We value your privacy & take necessary steps to protect your information.
With a focus to ease doing business in India, the Government of India through this Bill addresses inconsistencies and procedural restrictions in the present Companies Act, 2013. Considering the changes the Bill propose to bring about, it can be clearly said that there will be a sea change in the present Act which will boost economic growth and upheave foreign investment in India.
In order to facilitate ease of doing business in India, the Lok Sabha on 27th July, 2017 passed The Companies (Amendment) Bill, 2016 (“Bill”) thereby bringing change to the present Companies Act, 2013 (“Act”) with respect to structuring, disclosure and compliance requirements for the companies.
Some of the focal points of the Bill are discussed hereinbelow:
The Bill propose to include the definition of “joint venture” which shall mean a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
Additionally, a body corporate which is an investing company or the venturer of a company would also be a related party.
However, where the company propose to carry out any specific object or activity, it has to mention the same in the Memorandum and the company shall not pursue any other activity than mentioned in the Memorandum.
The time limit for reservation of name of the company by the Registrar of Companies has been proposed to be reduced to twenty days from the existing period of sixty days.
EGM can be called at a shorter notice where consent is given by members holding not less than 95% of paid-up share capital in case the company is having share capital.
The CSR committee can be constituted with two or more directors in case the company is not required to appoint independent director.
(The author would like to thank Ankita Singh, Associate of the firm for the valuable assistance in researching for this article.)