A few salient features of the bill are:
1)Number of sections have been reduced from 642 to 462
2)The reduction in number of sections has been achieved by:
-Consolidating various individual sections into single section and
-Increasing the number of sub sections
3)All definitions have been put in one single place in the bill whereas under the Companies Act, 1956 (the act) they are under the respective sections.
Major changes effected in the bill:
-Central government approval which was earlier required under various sections has been dispensed with.
-Shareholders democracy has been insisted upon
-Very heavy penal provisions have been introduced
-Ceiling for Managerial Remuneration has been removed
-Self regulation has been insisted upon throughout the bill
-Public deposits cannot be accepted (only from the members )
-Electronic voting permitted
-All communication to the shareholders need to sent only through registered post
In many clauses (sections) the word prescribed has been used and rules are yet to be framed. The bill is "Heart without a beat"without the rules
2 comments:
Felt like adding onto this.
1.A new entity in the form of One-Person Company (OPC) while empowering Government to provide a simpler compliance regime for small companies. This was not there earlier right?
2. relaxation of restrictions limiting the number of partners in entities such as partnership firms, banking companies etc., to a maximum 100, with no ceiling as to professional associations regulated by Special Acts;
3. Clause relating to minimum paid-up capital requirement of Rs.100,000 removed (private company)
4. Clause relating to minimum paid-up capital requirement of Rs. 5,00,000 removed (public company)
5. Concept of differential voting rights shares within a class of share have been done away.
6. The Company Secretary to be as key management personnel (KMP).
7.Clause 117 also makes it mandatory for the preparation of the consolidated financial statement if it has more than one subsidiary – whether such company is listed on stock exchange or not.
8. Time interval between two board meetings increased to 120 days as against three months earlier.
9. Any non cash transactions with a director or its holding company or a person connected with him for acquisition of assets from/by the Company shall now require prior approval of the members in general meeting.
Yup correct.There are lots more especially on the M&A front (Sections 391 to 394 in the act now), Independent directors, Audit committee, Audit of accounts, appointments, disqualification of auditors etc. But when this bill will become a act is anybody's guess now.
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