New Latest Amendments in Company Law

Another Revamp of Company Law

 

The government has placed a Bill in Parliament to further amend Companies Act 2013. The Bill Proposes over 80 small and big changes to improve ease of doing business. ET explains

1. CHANGE

For Startups

The limit on sweat equity to be raised to 50% from 25% of paid up capital

ESOPs to promoters working as employees

No limit on raising deposits from members for startups for the first five years

WHAT IT MEANS

Improve incentives for innovators, ease fund raising and boost startup India initiative

2. CHANGE

Raising Deposits

Remove Insurance deposit clause for cos raising deposits from public

Cos that have defaulted on payments to be allowed to raise money again from public after a cool off period in case they have made the due payments

WHAT IT MEANS

Raising deposits through public will be easier & also the cost of raising it

3. CHANGE

Remueneration

No approval from govt for managerial remuneration beyond the prescribed threshold for key officials if shareholders agree

WHAT IT MEANS

Cut down regulatory approvals to improve ease of doing business

4. CHANGE

Governance

Allow private cos to hold AGML anywhere in India subject to approval from 100% shareholders

WHAT IT MEANS

Giving more flexibility to private cos

5. CHANGE

For Directors

Directors can also use a universally acceptable identification other than DIN

Directors can join board meeting via video

WHAT IT MEANS

Ease of doing business

6. CHANGE

Relaxations for Auditors

Several fines and penalties for auditors related to non-compliance of filling to be eased

Three-year auditor rotation policy applicable from AGM to AGM, not Calendar year

WHAT IT MEANS

Softening penalties for routine filling issues

7. CHANGE

Curbing Misuse of Corporate Structure

Specific definition of beneficial interest in share and beneficial ownership of a co

WHAT IT MEANS

Changes in line with the global move to prevent possible misuse of corporate structure

8. CHANGE

Providing Loan to Other Entities

Allow cos to provide loans to other entities in which the directors are interested

WHAT IT MEANS

Provides flexibility in intra-group financing

 

1019 Total Views 5 Views Today

Leave a Reply

Your email address will not be published. Required fields are marked *