fb


The amended 11 provisions of Companies (Amendment) Act, 2020 effective from 22nd January 2021

The amended 11 provisions of Companies (Amendment) Act, 2020 effective from 22nd January 2021

The amended 11 provisions of Companies (Amendment) Act, 2020 effective from 22nd January 2021

The Ministry of Corporate Affairs had notified on 22nd January 2021 as the date on which 11 provisions of the Companies (Amendment) Act, 2020 shall be enforced. 

Sections 2, 11, 25, 27, 53, 55, 58, 59, 60, 62, 64, 65, Clause (c) of section 18 and Clause (ii) of section 22 of Companies (Amendment) Act, 2020, has also come into force. 

1. Section 2(52), Definition of ‘listed company’ in which the Central Government had sanctioned towards excluding some companies, based on the listing of certain securities on recognized stock exchanges, as might be provided by rules, in consultation with SEBI from the definition of listed companies.

Therefore, companies that list only debt securities (NCDs) might be excluded from the definition of a listed company as per the Companies Act.

2. Section 11 which sought to modify Section 62 of the Companies Act, 2013 with regard to the further issue of share capital in which the earlier Central Government is allowed to recommend days lesser than 15, for deeming decline of offer of the rights issue, but this would decrease the timelines for applying for rights issues.

3. Section 18 which sought towards amending Section 89 of the Companies Act, 2013 in which a new sub-section (11) was introduced towards enabling the Central Government to notify a class or classes of individuals who shall, unconditionally or subjected to such conditions as might be stated, be exempted from complying with section 89 excluding sub-section (10).

4. Clause (ii) of section 22 which sought towards amending Section 117 of the Companies Act, 2013 in which the Central Government is allowed towards exempting any class of NBFCs and any class of HFCs from the filing of resolutions passed to grant loans or provide guarantees or towards providing security with regard to loans in the ordinary course of their business. Previously, only Banking Companies had been exempted.

5. Section 25 in which new section 129A was introduced towards empowering the Central Government to provide by rules such class or classes of unlisted firms in order to prepare periodical fiscal results of the corporation, audit or limited review thereof as well as their filing with Registrar within 30 days from the end of that period as stated in the rules.

6. Section 27 which sought towards amending Section 135 of the Companies Act, 2013 in which now, the companies, which spend an amount more than the requirement of 2%, would be permitted to set off such excess amount out of their obligation in the succeeding fiscal years after complying with the set rules.
Also, a new sub-section (9) was introduced to provide that the obligation of the constitution of the CSR Committee would not be applicable, in case the sum required to be spent on CSR doesn’t surpass Rs. 50 lakhs and the functions of CSR Committee in such a case, perhaps discharged through the Board of directors.

7. Section 53 which sought towards amending Section 379 of the Companies Act, 2013 in which the provision to sub-section (1), which authorizes the Central Government to exempt any class of foreign corporations from any of the provisions of sections 380 to 386, 392 as well as 393 by Order published in Official Gazette was omitted since a new provision wereintroducedin order to provide the Central Government with power related to granting exemption to foreign corporations.

8. Section 55 in which a new section 393A was introduced in the Act to authorize the Central Government to exempt any class of foreign corporations or companies incorporated or to be incorporated out of India, from any of the provisions of Chapter XXII of the Act through a notification to be laid before both Houses of Parliament.

9. Section 58 to section 60 in which the restriction on the appointment of the number of judicial as well as technical members in the Appellate Tribunal through the Central Government was removed; a new section 418A was introduced to provide for the constitution of additional Benches of NCLAT and associated provisions; and it provides that the offense under section 452 that is, punishment for wrongful withholding of property, would be excluded from the applicability of section 435 that is the Special Court.

10. Section 62 in which Section 446B was substituted to provide for payment of lessor financial penalty by a start-up company, Producer Company, One Person Company or small corporation on failure towards complying with provisions of the Act which attract financial penalties.

11. Section 64 and section 65 a provision in sub-section (2) was introduced to provide that the detention of an officer or member of the corporation for wrongful withholding of property would not be ordered by the Court if the court is satisfied that such officer or member has not received certain statutory dues from the corporation, and a new provision in sub-section (3) was introduced to provide that no financial penalty shall be levied by the adjudicating officer when the default relates towards non-compliance of section 92(4), Annual Return or section 137(1) or (2) Filing of Financial Statements were corrected either prior to, or within 30 days of, the issue of the notice through the adjudicating officer, respectively.

Get a Free Consultation for any registration with Our Experienced Experts. Sign up Now!

Author:

eStartIndia Team



Leave a Comment



Previous Comments


Related Blogs