The Ministry of Law and Justice in its gazette notification has published the Companies (Amendment) Act, 2020 which has received the assent of the President on 28th September 2020.
Key Highlights from the Amendments:
Under the definition clause for the term listed company a new proviso has been inserted which enables the Central Government to exclude certain class of companies, which have listed or intend to list such class of securities, as may be prescribed in consultation with SEBI, from the definition of listed companies.
The Amendment removes the penalty, imprisonment for 9 offenses which relate to non-compliance with orders of the national company law tribunal (NCLT), and reduces the amount of fine payable in certain cases. These include matters relating to winding-up of companies, default in publication of NCLT order relating to reduction of share capital, rectification of registers of security holders, variation of rights of shareholders and payment of interest and redemption of debentures.
Further to enable the Central Government to provide by rules, such days lesser than fifteen for deeming the decline of the offer made under the said provision.The amendment reduces the range of time limit from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined.
The Act makes special provisions for payment of remuneration to executive directors of a company (including managing director and other whole-time directors) if the company has inadequate or no profits in a year.
The Act requires companies to file certain resolutions with the Registrar of Companies. These include resolutions of the Board of Directors of the company to borrow money or grant loans. However, banking companies are exempted from filing resolutions passed to grant loans or to provide guarantees or security for a loan. This exemption has been extended to registered non-banking financial companies and housing finance companies.
Image download link:
