The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament to make certain amendments in the Companies Act, 2013.

1. TheUnionCabinet,ChairedByThePrimeMinisterShriNarendraModi,ApprovedTheIntroductionOfTheCompanies(Amendment)Bill,2014InParliamentToMakeCertainAmendmentsInTheCompaniesAct,2013. By:-ROCKY SHARMA
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2. Amendment
TheCompaniesAct,2013(Act)wasnotifiedon29.8.2013.Outof470sectionsintheAct,283sectionsand22setsofRulescorrespondingtosuchsectionshavesofarbeenbroughtintoforce.InordertoaddresssomeissuesraisedbystakeholderssuchasCharteredAccountantsandprofessionals,followingamendmentsintheActhavebeenproposed:
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1.Omittingrequirementforminimumpaidupsharecapital,andconsequentialchanges. (Foreaseofdoingbusiness)
2.Makingcommonsealoptional,andconsequentialchangesforauthorizationforexecutionofdocuments.(Foreaseofdoingbusiness)
3.PrescribingspecificpunishmentfordepositsacceptedunderthenewAct.ThiswasleftoutintheActinadvertently.(Toremoveanomission)
4.ProhibitingpublicinspectionofBoardresolutionsfiledintheRegistry.(Tomeetcorporatedemand)
5.Includingprovisionforwritingoffpastlosses/depreciationbeforedeclaringdividendfortheyear.ThiswasmissedintheActbutincludedintheRules.
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4. 6.Rectifyingtherequirementoftransferringequitysharesforwhichunclaimed/unpaiddividendhasbeentransferredtotheIEPFeventhoughsubsequentdividend(s)hasbeenclaimed.(Tomeetcorporatedemand)
7.EnablingprovisionstoprescribethresholdsbeyondwhichfraudshallbereportedtotheCentralGovernment(belowthethreshold,itwillbereportedtotheAuditCommittee). DisclosuresforthelattercategoryalsotobemadeintheBoard’sReport.(Demandofauditors)
8.Exemptionu/s185(LoanstoDirectors)providedforloanstowhollyownedsubsidiariesandguarantees/securitiesonloanstakenfrombanksbysubsidiaries.(ThiswasprovidedundertheRulesbutbeingincludedintheActasamatterofabundantcaution).
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5. 9.EmpoweringAuditCommitteetogiveomnibusapprovalsforrelatedpartytransactionsonannualbasis.(AlignwithSEBIpolicyandincreaseeaseofdoingbusiness)
10.Replacing‘specialresolution’with‘ordinaryresolution’forapprovalofrelatedpartytransactionsbynon-relatedshareholders.(Meetproblemsfacedbylargestakeholderswhoarerelatedparties)
11.Exemptrelatedpartytransactions.holdingcompaniesandwhollyownedsubsidiariesfromtherequirementofapprovalofnon-relatedshareholders.(corporatedemand)
12.Bailrestrictionstoapplyonlyforoffencerelatingtofraudu/s447.Thoughearlierprovisionismitigated,concessionismadetoLawMinistry&WindingUpcasestobeheardby2-memberBenchinsteadofa3-memberBench.(Removalofaninadvertenterror)
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6. 13.SpecialCourtstotryonlyoffencescarryingimprisonmentoftwoyearsormore.(Toletmagistratetryminorviolations).
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