JUL 14, 2017

Updated related to Companies Act, 2013

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MCA amends the Companies (Meetings of Board and its Powers) Rules, 2014

MCA vide Notification dated July 13, 2017 has amended the Companies (Meetings of Board and its Powers) Rules, 2014, namely:-

S.No. Amendments Impact
1. In rule 3, in sub-rule (3), for clause (e), the following shall be substituted, namely:-

"(e) Any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year:

Provided that such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person.”
Any director who has given intimation about participation in the meeting through electronic mode can also participate in person after intimating the company sufficiently in advance of his intention to participate in person.
2. In rule 3, in sub-rule (11), in clause (a), after the words "decision taken by majority" , the words "and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes in accordance with sub-rule (12)" shall be inserted At the end of discussion on each item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes in accordance with sub-rule (12).
3. In the principal rules, for rule 6, the following rule shall be substituted, namelv:-

"6. Committees of the Board. - The Board of directors of every listed company and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 shall constitute an 'Audit Committee' and a'Nomination and Remuneration Committee of the Board'.
Now the criteria for constitution of “Audit Committee” and “Nomination and Remuneration Committee” has been aligned with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014and accordingly following classes of unlisted public companiesare not required to constitute such committees, namely:-

a) a joint venture;
b) a wholly owned subsidiary; and
c) a dormant company as defined under section 455 of the Act."

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MCA has issued corrigendum on exemption notification related to private companies dated 13th June, 2017

MCA has issued corrigendum with respect to its Notification No. G.S.R. 583(E), dated the 13th June,2017 and consequently, the provisions relating to statement about internal financial controls system in the auditor’s report shall not apply to a private company: -

(i) which has turnover of less than rupees fifty crores,and

(ii) which has aggregate borrowings of less than rupees twenty-five crore from banks or financial institutions or anybody corporate at any point of time during the financial year.

Earlier for claiming the exemption, either of the conditions specified in (i) or (ii) needs to be complied with.

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