A draft notification posted here on website of Ministry of Corporate Affairs says that Section 1 to 12 and Section 15 to 23 of the Companies (Amendment) Act, 2015 came into force with effect from 29th May 2015. The official language of notification read, “the Central Government hereby appoints the 296 May, 2015 as the date on which the provisions of sections 1 to 12 and 15 to 23 of the said Act shall come into force.” The Amendment Act was got presidential assent and notified by Ministry of Law and Justice as such on 26th May 2015 in official gazette.
Two sections not notified yet deals with Fraud Reporting Procedure [Section 13 amending Section 143 of Principal Act] and Related Party Transactions [Section 14 amending Section 177 of Principal Act]. This is understood that Rules related to these sections are in drafting process.
Sections which have came into force deals with:
- Omission of need for minimum paid up capital of companies,
- Common Seal is optional now,
- Punishment for violation of law in acceptance of deposits by companies,
- No public inspection of board resolution filed with Registrar of Companies under Section 117,
- Writing off past losses and/or depreciation before declaring dividend,
- Any dividend paid or claimed for any year during the period of seven consecutive years, the share shall not be transferred to Investor Education and Protection Fund,
- Fraud reporting by auditor, (Procedure related to fraud reporting not changes yet),
- Loan and guarantee to wholly owned subsidiaries,
- Relate party transaction between Holding and wholly owned subsidiary Companies,
- Making ease for bail related of some offences,
- No removal of name of company for want of minimum paid up capital,
- Winding up hearing by two member bench,
- Offense to be heard by normal courts, and
- Change in procedure for issuing exemption Notification.
I have discussed these amendments in earlier posts here, here and here.
This may be good to note that Ministry of Corporate also amended five Companies Rules which will came into effect from date of their publication in Official Gazette.
- Companies (Share Capital and Debentures) Second Amendment Rules, 2015
- Companies (Declaration and Payment of Dividend) Second Amendment Rules, 2015
- Companies (Incorporation) Second Amendment Rules, 2015
- Companies (Registration of Charges) Amendment Rules, 2015
- Companies (Registration Offices and Fees) Second Amendment Rules, 2015
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