The Companies (Amendment) Bill, 2016, (Old Bill) was introduced in Lok Sabha on 16 March, 2016. It was then referred to the Standing Committee on Finance on 12 April 2016. The Committee submitted its report on 30 November 2016 and then finally the Government after considering the suggestions of the Committee and also of the representatives of the Chambers of Commerce and Industry as well as professional bodies, introduced the revised Companies (Amendment) Bill, 2017(New Bill) in the Lok Sabha. The Lok Sabha has passed the Companies (Amendment) Bill, 2017 on 27 July 27 2017 and now only the approval of Rajya Sabha along with the President’s Assent is pending to give it the stature of Companies (Amendment) Act, 2017.
The major amendments proposed in the New Bill include clarity on definitions for identifying associate companies, holding & subsidiary companies, related parties etc; aligning disclosure requirements in the prospectus with the regulations made by SEBI, providing for maintenance of register of significant beneficial owners and filing of returns in this regard with the ROC, simplification of the private placement procedure, removal of requirement for annual ratification of auditor, rationalization of provisions related to loan to directors, omission of provisions relating to forward dealing and insider trading and doing away with the requirement of approval of the Central Government for managerial remuneration above prescribed limits.
The major changes from the Old Bill subsequently introduced in revised New Bill include continuing with the earlier provisions relating to segregation of the object clause in the memorandum of association of the Company into Main & Other objects, making offence for contravention of provisions relating to deposits as non-compoundable, requiring attaching of financial statement of associate companies, stringent additional fees of Rs 100 per day in case of delay in filing of annual return and financial statement, continuing with restrictions on layers of investment subsidiaries, etc.
Our newsflash presents a comparative analysis as well as the impact of the New Bill and we trust you will find the same useful.