| Section no. of the Companies (Amendment) Act, 2017 | Corresponding section of the Companies Act, 2013 | Amendments |
| Section 2 [except clause (i) and clause (xiii)] | Section 2(28)- Definition of ‘cost accountant’ | Change in definition of ‘cost accountant’
“Cost Accountant" means a person who is a member of the Institute of Cost and Works Accountants of India and who holds a valid certificate of practice. |
| Section 2(30)- Definition of ‘Debenture’ | Under the definition of the term “debenture”, instruments referred to in Chapter III-D of the Reserve Bank of India Act 1934 and such other instruments prescribed by the Central Government in consultation with the RBI are excluded. |
| Section 2(41)- Definition of ‘Financial year’ | Associate company of a company incorporated outside India can also apply to the Tribunal for a different financial year. |
| Section 2(46)- Definition of ‘Holding Company’ | For the purpose of definition of the term ‘holding company’, the expression "company" will include any body corporate. |
| Section 2(49)- Definition of ‘Interested director’ | The definition of the term ‘Interested director’ has been deleted. |
| Section 2(51)- Definition of ‘Key Managerial Personnel’ | Under the definition of the term “Key Managerial Personnel”, such other officer not more than one level below the directors who is in whole time employment and designated as KMP by the Board, has been included. |
| Section 2(57)- Definition of ‘net worth’ | The debit or credit balance of profit and loss account will be included in the calculation of net worth. |
| Section 2(71)- Definition of ‘public company’ | The word ‘and’ has been included in the definition for more clarity to clarify that a public company must satisfy both the conditions mentioned in the sub-section. |
| Section 2(72)- Definition of ‘public financial institution’ | The Central Government may notify other institution which has been established or constituted by or under any Central or State Act other than the Companies Act, 2013 or previous Company Law after consultation with the RBI as “public financial institution”. |
| Section 2(76)- Definition of ‘Related Party’ | Following two amendments have been made: - Instead of only a company, anybody corporate which is holding, subsidiary or an associate company of such company or a subsidiary of a holding company to which it is also a subsidiary or an investing company or venture of the Company, shall be considered as a related party.
- “An investing company or the venturer of the company” will mean a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.
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| Section 2(85)- Definition of ‘small company’ | - The maximum paid-up share capital amount which can be prescribed for the purpose of determining a company as a small company has been increased from five crore rupees to ten crore rupees and prescribed turnover amount from twenty crore rupees to one hundred crore rupees.
- Further turnover should be as per profit and loss account for the immediately preceding financial year and not as per its last financial year.
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| Section 2(91)- Definition of ‘Turnover’ | The definition of turnover has been changed to mean the gross amount of revenue recognised in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year. |
| Section 3 | Section 3A- Members severally liable certain cases | A new section regarding liability of members in case number of members is reduced from statutory minimum, i.e. seven in the case of public company or two in case of a private company has been inserted. This section was there in the Companies Act 1956 but was missing from the Companies Act 2013. |
| Section 7 | Section 21- Authentication of documents, proceedings and contracts | Apart from KMP and any officer of the company, an employee can also be authorized to authenticate documents on behalf of the company. |
| Section 9 | Section 35- Civil liability for Mis-statements in prospectus | Section 35 has been amended to relieve the Director, promoter etc. from any civil liability if such person(s) has relied on a misleading statement made by an expert and he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it and that the said person had given the consent required and had not withdrawn it. |
| Section 11 | Section 47- Voting rights | Since a member who is a related party cannot vote on a resolution to be passed under section 188 of the Companies Act 2013, it is clarified that the right of every member holding equity shares to vote on all resolutions placed before the meeting would be subject to sub-section (1) of section 188of the Act. |
| Section 12 | Section 53- Prohibition on issue of shares at discount | - The words “discounted price” have been replaced with the word “discount”.
- Further companies have been allowed to issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme in accordance with any guidelines or directions or regulations specified by Reserve Bank of India under the Banking Regulation Act, 1949 or the Reserve Bank of India Act 1934.
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| Section 14 | Section 62- Further issue of share capital | - The requirement of compliance with section 42 in respect of the preferential offer has been provided in the section itself. Currently the applicability of section 42 is provided by the rules.
- Right issue offer letter can be sent through courier also.
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| Section 17 | Section 76A- Punishment for Contravention of Section 73 or Section 76 | - The penalty from a fine not less than rupees one crore has been changed to rupees one crore or twice the amount of deposits accepted by the company, whichever is lower.
- Further an officer of the company who is in default shall be punishable with imprisonment and fine. Earlier it was imprisonment or fine. In the process, the offence has been made non-compoundable.
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| Section 27 | Section 100- Calling of Extraordinary General Meeting | Extraordinary General Meeting (‘EGM’) of wholly owned subsidiary of a company incorporated outside India can be held outside India. A company other than wholly owned subsidiary of a company incorporated outside India must hold EGM at a place within India. |
| Section 28 | Section 101- Notice of meeting | |
| Section 29 | Section 110- Postal Ballot | Companies which are mandatorily required to provide electronic voting facility, have been allowed to transact items in general meeting, which are mandatorily required to be transacted through postal ballot. |
| Section 32 | Section 123- Declaration of dividend | - In computing profits any amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded
- In the case of inadequate or absence of profits, dividend can be declared out of accumulated profits earned by the company in previous years and transferred by the company to free reserves (instead of reserves).
- The Board of Directors of a company may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend.
In case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during immediately preceding three financial years. |
| Section 34 | Section 130- Re-opening of accounts on court’s or tribunal’s orders | - In addition to authorities already specified, any other person concerned shall be given notice before passing an order for re-opening of accounts and the court or the Tribunal shall also take into consideration the representations made by the other person.
- Order for reopening of accounts can be made upto eight financial years preceding the current financial year unless there is a specific direction under section 128(5) from the Central Government that the books of accounts may be kept for longer period in which case the books of account may be ordered to be reopened for a longer period
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| Section 35 | Section 132- Constitution of National Financial Reporting Authority | - The minimum fine in respect of professional or other misconduct has been reduced from ten lakh rupees to five lakh rupees.
- The provisions regarding constitution of separate Appellate Authority under this section has been omitted and appeal against any order of NFRA shall lie before the National Company Law Appellate Tribunal in the prescribed manner.
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| Section 38 | Section 136- Right of member to copies of audited financial statement | - Copies of audited financial statements and other documents can be sent at shorter notice if it is so agreed by members-
- holding, if the company has a share capital, majority in number entitled to vote and who represent not less than ninety-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or
- having, if the company has no share capital, not less than ninety-five per cent. of the total voting power exercisable at the meeting.
- Only listed companies shall place on its website, if any the separate audited accounts of its subsidiary or subsidiaries. Currently all companies required to comply this.
- If the foreign subsidiary is statutorily required to prepare consolidated financial statement under any law of the country of its incorporation, the requirement of posting audited accounts of subsidiary shall be met if consolidated financial statement of such foreign subsidiary is placed on the website of the listed company.
- If the foreign subsidiary is not required to get its financial statement audited, the holding listed company may place such unaudited financial statement on its website and where such financial statement is in a language other than English, a translated copy of the financial statement in English shall also be placed on the website.
- Every company having a subsidiary or subsidiaries shall provide a copy of separate audited or unaudited financial statements, as the case may be, as prepared in respect of each of its subsidiary to any member who asks for it.
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| Section 41 | Section 140- Removal, Resignation of Auditor and giving of special notice | The fine in case of failure to file resignation by auditor in Form ADT-3 has been reduced to fifty thousand rupees or the remuneration of auditor whichever is less. |
| Section 42 | Section 141- Eligibility, Qualification and Disqualifications of Auditors | A person who, directly or indirectly, renders any service referred to in section 144 to the company or its holding company or its subsidiary company will not be eligible for appointment as Auditor. Currently the restriction is only on the person, whose subsidiary, associate company or any other form of entity is engaged as on the date of appointment in consulting and specialized services as provided in section 144. |
| Section 43 | Section 143- Powers and duties of auditors and auditing standards | - Associate companies are also covered along with subsidiary companies with respect to right of auditors to have access to accounts and records.
- The auditor’s report is to include whether internal financial controls with reference to financial statement are in place and not in respect of internal financial control system.
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| Section 44 | Section 147- Punishment for contravention | - The maximum fine which can be imposed on an auditor has been revised from rupees five lakh to rupees five lakh or four times the remuneration of the auditor, whichever is less. If the auditor has contravened provisions knowingly or wilfully with the intention to deceive the company etc., the amount of fine has been reduced to minimum of fifty thousand rupees but which may extend to twenty-five lakh rupees or eight times the remuneration of the auditor, whichever is less.
- The liability of auditor who is convicted of any default, has been restricted to pay the damages to any person for loss arising out of incorrect or misleading statements made in the audit report, to only members and creditors of the company. Currently the Auditor is liable to pay damages to any person concerned.
- Criminal liability of an audit firm, in respect of liability other than fine, the concerned partner or partners, who acted in a fraudulent manner or abetted or, as the case may be, colluded in any fraud shall only be liable. Currently the criminal liability is of the partner or partners concerned of the audit firm and the firm, jointly and severally.
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| Section 45 | Section 148- Central Government to specify audit of items of Cost in respect of Certain Companies | The words 'cost accountant in practice' has been substituted with the words 'cost accountant' and also substitute the words 'Institute of Cost and Works Accountants of India' with the words 'Institute of Cost Accountants of India' for clarity purpose. |
| Section 47 | Section 152- Appointment of directors | Provisions may provide that in addition to DIN, a director may hold any other identification as may be prescribed by the Central Government under section 153. |
| Section 48 | Section 153- Application for allotment of Director Identification Number | The Central Government may recognize any other identification number to be treated as director identification number. It is expected that Central Government will notify either PAN or Aadhar as DIN. |
| Section 50 | Section 160- Right of persons other than retiring directors to stand for directorship | The requirement of deposit of rupees one lakh with respect to nomination of directors shall not be applicable in case of appointment of independent directors or directors nominated by nomination and remuneration committee or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee. |
| Section 51 | Section 161- Appointment of Additional director, Alternate director and Nominee director | - A person cannot be appointed as an alternate director if he is holding directorship in the same company.
- All companies including a private company may fill up the causal vacancy by the board and casual vacancy filled by the Board shall be subsequently approved in the immediate next general meeting.
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| Section 53 | Section 165- Number of Directorship | The directorship in a dormant company shall not be included in the limit of directorships of 20 companies. |
| Section 59 | Section 180- Restrictions on powers of board | Securities premium will be included along with paid-up share capital and free reserves for calculation of maximum limits on borrowing powers of the Board. |
| Section 60 | Section 184- Disclosure of interest by directors | - The minimum penalty with respect to failure by directors to disclose interest has been omitted.
- Exempt body corporate where any director or two or more of them holds or hold not more than 2% of the paid-up share capital, from the purview of section 184.
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| Section 63 | Section 188- Related Party Transactions | - The requirement related to restriction on voting by relatives in the general meeting shall not apply to a company in which ninety per cent or more members in numbers are relatives of promoters or related parties.
- Non-ratification of transaction shall be voidable at the option of the Board or shareholders, as the case may be. This amendment aims at bringing clarity since currently though ratification is allowed both by Board or Shareholders but transaction was only voidable at the option of the Board.
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| Section 64 | Section 194- Prohibition on Forward dealings in securities of company by director or Key Managerial Personnel | Omitted. |
| Section 65 | Section 195- Prohibition on Insider trading of securities | Omitted. |
| Section 72 | Section 223- Inspector’s report | A copy of inspectors report shall be made available only to members, creditors or any other person whose interest is likely to be affected, on their request. Currently any person can request for the copy. |
| Section 73 | Section 236- Purchase of Minority Shareholding | The words 'transferor company' have been substituted with the words 'company whose shares are being transferred' for providing clarity in sub-sections (4), (5) and (6). |
| Section 74 | Section 247- Valuation by Registered Valuers | The restriction on appointment of a registered valuer by providing that that registered valuer has been diluted can be appointed for valuation of an asset in which he has a direct or indirect interest or becomes so interested during a period of three years prior to appointment as valuer or three years after valuation of assets.
Currently restriction on appointment of registered valuer for undertaking valuation of any assets in which he has a direct or indirect interest or becomes so interested is without any limitation on time. |
| Section 77 | Section 379- Application of Act to foreign companies | - Sections 380 to 386 and 392 and 393 shall apply to foreign companies.
- The Central Government is empowered to exempt any class of foreign companies from complying with the aforesaid provisions.
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| Section 78 | Section 384- Debentures, Annual Return, Registration of charges, books of account and their Inspection | Section 135 shall apply to foreign companies. |
| Section 79 | Section 391- Application of sections 34 to 36 and Chapter XX | The provisions relating to winding up contained in Chapter XX shall apply for closure of place of business of a foreign company in India as if it were a company incorporated in India in case such foreign company has raised monies through offer or issue of securities which have not been repaid or redeemed. In other words, if a foreign company has not raised monies, the provisions relating to winding up will not be applicable. |
| Section 82 | Section 409- Qualification of President and Members of Tribunal | Following changes have been made with respect to eligibility for technical members with respect to the constitution of the National Company Law Tribunal: - Instead of Joint Secretary to the Government of India, person who has been holding the rank of Secretary or Additional Secretary to the Government of India, will be eligible
- A person of proven ability, integrity and standing having special knowledge and professional experience of not less than fifteen years in industrial finance, industrial management, industrial reconstruction, investment and accountancy will be eligible. Expertise in other disciplines like law, labour laws, and disciplines related to management, conduct of affairs, revival, rehabilitation and winding-up of companies are proposed to be deleted.
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| Section 84 | Section 411- Qualifications of Chairperson and Members of Appellate Tribunal | Eligibility for appointment as Technical member has been brought in sync with the amendment made in section 409. |
| Section 85 | Section 412- Selection of Members of Tribunal and Appellate Tribunal | This section has been aligned with Supreme Court directions with respect to constitution of Selection Committee. |
| Section 90 | Section 441- Compounding of certain offences | The Tribunal has been empowered to compound offences punishable with fine only as well as offences punishable with fine or imprisonment The provision has now been brought in line with section 621A of the 1956 Act. |
| Section 91 | Section 446A- Factors for determining level of punishment | New section has been inserted providing for the following factors which the court or special court will consider while determining level of punishment: - size of the company;
- Nature of business carried on by the company;
- Injury to public interest;
- Nature of the default; and
- Repetition of the default.
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| Section 446B- Lesser penalties for One Person Companies or small companies | Relief has been provided to OPC and Small co., in case of failure to comply with the provisions of sub-section (5) of section 92 (Annual Return), clause (c) of sub-section (2) of section 117 (Resolutions and agreements to be filed), sub-section (3) of section 137 (Copy of financial statement to be filed with Registrar). In case of default, such company and officer in default of such company shall be punishable with fine or imprisonment or fine and imprisonment, as the case may be, which shall not be more than one-half of the fine or imprisonment or fine and imprisonment, as the case may be, of the minimum or maximum fine or imprisonment or fine and imprisonment, as the case may be, specified in such sections. |
| Section 92 | Section 447- Punishment for Fraud | - Only person guilty of fraud involving an amount of at least ten lakh rupees or one percent. of the turnover of the company, whichever is lower shall be punishable with imprisonment for a term which shall not be less than 6 months but which may extend to ten years and shall also be liable to a fine which shall not less than the amount involved in the fraud but which may extend to three times the amount involved in the fraud.
- Further that where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to twenty lakh rupees or with both.
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| Section 93 | Section 458 Delegation by Central Government of its powers and functions | Consequent upon omission of sections 194(Forward dealings) and 195(Insider trading), the proviso to sub-section (1) of section 458 has been omitted. |