The Corporate Affairs Ministry has had extensive consultations with stakeholders in the matter. The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, on 2nd
Sr No. December 2014 approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament to make certain amendments in the Companies Act, 2013. This would be among the first major initiatives by the government to make changes in the country’s regulatory framework to improve its global ranking for ease of doing business, where India has been ranked very low at the 142nd position in the latest World Bank report and includes provision to ensure that frauds beyond a certain threshold would need to be mandatorily reported by the auditors to the government.
Omission the Requirement
Omitting requirement for minimum paid up share capital, and consequential changes.
Making common seal optional and consequential changes for authorization for execution of documents.
Prescribing specific punishment for deposits accepted under the new Act. This was left out in the Act Inadvertently.
Prohibiting public inspection of Board resolutions filed in the Registry.
Including provision for writing off past losses/depreciation before declaring dividend for the year. This was missed in the Act but included in the Rules.
Rectifying the requirement of transferring equity shares for which unclaimed/unpaid dividend has been transferred to the IEPF even though subsequent dividend(s) has been claimed.
Enabling provisions to prescribe thresholds beyond which fraud shall be reported to the Central Government (below the threshold, it will be reported to the Audit Committee). Disclosures for the latter
Companies (Amendment) Bill, 2014
Exemption u/s 185 (Loans to Directors) provided for loans to wholly owned subsidiaries and Guarantees/securities on loans taken from banks by subsidiaries.
Empowering Audit Committee to give omnibus approvals for related party transactions on annual basis.
Replacing ‘special resolution’ with ‘ordinary resolution’ for approval of related party transactions by nonrelated shareholders.
Exempt related party transactions between holding companies and wholly owned subsidiaries from the requirement of approval of non-related shareholders.
Bail restrictions to apply only for offence relating to fraud u/s 447.
Winding Up cases to be heard by 2-member Bench instead of a 3-member Bench.
Special Courts to try only.
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