The Companies amendment bill 2017 was introduced in the lower House of Indian Parliament, the Lok Sabha on 16 March 2016 this was because on, 12 April 2016, it was referred to the Standing Committee on Finance which after considering the ideas and suggestions of the Chambers of Commerce and Industry and the professional bodies came up with a report on 30th November. Suggestions of the Committee were adopted by the Government considering its experience as well. Government ordered to have amendments as directed by the cabinet. The Companies (Amendment) Bill was finally cleared by the Lok Sabha on July 27, 2017, and the upper house too approved it by 19th December.
The main modifications as suggested in the bill include refinement and ease up the policy of private placement process. To add on to that, no company can use the money that is raised through private placement unless and until there is an allotment made and the return for such an allotment is filed with the Registrar. The amendment includes two entirely new sections dealing with the rationalization of punishment for companies and provisions for a lesser degree of punishment for small or one person companies. The criteria for judging or deciding punishment shall now also be based on how big or how small the company is apart from the nature of the default, repetition of default etc. In other words, there is a reduction in the penal provision for small companies or one person companies.
It will also cause rationalization of loan provisions to directors. One benefit would be the omission of provisions concerning forward dealing and insider trading and also it will save traders from the hassle of, getting approval by the central government for managerial remuneration above the limits decided by the government. It will also disclose the prospectus with regulations to be made by SEBI. For the first time, any act is modified to work in accordance and harmony with the rules and regulations of SEBI and RBI. It will also provide them with a better maintenance record of significant beneficial owners return filing to ROC. There would be no compulsion for getting yearly ratification of appointment or extended period of work of the auditor.
The amendments will also focus on continuing with the provisions relating to layers of subsidiaries and carrying up the provisions according to the memorandum. The bill holds it an offense for contravention of provisions related to deposits as non-compoundable. Any financial business with an associate company needs to be mentioned in the form of a financial statement and attached. There is an additional fee of hundred rupees per day for causing delay in filing of financial statement and annual returns
The Companies Act has been amended twice. The last time it was amended was back in 2015. Since then, after the Companies (Amendment) Bill finally became an Act receiving the President’s signature, there are more than forty revisions in total in this Act. The Act aims towards easing up the process of doing and monitoring business in India.