Rajya Sabha on 13 May 2015 passed the Companies (Amendment) Bill, 2014 by voice vote. Bill is passed by both the houses of Parliament as Lok Sabha had already passed the bill on 17 December 2014.
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 to simplify bail provisions. For example, except in various issues of serious frauds, normal Criminal Procedure Code (CrPC) provisions would apply.
Finance Minister Mr. Arun Jaitley said that an expert committee will decide for more amendments so as to simplify the Companies Act further. The committee shall be comprised of representatives of bodies of company secretaries, chartered accountants, industry chambers and officials.
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Companies (Amendment) Bill, 2014
- The bill seeks to amend the Companies Act, 2013 that came into effect on 1 April 2015.
- The relevant amendment now prohibits public inspection of board resolutions filed in the registry.
- The paid-up capital criteria have been removed while threshold limits for various transactions for getting shareholders’ nod has now been added.
- One of the amendments approves specific punishment for deposits accepted, that was left out in the Companies Act accidentally.
- Amendments also exempts corporate from the need to get shareholders’ nod in the case of related party transactions for valued less than 100 crore rupees or 10 percent of net worth.
- Amendments also exempts related party transactions between holding companies and wholly owned subsidiaries from the requirement of approval of non-related shareholders.
