Summary of the Notified Sections Companies (Amendment) Act, 2017

Deepak Gupta | Feb 13, 2018 | Views 2299811

Summary of the Notified Sections  Companies (Amendment) Act, 2017

Summary of the notified sections Companies (Amendment) Act, 2017
MCA Vide its notification dated 23.01.2018 has notified 26th January 2018 as the appointed date of commencement of Companies (Amendment), 2017.
On 9th February 2018 certain other section of Companies (Amendment), 2017 were notified.

Summary of the Notified Sections Companies (Amendment) Act, 2017

  1. Cost Accountant in practice” added in definition of cost accountant
  2. Exempted instruments under chapter III D of Reserve Bank of India and instruments prescribed by
    CG in consultation with RBI will not be treated as debentures
  3. Now even associate company of company incorporated outside India can apply for change in its Financial Year.
  4. Company incorporated outside India & Limited Liability Partnership will now be treated as holding company.
  5. Change in definition of KMP now such other officer, not more than one level below the directors will also be covered in definition of KMP.
  6. While calculating Net-worth, now onwards the credit balance of P & L account will also be taken into account
  7. Now a an investing company or the venturer of a the company will be covered in ambit of related party in relation to a company.
  8. Upper limit which can be prescribed is increased for small company to Rs 10 crore for paid up capital and to Rs 100 cr for turnover.Further turnover should be as per profit and loss account for the immediately preceding financial year and not as per its last financial year.
  9. Turnover is as recognized in Profit & Loss account and not the amount realised.
  10. Now a employee can be signing authority.
  11. Company may issue shares at discount to its creditors at the time of conversion of debt into shares pursuant to Statutory resolution plan; or Debt restructuring scheme. This shall be done in accordance with the guidelines specified by RBI.
  12. Compliance of chapter III is required for issue of shares to any other person other than shareholder and ESOP.
    Courier or any other mode which has proof of delivery can now be used for dispatching the notice.
  13. Modification in penal provisions for company as well as defaulting officer for contravention of section 73 or section 76.
  14. EGM of wholly owned subsidiary of a company incorporated outside India can be held at any place.
  15. While computing profits for dividend any amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded. Declaration of dividend will be out of free reserves only.
  16. Books of accounts should be maintained for the period of 8 years preceding the current financial year unless directed by the central government.
  17. Amendment to sub-section (1) of section 136 to provide that copies of audited financial statements and other documents may be sent at shorter notice if ninety five percent of members entitled to vote at the meeting agree for the same.
  18. Every listed company shall place separate audited accounts in respect of each of subsidiary on its website. Where Foreign Subsidiary statutorily required to prepare consolidated financial statement under any law of the country of its incorporation, the requirement of this proviso shall be met if consolidated financial statement of such foreign subsidiary is placed on the website of the listed company. Also when foreign subsidiary is not required to get its financial statement audited under any law of the country of its incorporation, the holding Indian listed company may place such unaudited financial statement on its website.
  19. Every company having a subsidiary or subsidiaries shall provide a copy of separate audited or unaudited financial statements, as the case may be, as prepared in respect of each of its subsidiary to any member of the company who asks for it.
  20. Reduced the fine in case of failure to file resignation by auditor.
  21. A person who, directly or indirectly, renders any service referred to in section 144 to the company or its holding company or its subsidiary company shall not be eligible for appointment as an auditor of a company.
  22. Right of auditors of holding company to have access to accounts of records of associate companies alongwith subsidiary company also  Auditors report to include internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;
  23. CG may prescribe another number which can be used as DIN
  24. Directorship in dormant company shall not be included in the limit of directorship
  25. Now Securities premium also included in calculation of maximum limit on borrowing
  26. The provision that provides power to SEBI to enforce the insider trading and forward dealing provisions of the act have been deleted.

Commencementnotification_12022018 Click here to download the notification.

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