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COMPANIES ACT,
1956
AND
COMPANIES BILL,
2012 (BILL NO. 121-C OF 2O11)
-... A Comparative
By Team Manupatra
-December 2012
- THE HISTORY
- TOPICAL COMPARATIVE
-December 2012
- December 2012
... THE HISTORY
December 2012
2008 Bill
•Introduced in Lok Sabha on 23.10.08
•To replace the Companies Act, 1956
• Lapsed due to dissolution of Parliament
2009 Bill
•2008 bill modified
•Re-introduced in 2009 on 3.8.09
Bill referred to Standing Committee for review
Report tabled in Lok Sabha on August 31, 2010
2011 Bill
•Introduced in Lok Sabha on December 14, 2011
Was shelved for taking up the same in winter session of Parliament on December 22, 2011
2011 Bill
• Passed by Lok Sabha on December 18, 2012 as the Companies Bill 2012
THE ACT OF 1956 & THE ACT AS
PROPOSED TO BE....
Details Companies Act, 1956 Companies Bill, 2012
Parts/ Chapter 13 29
Sections 658 470
Schedules 15 7
No. of clauses in
Section 2
(Definitions)
67 95
- December 2012
... TOPICAL
COMPARATIVE
DEFINITIONS
Details Companies Bill, 2012
New Definitions – as
introduced
(Clause 2)
Some of the new definitions as introduced are of Accounting
Standards, Auditing Standards, Associate Company, Chief
Executive Officer, Chief Financial Officer, Control, Deposit,
Employee Stock Option, Financial Statement, Global
Depository Receipt, Indian Depository Receipt, Independent
Director, Interested Director, Key Managerial Personnel,
Promoter, One Person Company, Small Company, Turnover,
Voting Right etc..
Details Companies Act, 1956 vis-à-vis Companies Bill, 2012
Definitions –
Modified/ other
important terms
• Incase of Private Limited Company [Section 3 & Cl. 2(68) –
Maximum number of members proposed to be increased
from 50 to 200
• Private company which is a subsidiary of a public company
shall be deemed to be a public company.
• Key Managerial Person (KMP) – Cl. 2(51) states that KMP
includes the Chief Executive Officer or the managing
director or the manager; the company secretary; the Chief
Financial Officer if the Board of Directors appoints him; and
such other officer as may be prescribed;
DEFINITIONS
Details Companies Act, 1956 vis-à-vis Companies Bill, 2012
Definitions –
Modified/ other
important terms
• Scope of the term “officer who is in default” enlarged – The term was
defined in Section 5 of the Act. Its scope has now been enlarged. It
now states includes as under:
(i) whole-time director; (ii) key managerial personnel; (iii) where there
is no key managerial personnel, such director or directors as specified
by the Board in this behalf and who has or have given his or their
consent in writing to the Board to such specification, or all the
directors, if no director is so specified; (iv) any person who, under the
immediate authority of the Board or any key managerial personnel, is
charged with any responsibility including maintenance, filing or
distribution of accounts or records, authorises, actively participates
in, knowingly permits, or knowingly fails to take active steps to
prevent, any default; (v) any person in accordance with whose advice,
directions or instructions the Board of Directors of the company is
accustomed to act, other than a person who gives advice to the Board
in a professional capacity; (vi) every director, in respect of a
contravention of any of the provisions of this Act, who is aware of
such contravention by virtue of the receipt by him of any proceedings
of the Board or participation in such proceedings without objecting to
the same, or where such contravention had taken place with his
consent or connivance; (vii) in respect of the issue or transfer of any
shares of a company, the share transfer agents, registrars and
merchant bankers to the issue or transfer.
DEFINITIONS
Details Companies Act, 1956 vis-à-vis Companies Bill, 2012
Definitions –
Modified/ other
important terms
• Definition of the term “Subsidiary Company” modified – The term is
defined in Section 4 of the Act. Its scope has now been modified to
mean a Company in which the holding Company –
(i) Controls the composition of the Board of Directors; or (ii) Exercises
or controls more than one half of the total share capital (instead of
equity share capital as prescribed under the 1956 Act) either at its
own or together with one or more of its subsidiary companies.
Provided that such class or classes of holding companies as may be
prescribed shall not have layers of subsidiaries beyond such numbers
as may be prescribed.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Concept of One
Person Company
(OPC) – Cl. 2(62)
It means a Company which has only one person as a
member;
Concept of Small
Companies – Cl. 2(85)
means a company, other than a public company — with paid-up
share capital not exceeding fifty lakh rupees or such amount as
may be prescribed, not to be more than five crore rupees; or
turnover of which as per its last profit and loss account does not
exceed two crore rupees or such higher amount as may be
prescribed which shall not be more than twenty crore rupees.
This will include a holding company or a subsidiary company; a
company formed with charitable objects; or a company or body
corporate governed by any special Act;
Term ‘Promoter’
defined – Cl. 2(69)
(i) Promoter is one who has been named as such in a prospectus
or is identified by the company in the annual return, or (ii) who
has control over the affairs of the company, directly or indirectly
whether as a shareholder, director or otherwise; or (iii) in
accordance with whose advice, directions or instructions the
Board of Directors is accustomed to act. Provided that nothing in
sub-clause (c) shall apply to a person who is acting merely in a
professional capacity.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Directors • Duties of the directors towards a company prescribed (not provided
in the Companies Act, 1956).
• Maximum there can be15 directors. This number can go up on the
passing of special resolution.
• In certain prescribed companies atleast one woman director should
be appointed
• Every company to have one resident director, i.e. a director who has
stayed in India for minimum 182 days in the previous calendar year.
• Every company belonging to such class or description of companies
as may be prescribed shall have Managing Director (MD) or Chief
Executive
• Director (CEO) or Manager and in their absence, a Whole time
Director (WTD) TD and a Company Secretary.
• Individual not to be the Chairman of the company as well as the MD
or CEO of the company at the same time (AoA can provide for this);
• Every whole time KMP to be appointed by a resolution at BOD
meeting;
• A WTKMP not to hold office in more than one company at the same
time.
• Any vacancy in the office of any KMP to be filled up by the BOD
within 6 months.
• Provisions relating to separation of office of Chairman and
Managing Director (MD) modified to allow, in certain cases, a class of
•companies having multiple business and separate divisional MDs to
appoint same person as ‘Chairman as well as MD’
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Concept of
Independent
Directors – Cl. 149(5)
All listed companies shall have at least one-third of the Board as
independent directors.
• Such other class or classes of public companies as may be
prescribed by the Central Government shall also be required to
appoint independent directors.
• The independent director has been clearly defined in the Bill.
• Nominee director nominated by any financial institution, or in
pursuance of any agreement, or appointed by any government to
represent its shareholding shall not be deemed to be an
independent director.
• An independent director shall not be entitled to any
remuneration other than sitting fee, reimbursement of expenses
for participation in the Board and other meetings and profit
related commission as may be approved by the members.
• An Independent director shall not be entitled to any stock
option.
•Only an independent director can be appointed as alternate
director to an independent director. [clause 161(2)].
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Duties of Directors –
Cl. 166
• To act in accordance with the articles of the company.
• To act in good faith in order to promote the objects of the company
for the benefit of its members as a whole, and in the best interests of
the company, its employees, the shareholders, the community and for
the protection of environment.
• To exercise his duties with due and reasonable care, skill and
diligence and shall exercise independent judgment.
• Not to involve in a situation in which he may have a direct or
indirect interest that conflicts, or possibly may conflict, with the
interest of the company.
• Not to achieve or attempt to achieve any undue gain or advantage
either to himself or to his relatives, partners, or associates and if such
director is found guilty of making any undue gain, he shall be liable
to pay an amount equal to that gain to the company.
• Not to assign his office and any assignment so made shall be void.
Resignation of
Director [Cl. 168]
• A Director may resign from his office by giving a notice in writing
and the Board shall, on receipt of such notice take note of the same
and the company shall intimate the Registrar and place such
resignation in the subsequent general meeting of the company. The
director shall also forward copy of resignation with reasons to
Registrar. The clause further provides for the date on which the
notice of resignation shall take effect. The director shall be liable for
the offences occurred during his tenure.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Cross Border Mergers • The Bill provides for Cross Border Mergers which means that a
foreign Company may with due prior approval of the Reserve
Bank of India, merge or amalgamate in to a Company registered
under this Act or vice-versa.
• Payment of consideration to the shareholders of the merged
Company in cash, or in Depository Receipts (DRs) or partly by
cash and DRs.
Account Books/ Audit/
Auditors
• Company can maintain Books of Account in electronic mode
• The Bill provides for conduct of internal audit of prescribed
class or classes of companies.
• 5 Year Tenure for Auditors:
- Audit firm or an individual including an LLP to be appointed
for 5 yrs, i.e. to hold office upto the date of the sixth AGM.
- Appointment of auditors for five years shall be subject to
ratification by members at every Annual General Meeting.
Uniform Financial
Year
Company or body corporate to adopt uniform financial year i.e.
1st April to 31st March every year except in certain exceptional
cases.
Existing Companies not adopting 1st April to 31st March as
financial year for the purposes of Companies Act to align
themselves with this within two years of commencement of the
Companies Act, 2012.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Serious Fraud
Investigating Office
(SFIO)
[Cl. 211]
• This is a new clause and seeks to provide that the Central
Government shall constitute Serious Fraud Investigation Office
(SFIO).
• The SFIO will be headed by a director and will consist of
experts from various disciplines.
• The Central Government shall also appoint a Director in the
SFIO not below the rank of Joint Secretary and may also appoint
such experts and other officers as it considers necessary for
efficient discharge of functions.
Corporate Social
Responsibility
[Cl. 135]
• Every company having specified net worth or turnover or net
profit during any FY shall constitute the Corporate Social
Responsibility Committee of the Board. The composition of the
committee shall be included in the Board's Report.
• The Board shall disclose the content of policy in its report and
place on website, if any of the Company.
• The Board shall endeavour to ensure that atleast two per cent
of average net profits of the Company made during three
immediately preceding financial years shall be spent on such
policy every year. If the company fails to spend such amount the
Board shall give in its report the reasons for not spending.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
E-governance • Maintenance and allowing inspection of documents by
companies in electronic form being allowed for the first time
Auditor’s
Accountability/ NFRA
• Rotation of auditors and audit firms being provided for.
• Stricter and more accountable role for auditor being retained.
Provisions relating to prohibiting auditor from performing non-
audit services revised to ensure independence and accountability
of auditor.
• Subject to the maximum prescribed number of companies, the
members of a company may resolve that the auditor or audit
firm of such company shall not become auditor in companies
beyond the number as may be specified in such resolution.
• National Advisory Committee on Accounting and Auditing
Standards (NACAAS) proposed to be renamed as National
Financial Reporting Authority (NFRA) with a mandate to ensure
monitoring and compliance of accounting and auditing standards
and to oversee quality of service of professionals associated with
compliance.
• Authority to consider the International Financial Reporting
Standards and other internationally accepted accounting and
auditing policies and standards.
Contd...
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
… contd.
• The Authority is also proposed to be empowered with quasi
judicial powers to ensure independent oversight over
professionals.
• Cost Audit: Cost records to be mandated for companies engaged
in production of such goods or rendering of such services as may
be prescribed. The concept of "cost auditing standards" being
mandated.
• Secretariat Audit: Prescribed class of companies would need to
attach with the Board's Report, a Secretarial Audit Report given
by a company secretary in practice.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Managerial
Remuneration
• Provisions relating to limits on remuneration provided in the
existing Act (11% of net profits) included.
• For companies with no profits or inadequate profits
remuneration shall be payable in accordance with new Schedule
of Remuneration annexed to the Bill and in case a company is
not able to comply with such Schedule, approval of Central
Government would be necessary.
• Individual limits for remuneration enhanced in the Bill vis-a-
vis the existing limits.
• Concept of payment of periodic fees which shall include sitting
fees to directors being included in the Bill.
• Independent Directors (IDs) not to get stock option: IDs not to
get stock option but may get payment of fees and profit linked
commission subject to limits specified in the Bill/rules.
• Central Government may prescribe amount of fees under the
rules.
Mediation and
Conciliation Panel
• It is proposed to create and maintain as "Mediation and
Conciliation Panel" for facilitating mediation and conciliation
between parties during any proceeding under the proposed
Legislation before the Central Government or Tribunal.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Protection for
Minority
Shareholders
• Exit option to shareholders in case of dissent to change in
object for which public issue was made.
• Specific disclosure regarding effect of merger on creditors, key
managerial personnel, promoters and non-promoter shareholders
is being provided. The Tribunal is being empowered to provide
for exit offer to dissenting shareholders in case of compromise or
arrangement.
• The Board may have a director representing small shareholders
who may be elected in such manner as may be prescribed by
rules.
Investor Protection • Acceptance of deposits from public subject to a more stringent
regime.
• Central Government to have power to prescribe class or classes
of companies which shall not be permitted to allow use of
proxies. The Bill also to have provisions to provide that a person
shall have proxies for such number of members /such shares as
may be prescribed.
• Provisions for Class Action Suits revised to provide minimum
number of persons who may apply for such suits. Safeguards
against misuse of these provisions also being included.
NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
Insider Trading
[Cl. 195]
• This is a new clause and seeks to prohibit directors or key
managerial person of the company to deal in securities of a
company, or counsel, procure or communicate, directly or
indirectly, about any non-public price-sensitive information to
any person.
• This clause further provided for penal provision in case of
contravention.
Investor Protection • Acceptance of deposits from public subject to a more stringent
regime.
• Central Government to have power to prescribe class or classes
of companies which shall not be permitted to allow use of
proxies. The Bill also to have provisions to provide that a person
shall have proxies for such number of members /such shares as
may be prescribed.
• Provisions for Class Action Suits revised to provide minimum
number of persons who may apply for such suits. Safeguards
against misuse of these provisions also being included.
HOLDING COMPANY AND SUBSIDIARY
Details Companies Act, 1956 Companies Bill, 2012
Meaning/
Restrictions in
regard to Subsidiary
No restriction Class or classes of holding
Companies as may be
prescribed shall not have
layers of subsidiaries
beyond such numbers as
may be prescribed [Cl.
2(87)]
SHARES - TRANSFER [S. 111 OF THE 1956 ACT AND CL. 58 OF THE BILL]
Details Companies Act, 1956 Companies Bill, 2012
Transfer of Shares –
Public Company
Securities or other interest of
any member freely transferable.
[sub-sections (1) and (2) of
section 111]
Freely transferable,
however there needs to be
a contract/agreement with
regard to the transfer of
securities which can be
made enforceable as a
contract. [Cl. 58]
SECURITIES – BUY-BACK
Details Companies Act, 1956 Companies Bill, 2012
Restriction – further
offer of Buy-back
Where buyback is by Board (10
per cent of the total paid up
equity capital and free
reserves), no further offer of
buyback is permissible within
one year from the date of last
offer of buyback. [S. 77A]
No offer of buy-back shall
be made within
a period of one year
reckoned from the date of
the closure of the
preceding offer of
buy-back, if any. [Cl. 68]
ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Companies Act, 1956 Companies Bill, 2012
[Cl. 73]
Eligibility – for
acceptance from
public and
shareholders
Public Companies are
permitted to accept deposits
from public and shareholders
in accordance to Companies
(Acceptance of Deposit)
Rules.
[Section 58A)
No Company except Banking
Company and such other
Company as may be specified
in this behalf shall invite,
accept or renew deposits
from the subject to
fulfillment of certain
conditions. A Company may,
subject to the passing of a
resolution in general meeting
and prescribed rules accept
deposits from its members on
such terms and conditions as
may be agreed upon between
the Company and its
members, subject to the
conditions prescribed:
ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Companies Act, 1956 Companies Bill, 2012
Eligibility – for
acceptance
from public and
shareholders
- … contd.
The conditions are:
- statement showing the financial
position of the company, the credit
rating obtained, the total number of
depositors and the amount due
towards deposits in respect of any
previous deposits accepted by the
company
- depositing such sum which shall
not be less than 15 per cent of the
amount of its deposits maturing
during a FY and the FY next
following, and kept in a separate
bank account in a scheduled bank
to be called as deposit repayment
reserve account;
ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Companies Act,
1956
Companies Bill, 2012
Eligibility – for
acceptance
from public
and
shareholders
- … contd.
- providing deposit insurance in the
manner and extent prescribed
- certifying that the Company has not
defaulted in the repayment of deposits
or payment of interest
- providing security, if any for the due
repayment of the amount of deposit or
the interest thereon including the
creation of such charge on the property
or assets of the company. However,
where a Company does not secure the
deposits or secures such deposits
partially, then, the deposits shall be
termed as 'unsecured deposits' and
shall be so quoted in every circular,
form, advertisement or in any
document related to invitation or
acceptance of deposits.
ACCEPTANCE OF DEPOSITS
Details Companies Act,
1956
Companies Bill, 2012
Eligibility – for
acceptance from
public and
shareholders
- … contd.
The deposit repayment reserve account
referred to in clause (c) of sub-section (2) shall
not be used by the company for any purpose
other than repayment of deposits.
No Company except Banking Company and
such other Company as may be specified in
this behalf shall invite, accept or renew
deposits from the public except in the manner
provided.
A Company may, subject to the passing of a
resolution in general meeting and prescribed
rules accept deposits from its members on
such terms and conditions as may be agreed
upon between the Company and its members,
subject to the conditions prescribed:
DIVIDEND – DECLARATION & PAYMENT
Details Companies Act, 1956 [Section 205]
Companies Bill, 2012
Declaration of
Dividend -
Transfer of
Reserves
No dividend to be declared or paid
by a Company for any FY out of the
profits of the Company for that year
arrived at after providing for
depreciation except after the
transfer to the reserves of the
Company of such percentage of its
profits for that year, not exceeding
ten per cent.
A voluntary transfer by Company to be
made, as considered appropriate before
declaration of any dividend. [Cl. 123]
Declaration in the
event of
inadequate profits
Dividend to be declared in
accordance to Companies
(Declaration of dividend out of
Reserves) Rules, 1975 with a
maximum rate prescribed as 10 per
cent
Dividend to be declared out of the
accumulated profits transferred to reserves
in accordance to applicable rules
Declaration of
interim dividend
– Any restrictions
No restrictions Interim declaration may be declared out of
the surplus in P&L Account as well as
profits of the FY in which dividend is
sought to be declared. Failure in
compliance will bar the Company to
declare dividend during the period of non
compliance
BOOKS OF ACCOUNT
Details Companies Act, 1956 Companies Bill, 2012 [Cl. 129]
Consolidated
Statements
No Provisions
The financial statement shall be laid in
the AGM of that FY. In case of
subsidiary companies, the company
shall prepare a consolidated financial
statement of the Company and all
subsidiaries and lay before the AGM.
The Central Government shall have
the power to exempt a class or classes
of companies from any of the
requirement of this section. The clause
also provide the penalty where
company contravenes the provision of
this section.
For the purpose of above, "subsidiary"
shall include 'associate company' and
'joint venture'
LOAN AND INVESTMENT BY COMPANY
Details Companies Act, 1956 Companies Bill, 2012
Exemptions [Section 372A]
Any loan made, any guarantee given or
any security provided or any investment
made by -
Banking company, or an insurance
company, or a housing finance company in
the ordinary course of its business, or a
company established with the object of
financing industrial enterprises, or of
providing infrastructural facilities;
Company whose principal business is the
acquisition of shares, stock, debentures or
other securities;
A private company, unless it is a
subsidiary of a public company;
To investment made in shares allotted in
pursuance of clause (a) of sub-section (1) of
section 81;
To any loan made by a holding company to
its wholly owned subsidiary;
To any guarantee given or any security
provided by a holding company in respect
of loan made to its wholly owned
subsidiary; or
To acquisition by a holding company, by
way of subscription, purchases or
otherwise, the securities of its wholly
owned subsidiary.
[Cl. 186]
- Loan made, guarantee given or
security provided by a banking
company or an insurance
company or a housing finance
Company in the ordinary course
of its business or a company
engaged in the business of
financing of companies or of
providing infrastructural
facilities;
- To any acquisition (i) made by a
non-banking financial company
whose principal business is
acquisition of securities.
- Exemption to NBFC shall be in
respect of its investment and
lending activities;
- Acquisition made by a company
whose principal business is the
acquisition of securities;
- Acquisition of shares allotted in
pursuance to further issue of
capital
RELATED PARTY TRANSACTIONS
Details Companies Act, 1956 Companies Bill, 2012
Provisions/ scope thereof [Section 297]
A company is debarred from entering
into:
- Contracts relating to sale, purchase or
supply of any goods or materials and
services;
-Contracts relating to underwriting
subscriptions of shares, debentures of a
company.
Contracts cover the following specified
persons:-- Director/Relative of Director
of a Company; Firm where such
Director/Relative is a partner; Any
other partner of such firm as above;
Private company where such Director is
Director or member
Such transactions are subject to prior
approval by resolution passed by the
Board of Directors in a Board Meeting.
In case of paid up capital of Company
exceeds one crore, prior approval of the
Regional Director is required.
[Cl. 188]
A Company is debarred from
entering into:
-Contracts relating to: sale,
purchase or supply of any goods
or materials; buying/selling
/disposing otherwise any
property; leasing of any
property; availing/ rendering of
any services; appointment of
any agents for purchase or sale
of goods, materials, services or
property; such related party's
appointment to any office or
place of profit in the company,
its subsidiary or associate
company; underwriting
subscription of any securities/
derivatives of the company.
Contracts cover specified
persons under Section 2 clause
76 of the Bill defining the term
Related Party.
RELATED PARTY TRANSACTIONS … CONTD.
Details Companies Act, 1956 Companies Bill, 2012
Exemptions are provided in the
case of:
1.Purchase/ Sale of goods and
materials:
(a) for cash at current Market
price
(b) Also services, the cost of
which does not exceed Rs. 5000
in any year during tenure of
Contract
2.Transactions by Banking /
Insurance Companies in the
ordinary course of Business.
Such transactions are
subject to prior approval
by resolution passed by
the Board of Directors in
a Board Meeting. In case
the paid up capital of the
Company/transaction
exceeds prescribed limit,
prior approval of the
shareholders is required.
Exemptions are provided
in the case of transactions
in ordinary course of
business, other than those
which are not an arms
length basis
COMPROMISES, ARRANGEMENTS AND
AMALGAMATIONS
Details Companies Act, 1956 Companies Bill, 2012
How this can be
approved
To be approved by Majority
representing 3/4th in value of
the creditors or members or
class thereof present and voting
or by proxy.
Approval of High Court (NCLT)
Voting by Postal Ballot
added
Approval of High Court
(NCLT)
[Clause 230]
About the Valuation
Report
Valuation report not to be given
to shareholders/ creditors
alongwith notice convening
meeting
It now needs to be given
Objections against
the purpose
Objection can be made by any
shareholder or creditor. Such
objection can be made
irrespective of their
shareholding/ debt outstanding
Objection to be made only
by:
• persons holding more
than 10% shareholding; or
• having outstanding debt
of more than 5% of total
outstanding debt as per
the last audited balance
sheet
COMPROMISE, ARRANGEMENT AND
AMALGAMATION
Details Companies Act, 1956 Companies Bill, 2012
Buy back of
Securities
The scheme can include
any buyback of securities
It can form part of it as per
the provisions of buyback.
On the Takeover
offer
Scheme cannot include a
Take over offer
As per the manner
prescribed. In the case of
listed Companies such offer
has to be as per SEBI
Regulations
Transfer – Listed
Company with
Unlisted Company
No specific requirement to
serve notice on Income tax
department and other
regulatory body
Notice needs to be served on
IT department, RBI, SEBI,
the Stock Exchanges, CCI,
Sectoral regulators/
authorities
COMPROMISE, ARRANGEMENT AND
AMALGAMATION
Details Companies Act, 1956 Companies Bill, 2012
Merger – Indian
Companies with
Foreign Company
No Yes, with prior approval of
RBI
Takeover offer Scheme cannot include a
Take over offer
It may include in a prescribed
manner . In the case of listed
Companies such offer has to
be as per SEBI Regulations
Offer to sell
(Minority
Shareholders to
Majority
shareholder)
No May sell at the price
determined in accordance to
applicable rules
COMPROMISE, ARRANGEMENT AND
AMALGAMATION
Details Companies Act,
1956
Companies Bill, 2012
Purchase –
Minority
shareholding by
Majority
shareholder
No specific provision •Acquirer and/ or PAC or person/
group of persons holding 90 per
cent or more of the issued equity
capital of the Company by virtue of
amalgamation, share exchange,
conversion of securities or for any
other reasons, can purchase the
remaining equity shares of the
Company from minority
shareholders at a price determined
by registered valuer
•Minority shareholders may also
offer to the majority shareholders
to purchase their equity
shareholding in the Company at
the price determined by registered
valuer.
LOAN TO DIRECTORS
Details Companies Act,
1956 [S. 295]
Companies Bill, 2012
[Cl. 185]
Provisions • Provisions are
application only to
Public Companies
subject to the following
exceptions: - Banking
Companies; Holdings to
subsidiary Company ;
Private Company;
• Prior approval of the
CG is mandatory before
any Public Company
directly/indirectly
makes loan, gives
guarantee or provides
security to its Directors
or other specified
persons.
•Provisions are applicable only to both
Public and Private Companies subject
to the following exceptions:
• Managing or whole-time conditions of
service extended by company director,
as part of to all its employees or in
furtherance to any scheme approved by
a special resolution of its members.
• Company which in the ordinary course
of business provides loans ,gives
guarantees or securities for the due
repayment subject to the condition that
rate of interest is not less than the
bank rate declared by the Reserve Bank
of India.
REGISTERED VALUER
Details Companies Act, 1956 Companies Bill, 20112
[New Provision – Cl.
247]
Provision relating to
Registered Valuer
No provisions prescribed Where valuation is to be
made under the Act, in
respect of any property,
stocks, shares,
debentures, ,securities or
goodwill or other assets or
net worth of a Company
or its liabilities, such
valuation shall be done by
a registered valuer.
REMOVAL OF NAMES OF COMPANIES
FROM THE REGISTER OF COMPANIES
Details Companies Act,
1956
Companies Bill, 2012
Grounds [Section 560]
A Company may be
struck off by ROC if
it has reasonable
cause to believe that
a Company is not
carrying on business
or operations
[Cl. 248]
Reasons for Strike off:
• subscribers to the memorandum
have not paid the subscription
money with 180 days from the date
of incorporation
• Company has failed to commence
its business within one year of its
incorporation
• Company is not carrying on any
business or operation for two
immediately preceding financial
year and has within such period
applied for status of a dormant
Company
WINDING-UP
Details Companies Act,
1956 [Ss. 433 &
434]
Companies Bill, 2012
Grounds • By Special
resolution
• If Company is
unable to pay its
debt.
• Business not
commenced within
one year of its
incorporation or
suspends its
business for the
whole year
• Minimum number
of member goes
below than as
prescribed i.e. 2 and
7 incase of Pvt. and
Public limited
Company
[Cl. 271]
• Requirement of minimum
number of member removed
• Following additional grounds
added:
i. Management of company
affairs in fraudulent manner
ii. Formation of Company for
fraudulent and unlawful
purpose
iii. Persons involved/ concerned
in the formation of Company
guilty of fraud, misfeasance or
misconduct in connection
therewith.