Background

The Companies Law Committee (CLC) had submitted its recommendations to the government on changes to be made to the Companies Act, 2013 (2013 Act) on 1 February 2016. Based on the recommendations of the CLC, on 16 March 2016, the government proposed the Companies (Amendment) Bill, 2016 on issues arising on account of implementation of the 2013 Act in order to amend the 2013 Act. However, the Companies (Amendment) Bill, 2016 was not approved by the Parliament in 2016. Therefore, it was presented again in 2017 as Companies (Amendment) Bill, 2017.

On 27 July 2017, Lok Sabha passed the Companies (Amendment) Bill, 2017.

New development

After much deliberation, on 19 December 2017, Rajya Sabha passed the Companies (Amendment) Bill, 2017 and on 3 January 2018, the Companies (Amendment) Act, 2017 (Amendment Act, 2017) received the assent of the President of India.

The Amendment Act, 2017 will come into force on such date as the Central Government (CG) may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of the 2013 Act and any reference in any provision to the commencement of the 2013 Act should be construed as a reference to the coming into force of that provision.

The Amendment Act, 2017 makes significant changes to the 2013 Act which are aimed at ease of doing business, better corporate governance and enforcement of stringent penal provisions for defaulting companies.

In this issue of First Notes, we aim to provide an overview of the significant changes made to the 2013 Act by the Amendment Act, 2017.

To access the text of the Companies (Amendment) Act, 2017, please click here.