private Placement offer-cum application may be issued by the Government.
13. Wholly owned subsidy of foreign Company can hold EGM outside India also.
14. Disclosures included in Financial Statements already, need not to be repeated in Board Report.
15. If Company defaults in filing of Return of Allotment (PAS-3) beyond 15 days then Co., its promoters and Directors are liable to pay penalty of Rs. 1000 per day subject to maximum of Rs. 25 Lacs.
16. Associate company of a company incorporated outside India can also apply to the Tribunal for a different financial year.
17. For CSR Net worth/ Turnover/ Net Profit shall be considered for immediately preceding Financial Year instead of 3 preceding year.
18. Notice of every change of shifting of Registered Office (E-Form INC-22) is now required to file with ROC within 30 days instead of 15 days.
19. If a Director is disqualified u/s 164 (2)  of Companies Act, 2013 then he will to vacate his office from All Companies except that the Company which is in default.
20. Abridged version of Annual Return for OPC & Small companies shall be prescribed.
21. In addition to Nidhi Companies, Mutual Benefit Society can also be registered under Chapter XXVI of the Act.
22. Wholly owned subsidy of foreign Company can hold EGM outside India also.
23. Financial Statements for Joint Ventures shall not be Consolidated with the Financial Statements of the Company.
24. Return of Allotment (PAS-3) shall be filed within 15 days of Allotment instead of 30 days.
25. From now onwards CEO of the Company shall sign the Financial Statements of the Company.
26. Annual General Meeting of Unlisted Company may be held at any place in India if the consent is received in advance from all the members.
27. Disclosures included in Financial Statements already, need not to be repeated in Board Report.
28. Partnership Firm, LLP, Societies etc. may convert itself into a Private Company with 2 or more members only. (Earlier at least 7 members was required).
29. Now the Company to have at least one Resident Director who stays in India for a total period of 180 days during the Financial Year instead of Calendar Year.
30. Sweat Equity Shares can now be issued at anytime, hence no need to wait for one year from commencement of business.

The Amendment Act broadly seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country.

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