Amendments in Companies Act

Since the commencement of the Companies Act in the year 1956, there have been many amendments in the Act, out of which major amendments are of the year 2000, 2011, 2013, 2015 and 2017.

The Companies (Amendment) Act, 2000

The Companies (Amendment) Act, 2000 came into force on 13th of December, 2000 and is the largest amendment among all the amendment Acts.

The Companies Amendment Act, 2000, inserted various new provisions. With this amendment, there was insertion of new sections and also the addition and alteration of existing provisions. The main provisions of the amendment are-

  • Minimum paid-up capital for registration of public and private company.

After the amendment of 2000, the minimum paid-up capital for the registration of private and public company got changed. The changes were follows-

CompanyMinimum Paid-up Capital
Private CompanyOne lakh rupees or more
Public CompanyFive lakh rupees or more
  • Change of registered office within the State.

With the amendment of 2000, a new section was inserted in the Companies Act, Section 17A. As per this Section, a company cannot change its registered office from one place to another within the State.

However, such change can be done if it is confirmed by the Regional Director. Prior to this amendment, the change in registered office within the State was made possible by passing of the Special Resolution. But, now with the amendment, the approval of Regional Director has also become necessary.

  • Powers of Securities and Exchange Board of India (SEBI)

With the amendment of 2000, for the first time, the SEBI was made responsible for the company matters; particularly the transfer and issue of securities and non-payment of dividend of a company.

  • Equity Share Capital

Before the amendment of 2000, the equity share capital of a company, limited by shares, was divide into two parts; namely, Equity Share Capital and Preference Share Capital. This division was under Section 86 of the Act.

With the amendment of 2000, Section 86 is now substituted, dividing the Equity Shares into further two parts-

  • Equity Share Capital with Voting Rights.
  • Equity Share Capital with Differential Rights as to Dividend, Voting or Otherwise.

Further, Preference Share Capital is retained in the amendment.

The Companies (Amendment) Act, 2011

After the amendment of 2000, the Companies Act got amended in the year 2011. The Indian Government made the amendment in the 2011 in the Companies Act, in order to boost the economic growth.

The important features of the Companies Bill 2011 are-

  • “Whole Time Director” has been included in the definition of the “Key Managerial Personnel”.
  • Under the Clause 61 of the amendment, the approval of the Tribunal has been made mandatory for the consolidation and division of the share capital of the company.
  • Clause 135 of the amendment has been made to introduce the concept of Corporate Social Responsibility (CSR).
  • Under the Clause 139 of the amendment, it has been proposed that the appointment of the auditor of the company shall be subject to ratification by the members at every Annual General Meeting (AGM).
  • Under the Clause 141 of the amendment, it has been made clear that a person can be the director of maximum 20 companies at one time.

The Companies (Amendment) Act, 2013

The amendment in the Companies Act, 1956 in the year 2013 was considered to be a major amendment in the act. With this amendment, the Companies Act got to be renamed to Companies Act, 2013. The main amendments in the Act were-

  • There was a significant change in the composition of the Board of Directors, with the amendment of 2013. A One Person Company (OPC) could have a minimum of 1 Director. With the amendment in 2013, there was made a restriction in the maximum number of Directors, which a company can have, which is made to 15. However, this limit of 15 can be increased by passing a Special Resolution.
  • With the amendment of 2013, the Board has been given power to constitute 4 types of the committees. These are-
    • Audit Committee
    • Nomination and Remuneration Committee
    • Stakeholders Relationship Committee
    • Corporate Social Responsibility Committee (CSR Committee)
  • The amendment of 2013 made it mandatory for the companies to conduct their first Board of meeting within 30 days of their incorporation.
  • For every Board Meetings, a notice of minimum 7 days is to be given. The notice can be given via electronic means also.
  • With the amendment of 2013, the directors of the company are given permission to attend the meeting through video conferencing or other audio visual means.
  • Earlier, every company was required to hold the Board Meeting in every quarter. But, now with the amendment of 2013, this has been discontinued. Now, at least 4 meeting are to be held every year, with a time gap of not less than 120 days between 2 Board Meetings.
  • The amendment of 2013 has made it a requirement for the companies to have the following classes of directors-
    • Resident Director
    • Independent Director
    • Woman Director

Aishwarya Says:

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