Practicing Company Secretary



New Delhi: The RAJYA SABHA on 13th May 2015 passed the Companies (Amendment) Bill, 2014, which provides for severe punishment for those raising illegal deposits from the public.

The LOK SABHA in 2014 passed the Companies (Amendment) Bill, 2014, after Corporate Affairs Minister Arun Jaitley told the house that some of the original provisions were only posing hurdles to doing business in the country.


The Companies (Amendment) Bill received the assent of the President on the 25th May, 2015 and published in official Gazette of India on 26th May, 2015 and became “THE COMPANIES (AMENDMENT) ACT, 2015. This Act shall come into force on 26th May, 2015 (Date as


The proposed amendments deal with related party transactions, fraud reporting by auditors, public inspection of Board resolutions, responsibilities of audit committee, restrictions on bail, making common seal optional, requirement for minimum paid-up share capital, strength of benches for hearing winding up cases, jurisdiction of special courts to try offences.

The Cabinet, chaired by Prime Minister Narendra Modi, had approved the 14 proposed changes in various provisions of the new Companies Act, 2013, which came into force with effect from April 1, 2014.





2 (68)

Private Company required “Minimum Paid up Share Capital of Rs 100,000/-“

No requirement of Minimum Paid Up Capital.

2 (71)

Public Company required “Minimum Paid up Share Capital of Rs 500,000/-“

No requirement of Minimum Paid Up Capital.

9, 12 and 223

Affixation of Common Seal is Mandatory

Use of Common Seal is now optional. (Not Mandatory)


Commencement of Business

No requirement of Commencement of Business Certificate.

Such section shall be omitted.


Execution of Bills of Exchange

Use of Common Seal is now optional. (Not Mandatory)


If company doesn’t have common seal the authorization under sub section (2) of Section 22 shall be made by two director or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.


Issue of Share Certificate


(46(1): A share certificate issue under the common seal of Company

{Clause substituted)

Use of Common Seal is now optional. (Not Mandatory)


If company doesn’t have common seal then signed by two Directors or by a director and Company secretary (if any)


This was not in the Act.

New Section 76A inserted after Section 76 for punishment for deposits accepted in violation of the provisions of the said Act.


(Bare Act Language of Section 76A given at the end)


Public can inspect the form MGT-14 filed by the Companies as per section 179(3) for the Board Resolution.

Public can’t inspects form MGT-14 filed for the purposes mention in section 179(3).


{MGT-14 (filed for purpose of Section 179(3), Board Resolution) will not available for public inspection on MCA portal.}



This was not in the Act.

After the third proviso of 123(1), the following proviso is inserted.


Proviso, 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.



“Unpaid or unclaimed dividend has been transferred under sub-section (5) Substituted


(i) for the words, brackets and figure “unpaid or unclaimed dividend has been transferred under sub-section (5) shall also be”, the words “dividend has not been paid or claimed for seven consecutive years or more


(ii) after the proviso, the following explanation shall be inserted, namely:—


“Explanation.— 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.’’.


Not Earlier in the Act.

After Clause “c” following clause (ca) is inserted:


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”



The Act requires that if the auditor of a company has reason to believe that an offence of fraud has been committed against the company, by its employees, he must report the matter to the central government within a time period and in a manner prescribed

Notwithstanding anything contained in this section, if any 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 subsection 12 to the Audit Committee or the Board but not reported to the Central Government, shall disclosed details about such frauds in the Board Report in such manner as may be prescribed.


Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall inter alia include

(iv) approval or any subsequent modification of transaction of the Company with Related Party

After 117(4)(iv) following proviso added:


Provided that the Audit Committee may make omnibus approval for related party transaction proposed to be entered into by the company subject to such conditions as may be prescribed”


Not Earlier in the Act.


Bare Act Language of Section 185(1)(b) : A company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loan an interest in charged at a rate not less than the bank rate declared by the RBI.

After clause (b) Sub Section (1) of Section 185 following clause and proviso added:


(c) Any loan made by a Holding Company   to its Wholly own Subsidiary Company or any guarantee given or security provided by a Holding Company in respect of any loan made to its wholly own subsidiary Company,


(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 loan made under clauses (c) and (d) are utilized by the subsidiary company for its principal business activity.




Earlier Special Resolution was required.


(As per the previous system, the companies with a paid up capital of Rs 10 crore or more were required to get shareholders' nod through a special resolution in case of related party transactions)

For the word “Special Resolution” the word “Resolution” is substituted under the Act.

Now Ordinary resolution will work.




Not Earlier in the Act.

Not required to follow provision of Section 188. After the third proviso of Section 188(1) the following proviso inserted:


Provided also that that the requirement of passing the resolution under the first proviso shall not be applicable for transactions entered between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and have been placed before the shareholders for their approval


Investigation into affairs of Company by Serious Fraud Investigation office

Here provided Bail restriction for many sections.

The bail restrictions to apply only for offence relating to fraud u/s 447;


In Section 419(4) winding up was mentioned

The word WINDING UP shall be omitted.


Establishment of Special Courts Establishment of Special Courts.

The Central Govt. may for the purpose of providing speedy (Trial of offences under this Act), established or   designate as many Special Courts as may be necessary.

For the Words “Trial of Offences under This Act”, The words “
Trial of offences punishable under this Act with imprisonment with 2 years or more” is substituted.


After Sub Clause (1) the following proviso is inserted:


“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 pervious Company Law.


Offence Triable by special courts Section 436(1)(a)

For the words "all offences under this Act", the words, brackets and figures "all offences specified under sub-section (1) of section 435" shall be substituted


Section 435(1) given below.


Subsection {2,3 and 4 of Section 462) shall be substituted.

Substituted language of Section 462(2),(3) and (4) given below.

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