Comparative
Table between Companies Act, 2013 and Companies (Amendment) Act, 25th May ,2015
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Section
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Act
of 2013[1]
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Act
of 2015[2]
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Effect/Comments
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2(68):
Definitions
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“private company” means a
company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital
as may be prescribed, and which by its articles
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“of one lakh rupees or such higher paid-up share capital as may be
prescribed”
OMITTED
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1. Formation
of a private limited company requires no minimum amount of capital
2. Any
and every private company will be covered under the definition of a private
company under the Act
3. May
increase risk factor for shareholders, as start-up requires no minimum amount
of capital
4. Company
may undertake more business than it is capable of, which adversely affects
its liquidity
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2(71)(b):
Definitions
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“public company” means a
company which—
(a) is not a private company;
(b) has a minimum paid-up share
capital of five lakh
rupees or such higher
paid-up capital, as may be prescribed:
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“of five lakh rupees or such
higher paid-up capital,”
OMITTED
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1. Formation
of a public company requires no minimum amount of capital
2. Any
and every private company will be covered under the definition of a private
company under the Act
3. May
increase risk factor for shareholders, as start-up requires no minimum amount
of capital
4. Company
may undertake more business than it is capable of, which adversely affects
its liquidity
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9: Effect
of
Registration
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From the date of incorporation
mentioned in the certificate of incorporation, such subscribers to the
memorandum and all other persons, as may, from time to time, become members
of the company, shall be a body corporate by the name contained in the memorandum,
capable of exercising all the functions of an incorporated company under this
Act and having perpetual succession and a common seal with power to acquire, hold
and dispose of property, both movable and immovable, tangible and intangible,
to contract and to sue and be sued, by the said name
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“and a common seal”
OMITTED
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1. Subscribers
to the memorandum can no longer exercise the common seal of the company
2. It
will lead to decrease in fraud or cheating undertaken by subscribers in the
name of the company, who unlawfully utilise the company seal to undertake
contracts and profit from it
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11: Commencement of Business
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(1) A company having a share capital shall not commence any business
or exercise any borrowing powers unless— (a) a declaration is filed by a
director in such form and verified in such manner as may be prescribed, with
the Registrar that every subscriber to the memorandum has paid the value of
the shares agreed to be taken by him and the paid-up share capital of the
company is not less than five lakh rupees in case of a public company and not
less than one lakh rupees in case of a private company on the date of making
of this declaration; and (b) the company has filed with the Registrar a
verification of its registered office as provided in sub-section (2) of
section 12. (2) If any default is made in complying with the requirements of
this section, the company shall be liable to a penalty which may extend to
five thousand rupees and every officer who is in default shall be punishable
with fine which may extend to one thousand rupees for every day during which
the default continues. (3) Where no declaration has been filed with the
Registrar under clause (a) of subsection (1) within a period of one hundred
and eighty days of the date of incorporation of the company and the Registrar
has reasonable cause to believe that the company is not carrying on any
business or operations, he may, without prejudice to the provisions of
sub-section (2), initiate action for the removal of the name of the company
from the register of companies under Chapter XVIII.
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ENTIRE SECTION OMITTED
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1. Commencement
of a business no longer requires any formalities, it can take place
immediately after incorporation of a company
2. Provides
ease of doing business
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12(3)(b): Registered office of company
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(3)
Every company shall—
(b) have its name engraved in legible
characters on its seal;
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“(b) have its name engraved in legible characters on its seal, if
any;”.
SUBSTITUTED
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1. Company
seal made voluntary
2. Only
if a company undertakes to have a company seal, will the section apply
3. If
the company has a seal, it must have the seal engraved in a manner legible,
so that the company name can be concluded with ease
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22(2): Execution
of bills of exchange, etc.
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A
company may, by writing under
its common seal, authorise any person, either generally or in respect
of any specified matters, as its attorney to execute other deeds on its
behalf in any place either in or outside India.
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“Provided that in case a company does not have a common seal, the
authorisation under this sub-section shall be made by two directors or by a
director and the Company Secretary, wherever the company has appointed a
Company Secretary.”
SUBSTITUTED
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1. Company
seal made voluntary
2. Only
if a company undertakes to have a company seal, will the execution of bills
require the common seal
3. Lack
of seal will not make authorisation invalid
4. In
cases where the company has no seal, authorisation will be granted by the
director or CS
5. Authorization
regulated strictly, thereby reducing chances of cheating of fraud through
misrepresentation
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22(3): Execution of bills of exchange,
etc.
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A
deed signed by such an attorney on behalf of the company and under his seal
shall bind the company and
have the effect
as if it were made under its common seal.
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‘‘and have the effect as if it were made under its common seal”
OMITTED
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1. Authorisation
will have the effect of binding the company, regardless of seal
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46(1): Certificate
of shares
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A
certificate, issued
under the common seal of the company, specifying the shares held by any person,
shall be prima facie evidence of the title of the person to such shares.
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“issued under the common seal, if any, of the company or signed by
two directors or by a director and the Company Secretary, wherever the
company has appointed a Company Secretary”
SUBSTITUTED
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1.
A certificate of shares
accompanied by the company seal or the director and or the CS signature is
evidence enough of the title of shareholder.
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76A: Punishment for
contravention of section 73 or section 76.
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-
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NEW SECTION INSERTED
76A: Where
a company accepts or invites or allows or causes any other person to accept or
invite on its behalf any deposit in contravention of the manner or the
conditions prescribed under section 73 or section 76 or rules made thereunder
or if a company fails to repay the deposit or part thereof or any interest
due thereon within the time specified under section 73 or section 76 or rules
made thereunder or such further time as may be allowed by the Tribunal under
section 73,— (a) the company shall, in addition to the payment of the amount
of deposit or part thereof and the interest due, be punishable with fine
which shall not be less than one crore rupees but which may extend to ten
crore rupees; and (b) every officer of the company who is in default shall be
punishable with imprisonment which may extend to seven years or with fine
which shall not be less than twenty-five lakh rupees but which may extend to
two crore rupees, or with both: Provided that if it is proved that the
officer of the company who is in default, has contravened such provisions
knowingly or wilfully with the intention to deceive the company or its
shareholders or depositors or creditors or tax authorities, he shall be
liable for action under section 447.”
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1. Stricter
compliance and accountability for accepting of deposits from public by
companies i.e. section 73 and 76 of the Act
2. May
decrease chances of fraud in cases of public deposits by companies
3. Lowering
risk and increasing protection for
existing and potential investors
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117(3)(g):
Resolutions
and agreements to be filed.
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(3)
The provisions of this section shall apply to---
(g)resolutions
passed in pursuance of sub-section (3) of section 179; and
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‘‘and’’
OMITTED
“Provided that no person shall be entitled under section 399 to
inspect or obtain copies of such resolutions; and”.
PROVISO ADDED
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Copies of resolutions taken by
the board as per section 179(3), cannot be inspected by the registrar as per
section 399
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123(1): Declaration
of dividend
PROVISO
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-
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“Provided also that no company shall declare dividend unless carried
over previous losses and depreciation not provided in previous year or years
are set off against profit of the company for the current year.”
PROVISO ADDED
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1. Dividend
to be declared only after setting off previous losses and undeclared
depreciation
2. As
a result Balance sheets of companies are not shown bloated i.e. a true
picture of company’s financial status is portrayed
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124(6): Unpaid
Dividend Account.
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All
shares in respect of which unpaid
or unclaimed dividend has been transferred under sub-section (5) shall also
be transferred by the company in the name of Investor Education and
Protection Fund along with a statement containing such details as may be
prescribed
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“dividend has not been paid or claimed for seven consecutive years or
more shall be”
SUBSTITUTED
Explanation.—For the removal of doubts, it is hereby clarified that
in case any dividend is paid or claimed for any year during the said period
of seven consecutive years, the share shall not be transferred to Investor
Education and Protection Fund.’’.
EXPLANATION INSERTED
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Only after the period of 7
years can Unpaid/unclaimed dividend be transferred to the IEPF
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134(3)(ca): Financial
statement, Board’s report, etc.
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-
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details in respect of frauds reported by auditors under sub-section
(12) of section 143 other than those which are reportable to the Central
Government;”
CLAUSE ADDED
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1. BoD’s
Report to include frauds reported by auditor
2. Intimation
to all regarding frauds taking place in the company
3. Lesser
scope of fraud taking place
4. Immediate/Timely
rectification measures can be undertaken by board
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143(12): Powers
and duties of auditors and auditing standards
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Notwithstanding anything contained in
this section, if an auditor of a company, in the course of the performance of
his duties as auditor, has reason to believe that an offence involving fraud
is being or has been committed against the company by officers or employees
of the company, he shall immediately report the matter to the Central
Government within such time and in such manner as may be prescribed.
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Notwithstanding anything contained in this section, if an auditor of
a company in the course of the performance of his duties as auditor, has
reason to believe that an offence of fraud involving such amount or amounts
as may be prescribed, is being or has been committed in the company by its
officers or employees, the auditor shall report the matter to the Central
Government within such time and in such manner as may be prescribed:
Provided that in case of a fraud involving lesser than the specified
amount, the auditor shall report the matter to the audit committee
constituted under section 177 or to the Board in other cases within such time
and in such manner as may be prescribed:
Provided further that the companies, whose auditors have reported
frauds under this sub-section to the audit committee or the Board but not
reported to the Central Government, shall disclose the details about such
frauds in the Board's report in such manner as may be prescribed.”.
SUBSTITUTED
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1. Auditor’s
power increased
2. Offence
involving fraud can be reported to the central government and/or the Audit
Committee, depending upon the nature and gravity of fraud
3. The
auditor will also report the fraud in BoD’s meetings, intimating all of
happenings in the company
4. Lesser
scope of fraud taking place
5. Immediate/Timely
rectification measures can be undertaken by board
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177(4)(iv): Audit
Committee
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"Provided that the Audit Committee may make omnibus approval for
related party transactions proposed to be entered into by the company subject
to such conditions as may be prescribed;"
PROVISO ADDED
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1. Increasing
the scope of Audit Committee ‘s powers
2. Ease
of business
3. Time
efficient transactions
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185(1): Loan
to directors, etc.
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"(c) any loan made by a holding company to its wholly owned
subsidiary company or any guarantee given or security provided by a holding
company in respect of any loan made to its wholly owned subsidiary company;
or
(d) any guarantee given or security provided by a holding company in
respect of loan made by any bank or financial institution to its subsidiary
company:
Provided that the loans made under clauses (c) and (d) are utilised
by the subsidiary company for its principal business activities.".
CLAUSE AND PROVISO ADDED
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1. Increasing
the scope of section to legalise and regulate the loans/security/guarantees
given by a holding company to its subsidiary company
2. Ease
of business
3. Financial
stability to subsidiary company through loans obtained from holding company
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188(1): Related
party transactions.
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Provided
that no contract or arrangement, in the case of a company having a paid-up
share capital of not less than such amount, or transactions not exceeding
such sums, as may be prescribed, shall be entered into except with the prior
approval of the company by a special resolution:
Provided
further that no member of the company shall vote on such special resolution, to
approve any contract or arrangement which may be entered into by the company,
if such member is a related party:
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Special Resolution” substituted for “Resolution”
"Provided also that the requirement of passing the resolution
under first proviso shall not be applicable for transactions entered into
between a holding company and its wholly owned subsidiary whose accounts are
consolidated with such holding company and placed before the shareholders at
the general meeting for approval.";
PROVISO ADDED
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1. Ease
of doing business
2. Time
efficient transactions
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188(3): Related
party transactions.
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Where
any contract or arrangement is entered into by a director or any other
employee, without obtaining the consent of the Board or approval by a special resolution in
the general meeting under sub-section (1) and if it is not ratified by the
Board or, as the case may be, by the shareholders at a meeting within three
months from the date on which such contract or arrangement was entered into,
such contract or arrangement shall be voidable at the option of the Board and
if the contract or arrangement is with a related party to any director, or is
authorised by any other director, the directors concerned shall indemnify the
company against any loss incurred by it.
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Special Resolution” substituted for “Resolution”
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1. Ease
of doing business
2. Time
efficient transactions
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212(6): Investigation
into affairs of Company by Serious Fraud Investigation Office.
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Notwithstanding
anything contained in the Code of Criminal Procedure, 1973, the offences covered under
sub-sections (5) and (6) of section 7, section 34, section 36, subsection (1)
of section 38, sub-section (5) of section 46, sub-section (7) of section 56,
subsection (10) of section 66, sub-section (5) of section 140, sub-section
(4) of section 206, section 213, section 229, sub-section (1) of section 251,
sub-section (3) of section 339 and section 448 which attract the punishment for fraud provided
in section 447 of this Act shall be cognizable and no person accused
of any offence under those sections shall be released on bail or on his own
bond unless
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"offence covered under section 447"
SUBSTITUTED
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Expanding the scope of the
section, by making any and every offence of fraud committed by any and every
individual associated with the company, punishable as per section 447
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223(4)(a): Inspector’s
report
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The
report of any inspector appointed under this Chapter shall be authenticated
either— (a) by the seal
of the company whose affairs have been investigated
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"by the seal, if any,"
SUBSTITUTED
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Authentication through company
seal applicable only if the company uses the company seal
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248(1); Power
of Registrar to remove name of company from register of companies.
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(1)
Where the Registrar has reasonable cause to believe that—
(a)
a company has failed to commence its business within one year of its incorporation
(b) the subscribers to the memorandum
have not paid the subscription which they had undertaken to pay within a
period of one hundred and eighty days from the date of incorporation of a
company and a declaration under sub-section (1) of section 11 to this effect
has not been filed within one hundred and eighty days of its incorporation;
or
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‘or’
SUBSTITUTED
CLAUSE (b) OMITTED
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1. Date
of removal from name of registrar, 1 year from the commencement of operations
instead of incorporation
2. Unpaid
Subscription amount no longer a ground for removal, provides ease of business
3. However
a minimum period for payment of subscription amount should be given to avoid
possibility of financial distress on company
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419(4): Benches
of Tribunal.
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The
President shall, for the disposal of any case relating to rehabilitation,
restructuring, reviving or
winding up, of companies, constitute one or more Special Benches
consisting of three or more Members, majority necessarily being of Judicial
Members.
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"or winding up"
OMITTED
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1. Winding
up made easier
2. No
constitution of a special bench required for winding up
3. Time
efficient winding up can take place
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435(1): Establishment
of Special Courts.
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The
Central Government may, for the purpose of providing speedy trial of offences under this
Act, by notification, establish or designate as many Special Courts as
may be necessary
"Provided that all other
offences shall be tried, as the case may be, by a Metropolitan Magistrate or
a Judicial Magistrate of the First Class having jurisdiction to try any
offence under this Act or under any previous company law.".
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"trial of offences punishable under this Act with imprisonment
of two years or more"
SUBSTITUTED
PROVISO ADDED
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1. Special
courts to take cognizance of only those trials punishable with imprisonment
of 2 or more years
2. Offences
punishable with less than 2 years reverted to MM or JM of 1st
class
3. Special
courts not burdened with suits of trivial nature
4. Pressure
on Special courts decreases thus can dispose of cases speedily
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436(1)(a): Offences
triable by Special Courts.
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(1)
Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—
(a) all offences under
this Act shall be triable only by the Special Court established for
the area in which the registered office of the company in relation to which
the offence is committed or where there are more Special Courts than one for
such area, by such one of them as may be specified in this behalf by the High
Court concerned;
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"all offences specified under sub-section (1) of section
435"
SUBSTITUTED
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1. Special
courts to take cognizance of only those trials punishable with imprisonment
of 2 or more years
2. Offences
punishable with less than 2 years reverted to MM or JM of 1st
class
3. Special
courts not burdened with suits of trivial nature
4. Pressure
on Special courts decreases thus can dispose of cases speedily
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462(2): Power
to exempt class or classes of companies from provisions of this Act
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A
copy of every notification proposed to be issued under sub-section (1), shall
be laid in draft before each House of Parliament, while it is in session, for
a total period of thirty days which may be comprised in one session or in two
or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both
Houses agree in disapproving the issue of the notification or both Houses
agree in making any modification in the notification, the notification shall
not be issued or, as the case may be, shall be issued only in such modified
form as may be agreed upon by both the Houses.
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A copy of every notification proposed to be issued under sub-section
(1), shall be laid in draft before each House of Parliament, while it is in
session, for a total period of thirty days, and if, both Houses agree in
disapproving the issue of notification or both Houses agree in making any
modification in the notification, the notification shall not be issued or, as
the case may be, shall be issued only in such modified form as may be agreed
upon by both the Houses.
SUBSTITUTED
(3) In reckoning any such period of thirty days as is referred to in
sub-section (2), no account shall be taken of any period during which the House
referred to in subsection (2) is prorogued or adjourned for more than four
consecutive days. (4) The copies of every notification issued under this
section shall, as soon as may be after it has been issued, be laid before
each House of Parliament.”.
CLAUSE 3 AND 4 ADDED
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Scope of section increased,
wherein the specific procedure and time period for proposed notification to
be accepted by both houses of the parliament laid down.
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[1] http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf,
OFFICIAL MCA WEBSITE, LAST VISITED 28/05/15
[2] http://www.mca.gov.in/Ministry/pdf/AmendmentAct_2015.pdf,
OFFICIAL MCA WEBSITE, LASTVISITED 28/05/2015
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