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Important changes The Companies (Amendment) Act, 2017

The Companies (Amendment) Act, 2017 (“Act, 2017”) received President’s assent on January 03, 2018. Some of the major changes are :

  1. The definition of small companies : Limit upto which maximum paid-up share capital and turnover of a small company can be prescribed has been increased from INR 5 crore and INR 20 crore to INR 10 crore and INR 100 crore.However until such higher limit is notified and made applicable by the government, the existing lower limit of paid up capital of Rs 50 lakh  and turnover of Rs 200 lakhs shall continue to apply

Further, it is now clarified that for the purpose of computing turnover, profit and loss account of immediately preceding financial year shall be considered

2. The definition of Subsidiary and Associates : In order to determine subsidiary and associates, the exercise of control over share capital used to be considered. Now onwards, control over voting rights will be considered. Which means preference share held will not be considered from now on

3. Name Reservations : will now be made by the Registrar only for 20 days from earlier 60 days.

4. The requirement of furnishing an affidavit by first subscribers to the memorandum and articles has been substituted with declaration.

5. Time for having new registered office by new company has been increased from 15 days to 30 days

6. In case of failure to register satisfaction of charge , the company shall file now file Form CHG-4 within 30 days. In case of delay, the company can file Form CHG-4 within 300 days from the date of payment/satisfaction, with payment of additional fees, as against requirement of filing for condonation of delay.

7. Requirement to ratify auditor appointment at every AGM is done away with.

8. Provision has been made for declaration of interim dividend for any financial year or at any time during the period from closure of financial year till holding of the annual general meeting.

9. New director appointed in a defaulting company shall not be held disqualified for 6 months from the date of his appointment.

10. If a director incurs any of the disqualifications referred to under section 164, he shall vacate the office of director in all the companies where he is a director except in company which is in default

11. The requirement of related party to abstain from voting will not apply to a company in which ninety per cent or more members, in number, are relatives of promoters or are related parties.

12. Annual filing forms if filed beyond the period specified in those sections, it may be submitted, filed, registered or recorded, as the case may be, after expiry of the period so provided in those sections, on payment of such additional fee as may be prescribed, which shall not be less than one hundred rupees per day and different amounts may be prescribed for different classes of companies. Higher additional fee will be imposed in case of default on two or more occasions.