1. Companies Bill,2013 CA. UMESH CHAND

2. Summary Companies Act,1956 Companies Bill,2013 658 Sections470 Clauses 13 Parts 29 Chapters 15 Schedules07 Schedules CA. UMESH CHAND

3. Special Features Self Regulation. Forced Compliance. Equal Provisions for Private & Public Co(s). Harmonise with internationally accepted practice. Strict Penal Provisions. CA. UMESH CHAND

4. Special Features 33 new definitions inserted. 3 new schedules inserted: – Corporate Social Responsibility (CSR). – Code for independent directors. – Infrastructure projects & facilities. CA. UMESH CHAND

5. Special Features At 385 places in 470 clauses it is written as may be prescribed. It means that the provision will be cleared on isssuance of Rules. Rules has been drafted and by the end of the month will be available for public comments for 45-60 days. The act will become operational/applicable with in 6 months i.e. w.e.f. 01.04.2014 (approx.) Transitional Period is provided for various clauses. CA. UMESH CHAND

6. Major Changes Level of disclosure enhanced in Annual Return, BOD Report & Directors Responsibility Statement. (Non Financial Information) Applicability of Corporate Social Responsibility for specified co(s). Appointment of Independent Directors made mandatory for listed Co(s) & specified Co(s). CA. UMESH CHAND

7. Major Changes Appointment of Women Director made mandatory for Specified Co(s). Duties of Directors defined. Appointment of at least one resident director mandatory. Maximum no. of Directors increased from 12 to 15. CA. UMESH CHAND

8. Major Changes CG permission is not required for loan to directors/ for entering into related party transaction/ appointment of any director to any office or place of profit. Maximum no. of Directorship in the company increased from 15 to 20 but in public co(s) it is restricted to 10 (Transition period of 1 year is provided). Definition of Key Managerial Personnel/ Financial Statement introduced. CA. UMESH CHAND

9. Major Changes Whole time director to vacate office if he is absent for a consecutive period of 12 months even if leave of absence granted. The provisions related to WTD/MD/manager are now applicable to Private Co(s) also. Directors are also required to file their resignation to ROC along with detailed reason. In case of Pvt. Co. also the interested directors can not vote. CA. UMESH CHAND

10. Major Changes Certain powers of board provided in earlier section 293 will be exercised by passing of special resolution only. Exemption to Pvt. Co(s) for making loan or providing guarantee etc. stands withdrawn. Exemption in relation to investment/ loan/ guarantee/ security by a holding co. in/to its wholly owned subsidiaries stands withdrawn. CA. UMESH CHAND

11. Major Changes Compulsory Rotation of Auditors/Firm of Auditors for listed co (s) & specified Co(s). - A transition period of 3 years is provided. (Individual/Firm-5/10 years respectively). Restriction made on auditors to provide specified services to the Co. & its Holding/Subsidiary Co. - a transitional period is provided to the auditors. Applicability of Secretarial Audit for Specified Co(s). Appointment of Internal Auditor for Specified Co(s). CA. UMESH CHAND

12. Major Changes CG permission is not required for appointment of Cost Auditor. Compliance of Auditing Standards become mandatory for auditors. CA. UMESH CHAND

13. Major Changes Restriction that in each quarter 1 BM to be held is dispensed with but the gap should not exceed 120 day between 2 BMs. 7 Days BM notice is mandatory. Secretarial Standard related to BM and GMs made mandatory. Quorum for GM of Public co(s) is depend on the no. of members but in case of Pvt. Co(s) it is 2 members. CA. UMESH CHAND

14. Major Changes Provisions of postal ballot will be applicable on all co(s). Concept of whistle blower introduced for listed co(s) and specified co(s) to enable their directors and employees to report genuine concern. Certain new matters to be transacted at BMs only. (Clause 149).e.g. – To Diversify the business of the company. – To grant loans or give guarantee or provide security in respect of loans. CA. UMESH CHAND

15. Major Changes Books of accounts now may be kept in electronic form. Financial year of the co. should be April to march only. Consolidated financial statements made mandatory if the co has one or more subsidiary company. Reopening/ recasting of financial statements on the application of statutory body. CA. UMESH CHAND

16. Major Changes Concept of Stakeholders relationship committee and Nomination & Remuneration committee introduced for specified co(s). Function of Company Secretary defined. Concept of One person Company introduced. Concept of Small co introduced subject to certain ceiling. Concept of Class action suit by member introduced. All types of charge now required to be registered. CA. UMESH CHAND

17. Major Changes The requirement of attaching the B/S, P/L, BOD Report/auditors report / holding co(s) interest u/s 212 is dispensed with. Monitoring power to National Financial Reporting Authority (NFRA) provided. Name of National Advisory Committee on Accounting Standards changed to NFRA. CA. UMESH CHAND

18. Major Changes Valuation of assets/liability/net worth etc. by Registered Valuers only. No. of Private Co(s) members increased from 50 to 200. Restriction on acceptance of deposits from public i.e. subject to strict conditions only e.g. SH(s) approval etc. Role of Information Technology enhanced i.e. holding BM through video conferencing/other audio visual means/E voting etc. (Not for all business) CA. UMESH CHAND

19. Major Changes Investors are entitled to claim dividends t/f to Investor Education & Protection Fund. (IEPF) Shares in respect of unclaimed dividend is also to be transferred to IEPF. Transfer of specified sum to reserves before declaration of dividend is now discretionary. CA. UMESH CHAND

20. Major Changes Inter corporate loan/investment now extended to loan & investments to any person also. A company can’t make investment through two layers of investment co(s). The limit of political contribution enhanced from 5% to 7.5%. On Commencement of business, a declaration by directors and confirmation by company is to be filed with ROC. CA. UMESH CHAND

21. Major Changes Scope of Officer in default enhanced. A defaulter Co. can make buy back of shares subject to the condition that default have been corrected and 3 years has elapsed. MOA - Requirement to bifurcate object clause into main/ancillary and other objects is dispensed with. Attachment to forms in pdf form will be replaced by machine readable form (yet to be notified). CA. UMESH CHAND

22. Annual Return (Clause 92) Additional Disclosure: Remuneration of the Directors and KMP. Penalties imposed on the co. and on its directors/ compounding/ appeal made. Principal business activities of the company along with particulars of its holding/ subsidiary and associate co(s). Details of the meetings of members/boards along with attendance details. Note: In Annual return the information up to the date of closure of F.Y. is required not up to the date of AGM. CA. UMESH CHAND

23. Independent Director (Clause-149) Means a person who & his relative do not have any relation with the company directly or indirectly. Appointment will be subject to the approval in SH(s) Meeting. Code for independent directors is given in Schedule IV. In case of resignation/removal, a new independent director to be appointed with in 180 days. The liability of independent & non executive directors will be limited. Appointment is required in case of listed co(s) or such other co(s) as may be specified. (Disputed issue with CSR) CA. UMESH CHAND

24. Directors Report (Clause 134) Additional Disclosure: The extract of the annual return. No. of meetings of Board. Declaration by independent directors whether they are required to be appointed. The details about the policy developed and implemented by the co. on CSR. CA. UMESH CHAND

25. Directors Report (Clause 134) Particulars of contracts or arrangements with related parties. Particulars of loan, investment and guarantees. A statement indicating the development and implementation of a risk management policy of the co. Directors responsibility statement: The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate. CA. UMESH CHAND

26. Corporate Social Responsibility Conditions: (satisfy only 1 criteria) Net worth 500 Crore. Turnover1000 Crore. Net profit5 Crore. CA. UMESH CHAND

27. Corporate Social Responsibility Responsibility Regarding CSR: Form a CSR Committee (Minimum 3 directors of which 1 should be independent director) Appoint an independent director Formulate a CSR Policy Decide Expenditure on CSR CA. UMESH CHAND

28. CORPORATE SOCIAL RESPONSIBILITY Minimum expenditure should be 2% of ANP of last three preceding F.Y. Expenditure should be in vicinity of the Company. Expenditure should be as per purposes specified in schedule VII. CA. UMESH CHAND

29. Key Managerial Personnel(KMP) Appointment of KMP is mandatory for specified Co(s) only. Intimation to ROC regarding any change in KMP. Maintenance of Register of KMP. KMP includes: – MD, CS,CEO,CFO,WTD,Manager. – Such other officer as may be prescribed. CA. UMESH CHAND