2. Companies Bill 2012
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Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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3. Companies Bill 2012
2008 Bill 2009 Bill 2011 Bill 2012 Bill
• Introduced in • Modified 2008 Bill • Introduced in the Lok • Standing Committee
Lok Sabha on Re-introduced on Sabha on 14.12.11 submits its report in
23.10.08 03.08.09 June 2012
• Was shelved for
• To replace the • Bill referred to taking up the same in • Based on Standing
Companies Standing Winter Session of the Committee report the
Act, 1956 Committee of Parliament Bill reintroduced as
Finance for review the new Companies
• Lapsed due to Bill, 2012
dissolution of • Report tabled in
Parliament Lok Sabha on • Bill pending in
31.08.10 Rajya Sabha
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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4. Companies Bill 2012
Details Companies Act, 1956 Companies Bill, 2012
Parts/ Chapter 13 29
Sections 658 470
Schedules 15 7
No. of Clauses in Section 2 67 95
(Definitions)
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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5. Companies Bill 2012
Some Quick Bites….
Financial Year ~ 1 April to 31 March. Exception with the approval of
Tribunal for companies requiring consolidation outside India
Maximum number of members in a private company from 50 to 200
Concept of One Person Company
Subsidiary company means a company in which holding company
exercises or controls more than 50 percent of the total share capital
Private company which is a subsidiary of public company, shall be
regarded as a public company
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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6. Companies Bill 2012
Small Company
A company, other than a public company:
having paid-up share capital not exceeding Rupees 50 lakhs or such amount, not
exceeding Rupees 5 crores as may be prescribed OR
having turnover not exceeding Rupees 2 crores or such amount, not exceeding Rupees
20 crores, as may ne prescribed, as per its last profit and loss account.
Various relaxations in terms of reporting requirement, board meetings and
procedure for mergers/ amalgamations
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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7. Companies Bill 2012
Corporate Governance - Appointment & Qualification of Directors, Meeting of Board & its
Powers & Remuneration of Managerial Personnel:
Maximum limit of directors in a company raised from 12 to 15, with a power to add 1 more by Special Resolution
At least 1 director resident in India for at least 182 days in previous calender year (presently all can be foreigners not
residing in India)
1 woman director on Board mandatory
Person cannot be director in more than 20 companies as against 15 companies in existing Companies Act, 1956 & out of
20 in not more than 10 public companies
All listed companies required to appoint Independent Directors (IDs)
At least 1/3rd (33%) of the Board should comprise of IDs. Term of ID appointment is 5 consecutive years; eligible for
further 5 years and reappointment eligibility for 3years.
ID is not entitled to any remuneration except sitting fee, reimbursement of expenses for participation in the Board and
profit commission as approved by members
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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8. Companies Bill 2012
Accounts of Companies And Audit & Auditor’s functions:
Books of Accounts, documents, records, register of minutes may be kept in electronic form
Companies having subsidiaries required to prepare consolidated financial statement of the
company & all subsidiaries (also include financial statements of associate companies &
JVs)
Attaching of subsidiaries annual report u/s 212 of Companies Act 1956 dispensed
An individual or a firm as an Auditor appointed at 1st AGM shall hold office till 5th AGM &
thereafter till the conclusion of every 5th meeting
Rotation of Individual Auditors in every 5 years & Audit firms every 10 years. Members may
resolve to rotate auditing partner at specific interval.
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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9. Companies Bill 2012
Accounts of Companies And Audit & Auditor’s functions:
LLP allowed to be appointed as auditor
Auditor shall not provide directly or indirectly to the company, its holding company, its
subsidiary like internal audit, investment advise, management services, etc.
Auditing standards mandatory. Earlier only accounting standards were mandatory
20 is the limit for individual auditor for maximum number of companies. In case of firm, limit
is made applicable to each partner
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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10. Companies Bill 2012
Compromise, Arrangements & Easy Mergers/Amalgamations:
Merger of Indian Company with Foreign Company and vice versa allowed subject to prior
approval of RBI, the Companies Act 1956 does not allow merger of Indian Company into a
Foreign company
Mergers of two small companies or between holding company and it’s wholly owned subsidiary
has now been simplified without requirement of court process. notice has to be issued to ROC
and Official Liquidator (OL) first and objections / suggestions have to be placed before
members in general meeting. Once the scheme approved by members and creditors, notice
have to be given to Central Government , ROC and OL
Bill prohibits creation of treasury stock or trust shares. They have to be cancelled or
extinguished.
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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11. Companies Bill 2012
CSR
CSR has been made mandatory for companies with a Networth of INR 500 Cr. (INR 5
Billion) or more, or a turnover of INR 1000 Cr. (INR 10 Billion) or more, or a Net Profit of
INR 5 Cr. (INR 50 million) or more during each financial year
Such companies must spend 2% of their Average Net Profits the company made during
three (3) immediately preceding financial years
Such committee is required to constitute – CSR committee which include three (3) or
more directors and one (1) independent director which will formulate and recommend
CSR activities to the Board
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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12. Companies Bill 2012
Serious Fraud Investigation Office:
Central Government shall establish an office called the SFIO to investigate frauds
relating to a company
Statutory status has been conferred on SFIO
SFIO is empowered to arrest in respect of certain offences involving frauds
Declaration & Payment of Dividends:
Shareholders/ Claimants are entitled to claim dividends transferred to Investor
Education & Protection Fund
Average dividend rate of last three (3) years to be considered in case company has
incurred loss in quarter preceding declaration of dividends
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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