Overview Of The Companies (Amendment) Bill, 2017

This article shall give an overview of the Companies (Amendment) Bill, 2017 as passed by the parliament. The proposed amendments shall be shown section-wise for easier reference.

- Adv Sherry Samuel Oommen

The Companies (Amendment) Bill, 2017 (herein-after referred to as “the bill”) was introduced in the Lok Sabha on 16.03.2016 and was referred to the Standing Committee on Finance on 12.04.2016. The Standing Committee thereafter adopted its report on 30.11.2016. The Companies (Amendment) Bill, 2017 was passed by the Lok Sabha on 27.07.2017 and by the Rajya Sabha on 19.12.2017, and is currently awaiting the President’s assent.

The proposed amendments of the Companies Act, 2013 (act) as per the bill help in streamlining several of the processes under the act. It also clarifies on several aspects that have, until now, remained ambiguous. Furthermore, several procedures, such as conversion of partnership firms into a private company, have been simplified.

This article shall give an overview of the Companies (Amendment) Bill, 2017 as passed by the parliament. The proposed amendments shall be shown section-wise for easier reference. This article shall provide for only a few important amendments that are proposed and shall not go into every proposed amendment.

1. Definitions

(i) The definitions of debentures have been limited in its scope to exclude such instruments as are mentioned in Chapter IIID of the Reserve Bank of India Act, 1934. Furthermore, any other instrument as notified by the central government in consultation with the RBI shall also not be treated as debenture.

(ii) Small Company as defined under section 2(85) has been amended to mean a company having a paid up share capital not exceeding 10 Crores and whose turnover does not exceed 100 Crores in the profit and loss account of the immediately preceding financial year. This has effectively brought several companies under definition of Small Company. Considering the fact that investments and business is on the rise, this was a much-needed change.

2. Incorporation of company