Company Law Updates

1.    
The
Ministry of Corporate Affairs notified the provisions of sub-sections (8), (9)
and sub-section (10) of Section 212 of the Companies Act, 2013 relating to
investigation into the affairs of a company by Serious Fraud Investigation
Office vide commencement notification dated August 24, 2017.  In this regard, the Companies (Arrests in connection
with Investigation by Serious Fraud Investigation Office) Rules, 2017 were also notified on August
24, 2017.

2.    
The
Institute of Company Secretaries of India notified the withdrawal of Notification
ICSI No.1 (SS) of 2015 with respect to secretarial standards 1 & 2 (“Secretarial Standards”) with effect
from September 30, 2017, vide notification dated August 16, 2017. The
Institute announced that the revised Secretarial Standards will be applicable
for compliance by all the companies (except the exempted class of companies)
with effect from October 01, 2017 and will supersede the text of earlier Secretarial
Standards. The Institute of
Company Secretaries of India has subsequently announced that the Secretarial
Standards on Meetings of the Board of Directors (SS-1) and General
Meetings (SS-2) have been revised and the revised Secretarial Standards have received approval
from the Central Government which shall be applicable for compliance by
Companies from October 1, 2017

3.    
The
Companies (Amendment) Bill, 2017 (“Amendment
Bill, 2017”) introduced in the Lower House of the Parliament received its assent
on July 27, 2017. The Amendment Bill, 2017 seeks to make the following
amendments in the Companies Act, 2013 (“Existing
Act”):

Ø  Officers in whole time
employment of a company at one level below the board of directors are proposed
to be included in the definition of key managerial personnel;

Ø  The process and timelines
involved in the private placement of securities are proposed to be amended by
substitution of Section 42 of the Existing Act with a new section;

Ø  Section 90 of the Existing Act is
proposed to be substituted  by a new
section to introduce the concept of significant beneficial owner, to mean an
individual, holding beneficial interest not less than 25% in shares of a
company, whether directly or indirectly;

Ø  The annual general meeting  are proposed to be allowed to be held at any
place in India if the consent of members has been obtained;

Ø  Extraordinary general meetings
of a wholly owned subsidiaries are proposed to be  allowed to be held at a place outside India as
well;

Ø  The requirement of ratification
of auditors at every annual general meeting of a company is proposed to be done
away with;

Ø  Section 185 of the Existing Act
relating to loan to directors is proposed to be substituted by a new section to
provide the conditions of provision of loan to persons in which the directors
are interested;

Ø  Provisions relating to forward
dealing and insider trading of securities are proposed to be omitted; and

Ø  The requirement of obtaining the
Central Government approval for payment of managerial remuneration by a company
in terms of Section 197 of the Existing Act is proposed to be dispensed with.

4.    
The
Ministry of Corporate Affairs, on July 27, 2017 notified the Companies (Incorporation)
Second Amendment Rules, 2017
to prescribe certain changes in the process of shifting of registered office:

i.          
within
the same state; and