Rajya Sabha on 13 May 2015 passed the Companies (Amendment) Bill, 2014 by voice vote. With this, the bill stands passed by the two houses of Parliament as Lok Sabha passed the bill earlier on 17 December 2014.
The bill seeks to amend the Companies Act, 2013 that came into effect on 1 April 2015. Some sixteen amendments pertaining to winding up of companies, board resolutions, bail provisions and utilisation of unclaimed dividends have been incorporated into the Companies Act and are designed to address some issues raised by stakeholders.
Further, the amendments are also aimed at simplifying bail provisions. For instance, except in various issues of serious frauds, normal Criminal Procedure Code (CrPC) provisions would apply.
To maintain the confidentiality of the board resolutions, the relevant amendment now prohibits public inspection of board resolutions filed in the registry.
The paid-up capital criteria have been scrapped while threshold limits for various transactions for getting shareholders’ nod has now been stipulated.
Moreover, one of the amendments approves prescribing specific punishment for deposits accepted, a condition that was left out in the Companies Act inadvertently.
Another amendment exempts corporates from the need to get shareholders’ nod in the case of related party transactions valued lower than 100 crore rupees or 10 percent of net worth. Earlier corporate were required to get shareholders’ permission for party transactions valued more than 10 crore rupees.
Also, amendments to Companies Act exempts related party transactions between holding companies and wholly owned subsidiaries from the requirement of approval of non-related shareholders.
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