Company Law amendments - Series II

As I promised, I will keep posting the company law amendments frequently. In this post, you can read some more amendments in paragraph form as well as summary presented in tabular form.

Annual return

The section 92(2) of 2013 Act mentions that necessity of certification by a company secretary in practice of annual return will be extended to companies having paid up capital of five crore INR or more and turnover of 25 crore INR or more. While, Companies Act 1956 had required certification for listed companies only. The information that requires to be incorporated in the annual return has been enlarged. The extra information necessary, includes details of holding, subsidiary and associate companies, remuneration of directors and key managerial personnel, penalty or imprisonment imposed on the company, its directors or officers [section 92(1) of 2013 Act].

Place of keeping registers and returns

The section 94(1) of 2013 Act permits registers of members, debenture-holders, any other security holders or copies of return, to be kept at any other  place in India in which more than one-tenth of members leave  While, as per the 1956 Act, all these documents can be kept at that city, town or village only in which the registered office is situated.

General meetings

The section 96(1) of 2013 Act mentions that the first annual general meeting should be held within nine months from the date of closing of the first financial year of the company. While, the 1956 Act requires the first annual general meeting to be held  within 18 months from the date of registration. At present, the 1956 Act does not mentions business hours, which the 2013 Act currently defines as between 9 am and 6 pm. The section 96(2) of2013 Act mentions that annual general meeting can now be held on a national holiday. While, the AGM cannot be held on a public holiday as per the section 166(2) of the 1956 Act. In order to call an AGM at shorter notice, the  section 101(1) of 2013 Act states that consent of 95% of the members is required as against the current requirement in the 1956 Act which needs approval of all the members [section 101(1) of 2013 Act]. The section 102(1) of 2013 Act mentions that apart from director and manager, the nature of concern or interest of every director, manager, any other key managerial personnel and relatives of such director, manager or any other key managerial personnel in every item of special business will also require to be stated in the notice of the meeting. While, as per the section 102(2) of 2013 act, the threshold of disclosure of share holding interest in the company to which the business relates of every promoter, director, manager and key managerial personnel has been reduced from 20% to 2%.

The section 103(1) of  2013 Act states that in case of a public company, the quorum will depend on number of members as on the date of meeting. The required quorum is as follows:

•             Five members if number of members doesn’t exceeds one thousand

•             Fifteen members if number of members is more than one thousand but up to five thousand

•             Thirty members if number of members exceeds five thousand

The section 105(1) of 2013 Act has introduced the limit on the number of members which a proxy can stand for. The 2013 Act has introduced a double limit in terms of number of members, which is set as 50 members and also prescribes a limit in terms of number of shares holding in the total not more than 10 % of the total share capital of the company carrying voting rights. Further as per the section 106(1) of 2013 Act, it is significant to make a note of that the private companies cannot force restrictions on voting rights of members barring unpaid calls or sums or lien.

According to section 121 of 2013 Act, it will be essential for listed companies to file with the ROC a report in the form prescribed in the rules on every annual general meeting including a substantiation that the meeting was convened, held and conducted as per the provisions of the 2013 Act and the applicable rules.

Other matters

As per section 93 of 2013 Act, it is mandatory for the Listed companies to file a return with the ROC with respect to the alteration in the number of shares held by promoters and top ten shareholders within 15 days of such an alteration.

Key Points
S. No.	Particulars	As per Companies Act 1956	As per Companies Act 2013
1	Requirement of certification of annual return by a CS in practice of annual return	Certification required for listed companies only	Certification of annual return is required for all the companies having paid up capital of 5 cr and turnover of 25 cr
2	Place of keeping registers and returns	At the city, town or village only in which the registered office is situated	At any other place in India in which more than one-tenth of members resides
3	First AGM	Should be held within 18 months from the date of incorporation	Should be held within 9 months from the date of the closing of the first financial year of the company
4	Business Hours	No business hours defined	9 am to 6 pm
5	AGM on national holiday	Cannot be held	Can be held
6	AGM at shorter notice	Consent of all the members required	Consent of 95% of the members is required
7	Threshold limit	The threshold limit of disclosure of share holding interest in the company to which the business relates of every promoter, director, manager and key managerial personnel is 20%	Reduced to 2%
8	Quorum on the basis of number of members	No such provision	If members are less than 1000 - 5 members
			1001-5000 - 15 members
			More than 5000 - 30 members
9	Limit on the number of members which a proxy can represent	No such limit	In terms of number of members - 50 members
			In terms of number of shares holding in total - not more than 10 % of the total share capital of the company carrying voting rights
10	Report to ROC in respect to the alteration in the number of shares	No requirement of filing a return with the  ROC	it is mandatory for the Listed companies to file a return with the ROC with respect to the alteration in the number of shares held by promoters and top ten shareholders within 15 days of such an alteration.