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1
Practicing Company Secretary, Gurgaon
lalitjain2607@gmail.com
20 August 2016
www.pgcevents.com drop us email on
pgcevent...
Definition of Interested Director (S. 2(49))
Annual ratification of appointment of auditors (proviso to S. 139 (1)
Return ...
The Objects clause may provide that the company can engage in any business
or that it will confine to specified objects. (...
Particulars of indebtedness not to be given. (S. 92 (1) (c)
Instead of Names, addresses and other details of FIIs
sharehol...
AGM of an unlisted company may be held at any place in India if consent
is given in writing or by electronic mode by all t...
In Section 135(1), ‘any financial year’ to be replaced by ‘the
immediately preceding financial year.’
Where independent di...
A person cannot be appointed alternate director in a company
if he is holding directorship in the same company (S.
161(2)
...
For reckoning the limit of directorships of 20 companies, the directorship in a
dormant company shall not be included (new...
Where physical meeting mode is prescribed by government
for certain items, and in a meeting, physical quorum is
present, a...
Reference to CG approval for payment of managerial remuneration
exceeding 11% of net profits, removed in proviso to S 197(...
Loans cannot be given to:
(a) any director of company, or of a company which is its holding
company or any partner or rela...
Audit Committee mandatory for every listed public
company (instead of every listed company) S. 177(1)
In case of transacti...
NRC mandatory for every listed public company (instead
of every listed company) S. 178(1)
NRC need not carry out performan...
Deposit Repayment Reserve Account – presently 15% of
deposits maturing during a financial year and the financial
year next...
Return of allotment to be filed in 15 days (presently 30 days)
Money received not to be used till Return of allotment file...
General Meeting special resolution under Section 180 (c) would now be
required if borrowings would exceed the aggregate of...
Under Section 441, now offences punishable with ‘fine or imprisonment’
also could be compounded. Non-compoundable offence ...
Correction in language of Section 141(3) (i)
Restriction in 2nd proviso to Section 188(1) shall not apply to a
company in ...
Definition of ‘Small Company’ (S. 2(85)) proposed to be amended:
-Paid up Capital presently: maximum of Rs. 50 lakhs or hi...
20
Thank You
www.pgcevents.com drop us email on
pgceventsinc@gmail.com
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Cos amendment bill 2016 Mr Lalit jain pgc events

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Cos amendment bill 2016 Mr Lalit jain pgc events

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Cos amendment bill 2016 Mr Lalit jain pgc events

  1. 1. 1 Practicing Company Secretary, Gurgaon lalitjain2607@gmail.com 20 August 2016 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  2. 2. Definition of Interested Director (S. 2(49)) Annual ratification of appointment of auditors (proviso to S. 139 (1) Return of changes in promoters’ / top ten shareholders’ stake (S.93) Restriction on layers of subsidiaries (S. 186 (1)) Prohibition on forward dealings in securities (s.194) Prohibition on insider trading of securities (S. 195) 2 PROPOSED DELETIONS www.pgcevents.com drop us email on pgceventsinc@gmail.com
  3. 3. The Objects clause may provide that the company can engage in any business or that it will confine to specified objects. (S. 4 (1) (c) For name change or new name approval, ROC shall reserve the name for 20 days from the date of approval (currently 60 days from application) (S. 4(5)) 3 MEMORANDUM OF ASSOCIATION- PROPOSED CHANGES www.pgcevents.com drop us email on pgceventsinc@gmail.com
  4. 4. Particulars of indebtedness not to be given. (S. 92 (1) (c) Instead of Names, addresses and other details of FIIs shareholding, now details as prescribed would have to be given (S. 92(1) (j)) The Government may prescribe abridged form of annual return for One Person Company and small company. (S. 92 (1) 2nd proviso) Extract of Annual Return not to be included in Directors Report. However, a copy of the annual return shall be placed on the website of the company, if any, and the web- link of such annual return shall be disclosed in the Board's report (S.92(3)) 4 ANNUAL RETURN-PROPOSED CHANGES www.pgcevents.com drop us email on pgceventsinc@gmail.com
  5. 5. AGM of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance (S. 96(2) new proviso) EGM of a company, other than WOS of a company incorporated outside India, shall be held at a place within India (S.100 new proviso) General meeting at a shorter notice possible if consent, in writing or by electronic mode, is accorded thereto— (i) in the case of AGM, by not less than 95% of the members entitled to vote (ii) in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, not less than 95% of such part of the paid-up share capital of the company as gives a right to vote or (b) Where the company has no share capital, not less than 95% of total voting power (S. 101) (1) proviso 5 AGM AND EGM - PROPOSED CHANGES www.pgcevents.com drop us email on pgceventsinc@gmail.com
  6. 6. In Section 135(1), ‘any financial year’ to be replaced by ‘the immediately preceding financial year.’ Where independent directors are not required to be appointed under S.149(4), CSR committee may have 2 or more directors (Proviso to S.135(1)) Now the term ‘net profit’ is to be calculated as per S.198 instead of ‘average net profits’ in Explanation to S.135(5) 6 CSR www.pgcevents.com drop us email on pgceventsinc@gmail.com
  7. 7. A person cannot be appointed alternate director in a company if he is holding directorship in the same company (S. 161(2) Requirement of deposit of money while proposing candidature for directorship not to apply in case of -independent director -director recommended by NRC (S 160 (1) new proviso) Where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for 6 months from his appointment. (S 164(2) proviso) Disqualifications in clauses (d), (e) and (g) of sub-section (1) shall continue to apply even if the appeal or petition has been filed against the order of conviction or disqualification. (S.164(3) proviso)7 DIRECTORS - PROPOSED CHANGES-1 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  8. 8. For reckoning the limit of directorships of 20 companies, the directorship in a dormant company shall not be included (new Explanation II to S. 165) Where a director resigns, he may (earlier “shall”) forward a copy of resignation to ROC. (S 168(1) proviso) Where a director incurs disqualification under S. 164 (2) the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section (S 167(1) (a) new proviso) The office of director shall not be vacated in case of orders referred to in clauses (e) and (f)— (i) for thirty days from the date of conviction or order of disqualification; (ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed of; or (iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed of. (new proviso to S 167 (1)) 8 DIRECTORS - PROPOSED CHANGES- 2 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  9. 9. Where physical meeting mode is prescribed by government for certain items, and in a meeting, physical quorum is present, any other directors may participate through video conference as well. (S. 173(2)) 9 BOARD MEETING THROUGH VIDEO CONFERENCE www.pgcevents.com drop us email on pgceventsinc@gmail.com
  10. 10. Reference to CG approval for payment of managerial remuneration exceeding 11% of net profits, removed in proviso to S 197(1) All pending applications with CG to abate. Company shall, within one year of such commencement, obtain the necessary approvals. S.197 (17) For exceeding individual ceiling of 5%/10% to MDs/WTDs and exceeding other directors’ overall combined ceiling of 1% or 3%, Special Resolution required (earlier ordinary) as per S 197(1) 2nd proviso In case of defaults, NOC from bankers/lenders/creditors required before excess remuneration is waived. Waiver would be considered by members through a Special Resolution (S.197(10)) In case of no profits or inadequate profits, where remuneration is to be increased, CG approval not required. S. 197 (11) Auditors Report to state whether remuneration paid to directors is as per Section 197 and give prescribed details. S. 197(16)) 10 MANAGERIAL REMUNERATION www.pgcevents.com drop us email on pgceventsinc@gmail.com
  11. 11. Loans cannot be given to: (a) any director of company, or of a company which is its holding company or any partner or relative of any such director; or (b) any firm in which any such director or relative is a partner.(S. 185 (1)) Loans can be given to any person in whom any of the director of the company is interested i.e. : (a) any private company of which any such director is a director or member; (b) any body corporate at a general meeting of which not less than twenty-five per cent. of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or (c) any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company, if : -special resolution is passed by the company in general meeting -full disclosures are given in explanatory statement -the loans are utilised by the borrowing company for its principal business activities. (S. 185 (2)) 11 LOANS TO DIRECTORS ETC. www.pgcevents.com drop us email on pgceventsinc@gmail.com
  12. 12. Audit Committee mandatory for every listed public company (instead of every listed company) S. 177(1) In case of transaction, other than transactions referred to in section 188, and where Audit Committee does not approve the transaction, it shall make recommendations to the Board. S. 177(4)(iv) new provisos 12 AUDIT COMMITTEE Changes proposed www.pgcevents.com drop us email on pgceventsinc@gmail.com
  13. 13. NRC mandatory for every listed public company (instead of every listed company) S. 178(1) NRC need not carry out performance evaluation, but will specify the manner and agency for evaluation. It shall review the implementation and compliance. S.178(2) Remuneration policy shall be placed on the website of the company, if any, and the salient features of the policy and changes therein, if any, along with the web address of the policy, if any, shall be disclosed in the Board's report. Present requirement is that such policy shall be disclosed in the Board's report. S. 178 (4) (c) proviso 13 NOMINATION & REMUNERATION COMMITTEE Changes proposed www.pgcevents.com drop us email on pgceventsinc@gmail.com
  14. 14. Deposit Repayment Reserve Account – presently 15% of deposits maturing during a financial year and the financial year next following, to be kept in bank. (S. 73 (2)(c)) Proposed - depositing, on or before the 30th day of April each year, not less than 20% of deposits maturing during the following financial year to be kept in bank Deposit Insurance to be provided as prescribed. (S. 73 (2)(d)) Proposed to be deleted A default in repayment of deposits would be ignored if it has been made good five years back (S. 73 (2)(e)) 14 ACCEPTANCE OF DEPOSITS - PROPOSED CHANGES www.pgcevents.com drop us email on pgceventsinc@gmail.com
  15. 15. Return of allotment to be filed in 15 days (presently 30 days) Money received not to be used till Return of allotment filed Offer should not include right to renounce 15 PRIVATE PLACEMENT (SECTION 42) Changes proposed in revamped section www.pgcevents.com drop us email on pgceventsinc@gmail.com
  16. 16. General Meeting special resolution under Section 180 (c) would now be required if borrowings would exceed the aggregate of paid up capital, free reserves and securities premium. Presently, only paid up capital & free reserves are reckoned. Liability of members where number reduced below 7 or 2 (S. 3 A) The exemption under section 184(5)(b) would now cover transactions with bodies corporate. Presently, only companies are covered In Section 186 (2), proposed Explanation states that ‘person’ does not include any individual in employment of the company 16 MISC CHANGES PROPOSED - 1 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  17. 17. Under Section 441, now offences punishable with ‘fine or imprisonment’ also could be compounded. Non-compoundable offence now is “an offence punishable with imprisonment only, or punishable with imprisonment and also with fine” Financial statements may be sent less than 21 days before the date of meeting if it is so agreed by 95% of the members entitled to vote at the meeting (New proviso to S. 136(1)) Threshold limit for fraud fixed at Rs 10 lacs or 1% of turnover, whichever is lower. Lower fine and imprisonment for amounts below this. (S. 447) 17 MISC CHANGES PROPOSED - 2 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  18. 18. Correction in language of Section 141(3) (i) Restriction in 2nd proviso to Section 188(1) shall not apply to a company in which 90% or more members, in number, are relatives of promoters or are related parties. S. 188(1) Related Party to include any body corporate which is— ……. (C) an investing company or the venturer of a company. (S. 2(76)(viii)) Net worth definition changed to include debit or credit balance of profit and loss account. S.2(57)) 18 MISC CHANGES PROPOSED - 3 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  19. 19. Definition of ‘Small Company’ (S. 2(85)) proposed to be amended: -Paid up Capital presently: maximum of Rs. 50 lakhs or higher prescribed amount upto Rs. 5 crores. now Rs. 5 crores proposed to be raised to Rs. 10 crores. -Turnover presently: maximum of Rs. 2 crores or higher prescribed amount upto Rs. 20 crores now Rs. 20 crores proposed to be revised to Rs. 100 crores. For sweat equity shares issue, condition of section 54 (1) (c) regarding the completion of at least one year, deleted CEO to sign Financial Statement even when not a director (S. 134) (1) Subsidiary definition: Criterion of exercise or control of ‘more than half of total share capital’ changed to ‘more than half of ‘total voting power’ S.2(87) 19 MISC CHANGES PROPOSED - 4 www.pgcevents.com drop us email on pgceventsinc@gmail.com
  20. 20. 20 Thank You www.pgcevents.com drop us email on pgceventsinc@gmail.com

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