In and around the country, all companies are
working or doing their business or promoting their activities as per the
Companies Act which was passed by the Government of India. The amendment of the
companies’ act is intended to strengthen corporate governance standers, to
provide penalties or punishments for the tax evading companies and help to
improve ease of doing business in the country. This act enables the company to
do a business in a legal manner and helps to work effectively and efficiently.
The recent amendments were made to reduce the scams in corporate governance and
it will continue against the companies which are not complying the Corporate Social
The Companies (Amendment) Bill, 2017 was a result
of advises and recommendations from the professionals and Companies Law
Committee constituted by the Government of India. The Companies Amendment Bill
was introduced in Lok Sabha on 16th March 2016 as the Companies
Amendment Bill, 2016 refer to standing committee and same Companies (Amendment)
Bill, 2107 was passed on July 27, 2017. The Bill to amend Companies Act 2013
was passed in Rajya Sabha on 19th December 2017 and same assented by
President on 3rd January 2018. This is the second Amendment Bill
passed by the Parliament after the notification of the Companies Act 2013.The
Companies Amendment Bill, 2017 suggest 93 amendments to the Companies Act, 2013
and it is mainly gives the clarity on definitions i.e., Associate Companies,
Holding & Subsidiary Companies, Debentures, Turnover and Small Company etc.
the Main Objectives of Companies Amendment Act, 2017: –
Ease of Doing Business.
Simplification of Companies
Encouragement for Start-ups
Strengthen Corporate Governance Standards.
Strict action defaulting companies.
Amendment Act, 2017 is helpful in “Ease of doing business”
Authentication of documents:
Under Companies Act, 2013 a document or
proceeding requires approval by company or any key managerial person. But
according to the Amendment of 2017 Act, Company by Board resolution authorizes
any employ of Company can sign on documents and contract on behalf of the
Incorporation process was in fast track mode
under Companies Amendment Act 2017, as MOA (Memorandum of Association) and AOA
(Articles of Association) changed from physical mode to electric mode.
Issuance of Shares at discount:
According to the section 53(1) a company cannot
issue shares at discount. But 2017 Amendment act provides the situation where a
company can issue shares at discount.
Companies Amendment Act, 2017 allowed the unlisted
companies to conduct Annual General Meeting at any place in India. This will save
time and energy of companies in holding meetings at registered office by travelling
from various places.
Impact of Companies Amendment Act, 2017: –
For each amendment of The Companies Act, there
are major and minor effects on both Public and Private Limited Companies. These
amendments were suggested and recommended by the company shareholders,
professors and Company Law Committee which was constituted by the Government of
India. The CLC (Company Law Committee) were asked to set out solutions for the
current issues with the Companies Act, 2013 and asked to revisit the act. The Amendment
Bill was passed after much debate in winter session of the parliament.