The Companies Act, 2013 is passed by the Parliament and assented to by the President of India on the 29 th August, 2013. The rules in respect of most of the Chapters of the Companies Act, 2013 have already been notified by the Ministry of Corporate Affairs.

It has been decided to enforce the provisions of the new legislation in phases and accordingly, notifications for implementation of 283 Sections of the new Act with effect from 1st April 2014 have been issued by the Ministry as on 26th march, 2014.

Brief description of some of the Sections/ Rules of new Companies Act, 2013 as may be applicable to a listed Company

S No. Heading Section of companies Act, 2013

Corresponding Section of Companies Act, 1956 (Old Act)

Brief particulars of Section Section Notified

1Associate Company Section 2(6) New definition

A company is an associate company of the other, if the other company has significant influence over such company (not being a subsidiary) and includes a joint venture company.

Significant influence means control of at least 20 per cent of total share capital of a company (shares held in fiduciary capacity excluded) or of business decisions under an agreement.

Yes

2 Auditing Standard Section 2 {7} New Definition Every auditor shall comply with auditing standards.

Yes

3 Financial Year Section 2{41} 2{17} With the intention to have an uniformity in financial year, the term ‘financial year’ is redefined. Financial year for all the companies now will begin on 1st April and end on 31st March.

Yes

4 Independent Director Section 2{47} New Definition Independent director” means an independent director referred to in sub-section (5) of section 149. This is to remove any ambiguity as it was not defined in the old Act. Earlier & new Clause 49 of listing agreement provides for this.

Yes

5 Key Managerial Personnel

Section 2 {51} New Definition “Key Managerial Personnel”, in relation to a company, means —

(i) the Chief Executive Officer or the managing director, or the manager; (ii) the company secretary; (iia) the whole-time director (iii) the Chief Financial Officer ; and (iv) such other officer as may be prescribed;

Yes

6 Managing Director Section 2 {54} Section 2 {26} Means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers ofmanagement of the affairs of the company and includes a director occupying theposition of managing director, by whatever name called.

Routine administrative acts etc are not substantial powers.

Yes

7 Officer in default Section 2{60} Section 5 The definition has been modified to include Key Managerial Personnel;

Knowledge attributability / consent would also be determining factor while determining whether a person is officer in default or not.

The share transfer agents, bankers, registrars and merchant bankers to the issue or transfer have also been made liable as officer in default, in respect of the issue or transfer of any shares of a company.

Yes

8 Private Company Section 2{68} Section 3[1} {iii} The requirement of a private company having minimum paid-up capital of one lakh rupees has been retained. Number of members has been increased from 50 to 200 and restriction to invite public to subscribe shares or debentures has been extended to include all type of securities.

Yes

9 Promoter Section 2{69} New Definition promoter” means a person—

(a) who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or (b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act: Provided that nothing in sub-clause (b) and (c) shall apply to a person who is acting merely in a professional capacity;

Yes

10 Public Company Section 2{71} Section 3{1} {iv} The requirement of public company having minimum paid-up capital of five lakh rupees has been retained. It has been clearly provided that subsidiary of public company shall be deemed to be public company even if it continue to be private company in its Articles.

Yes

11 Related party 2{76} New Definition The definition has been inserted for the first time with very broad scope:-

related party”, with reference to a company, means—

(i) a director or his relative;

(ii) Key managerial personnel or his relative;

(iii) a firm, in which a director, manager or his relative is a partner;

(iv) a private company in which a director or manager or his relative is a member or director;

(v) a public company in which a director or manager is a director and holds along with his relatives, more than two per cent. of its paid-up share capital;

(vi) any body corporate whose Board of Directors, managing director, or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager;

(vii) any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses

Yes

(vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;

(viii) any company which is—

(A) a holding, subsidiary or an associate company of such company; or (B) a subsidiary of a holding company to which it is also a subsidiary: (ix) such other person as may be prescribed;

12 Relative Section 2(77) Section 2(41) Relative with reference to any person, means anyone who is related to another, if—(i) they are members of a Hindu Undivided Family;(ii) they are husband and wife; or(iii) one person is related to the other in such manner as may be prescribed;

In terms of the (Specification of definitions details) Rules, 2014, following persons have been further prescribed who shall be deemed to be the relative of another:(1) Father (including step-father)(2) Mother(including step-mother) (3) Son ( including the step-son) (4) Son’s wife. (5) Daughter. (6) Daughter’s husband. (7)Brother( including the step-brother); (8) Sister (including the step-sister)

Yes

13 Small Company Section 2(85) New definition A company other than a public company having a paid-up share capital of which does not exceed rupees fifty lakh or such higher amount as may be prescribed not exceeding rupees five crore or turnover of which as per its last profit and loss account does not exceed rupees two crore or such higher amount as may be prescribed not exceeding rupees twenty crore. Not applicable on holding and subsidiary companies/ Section 8 companies {Non Profit Making Organization} / companies governed under Special Act.

Yes

14 Holding company

Subsidiary Company

Section 2 {46} and 2 {87}

Section 4 Holding company in relation to one or more other companies, means a company of which such companies are subsidiary companies;

Subsidiary, in relation to any other company :-(that is to say the holding company), means a company in which the holding company—(i) controls the composition of the Board of Directors; or(ii) exercises or controls more than one-half of the total share capitaleither at its own or together with one or more of its subsidiary companies:

However such classe/s of holding companies as may be prescribedshall not have layers of subsidiaries beyond such numbers as may be prescribed. { Not yet implemented}

Foreign company can have public or private Indian subsidiary. Existing Indian subsidiary can continue.

Yes

Except proviso to section 2 {87}

15 Whole Time Director

Section 2{94} New definition Whole Time directors includes a director in the whole time employment of the Company

Yes

16 Incorporation of Companies

Section 3- Formation of Companies

Section 12 Public, Private and One Person Company can be formed. Company can be Limited by Shares, Guarantee or an Unlimited Company

The new concept of One person Company (OPC) has been introduced.

Yes

17Section 4- Memorandum

Sections 13, 14, 20 and 23

Memorandum of OPC shall indicate the name of a person, who will become member in the event of death of the single person. Prior written consent shall be taken from the person whose name would be mentioned in the Memorandum.The object clause of a company requires classification as: (a) object for which the Company is proposed to be incorporated, and (b) any matter considered necessary in furtherance thereof;

(Companies {Incorporation} Rules, 2014 have been prescribed.)Powers under Section 4(2) regarding determination of name whether desirable or undesirable delegated to RoC)

Yes

18 Articles of Association and that Companies may have provision for entrenchment therein

Section 5(3) New Provision The Articles may contain provisions for ENTRENCHMENT to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a Special Resolution, are met or complied with.

This provision shall only be made either on the formation of the Company or on amendment in the articles agreed by all the members in Private Companies and by passing Special Resolution in Public Companies

Where Articles contains the provision for entrenchment then specific notice of such provision is to be given to the Registrar.(Companies {Incorporation} Rules, 2014 have been prescribed)

Yes

19 Commencement of business

Section 11 Section 149 A public as well as a private company having share capital need to obtain certificate of commencement of business.(Companies {Incorporation} Rules, 2014 have been prescribed)

20 Charitable Company

Section 8 Section 25 Central Government {CG} has the power to register and issue license to an AOP as limited company having charitable objects to promote commerce, art, science, sports, education, research, social welfare, religion, charity etc., without adding to its name the words “Limited” or “Private Limited”. CG can revoke the license. Both M & A will need prior approval of CG for alteration. (Companies {Incorporation} Rules, 2014 have been prescribed ) -Powers under Sections 8(4)(i) (for alteration of MoA in case of conversion into another kind of company) and 8(6)

Yes

regarding revocation of license delegated to Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong and powers under Sections 8(1) regarding issue of liecence, 8(4)(i) (except for alteration of MoA in case of conversion into another kind of company) and 8(5) registration of another kind of company under Section 8 delegated to Registrar of Companies

21 Registered office

Section 12 Sections 17A, 146 and 147

Company shall, on and from the 15th day of its incorporation and at all times thereafter have a Registered Office capable of receiving and acknowledging all communications and notices as may be addressed to it.Company is required to furnish to the Registrar verification of its Registered Office within 30 days of its incorporation in the prescribed manner. Company is required to print Corporate Identification Number {CIN} along with its telephone number, fax number, e-mail and website addresses on all its business letters, billheads and letter and in all its notices and other official publications.Where a company has changed its name(s) during the last two years, it shall paint or affix or print at its Registered and other officers and other stationery, along with its name, the former name or names so changed during the last two years.

Notice of change after incorporation, verified in the manner prescribed, shall be given to the Registrar, within 15 days of the change who shall record the same.(Companies {Incorporation} Rules, 2014 have been prescribed)

Yes

22 Alteration of Memorandum and Articles

Section 13 & 14 Section 16, 18, 21, & 31

Company may alter its Memorandum by Special Resolution and need approval of CG for change of name, change of

Yes

registered office from one state to another, however for change of objects where the company has raised money through prospectus will need special Resolution and there will be right to the dissenting shareholders to exit. Company may alter its Articles by way of Special Resolution for conversion of :

a. Private Company into Public Company

b. Public Company into Private Company {with approval of Tribunal} {ROC has the powers }

Copy of altered Articles to be filed with Registrar within 15 days Companies {Incorporation} Rules, 2014 have been prescribed

Powers for rectification of the name of the Company under Section 16 delegated to Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong

23 Service of Documents

Section 20 Sections 51, 52 and 53

A document may be served upon a Company or its officers by registered post/speed post/courier service / leaving it at the Registered Office or by means of electronic transmission {Facsimile/ E-mail etc. and such other communication whose records are capable of retention, retrieval and review}_.

A document may be served upon a Registrar or members by registered post/ speed post/ courier service /leaving it at his Office/Address or by means of electronic transmission {Facsimile/ E-mail etc. and such other communication whose records are capable of retention, retrieval and review}_

Yes

Fee for servicing the documents on members by any particular mode as requested by the concerned member, may be determined by the Company in its Annual General Meeting.

Courier means a document sent through a courier which provides proof of delivery.

Companies {Incorporation} Rules, 2014 have been prescribed

24 Authentication of Documents, Proceedings and Contracts

Section 21 Section 54 Any document or proceeding requiring authentication by the Company or contracts entered into by or on behalf of the Company may be signed by any Key Managerial Personnel, or officer of the Company duly authorized by the Board in this behalf.

Yes

25 Public Offer and Private Placement

Sections 23 & 42 New Provision & Section 67

(1) A public company may issue securities—(a) to public through prospectus; or (b) through private placement or (c) through a rights issue or a bonus issue in accordance with the provisions of the Act and in case of a listed company or a company which intends to get its securities listed also in accordance with the provisions of the Securities and Exchange Board of India Act, 1992 and the rules and regulations made there under.

(2) A private company may issue securities—(a) by way of rights issue or bonus issue in accordance with the provisions of this Act; or (b) through private placement by complying with the provisions mentioned in the Act.

Private placement of all securities covered : to select group of persons, by issue of Letter of Offer, to prior recorded names, to maximum 50 persons or as may be prescribed, payment through banking channels, allotment within 60 days of receipt of application money, and

Yes

filing return with Registrar. (Companies {Prospectus & Allotment of Securities } Rules, 2014 have been prescribed)

26 Issue of share certificate

Section 46 Section 84 Certificates issued under the Common Seal of the Company / held in the depository form shall be the prima facie evidence for the title to such shares.(Companies {Share Capital & Debentures } Rules, 2014 have been prescribed)

Yes

27 Issue and Redemption of Preference shares

Section 55 Section 80 Irredeemable Preference shares cannot be issued. Company may issue preference shares which are liable to be redeemed within a period exceeding twenty years from the date of their issue for infrastructure projects, subject to the redemption of certain percentage on a annual basis at the option of such preferential shareholders.

Yes, sub section {3} not yet notified’where company cannot redeem preference shares

28 Transfer and Transmission of Securities

Section 56 Sections 108,109,110,113 and 109B

All securities are now covered under the new Companies Act against just shares or debentures as was the case in the Companies Act, 1956. In case of the transfer request only by the transferor for partly paid up shares, notice of such request needs to be sent to the transferee and no objection should be given by the transferee within two weeks from the receipt of such Notice. Share certificates shall be issued within two months from the date of incorporation.Legal Representative of a deceased person can transfer any security or interest owned by the deceased member.Instrument of transfer shall be delivered within 60 days of its execution to the company irrespective of nature of

Yes

company instead of 12 months or book closure whichever is later {Listed Company} and 2 months {Private Company}. After 60 days or where transfer deed is lost, the company will register transfer subject to indemnity.

Instrument of transfer executed before 1-4-2014 can be accepted by a company if lodged within the prescribed time as per Cos Act 1956. Time period for issue of Share Certificate(s) has been reduced as follows:In case of Allotment: from 03 Months to 02 MonthsIn case of Transfer and Transmission: from 02 Months to 01 Month.(Companies {Share Capital & Debentures } Rules, 2014 have been prescribed)

29 Power of Limited Company to Alter its Share Capital

Section 61 Section 94 Alteration of capital clause in the memorandum by way of increase/ consolidation/ division/ conversion of fully paid up shares into stock or its reconversion/ cancellation of shares not agreed to be taken by any person, can be done in the General Meeting, if so authorized by the Articles. Consolidation and division which results in changes in the voting percentages of shareholders shall take effect after prior permission of Tribunal.

Yes{Except Proviso to Clause (b) of Sub-Section (1)} regarding approval of tribunal for change in voting percentage by consolidation/division.

30 Further Issue of Share Capital

Section 62 Section 81 Company has the power to increase its subscribed capital by issue of further shares subject to such condition as prescribed. Offer of shares to existing equity shareholders

Section related to further issue of capital will now be applicable on all types of

Yes{Except Sub-Section (4) to (6)} regarding conversion of loan/ debentures into Shares.

Companies.Apart from the existing equity shareholders, the Company may also offer shares to the employees by way of ESOPs subject to the approval of shareholders by way of Separate Special Resolution subject to such conditions as may be prescribed.

If shares are being offered to persons other than existing Shareholders or employees by way of ESOP, either in cash or other than cash, then the price shall be arrived at, based on the Report of the Registered Valuer subject to such condition as may be prescribed.Price should not be less than valuation report. (Companies {Share Capital & Debentures} Rules 2014 have been prescribed.)

31 Issue of Bonus Shares

Section 63 New Provision Company may issue fully paid up Bonus shares to its members out of its reserves, the Securities Premium Account, or the Capital Redemption Reserves Account.The Bonus shares shall not be issued in lieu of dividend as mentioned SEBI (ICDR) Regulations.(Companies {Share Capital & Debentures} Rules 2014 have been prescribed)

Yes

32 Restriction on purchase of its own shares by a company, its power to Buy Back its own Securities

Section 67 , 68 & 69

Section 77 &77A Company cannot purchase its own shares subject to certain exceptions like giving loans to employees [not directors or KMP] for which disclosure has to be made in Boards Report. Company may buy back its own shares/ specified securities out of its free reserves, the Securities Premium Account or the proceeds of the issue of

Yes

any shares or other specified securities if the same is authorized by the Articles of Association and by the members (by way of Special Resolution) and after satisfying other conditions as laid down under the Act,Where buy back is effected an equal amount has to be transferred to capital redemption reserve account. (Companies {Share Capital & Debentures} Rules 2014 have been prescribed)

Debentures Section 71 Section 117, 117A, 117B, 117C , 118, 119, & 122

Issue debentures with an option to convert whole or part of the debentures into shares at the time of redemption.

Company may issue secured debentures, create debenture redemption reserve, appoint debenture trustee, & redeem debentures as per terms. Procedure to issue debentures provided for. (Companies {Share Capital & Debentures} Rules 2014 have been prescribed)

Yes except sub sections {9}, {10} and {11} regarding tribunal to decide on application relating to failure to redeem debentures.

33 Power to nominate Section 72 Section 109 A Enables every shareholder or debenture holder to appoint a nominee who shall be the owner of the securities in the event of the death of the holder or the joint holder.

Yes

34 Acceptance of Deposits by companies

Section 73, 74 75 & 76

Sections 58A and new provisions

A public company having net worth of Rs. 100 crores or turnover of Rs. 500 crores and after obtaining the prior consent of the shareholders by way of passing a Resolution; may accept deposits from persons other than its members subject to the prescribed compliance requirements and legal framework provided in these sections and Deposits rules. Such company will also have to obtain credit rating from

Yes except, Subsection (2) & (3) of 74 and Section 75 regarding application to Tribunal & damages for fraud.

recognised agency, provide Deposit Insurance (Companies may accept deposits without deposit insurance contract till 31st March, 2015) and create a charge on its assets {in case the FDs are to be secured}. Repayment of Deposits accepted by companies before commencement of the new Act which remain unpaid on such commencement or become due thereafter shall have to be done within one year from commencement or from date on which payment is due, whichever is earlier, Hence this is invoked where the company is not making repayment of deposits and interest thereon in terms of the provisions of previous Companies Act, 1956 and Rules made there under as also per the terms of the fixed deposits.In case of default in repayment of FD/Interest, Company can’t give any Inter corporate Loan/Guarantee/provide security/make acquisition till such default is continuing. (Companies {Acceptance of Deposits} Rules 2014 have been prescribed)

35 Filing and Registration of charges

Section 77 Sections 125 and 132

Company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge within a period 30 days.

Registrar may, on application allow a period of three hundred days of such creation on payment of such additional fees as may be prescribed.

(Companies {Registration of Charges} Rules 2014 have been prescribed)

Yes

Section 78 Section 141If a Company fails to register a charge within 300 days the company shall seek extension of time in accordance with Section 87{Application to CG} (Powers delegated to Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong) If company fails to get registered the charge within the aforesaid period then the person in whose favor the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time as may be prescribed.(Companies {Registration of Charges} Rules 2014 have been prescribed)

Yes

36 Power to Close Register of members/debenture holder or other security holders

Section 91 Section 154 Closure of Register of members/debenture holder or other security holders has been provided.Closure for not more than 45 days in a year but not exceeding 30 days at any one time.Previous notice of at least seven days or such lesser period as may be specified in such manner as may be specified by Securities and Exchange Board for listed Companies or Companies which intend to get their securities listed, by way of advertisement in at least once in a vernacular newspaper {vernacular language} and at least once in English newspaper { English language} having a wide circulation in the place where the registered office of the company is situated and publish the notice on the website as may be notified by the Central Government and on the website, if any, of the Company. The said rule of advertisement shall not be applicable to a private company provided that the notice has been served

Yes

on all members of the private company not less than seven days prior to closure of the register of members or debenture holders or other security holders.(Companies {Management & Administration } Rules 2014 have been prescribed)

37 Annual Return Section 92 Sections 159, 160, 161 and 162

Every company {with or without share capital} shall file Annual Return in Form No. MGT-7 containing the particulars {mentioned in the Act} up to the date of closure of Financial Year with Registrar within 60 days from the date of AGM or the Last date on which AGM should have been held. Annual Return of the company {except OPC and small company} shall be signed by Director and Company Secretary or where there is no Company Secretary, by Company Secretary in Practice{CSP}Annual Return, of listed companies or of companies having a paid up share capital of Rs. 10 crores or more or turnover of Rs. 50 crores or more shall also be certified by CSP in Form No. MGT-8For OPC and small company it shall be signed by Company Secretary or where there is no Company Secretary, by the Director of the CompanyExtract of the AR shall form part of Board’s Report in Form No.MGT-9.(Companies {Management & Administration } Rules 2014 have been prescribed)

Yes

38 Filing, in respect of change in Promoters’ stake, with Registrar

Section 93 New Provision Every listed company shall file with the Registrar, a return in Form No.MGT.10 along with the fee with respect to changes relating to either increase or decrease of two percent, or more in the shareholding position of promoters and top ten shareholders of the company in each case, within fifteen days of such change.

(Companies {Management & Administration } Rules 2014 have been prescribed)

yes

39 Annual General Meeting

Section 96

Section 101 regarding notice of meeting

Section 166

Sections 171 and 172

First AGM- within 9 months from the date of closing of first Financial Year

In any other case - within 6 months from the date of closing of Financial Year

Gap between two AGMs should not be more than 15 months.

Registrar for special reason extend the date of any AGM for three months except in case of First AGM AGM to be held between 9 A.M to 6 P.M, on any day which is not a public holiday.

One person Company is not required to hold Annual General Meeting.

General Meeting may be called by giving not less than clear 21 days’ notice either in writing or through electronic mode {among others, by way of e-mail as a text/ attachment to e-mail at the last address provided by

Yes

Yes

the member} containing place, date, time, venue and business to be transacted at such meeting. An advance opportunity at least once in a financial year, to the member to register his e-mail address and changes therein and such request may be made by only those members who have not got their email id recorded or to update a fresh email id and not from the members whose e-mail ids are already registered. The subject line in e-mail shall state the name of the company, notice of the type of meeting, place and the date on which the meeting is scheduled.

The company should ensure that it uses a system which produces confirmation of the (i) total number of recipients e-mailed and (ii) a record of each recipient to whom the notice has been sent and copy of such record and any notices of any failed transmissions and subsequent re-sending shall be retained by or on behalf of the company as ‘‘proof of sending’’.

The company’s obligation shall be satisfied when it transmits the e-mail and the company shall not be held responsible for a failure in transmission beyond its control. If a member entitled to receive notice fails to provide or update relevant e-mail address to the company or to the depository participant as the case may be, the company shall not be in default for not delivering notice via e-mail.

The recipient should be able to obtain and retain copies of the notice made available, among others, on the

New Provision

electronic link and the company shall give the complete address of the website and full details of how to access the document or information.

The notice of the general meeting of the company shall be simultaneously placed on the website of the company if any and on the website as may be notified by the Central Government.

An extra ordinary general meeting shall be held at a place within India. Companies {Management & Administration } Rules 2014 have been prescribed

General meeting may be called at shorter notice with the consent in writing or by electric mode by 95% of members entitled to vote at such meeting

Notice of every meeting of the Company is required to be sent to every member, director and Statutory Auditor of the Company

Every listed company or company having not less than 1000 shareholder shall provide facility to its members to exercise their vote electronically at the General Meeting

Company which opts to provide the aforesaid facility to its members should follow the procedure mentioned under (Companies (Management and Administration) Rules, 2014)

Yes

40 Calling of Extraordinary General Meeting

Section 100 Section 169 Power to call EGM has been conferred on the Board by the Act itself and Board shall also call EGM on the basis of the requisition made by:

Yes

Company having share capital: such members holding not less than one tenth of paid up share capital of the company as on that date carries voting right

Company not having share capital: such members having one tenth of total voting powerThe requisition shall be signed by the requisitionists and shall mention the matters for consideration and send the same at the Registered Office of the company

(Companies {Management & Administration } Rules 2014 have been prescribed)

41 Notice of meeting & Statement to be annexed with Notice

Sections 101 & 102 Sections 171, 172 & 173

21 days clear days’ notice for calling a general meeting in writing or through electronic mode. In addition to every member & auditor; the directors should also be sent the notice.

If any Special Business is to be transacted in any general meeting, the explanatory statement should also specify the concern or interest financial or otherwise of every Director and the Manager, other KMP and relatives of Director and KMP(Companies {Management & Administration } Rules 2014 have been prescribed)

Yes

42 Quorum for meetings, proxy, voting through electronic means, Demand for Poll, chairman , restriction on voting rights , voting by show of hands

Sections 103 , 104,105 , 106, 107, 108 & 109

Sections 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185

Unless the Articles provide for larger quorum:For Public Company quorum is : 05 members personally present, if no. of members as on the date of AGM up to 100015 members personally present, if no.

Yes

of members as on the date of AGM is more than 1000 but up to 5000

30 members personally present, if no. of members as on the date of AGM is more 5000For Private Company quorum is two members personally present.If the quorum is not present within half an hour from the appointed time then the meeting shall stand adjourned for the next week same time same place or such other date, time and place as the Board may determineFor adjourned meeting or change of day time or place of meeting, not less than three days’ notice should be given to member individually or by publishing an advertisement in the newspaperAt the adjourned meeting quorum is not present, the member present shall be the quorumA person cannot be Proxy of more than 50 members and holding in aggregate not more than 10% of total paid up share capital with voting rights. However a member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.Articles cannot allow voting by proxy on show of hands. Proxy can vote on only poll and has no right to speak.Member of Company registered u/s 8 (Companies with Charitable Organization) can only appoint another member as his proxy.

The appointment of proxy shall be in the Form No. MGT.11.Demand for poll by member/ proxy having not less than 1/10th of the total voting power or holding shares on which at least Rs 5 lacs or prescribed amount have been paid upUnless articles provide otherwise, members present personally in a general meeting shall elect one of them as chairman.In terms of articles, no member shall exercise any voting right on which he has not paid any call or where there is lien by the company on his shares. He can use his votes differently.At a general meeting, resolution put to vote to be decided by show of hands unless poll is demanded or voting is carried electronically. E voting made compulsory for listed & companies with not less than 1000 shareholders. Show of hands not allowed for shareholder who has electronically voted, however, he can attend general meeting.

Where there is e voting, poll cannot be demanded. Where a shareholder did not e vote nor was physically present in the general meeting, he cannot demand postal ballot.Concepts of one share one vote present. (Companies {Management & Administration } Rules 2014 have been

prescribed)

43 Postal Ballot & circulation of members resolution, ordinary & special resolution, and resolution requiring special notice

Section 110, 111, 114, & 115

Section 188, 189, 192A & 190

Postal ballot provisions are now applicable to all the companies whether listed or unlisted. The items, for which postal ballot is compulsory and its process is mentioned under Companies (Management and Administration) Rules, 2014. One Person Company and other companies having members up to two hundred are not required to transact any business through postal ballot. A company shall on requisition of specified members give notice to all members on proposed resolution intended to be moved in a general meeting. A resolution shall be ordinary resolution if votes cast in its favour exceed the votes cast against the resolution by the members in a general meeting. A resolution shall be special resolution if it is duly specified in the notice calling the general meeting and the votes cast in its favour are atleast three times the votes cast against it Special notice shall be given to the company by members {individually or collectively} holding not less than 1% total voting power or holding shares on which an aggregate sum of not less than five lakh rupees has been paid up thereon on the date of the notice, in accordance to the procedure prescribed under

(Companies (Management and Administration) Rules, 2014 )

Yes

44 Resolution and agreement to be filed

Section 117 Section 192 In addition to the prescribed resolutions and agreements under

Yes

with ROC Companies Act 1956, other resolutions/ agreements to be filed with ROC.

All the resolutions passed by the Board pursuant to section 179 of the Companies Act, 2013 i.e. Resolution for borrowing moneys, investing the funds, issue of securities, including debentures.

(Companies {Management & Administration } Rules 2014 have been prescribed)

45 Minutes of proceeding of general meeting/Board Meeting/other meetings and resolutions passed by postal ballot

Section 118 Sections 193, 194, 195 and 197

Every company is required to maintain the minutes of every meeting of any class of shareholders or creditor and every resolution passed by postal ballot and every meeting of Board of Director or committee thereofCompany shall follow the Secretarial Standards of ICSI while making the Minutes of Board Meetings and General Meetings.{ Not yet issued}Minutes prepared in accordance with provisions of these sections shall be evidence of the proceedings recorded therein (Companies {Management & Administration } Rules 2014 have been prescribed)

Yes

46 Maintenance and Inspection of Documents in Electronic Form

Section 120 New Provision Any document, record, register minutes etc. required to be kept by the company may now be maintained in electronic form as prescribed in Companies (Management and Administration) Rules, 2014

Every listed company or a company having not less than one thousand shareholders, debenture holders and other security holders, shall maintain

Yes

its records, as required to be maintained under the Act or rules made there under, in electronic form.

In case of existing companies, data shall be converted from physical mode to electronic mode within six months from the date of notification of provisions of Section 120 of the Act.

47 Report on Annual General Meeting.

Section 121 New Provision Every listed Company shall file a report in Form No. MGT.15, as mentioned in terms of Companies (Management and Administration) Rules, 2014, on decisions taken at each AGM to the Registrar within 30 days from the conclusion of the AGM.The report shall be signed by the Chairman of the meeting or in case of his inability to sign, by any two directors of the company, one of whom shall be the Managing director, if there is one and company secretary of the company;

Yes

48 Declaration of Dividend

Section 123 Section 205 Dividend shall be paid in terms of the provisions of the Act and Companies {Declaration and payment of Dividend} Rules, 2014.In case declaration of dividend out of reserves, the provisions of the said Rules must be complied.

Carried over previous losses & depreciation not provided are to be set off against profit of current year. In case of interim dividend, where Company has incurred losses, during the current Financial Year up to the end of the quarter immediately preceding the date of declaration of interim dividend, in such case, the rate at which such interim dividend shall be declared shall not exceed average

Yes

dividends declared by the Company during the immediately preceding three Financial Years.

49 Unpaid Dividend Account

Section 124 Section 205A Any dividend declared but has not been paid or claimed within 30 days from the date of declaration by the shareholder, the company shall transfer the amount to unclaimed dividend account within 07 days of expiry of said thirty days.Within 90 days from making the transfer, a statement containing names of the shareholders and their last address and amount to be paid to each one of shareholder, shall be placed on the website of the company, if any, and also on the web site approved by the Central GovernmentAny person claiming to be entitled to any money transferred to unpaid dividend account may now apply to the Company for payment of the money claimed.Any money and interest in the unclaimed dividend account which unpaid or unclaimed for a period of 07 years shall be transferred to Investor Education and Protection Fund and the statement in the form DIV 5 should be filed. (Companies {Declaration and payment of Dividend} Rules, 2014 have been prescribed.)

No

50 Investor Education and Protection Fund

Section 125 Section 205C Various additional categories of amounts would also be required to be transferred to the Fund, e.g. donations, grants given by the Central Government, donations by the State Govt. Companies or other institution for the purpose of the fund, etc. apart from the amount mentioned in the

No

earlier Companies Act, 1956.Account of the fund shall be audited by Comptroller and Auditor General.

Any person claiming to be entitled to the amount transferred in IEPF can apply to the authority for the amount he is entitled to.

51 Books of Accounts to be kept by the Company

Section 128 Section 209 The provisions provide that the books of Accounts to be kept giving true and fair view of the state of affairs. They may be kept in electronic form also Every company shall be required to prepare and keep at its Registered Office, financial statement along with books of account and other relevant books and papers for every financial yearPeriodic summarized returns, in respect of books maintained at the branch offices, sent to the registered office shall be deemed to be the compliance of maintaining the records at the registered office of the company.If Board decides to keep the books of accounts at any other place in India, then the notice to this effect shall be given to the Registrar of Companies.(Companies {Accounts} Rules 2014 have been prescribed.)

Yes

52 Financial Statements Section 129 Sections 210, 211 and 212

Financial statement consists of Balance sheet, Profit and Loss account, cash flow statement and statement showing changes in the EquityAlong with financial statement, consolidated financial statements of all subsidiaries including associate companies and joint ventures shall be laid at the AGMAll listed companies and public companies having net worth of more than Rs. 1 crore and turnover of more than Rs. 10 crores, the financial statements may be sent by electronic mode to such members whose shareholding is in dematerialised format and whose email Ids are registered with Depository for communication purposes or those have consented for the same,

Yes

and, in all other cases by despatch of physical copies through any recognised mode of delivery as specified under section 20 of the Act, . (Companies {Accounts} Rules 2014 have been prescribed.)

53 Re-opening of account on court’s or Tribunal’s order

Section 130 New Provision Books of Accounts may be re-opened or re- cast for the reasons of fraudulence / mismanagement, if an application is made by the Central Government, Income Tax Authorities, SEBI, or any other statutory regulatory body etc. and an order is made in this regard by a court of competent Jurisdiction or Tribunal.

No

54 Voluntary revision of financial statement or Board’s Report

Section 131 New Provision Directors of a company may prepare revised financial statements or Board’s report in respect of any of the three preceding Financial Years after obtaining approval of Tribunal, if it appears to them that the financial statements {Section 129} or Board’s Report {Section 134} do not comply with the applicable provisions under the Act.Detailed reason should also be mentioned in respect of such revision in the Board’s Report of the relevant financial year in which such revision is being made

No

55 Financial Statement and Board's Report etc.

Section 134 Sections 215, 216 and 217

The financial statement including Consolidated financial statement shall be approved by the Board before signed on behalf of the Board by the Chairperson, if authorized by the Board or by two Directors out of which and one shall be MD and the CEO, if he is a director in the company, the CFO and Company Secretary (if appointed). However, in case of OPC by one director

Except in the case of OPC, Board’s Report shall include additional information as mentioned in the Act and Companies {Accounts} Rules, 2014. Also declaration given by Independent Director about meeting with criteria of independence.

Yes

56 Corporate Social Responsibility

Section 135 New Provision Every Company having :

Net Worth- Rs.500 crores or more, orTurnover- Rs. 1000 crores or more, orNet Profit- Rs. 05 crores or more ,

during any Financial Year shall constitute a CSR Committee of the Board consisting of three or more Directors, out of which at least one shall be Independent Director. The Content of CSR Policy to be disclosed in the Board’s Report and on the Company’s Website, if any, and it shall be as per the Companies (Corporate Social Responsibility Policy} Rules, 2014

Company shall spend in each Financial Year at least 2% of its average net profit made during 03 immediately preceding Financial Years for corporate social responsibility in pursuant to CSR policy.

Preference to be given to the local areas around which the company operates.

Yes

Slum re-development or EWS housing is a CSR

One off events would not qualify as a part of CSR expenditure. CSR activities should be undertaken by companies in project / programme mode.

Expenses incurred by companies for fulfillment of any act / statute of regulations would not count as CSR expenditure.

Salaries paid by companies to regular CSR staff as well as volunteers can be factored into CSR project as part of CSR expenditure.

“Any financial year” referred in Section 135(1) implies ‘any of the three preceding financial years’.

Expenditure incurred by foreign holding company for CSR activities in India shall qualify as CSR spend of the Indian subsidiary company only if CSR expenditure is routed through Indian subsidiaries and the Indian subsidiary is required to do so as per Sec 135 of the Act.

In states where the registration of trust is not mandatory then the word ‘registered trust’ would include trusts which are registered under Income Tax Act.Contributions to trust / society / section 8 company will qualify as CSR

expenditure as long as the said entity is created exclusively for undertaking CSR activities or the corpus is created exclusively for a purpose directly relatable to activity covered under Schedule VII.

Administrative expenditure can also be included within the 5% limit of total CSR expenditure which a company may spend for building its own CSR capacity

If company fails to spend as aforesaid, the Board’s Report shall specify the reasons.

57 Right of members to copies of audited financial statements, Website Disclosures

Section 136 & 137 Section 219 & 220 Circulation of financial statements to every member, trustee of debenture holders, and others who are entitled at least 21 days before the date of general meeting. Copy of financial statements to be filed with the Registrar within 30 days of AGM.

Listed Company to place its financial statements including consolidated financial statements and all other documents required to be attached thereto on its website. Further every company is required to place separate audited accounts of each of its subsidiary on its website, if any.Companies {Accounts} Rules, 2014 have been prescribed.

yes

58 Internal Audit Section 138 New Provision Every Listed Company, unlisted public company, among others, having paid up share capital/turnover of Rs. 50 crores/Rs. 200 crores or more during preceding financial year and a private company, among others, having turnover of Rs. 200 crores or more during preceding financial year, shall be required to appoint a Chartered

Yes

Accountant, Cost Accountant or any other professional as may be decided by the Board as an Internal Auditor of the Company.Existing company covered under any of the above criteria shall comply with the requirements of section 138 and Companies {Accounts} Rules, 2014 within six months from the 01st April, 2014

The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.

59 Statutory Auditors Section 139, 140 , 141, 142, 143 & 144, 145, 146

Section 224, 225, 226, 227, 228 & 619

At first AGM, individual or firm shall be appointed by company as the Statutory Auditors to hold office from the conclusion of that meeting till the conclusion of its 6th AGM and thereafter till the conclusion of every sixth AGM subject to the ratification by member at every AGM.Except One person company and small company all listed Company or unlisted public company and private. company having paid up capital of Rs. 10 crores and 20 crores, respectively or more, or, companies not covered above but having borrowings of Rs. 50 crores or more shall appoint or re-appoint (i) an individual as Auditor for not more than one term of 5 consecutive years (ii) a firm as Auditor for not more than two terms of 5 consecutive years. Eligibility, qualification and disqualifications have been provided. Auditors cannot render certain services to the company, its holding or

Yes

subsidiary companies.Every company existing before the commencement of new Act shall comply the above within three years of such commencement.Shareholders at a general meeting may decide that auditing partners may be rotated or audit shall be done by more than one auditor.Casual vacancy of the auditor to be filed by Board but if resignation happens giving rise to casual vacancy, approval of shareholders in a general meeting required.

Audit Committee is required to recommend to Board in this regard.

No special notice will be required to remove an auditor where he or the firm has completed the statutory tenure.

For removal along with the approval of the CG (powers delegated to Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong.), special resolution of shareholders is required.

Auditor shall comply with auditing standards.

Auditors Report shall provide for any qualification, reservation etc., and whether company has adequate internal financial control system and their effectiveness. The auditor’s report shall also include their views and comments on the impact of pending litigation on financial position, provision for deviation contract and whether there is any delay in transfer of funds IPEF account. Where any matter required to be included in

the Auditors Report is answered in negative or with qualification, the reasons have to be given.

Auditors to sign Audit Report and he is to attend general meeting.

(Companies {Audit & Auditors} Rules, 2014 have been prescribed.)

60 Central Government to specify of Cost Audit in respect of certain companies

Section 148 Section 233B The Central Government can direct class of companies engaged in the production of such goods or providing such services, as may be prescribed, to get the Cost Audit done.No approval of Central Government is required for the appointment of Cost Auditor to conduct the Cost AuditCost Auditor shall submit the report to the Board of Directors, who shall forward the same to the Central Government

(Companies {Audit & Auditors} Rules, 2014 have been prescribed.)

Yes

61 Board of Directors Section 149, 150, 151, 152

Sections 252, 253, 254,255, 256, 259 & 264

Board shall consist of individual as directors and shall have three directors in case of public company, two in case of private company and one in case of OPC.Maximum directorship can be increased beyond 15 after passing Special Resolution.One women director should be appointed in (a) listed company (b) public company having a paid up share capital/turnover of Rs. 100 crores/ Rs. 300 crores {transition period of one year for compliance} Vacancy in the office of a woman director shall be filled-up by the Board at the earliest but not later than

Yes

immediate next Board meeting or three months from the date of such vacancy, whichever is later Every company shall have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year. {transition period of one year for compliance}However as per the clarification 182 days for existing Companies will be reckoned as 136 days for current calendar year {April to December, 2014} and new companies incorporated after 30th September, 2014 shall have a resident director at the incorporation stage. Every listed public company shall have one third Independent Director {defined in the Act} and fraction shall be rounded off to one. Having pecuniary relationship with the company in the ordinary course of business at arm’s length shall not disentitle an independent director. Same is the case where he receives sitting fees, commission and reimbursement of expenses for participation in board meetings. Public company having paid up share capital/ turnover/ borrowings of Rs. 10 crores/ Rs. 100 crores/ Rs. 50 crores or more shall have at least two directors as independent directors. Higher no of independent directors, if required to constitute audit committee, are required for such public company Any vacancy of an independent director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later.

Code of conduct to be complied by independent director is also mentioned in the Act.Declaration to be given by Independent Director that he meets with the criteria of independence.

Independent Director is appointed for a term upto 05 consecutive years { can be less than 05 years} on the Board of the Company and shall be eligible for re-appointment on passing of Special Resolution for next term of five years. However he shall hold only two consecutive terms of 05 years at a time and thereafter there should be gap of 03 years during which he cannot be associated in any capacity. Independent Director shall not be entitled for Stock Options but only for sitting fee, reimbursement of expenses for participation in Board Meeting and profit related commission.

Independent Director shall not retire by rotation.

Any tenure of an independent director on the commencement of the new Act shall not be counted herein. 1/3 directors shall be non rotational and 2/3 directors rotational. 1/3 of 2/3 shall retire by rotation at every AGM.Manner & selection of independent director, maintenance of their data bank, and appointment of director elected by small shareholders have been provided. Application & allotment of Director Identification Number {DIN} have also been provided.

(Companies {Appointment & Qualification of Directors} Rules, 2014 have been prescribed.)

62 Right of persons other than retiring director to stand for directorship, Appointment of Alternate/ Additional/ NomineeDirector

Sections 160 ,161 162, Sections 257, 260, 262, 263 and 313

If a person other than retiring director stands for directorship but fails to get appointed, he or the member intending to propose him as a director, as the case may be, shall be refunded the sum deposited by him, if he gets more than twenty five per cent of total valid votes For being appointed as Additional Director the person should be other than a person who fails to get appointed as a Director in a general meeting. Additional Director will hold office up to the next Annual General Meeting or on the last date on which AGM should have been held

Alternate Director can be appointed in case a Director is absent from India for a period of not less than 3 Months

He cannot hold alternate directorship for any other director in the company.

Alternate to an Independent Director should also satisfy the conditions of being an Independent Director.

Nominee Director can be appointed by the Board subject to Articles and in pursuance of any law or agreement Appointment of directors to be voted individually unless otherwise decided by the members unanimously.

(Companies {Appointment & Qualification of Directors} Rules, 2014 have been prescribed.)

yes

63 Disqualification of Director

Section 164 Section 274 Additional grounds for disqualifications have been added viz. convicted of an offence dealing with Related Party Transaction, a person without DIN, etc.

(Companies {Appointment & Qualification of Directors} Rules, 2014 have been prescribed.)

Yes

64 No of Directorships Section 165 Sections 275 to 279 Person cannot become a Director in more than 20 Companies out of which he cannot be a Director in more than 10 Public Companies. Transition provision of one year given. By passing Special Resolution the shareholders may specify less than 20 or 10 as the case may be.Resignation given by a Director in order to comply the aforesaid requirement shall be effective on the same date on which the resignation is dispatched to the Company

Yes

65 Duties of Directors Section 166 New Provision For the first time, duties of directors have been defined in the Act. A director of a company shall : act in accordance with the articles

of the company. act in good faith in order to

promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.

exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.

not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.

Yes

not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.

66 Vacation of Office by Director

Section 167 Section 283 Directors shall vacate the office if - he incurs any of the

disqualifications specified in section 164;

he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board;

he acts in contravention of the provisions of section 184 relating to entering into contracts or arrangements in which he is directly or indirectly interested;

he fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested, in contravention of the provisions of section 184;

he becomes disqualified by an order of a court or the Tribunal;

he is convicted by a court of any offence, whether involving moral turpitude or otherwise and sentenced in respect thereof to imprisonment for not less than six months.

Yes

67 Resignation of Director

Section 168 New Provision A director may resign from his office by giving notice in writing to the company. Resignation will be effective from the date on which notice is received by the Company or date, if any, mentioned by the director in the notice, whichever is later.A director shall also forward a copy of

Yes

his resignation along with the detailed reasons for the resignation to the Registrar within thirty days of resignation in form DIR-11. .If all the directors resign from their offices or vacate their office u/s 168, the promoter or in his absence the Central Government shall appoint the requisite directors who shall hold office till the directors are appointed in General Meeting

Companies {Appointment & Qualification of Directors} Rules, 2014 have been prescribed.

68 Removal of Director etc

Section 169, 170 & 171 Section 284, 303 304, & 307

By ordinary resolution a director can be removed by giving him reasonable opportunity to be heard and by complying with special notice.

Company to maintain register of directors and Key Managerial Personnel { KMP}. Members have right to inspect such register.

(Companies {Appointment & Qualification of Directors} Rules, 2014 have been prescribed.)

Yes {except Sub Section (4)} of section 169 regarding sending a copy of representation of director being removed to every member.

69 Meeting of Board Section 173 Section 285 and 286

First Board Meeting to be held within 30 days from the date of Incorporation. Thereafter, there shall be four Board meetings every year with not more than 120 days gap between two consecutive meetings.

Notice of not less than 7 days in writing is required to call a Board meeting {whether in India or Outside} and notice shall be given to all directors by hand delivery/post/electronic means. However the meeting can be held at shorter notice for urgent business, if at

Yes

least one independent director is present in the meeting, and, if he is not present the decision should be circulated to all directors and shall be valid only after final ratification of decision by at least one independent director

Participation in Board Meeting may either in person/through video conferencing or other audio visual means as prescribed under Companies (Meetings of Board and its Powers) Rules, 2014 , which are capable or recognizing the participation and storing the proceedings of such meetings along with date and time

Certain matters as mentioned in the said Rules viz. approval of Annual Accounts, Board’s Report, etc are not to be dealt with in a meeting through video conferencing or other audio visual means.

The draft minutes of the Board meeting shall be circulated among all the directors within 15 days of the meeting either in writing or in electronic mode and the directors shall give their comments maximum within 7 days thereafter or any reasonable time decided by the Board.

For OPC {not applicable for OPC with one director}, Small Company and Dormant Company- one meeting in each half of calendar year to comply this Section and the gap between two meetings is not less than 90 days.

(Companies {Meeting of Board and its Powers} Rules, 2014 have been

prescribed.)

70 Quorum of Board Section 174 Sections 287 and 288

One third of the total strength (does not include directors whose places are vacant) of Board or two directors, whichever is higher.

Participation of Directors by video conferencing/ other audio visual means shall also be counted for the purpose of quorum and the Chairperson shall ensure the presence of quorum throughout the Board Meeting.

If due to resignation or removal, the number of directors reduces below the quorum, then the continuing director/s may act for the purpose of increasing the number of directors required for the quorum or for summoning a general meeting and not for other purpose.

Yes

71 Passing of resolution by Circulation.

Section 175 Section 289 This provides that no resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation unless the resolution has been circulated in draft, to all the directors, or members of the committee at their addresses registered with the company in India and has been approved by a majority. The clause also provides that such a resolution shall be noted and made part of minutes at a subsequent meeting. Draft resolutions and other documents may be sent by electronic means which may include E-mail or fax.

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

Yes

72 Audit Committee Section 177 Section 292A Mandatorily for every listed Company / Public company having paid up share

Yes

capital/ turnover/ borrowings of Rs. 10 crores/ Rs. 100 crores/ Rs. 50 crores or more, respectively.. One year permitted for reconstitution.

Composition: Minimum 03 Directors with majority of Independent Directors. Majority of the members of committee including its Chairperson should have the ability to read and understand financial statements.

Terms of reference of the Committee have been specifically provided in the section itself.

Auditor and KMP shall have a right to be heard in Audit Committee meeting when Auditors Report is being considered and but shall not have the right to vote.

Establishment of Vigil Mechanism to enable the directors and employee to report genuine concerns {establishment shall be disclosed by the Company on its website and in Board’s Report}. It should provide adequate safeguard against victimization to persons using such mechanism and for direct access to chairperson of the Committee.

73 Vigil Mechanism Section 177 Section 292A Details regarding establishment of vigil mechanism for Directors and employees to report genuine concerns as required for listed company or such class of companies, {i.e. companies which accepts deposits from public or companies which have borrowed money from banks/ Public Financial Institution in excess of Rs. 50 crores} , to be posted on Company website

(Companies { Meeting of Board and its

Yes

Powers} Rules 2014 have been prescribed.)

74 Nomination and Remuneration Committee and Stakeholders Relationship Committee

Section 178 Schedule XIII of Companies Act 1956

Every listed Company/Public company having paid up share capital/ turnover/ borrowings of Rs. 10 crores/ Rs. 100 crores/ Rs. 50 crores or more shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one half shall be independent Directors.

Chairperson{Executive or non-Executive} of the Company may be appointed as member but shall not chair such committee

The Committee is required to recommend appointment and removal of directors and carry out their performance evaluation etc. It shall formulate a policy for determining remuneration for directors, employees and key managerial personnel.

Every Company having more than 1000 shareholder/debenture holders/ deposits holders and other security holder shall constitute a Stakeholders Relationship Committee consisting of Chairperson who shall be non-executive director and other members decided by Board. This committee shall consider and resolve the grievances of security holders.

The Chairperson of aforesaid committees or other member of the committee authorized by him shall attend the general meeting of the Company.

Yes

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed).

75 Powers of Board Section 179 Section 291, 292 The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—a) to make calls on shareholders in

respect of money unpaid on their shares;

b) to authorise buy-back of securities under section 68;

c) to issue securities, including debentures, whether in or outside India;

d) to borrow monies;e) to invest the funds of the company;f) to grant loans or give guarantee or

provide security in respect of loans;g) to approve financial statement and

the Board’s report;h) to diversify the business of the

company;i) to approve amalgamation, merger or

reconstruction;j) to take over a company or acquire a

controlling or substantial stake in another company;

k) to make political contributionsl) to appoint or remove key managerial

personnel (KMP)m) to take note of appointment(s) or

removal(s) of one level below the KMP

n) to appoint internal auditors and secretarial auditor;

o) to take note of the disclosure of director’s interest and shareholding;

p) to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company;

q) to invite or accept or renew public deposits and related matters;

Yes

r) to review or change the terms and conditions of public deposits to approve quarterly, half yearly and annual financial statements or financial results as the case may be

Provided that the Board may, by a resolution passed at a meeting, delegate these powers from (d) to (f)

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

76 Restriction on Powers of Board and contribution to bonafide and charitable funds

Section 180, & 181 Section 293 The Board shall exercise the following powers only with the consent of the company only by a special resolution of shareholders, namely:— to sell, lease or otherwise dispose

of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.“undertaking” and “substantially the whole of the undertaking” defined

to invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation;

to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the ordinary course of business

Yes

to remit, or give time for the repayment of, any debt due from a director.

Every special resolution passed by the company in general meeting in relation to the exercise of the borrowing powers shall specify the total amount up to which monies may be borrowed by the Board of Directors. 

Resolutions passed under Section 293 of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings (subject to the limits prescribed) and / or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of Section 180 of the Companies Act, 2013 for a period of one year from the date of notification of Section 180 of the Act { i.e till 11.09.2014}.Board may contribute to bonafide and charitable funds but prior approval of members in general meeting is required where the amount in any financial year exceeds 5% of average net profits for three immediately preceding financial years.

77 Disclosure of Interest by directors

Section 184 Sections 299 and 300

Every director shall at the first meeting of the Board in which he participates as director,

At the first meeting of the Board in every financial year,

Whenever there is any change in the disclosures already made, then at the first Board meeting held after such change, disclose his

Yes

concern or interest in any company/ies, bodies corporate, etc., which shall include the shareholding, in such manner as may be prescribed.

He cannot participate & consequently vote and also his presence will not count for quorum.

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

78 Loans to Directors Section 185 Sections 295 and 296

No company {public or private} shall directly or indirectly advance any loan to any director/or to any other person in whom director is interested or give any guarantee or provide any security except as provided in the Act

Loan may be given to Managing Director/ WTD if provided in the terms of service agreement with all the employees or pursuant to scheme approved by shareholders by way of Special Resolution.

Any loan made by a holding company to its wholly owned subsidiary company or any guarantee given or security provided by a holding company in respect of any loan made to its wholly owned subsidiary company is exempted from the requirements under this section. Any guarantee given or security provided by a holding company in respect of loan made by any bank or financial institution to its subsidiary company is also exempted from the requirements under this section.

Provided that such loans made aforesaid

Yes

shall be utilized by the subsidiary company for its principle business activities

Provision for applying to the Central Government has been dispensed with.

Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.

79 Inter corporate Loans and Advances

Section 186 Section 372A Company, unless otherwise prescribed, cannot make investment through more than two layers of investment companies.

No company shall directly or indirectly give any loan/ guarantee or provide security exceeding 60% of paid up share capital free reserves and securities premium account or 100 % of free reserves and securities premium account, whichever is more

Loan shall not be provided at a rate of interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan.

For giving loans / guarantee / providing security exceeding these limits prior approval at general meeting by means of special resolution is necessary. Further it would sufficient compliance if such special resolution is passed within one year from the date of notification of this section i.e 01.04.2014. The law now requires the company to disclose to the shareholders the full particulars of loans / guarantee / security provided along with the purpose for which these are proposed to be

Yes

utilized. Exemption to private companies, companies whose principle business is acquisition of securities, has been done away with. Where a loan or guarantee is given or where a security has been provided by a company to its wholly owned subsidiary company or a joint venture company, or acquisition is made by a holding company, by way of subscription, purchase or otherwise of, the securities of its wholly owned subsidiary company, the requirement of sub-section (3) of section 186 (i.e. approval of Shareholders by way of Special Resolution) shall not apply: Provided that the company shall disclose the details of such loans or guarantee or security or acquisition in the financial statement as provided under sub-section (4) of section 186. In case of default in repayment of FD/Interest, Company can’t give any Inter corporate Loan/Guarantee/Provide security/make acquisition till such default is continuing.

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

80 Investment of a company to be held in its own name

Section 187 Section 49 All investments made or held by a company in any property, security or other assets shall be made or held by it in its own name subject certain exception.

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

Yes

81 Related party Section 188 Sections 297 & 314 1. The following transactions require Yes

Transactions the approval of Board: a) Sale, purchase or supply of any

goods or materialsb) selling or otherwise disposing of,

or buying, property of any kind; c) leasing of property of any kind; d) availing or rendering of any

services; e) appointment of any agent for

purchase or sale of goods, materials, services or property;

f) such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company; and

g) underwriting the subscription of any securities or derivatives thereof, of the company:

a) Shareholders’ Approval by way of Special Resolution will be required for a company to enter into the transactions exceeding the limits prescribed in the Notification issued by Ministry of Corporate Affairs dated 14th

August, 2014.

Central Government approval which was required under the Old Act has been dispensed with.

2. the member shall not vote at any such resolution for approving any contract, if he is a related party (however, related party is to be construed only in reference of contract or arrangement to which the special resolution pertains).

3. The transactions entered into in ordinary course of business and on arm’s length basis are exempted from taking Board’s approval/ Shareholders’ approval, as the case

may be.4. Disclosure of all such contracts

along with the justification for entering into such contracts needs to be given under Board’s report.

The transaction may be ratified by the Board / members within three months of date thereof and if not so, becomes voidable at the option of Board, and, if director is involved he shall have to indemnify the company against any loss. It may be noted that transactions entered into before 1st April, 2014, after making necessary compliances under Section 297 of the Act need not be freshly approved under Section 188 of the Companies Act, 2013. However, if any modification in such contract is made on or after April 1, 2014, the requirements under section 188 are to be complied with.Public company in which a director is a director & holds along with his relatives more than 2% shall be a related party.Restructuring /amalgamation will not attract section 188. (Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

82 Register of Contracts and Arrangements

Section 189 Section 301 and 305

Director and KMP shall disclose the particulars of all contract/arrangement in terms of Section 184(2) {contract or arrangement in which directors are interested} or Section 188 {Related Party Transaction} to the company within 30 days of their appointment/relinquishment of his office. After entering the particulars in the Register maintained by the company, the same shall be placed in the next Board Meeting and must be signed by all the directors present.Register shall be open for inspection during the AGM to any person having right to attend the meeting

(Companies {Meeting of Board and its Powers} Rules, 2014 have been prescribed.)

Yes

83 Contract of Employment with MD/ WTD

Section 190 Section 302 Every company shall keep at its Registered Office: where a contract of service with a

managing or whole-time director is inwriting, a copy of the contract; or

where such a contract is not in writing, a written memorandum setting out itsterms.

Contract or Memorandum shall be open for inspection by any member of the Company without feeThis section is not applicable on private company

Yes

84 Restriction on non-cash transactions involving directors.

Section 192 New Provision Company shall not enter into arrangement by which:a). director of the company or its

holding/subsidiary/associate company or a person connected with him acquires or is to acquire assets for consideration other than cash

Yes

b). the company acquires or is to acquire assets for consideration other than cash from such director or connected person

unless the prior approval of such arrangement is accorded by Resolution of the company in general meeting and if the director/ connected person is director of the holding company, approval is also required in holding company by way of passing resolution in general meetingNotice for approval of the resolution by the company/its holding company in general meeting shall include particular of arrangement along with value of the assets involved duly calculated by the Registered valuer.

85 Prohibition on forward dealing in securities of company by Director or KMP

Section 194 New Provision Directors and Key Managerial Personnel are prohibited from forward dealings in securities of company

Yes

86 Prohibition on Insider Trading of securities

Section 195 New Provision No person including any director or key managerial personnel of a company shall enter into insider trading. The term ‘insider trading’ and ‘price sensitive information’ is defined in the section itself.

Provisions of the insider trading shall not be applicable to any communication in the ordinary course of business.

Yes

87 Appointment of MD, WTD, manager

Section 196 Sections 267, 317, 388, 197A, 269, 384 & 385.

Company cannot appoint a MD and a Manager at the same time.

The provision requires a company not to appoint or re-appoint any person as its managing director (MD), whole-time director (WTD) or manager for a term exceeding five years at a time. This provision is applicable to every company. The minimum age for the managing or whole-time director is reduced from twenty five to twenty-one years. Maximum age for them is seventy years. Upper age limit can be relaxed by the company if shareholders by special resolution approve it.

(Companies {Appointment & Remuneration of Managerial Personnel} Rules, 2014 have been prescribed.)

Yes

88 Overall Managerial Remuneration and Managerial Remuneration in case of absence or inadequate profits, and recovery of remuneration in certain cases

Section 197 & 199 Sections 198 and 309

Total Managerial Remuneration payable by public company to its directors including MD and WTD and its Manager should be maximum 11% of the net profit calculated in the manner laid down in Section 198 except remuneration of directors shall not be deducted from gross profit. 11% can be exceeded with the approval of the general meeting and CG or as per Schedule V of the Companies Act, 2013.For one MD/ WTD - 5% of net profit For more than one MD/ WTD -10% of net profit for allFor other directors {where No MD/WTD present}- 3% of net profit, For other directors {where there is MD/ WTD present} - 1% of net profit.

These can be exceeded with the approval of the general meeting and on complying with Schedule V of the Companies Act, 2013.Percentage aforesaid exclusive of sitting fees payable to aforesaid directors and different sitting for independent directors may be prescribed by Government.Independent Directors cannot receive Stock Options and may receive remuneration only by way of sitting fees or reimbursement of expenses for participation for Board

Yes

and other meetings or profit related commissionEvery listed company shall disclose in his Board Report the ratio of the remuneration of each director to the medium employee’s remuneration and such other details as may be prescribedIn case of inadequacy of profits/ no profits Schedule V of the Act is to be followed otherwise approval of the Central Government is required.In case a company is required to re-state its financial statements due to fraud or non-compliance with any requirements under this law, the company can recover from any past or present Managing Director or WTD or Manager who, during the period for which the financial statements are to be re-stated.

(Companies {Appointment & Remuneration of Managerial Personnel} Rules, 2014 have been prescribed.)

89 Calculation of Profits and recovery of remuneration in certain cases

Section 198, & 199 Section 349 In computing net profits, new items have been introduced in addition to the existing items as in terms of the old the Act. A new provision lays down for recovery of remuneration where financial statement is re stated due to fraud or non compliance.

Yes

90 Appointment of Key Managerial Person

Section 203 Sections 316, 386 and 383A

Every Listed Company, and every other public Company with the paid up Share Capital of Rs. 10 Crore or more need to appoint following Whole time KMP: Managing Director or Chief Executive Officer or

Manager and in their absence a WTD Company Secretary and Chief Financial OfficerIndividual shall not be appointed or re-appointed as the chairperson of a company in terms of the Articles of the Company, as well as MD or CEO at the same time unless the articles provide otherwise or the company is not engaged in multiple business.Every KMP shall be appointed through the Resolution of the Board and shall contain the terms and condition of appointment including the Remuneration Whole time KMP shall not hold office in more than one

Yes

company at the same time provided he may be appointed as a director of any company with the permission of the Board.Whole time KMP of holding company can be KMP of subsidiary company at the same time

With the approval of all the Directors present at the meeting, a Company may appoint a person as MD if he is already an MD or manager of not more than one other company.Vacancy in the position of KMP shall be filled at the meeting of the Board within 6 months from the date of such vacancy

(Companies {Appointment & Remuneration of Managerial Personnel} Rules, 2014 have been prescribed.)

91 Secretarial Audit for bigger companies

Section 204 New Provision Every listed company and other public companies with Paid up Share capital of more than Rs. 50 Crores or more or turnover of Rs 250 Crores or more shall have the secretarial Audit done from a Practicing Company Secretary {PCS} and report thereon in Form M.R. 3 shall be enclosed with the Board Report. Further the Board in their report, shall explain in full, any qualification or observation or other remarks made by PCS, in Board Report.

(Companies {Appointment & Remuneration of Managerial Personnel} Rules, 2014 have been prescribed.)

Yes

92 Role of Company Secretary

Section 205 New Provision Company Secretary has to discharge the duties as may be prescribed in the Act and includes reporting to the Board about compliance with the provisions of the Companies Act, rules made there under and other laws applicable to the company and shall ensure that the company complies with the applicable secretarial standards.

Further responsibilities for a Company Secretary have been prescribed in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Yes

93 Establishment of Section 211 New Provision Establishment of Serious Fraud investigation Office for Yes

Serious Fraud Investigation Office

investigation of frauds related to the companies.

(Companies {Inspection , Investigation and Inquiry } Rules, 2014 have been prescribed.)

94 Prevention of oppression and mismanagement

Section 241

Section 244

Sections 397, 398 and 401

Section 399

Application to National Company Law Tribunal instead of CLB for relief in cases of oppression, etc.

Right to apply under Section 241 :-

In case of company having share capital : 100 members or 1/10th of total members, whichever is less or member/s holding 1/10th of the issued share capital of the Company

In case of company not having share capital: 1/5th of total number of members.

No

95 Merger amalgamation, Cross Border Merger, etc.,

Sections 230, 231, 232, 233 , 234

Sections 391, 392, 393, 394, 394A, New provisions

Separate and simpler provisions have been provided for the merger or amalgamation between two small companies or between a holding company and it’s wholly owned subsidiary company or such other class or classes of companies as may be prescribed.

The Act has allowed cross border mergers with any foreign company. The cross border merger may be made between companies registered under this Act and companies incorporated under jurisdiction of such countries as may be notified by the Central Government.

No

96 Class Action Suits Section 245 New Provision If specified no. of members, depositors of the company or any class of them are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, concerned person can file an application before the tribunal on behalf of the members or depositors.Requisite majority for filing class action suit should be as per the provisions mentioned in the Act

No

97 Registered Valuer Section 247 New Provision If any valuation is required to be made of any property, stocks, shares, debentures, securities, goodwill or any

No

other asset or net worth of the company under the provisions of the Act then the same shall be done only by the qualified registered valuer appointed by the Audit Committee or in its absence by the Board.

98 Compounding of Offences

Section 441 Section 621A Offence punishable under this Act {committed by company or any officer} with fine only be compounded by :

a) Tribunal,

b) Regional Director or any officer authorized by the Central Government in case the amount of fine does not exceed Rs. 5 lacs.

No offence done by company/officers shall be compoundable, if the investigation against such company has been initiated or is pending under the Act Any Offence punishable under this Act with imprisonment or fine or with imprisonment/ fine or with both shall be compoundable only with the permission of the Special Court.

Compounding cannot be done in case the same offence was compounded less than 3 years ago.

No

99 Dormant Company Section 455 New Provision Where a Company is formed and registered for a future project or to hold an asset or intellectual property and has no significant accounting transaction, then such a Company or an Inactive Company may make an application to the Registrar for obtaining the status of a Dormant Company.

The Registrar will issue the certificate to the Company on consideration of application and enter the name in the Register of dormant companies.

Inactive Company means in case of a Company which has not been carrying business/ operation or not made any significant accounting transaction during last two Financial Years or has not filed its financial statement and Annual Return for two financial years.

No

100 Mediation And Conciliation Panel

Section 442 New Provision The Central government shall maintain a panel of experts to be called Mediation and Conciliation Panel for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act.

No

Date: Last updated on 10th October 2014