Effective Provisions of the Companies Amendment Act 2017 w.e.f. 13 June 2018


With Four Notifications; S.O. 351(E) dated 23rd January 2018, S.O. 630(E) dated 9th February 2018, S.O. 1833(E) dated 7th May 2018 and S.O. 2422(E) dated 13th June 2018 most provisions of the Companies (Amendment) Act, 2017 (1 of 2018) come into force. Here is a bird’s eye view.

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Qualification of Independent Director


The qualification of independent director is among few provisions where the Companies Act, 2013 become stringent after amendments. The Companies Amendment Act, 2017 read with Notification S.O. 1833(E) dated 7th May 2018 amended sub-section (6) of 149.

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Curious Case of IEPF – 7


Ministry of Corporate Affairs on 22nd May 2018 notified the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Third Amendment Rules, 2017 to amend Rule 6 of principal Rules and to insert Form IEPF – 7. The nomenclature of these amendments charily indicates that thought process to introduced Form IEPF -7 was started during the year 2017 but somehow delayed. Let us discuss these amendments.

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Compounding


The Companies (Amendment) Act 2017 increased importance of compounding of offence manifold. Section 90 of the Companies (Amendment) Act, 2017 read with notification Notification S. O. 630(E) dated 9th February 2018 amended law related to compounding with effect from that date. However, provision of Section 441, as amended, of the Companies Act, 2013 gain momentum with notification Notification S.O. 1833(E) dated 7th May 2018. This notification notified amendment in Section 403. Most compounding application comes due to the late filing of forms constituting the violation of Section 403. Continue reading

Fee for Filing


The Companies Amendment Act, 2017 read with Notification S.O. 1833(E) dated 7th May 2018 amended law related to fee for the filing of forms. This may be considered most strict amendment introduced by the Amendment Act. As a result, companies need to pay an increased filing fee calculated on daily basis. Presently only first proviso related to additional fee for annual forms has been notified. The second and third proviso may be notified soon. The third proviso is harsh in nature.

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Ratification of Auditor –Bye Bye


Effect of non – ratification of the appointment of the auditor was one of the wonders of the Companies Act, 2013. There were so many queries regarding effects of non – ratification of auditor and removal of an auditor. Now, all these long discussions came to end. The Companies Amendment Act, 2017 read with Notification S.O. 1833(E) dated 7th May 2018 deletes provision of annual ratification of the appointment of auditor.

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Criminal Liability in case of Audit Firm


Recently, after the Companies (Audit and Auditor) (2nd) Amendment Rules, 2018 some section of media reported that an audit firm shall be criminally liable under the company law for a fraudulent act of an audit partner, while few others have view that there is some new position of law regarding criminal liability of audit firms. Both of these are slightly wrong interpretations.

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