Companies Amendment Act 2017 : Key Points

Last Updated On: Feb. 9, 2020, 7:24 p.m.

Key Highlights of the Companies Amendment Act 2017:

1. Name reservation in case of new company Incorporation shall be valid for 20 days from the date of approval instead of 60 days from the date of application.

2. In case of Change of Name of existing Company, Name Reserved by the ROC shall be valid for 60 days from the date of Approval.

3. A partnership firm, LLP, etc . with 2 or more partners (previously 7) can be converted into Private Limited Company. 

4. Every company shall have a registered office within 30 days of incorporation instead of the current requirement to have a registered office within 15 days.

5. Notice of every change of situation of the registered office shall be given to ROC within 30 days instead of 15 days as currently provided.

6. Sweat equity shares can be issued at any time currently it can be issued after 1 year from commencement of business.

7. In addition to Directors & KMP, any employee of the company can also authenticate company documents as authorized.

8. Annual General Meeting of the unlisted companies can be held anywhere in India.

9. Wholly owned subsidiary (WOS) of a company incorporated outside of India is now allowed to hold EGM outside India.

10. No central govt. approval required for payment of remuneration in excess of 11% of net profit.

11. Money received under the private placement shall not be utilized unless the return of allotment is filed with the ROC.

12. Companies that have defaulted in repayment of deposits, can also accept deposits after a period of 5years from the date of making good the default.

13. An amount being not less than 20 % of the number of deposits, maturing during the following financial year be deposited on or before the 30th day of April each year and kept in a separate bank account[i.e.deposit repayment reserve account].

14. Central govt. It can provide any other number to be treated as DIN like Aadhar or Pan.

15. Requirement related to resident director eased i.e.“stay in India for a total period not less 182 days during the financial year” 

16. The requirement of filing of form DIR 11 (Filing of a copy of the resignation to ROC by director itself) made optional.

17. Where a director incur any of disqualification under section 164(2) due to default of filing of financial statement or annual return or repayment of deposit or pay interest or other mentioned in the section, then he shall vacate the office of the director in all the companies other than the company which is in default.

18. Eligibility for doing CSR to be determined based on preceding "Financial Year" instead of "three preceding Financial year";

19. The requirement related to annual ratification of the appointment of auditors by members is omitted.

20. The Requirement of MGT-9 ie. extract of Annual Return to form part of Board's Report, has been omitted. Instead, the copy of the Annual Return shall be uploaded on the website of the Company if any, and its link shall be disclosed in the Board's Report.

21. CG will prescribe an abridged Board Report for One Person Company and small company.

22. The disclosure which have been provided in the financial statement shall not be required to be reproduced in the Board Report again.

23. Disclosure by promoters and top 10 shareholders with respect to a 2% change in shareholding in a listed company has been omitted.

24. In case delay in filing documents, fact or information required to be submitted under section 92 (Annual Return) or 137 (copy of financial statement), after the expiry of the prescribed period a flat additional fee of Rs.100 per day shall be paid instead of slab wise additional fee.

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