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HIGHLIGHTS OF THE COMPANIES (AMENDMENT) ACT, 2017
The Companies (Amendment) Act, 2017 which was passed by the Lok Sabha on July 27, 2017 and by the Rajya Sabha on December 19, 2017,
has received the assent of the President of India on January 3, 2018 and subsequently published in the Gazette of India.
The amendment Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and
different dates may be appointed for different provisions of the Act.
The said Amendment Act is placed at the link: http://www.mca.gov.in/Ministry/pdf/CAAct2017_05012018.pdf
The amendments under the Companies (Amendment) Act, 2017, are broadly aimed at:
addressing difficulties in implementation owing to stringent compliance requirements;
facilitating ease of doing business in order to promote growth with employment;
harmonisation with the Accounting Standards, the Securities and Exchange Board of India Act, 1992 and the regulations made
thereunder, and the Reserve Bank of India Act, 1934 and the regulations made thereunder;
rectifying omissions and inconsistencies in the Act.
Highlights of the Companies (Amendment) Act, 2017 are given hereunder:
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Amendments as per
S. Section Existing Provision Companies Revised Provision Explanation
No. (Amendment) Act, 2017
AMENDMENTS TO ADDRESS DIFFICULTIES IN IMPLEMENTATION
A. Name Reservation / Approval
1. In section 4 of the The period for reservation of name
Section Section 4(5)(i)- Revised Section 4(5)(i)-
4(5) principal Act, in sub- is substituted from ‗sixty days from
‗Upon receipt of an section (5), for clause (i), ―Upon receipt of an application the date of the application‘ to
application under sub- the following shall be under sub-section (4), the ‗twenty days from the date of
section (4), the Registrar substituted, namely:- Registrar may, on the basis of approval or such other period as
may, on the basis of information and documents may be prescribed‘.
information and ―(i) Upon receipt of an furnished along with the
documents furnished application under sub- application, reserve the name for There were concerns that the period
along with the section (4), the Registrar a period of twenty days from the of sixty days for reservation of
application, reserve the may, on the basis of date of approval or such other name should be from date of
name for a period of information and period as may be prescribed: approval and not from the date of
sixty days from the date documents furnished along application. This concern is
of the application.‘ with the application, Provided that in case of an addressed.
reserve the name for a application for reservation of
period of twenty days from name or for change of its name A provision for existing companies
the date of approval or by an existing company, the is also provided. In case of an
such other period as may Registrar may reserve the name application for reservation of name
be prescribed: for a period of sixty days from or for change of its name by an
the date of approval.‖ existing company, the Registrar
Provided that in case may reserve the name for a period
of an application for of sixty days from the date of
reservation of name or for approval.
change of its name by an
existing company, the
Registrar may reserve the
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Amendments as per
S. Section Existing Provision Companies Revised Provision Explanation
No. (Amendment) Act, 2017
name for a period of sixty
days from the date of
approval.‖
B. Registered Office of Company
2. In section 12 of the Section 12(1) requires that a
Section Section 12(1)- Revised Section 12(1)-
12(1) principal Act,— company shall, on and from the
& (4) ‗A company shall, on and ―A company shall, within thirty fifteenth day of its incorporation,
from the fifteenth day of In sub-section (1), for the days of its incorporation and at and at all times thereafter, have a
its incorporation and at words "on and from the all times thereafter, have a registered office. This does not
all times thereafter, have fifteenth day of its registered office capable of allow a company to have its
a registered office incorporation", the words " receiving and acknowledging all registered office immediately on
capable of receiving and within thirty days of its communications and notices as incorporation, or earlier than the
acknowledging all incorporation" shall be may be addressed to it.‖ fifteenth day of its incorporation,
communications and substituted; whereas a company could have its
notices as may be office from the day of its
addressed to it.‘ incorporation. The amendment
provides for a company to have its
Section 12(4)- In sub-section (4), for the Revised Section 12(4)- registered office within 30 days of
words "within fifteen its incorporation.
‗Notice of every change days", the words "within ―Notice of every change of the
of the situation of the thirty days" shall be situation of the registered office, The time period for giving notice of
registered office, verified substituted. verified in the manner prescribed, change of situation of registered
in the manner prescribed, after the date of incorporation of office is increased from 15 days to
after the date of the company, shall be given to 30 days.
incorporation of the the Registrar within thirty days
company, shall be given of the change, who shall record There were difficulties in filing the
to the Registrar within the same.‖ prescribed form for change of the
fifteen days of the registered office of a company with
3
Amendments as per
S. Section Existing Provision Companies Revised Provision Explanation
No. (Amendment) Act, 2017
change, who shall record the Registrar. The concern was that
the same.‘ the period of fifteen days is too
short as certain documents like
lease deeds, rent agreements and
other related documents are
required to be submitted besides
various approvals that may have to
be obtained. Accordingly to address
the concerns, the period is
increased to thirty days.
C. Effect of number of members falling below the minimum requirement
3. -- After section 3 of the Section 3(1) of the Act provides for
Section Section 3A-
3A principal Act, the the minimum number of persons
following section shall be ―3A. If at any time the number of required for formation of a
inserted, namely:— members of a company is company.
reduced, in the case of a public
―3A. If at any time the company, below seven, in the A new section 3A has been inserted
number of members of a case of a private company, below which prescribes that if at any time
company is reduced, in the two, and the company carries on the number of members of a
case of a public company, business for more than six company is reduced below the
below seven, in the case of months while the number of minimum prescribed and the
a private company, below members is so reduced, every company carries on business for
two, and the company person who is a member of the more than six months while the
carries on business for company during the time that it number of members is so reduced,
more than six months so carries on business after those then every person who is a member
while the number of six months and is cognisant of the of the company during that time,
members is so reduced, fact that it is carrying on business shall be severally liable for the
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