Tuesday, June 16, 2015

Companies Amendment Act, 2015

Key changes, as are effective from 29th may 2015, are as under:
Certificate of Commencement of Business Certificate of Commencement of Business
Doing away with the requirement for filing a declaration by a company before commencement of business or exercising its borrowing powers.
Common Seal Optional :-
Making common seal optional and consequential changes for authorization for execution of documents.
Board Regulation Confidentiality :-
Prohibiting public inspection of Board resolutions filed with the Registry under Section 177(g)
Punishment for Contravention of section 73 or Section 76 :-
A new section 76A introduced to heavily punish and imprison company and officials for non compliance or for non repayment of deposits.
Prohibition to declare dividend :-
No Company shall declare dividend unless carried over Previous losses and Depreciation not provided in previous year or years, are set off against profit of the company for the current year.
Fraud Reporting by Auditors :-
If an auditor of a company in the course of the performance of his duties as auditor, has reason to believe that an offence of fraud involving such amount or amounts as may be prescribed, is being or has been committed in the company by its officers or employees, the auditor shall report the matter to the Central Government within such time and in such manner as may be prescribed.In case of a fraud involving lesser than the specified amount, the auditor shall report the matter to the audit committee constituted under Section 177 or to the Board in other cases within such time and in such manner as may be prescribed.The companies, whose auditors have reported frauds under this sub-section to the Audit Committee or the Board but not reported to the Central Government, shall disclose the details about such frauds in the Board's report in such manner as may be prescribed.
Related party transactions (Section 177) -
New provision :-The Audit Committee may make omnibus approval for Related Party transactions proposed to be entered into by the company subject to such conditions as may be prescribed.
Related party transactions(Sec 188) :-
Approval needed only by an Ordinary Resolution and not by Special Resolution.


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