| Section no. of the Companies (Amendment) Act, 2017 | Corresponding section of the Companies Act, 2013 | Amendments |
| Section 2 [clauses (i) and (xiii)] | Section 2(6)- Definition of ‘associate company’ | - Change in explanation of the term ‘significant influence’ under the definition of Associate Company.
Significant influence is proposed to mean control of at least 20% of the voting power or control or participation in business decision under an agreement. Previously the Act provided for control of at least 20% total share capital. - Further the term ‘Joint Venture’ has also been defined to mean a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
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| Section 2(87)- Definition of ‘subsidiary company’ | A company will be treated as subsidiary in case the holding company exercises or controls more than one-half of the total voting power either at its own or together with one or more of its subsidiary companies. Previously the Act provided for exercise or control of more than half of the total share capital. |
| Section 8 | Section 26- Matters to be stated in Prospectus | Instead of detailed list of contents of the Prospectus, the prospectus shall state such information and set out such reports on financial information as may be specified by SEBI in consultation with the Central Government. Till the time SEBI specifies the information and reports on financial information, the regulations made by it under the SEBI Act, 1992, in respect of such financial information or reports on financial information shall apply. |
| Section 13 | Section 54- Issue of Sweat Equity Shares | Sweat equity shares can be issued at any time after registration of the company. Previously such shares can be issued only after the expiry of one year from the date of commencement of business. |
| Section 18 | Section 77- Duty to register charges, etc. | This section shall not apply to certain charges, as may be prescribed by the Central Government in consultation with the Reserve Bank of India. |
| Section 19 | Section 78- Application for Registration of charge | The person in whose favour the charge has been created can file the charge on the expiry of 30 days from the creation of charge where the company fails to file so. Currently the charge holder can register the charge only in case the company fails to do so within the period specified under section 77, which is 300 days. |
| Clauses (i) and (ii) of section 21 | Section 89- Declaration in respect of beneficial interest in any share | Earlier, return of beneficial interest declaration could also be filed on payment of additional fee within 270 days from the date by which it should have been filed. The time limit of 270 days has been done away with and the return can be filed at any time on payment of prescribed additional fee. |
| Clauses (iii) and (iv) of section 23 | Section 92- Annual Return | Time limit of 270 days within which annual return could be filed on payment of additional fee has been done away with. A company can file the annual return with ROC at any time on payment of prescribed additional fee. |
| Section 30 | Section 117- Resolutions and Agreements to be filed | - Banking companies are exempted from filing resolutions with respect to grant of loans, giving of guarantee or providing of security in respect of loans in the ordinary course of its business.
- The minimum fine for non-filing under this section for company and officer in default has been reduced from rupees five lakh to one lakh rupees and from rupees one lakh to rupees fifty thousand.
- Time limit of 270 days within which resolutions and agreements could be filed on payment of additional fee has been done away with. A company can file the resolutions and agreements with ROC at any time on payment of prescribed additional fee.
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| Section 31 | Section 121- Report on annual general meeting | Time limit of 270 days within which report on annual general meeting could be filed on payment of additional fee has been done away with. A company can file the report on annual general meeting with ROC at any time on payment of prescribed additional fee |
| Section 33 | Section 129- Financial Statement | - The explanation providing that subsidiary includes associate company and joint venture has been deleted. The section has been amended to provide for consolidation of the accounts of associate companies in addition to its subsidiaries in the same form and manner as that of its own in accordance with applicable accounting standards.
- The company shall also attach along with its financial statement, a separate statement containing the salient features of the subsidiary and associate companies.
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| Section 39 | Section 137- Copy of Financial Statement to be filed with Registrar | - The filing of unaudited financial statements of foreign subsidiary which is not required to get its accounts audited along with a declaration to that effect has been allowed.
- Time limit of 270 days within which financial statement could be filed on payment of additional fee has been done away with under all the sub-sections. A company can file the financial statement with ROC at any time on payment of prescribed additional fee
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| Section 40 | Section 139- Appointment of Auditors | The requirement related to ratification of appointment of auditors by members at every annual general meeting has been omitted. |
| Section 46 | Section 149- Company to have Board of Directors | - 182 days for determining whether a director is resident in India shall be computed with reference to the financial year. Previously it was calculated in reference to previous calendar year.
- Further in case of new companies, the requirement of period of 182 days shall apply proportionately at the end of the financial year in which it is incorporated.
- In the definition of Independent Director, the words ‘pecuniary interest’ has been substituted by "pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten per cent, of his total income or such amount as may be prescribed.
- While determining the eligibility for appointment as Independent director, the restriction related to pecuniary relationships with respect to relative of a director to include the following:
(i) is holding any security of or interest in the company, its holding, subsidiary or associate company during the two immediately preceding financial years or during the current financial year. Provided that the relative may hold security or interest in the company of face value not exceeding fifty lakh rupees or two per cent. of the paid-up capital of the company, its holding, subsidiary or associate company or such higher sum as may be prescribed; (ii) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors, in excess of such amount as may be prescribed during the two immediately preceding financial years or during the current financial year; (iii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company, for such amount as may be prescribed during the two immediately preceding financial years or during the current financial year; or (iv) has any other pecuniary transaction or relationship with the company, or its subsidiary, or its holding or associate company amounting to two per cent. or more of its gross turnover or total income singly or in combination with the transactions referred to in sub-clause (i), (ii) or (iii) above. - The appointment of person as an independent director, whose relative is an employee during the three financial years immediately preceding the financial year, in which the person is proposed to be appointed as Independent Director is now allowed.
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| Section 49 | Section 157- Company to inform Director Identification Number to Registrar | Time limit of 270 days within which a company could furnish DIN of all its directors on payment of additional fee has been done away with. A company can furnish DIN of all directors to ROC at any time on payment of prescribed additional fee |
| Section 52 | Section 164- Disqualifications for appointment of director | - When a director is appointed in company which is in default of filing of financial statements or annual return or repayment of deposits or pay interest or redemption of debentures or payment of interest thereon or payment of dividend then such director shall not incur the disqualification for a period of six months from the date of his appointment.
- Disqualification arising due to conviction by court or order passed by court or tribunal or conviction related to section 188, shall continue to exist even if appeal or petition has been filed against the order of conviction or disqualification.
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| Section 54 | Section 167- Vacation of office of director | - In case a director incurs any of disqualifications under section 164 (2) due to default of filing of financial statements or annual return or repayment of deposits or pay interest or redemption of debentures or payment of interest thereon or payment of dividend, then he shall vacate office in all the companies other than the company which is in default.
- The director will not vacate office in certain cases where an appeal is preferred.
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| Section 55 | Section 168- Resignation of director | Filing of Form DIR-11 regarding forwarding of copy of resignation by director to the Registrar has been made optional. |
| Section 56 | Section 173- Meetings of Board | Participation of directors on restricted items at Board meetings through video conferencing or other audio-visual means has been allowed if there is quorum through physical presence of directors. |
| Section 57 | Section 177- Audit Committee | - Instead of every listed company, every listed public company shall constitute an audit committee.
- Related party transactions other than those prescribed under section 188, if not approved by Audit committee, will require the approval of Board of Directors.
- In case any transaction involving any amount not exceeding one crore rupees is entered into by a director or officer of the company without obtaining the approval of the Audit Committee and it is not ratified by the Audit Committee within three months from the date of the transaction, such transaction shall be voidable at the option of the Audit Committee and if the transaction is with the related party to any director or is authorised by any other director, the director concerned shall indemnify the company against any loss incurred by it
- Approval of audit committee with respect to transactions between a holding company and its wholly owned subsidiary company will only be required, if the transactions falls under section 188
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| Section 58 | Section 178- Nomination and remuneration Committee and Stakeholders Relationship Committee | - Instead of every listed company, every listed public company shall constitute a Nomination and Remuneration Committee (‘NRC’).
- NRC will specify methodology for effective evaluation of performance of Board and committees and individual directors either by the Board, NRC or an independent external agency and NRC can review the implementation of evaluation system.
- Instead of disclosing the policy in the Board’s report, such policy shall be placed on the website of the company, if any and only the salient features of the policy and the changes therein need to be disclosed in the Board’s report.
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| Section 61 | Section 185- Loan to directors, etc. | The whole of the section has been substituted by new section. Some of the key changes are : - Complete restriction on providing loan, guarantee or security in connection with loan to any director, director of the holding company or any partner or relative of any such director or any firm in which any such director or relative in a partner.
- Loan to following parties is allowed subject to special resolution of shareholders and certain other prescribed conditions
- any private company of which any such director is a director or member;
- any body corporate at a general meeting of which not less than twenty- five per cent. of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or
- any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company Currently transactions with aforesaid categories is prohibited
- Previous exemption provided under section 185(1) continues to remain except that when company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the rate of prevailing yield of one year, three year, five year or ten year Government security closest to the tenor of the loan.
- Defaulting officer in the company along with the company and director or the other person to whom any loan is advanced or guarantee or security is given will be penalized.
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| Section 62 | Section 186- Loan and investment by company | - Employees have been excluded from the ambit of this section.
- Shareholders’ approval will not be required where a loan or guarantee is given or where a security has been provided by a company to its wholly owned subsidiary company or a joint venture company, or acquisition is made by a holding company, by way of subscription, purchase or otherwise of, the securities of its wholly owned subsidiary company.
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| First proviso to clause (i) and clause (ii) of section 80 | Section 403- Fee for Filings, etc. | - Only document, fact or information required to be submitted under section 92 (Annual Return) or 137 (Copy of financial statement to be filed with registrar) may be submitted, after expiry of the period so provided in those sections, on payment of such additional fee as may be prescribed which shall not be less than Rs. 100 per day and different amounts may be prescribed for different classes of companies.
- Where a company fails or commits any default to submit, file, register or record any document, fact or information before the expiry of the period specified in the relevant section, the company and the officers of the company who are in default, shall, without prejudice to the liability for the payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default.
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| Section 83 | Section 410- Constitution of Appellate Tribunal | In addition to the order of the Tribunal, the order of the National Financial Reporting Authority shall be appealable before the National Company Law Appellate Tribunal. |
| Section 86 | Section 435- Establishment of Special Courts | - Central Government authorized to establish Special Courts for the purpose of speedy trials of offences under the Act. Previously Special Court could be established for trying offences punishable with imprisonment of two years or more.
- The constitution of Special Court has been changed and will depend upon the nature of offence
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| Section 87 | Section 438- Application of Code to proceedings before Special Court | Section 438 of the Act has been amended as a consequence of amendments to section 435. |
| Section 88 | Section 439- Offences to be non-cognizable | Member along with shareholders has been included in respect of complaint with respect to taking cognizance of offences under the Act by the Court. |
| Section 89 | Section 440- Transitional provisions | Till the time a Special Court is established, the trial of offences shall be continued with Court of Session or Court of Metropolitan Magistrate or a Judicial Magistrate of the First Class. |