Important Changes by Companies Amendment Act 2017
The journey of Companies Amendment Act 2017 started on 16th March 2016 in Lok Sabha. Thereafter it was referred to Standing Committee Finance on 12th April 2016 for its examination. Committee after its examination and after receiving suggestions and views from professional Bodies etc. adopted its report on 30th November 2016.
Then it was finally passed by the Lok Sabha on 27th July 2017 and Rajya Sabha on 19th December 2017 respectively and presented to the president for his consent. On 3rd January 2018, received the assent of President.
And now after clearing all the above-mentioned stages finally The Companies Amendment Act, 2017 notified in Official Gazette on 3rd January 2018 but still, its implementation date is yet to be notified by MCA at the following link.
The Amendments under the Act aims to solve difficulties in implementation owing to stringent compliance requirements. It helps in Rectifying omissions and inconsistencies in the Act. Also, the stringent provisions with respect to penalties are introduced. Following are the top 35 useful and rememberable changes of Companies Amendment Act, 2017:
In case of Incorporation, Name shall be reserved for 20 days from the date of Approval instead of 60 days from the date from the date of application.
For registration of a Company ‘Declarations’ will be required instead of Affidavits.
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)
Objects of the Company can state that the company will do any lawful activity or business without giving any specific object.
In addition to Nidhi Companies, Mutual Benefit Society can also be registered under Chapter XXVI of the Act.
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.
Sweat Equity Shares can now be issued at any time, hence no need to wait for one year from the commencement of business.
In addition to Directors and KMP, any employee can also authenticate documents.
Officers not more than one level below the Directors who are in full-time employment of the Company can also be designated as KMP.
CSR from now onwards shall also apply to Foreign Companies with such exceptions as may be prescribed.
For CSR Net worth/ Turnover/ Net Profit shall be considered for immediately preceding Financial Year instead of 3 preceding years.
Form MGT-10 with respect to change in promoters and 10 top ten shareholders shareholding is not required to file with ROC.
Now Central Government can provide any other number to be treated as DIN.
From now onwards every Company to have at least One Resident Directors who stays in India for a total period of 180 days during the Financial Year instead of Calendar Year.
The associate company of a company incorporated outside India can also apply to the Tribunal for a different financial year.
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.
If an appointment of Independent Director or Director is nominated by Nomination and Remuneration Committee then it is not
required to deposit Rs. 1Lakh w.r.t to Nomination of such Director.
Director shall not be disqualified u/s 164 (2) for a period of 6 months from the date of his appointment.
If a Director is disqualified u/s 164 (2) of Companies Act, 2013 then he will vacate his office from All Companies except that the Company which is in default.
Filing requirement of Form DIR-11 for the resignation of Director is now Optional.
Ratification of Appointment of Auditor at every Annual General Meeting is not compulsory.
Form MGt-14 with respect to section 180 (1) (a) and (c) is not required to file with ROC.
If the consent is received in advance from all the members, AGM of Unlisted Company may be held at any place in India.
The abridged version of Annual Return for OPC & Small companies shall be prescribed.
Extract of the Annual Return (MGT-9) now can be placed on the website of the Company.
Disclosures included in Financial Statements already, need not be repeated in Board Report.
From now onwards CEO of the Company shall sign the Financial Statements of the Company.
Financial Statements for Joint Ventures shall not be Consolidated with the Financial Statements of the Company.
Wholly owned subsidy of foreign Company can hold EGM outside India also.
Now there are no restrictions on Companies to invest with respect to layers on Investment Companies.
Private Placement is to be made to ‘Identified Persons’ (Board shall identify the same).
New format for Private Placement offer-cum application may be issued by the Government.
An amount received under private placement shall not be utilized unless the return of Allotment is filed with the ROC.
Return of Allotment (PAS-3) shall be filed within 15 days of Allotment instead of 30 days.
If Company defaults in a filing of Return of Allotment (PAS-3) beyond 15 days then Co., its promoters, and Directors are liable to pay the penalty of Rs. 1000 per day subject to the maximum of Rs. 25 Lacs.