Sections as per Companies Act 1956

Section 77

Sections as per Companies Act 2013 with significant changes

Special resolution by shareholders now required Disclosures in respect of voting rights not exercised directly on ESOP shares shall be made in Directors Report Directors or KMPs cannot be beneficiaries of trust Penal provisions includes imprisonment upto 3 years Fine minimum Rs. 1,00,000/- and maximum Rs. 25,00,000/ Period of Buy Back (BB) changed to 365 days to 1 year 1 year reckoned from the date of closure of preceding offer of BB BB to be completed within 1year from passing of resolution either Board resolution or Special resolution

Restrictions on Section 67 purchase by company, or loans by company for purchase, of its own or its holding companys shares Power of company to purchase its own securities Section 68

Section 77A

Section 188 Section 196 Section 198

Section 201

Section 210

Circulation of members resolutions Inspection of minute books of general meetings Overall maximum managerial remuneration & managerial remuneration in case of inadequacy of profits Avoidance of provisions relieving liability of officers & auditors of the company Annual accounts & Balance sheet

Section 111 CLBs power to direct to inspection now transferred to Tribunal New provisions introduced Disclosure by Listed company in Boards Report regarding ratio of remuneration MD / WTD are not disqualified from receiving remuneration / commission from holding or subsidiary company subject to its disclosure in Boards report Premium paid by Company on insurance for indemnifying KMP against any liability shall not treated as part of remuneration, if KMP proved guilty then it shall be treated as part of remuneration. Consolidation of financial statements made mandatory in cases where company has one or more subsidiaries / associates / JVs. Concept of uniform financial year made mandatory i.e. 1st April to 31st March omitted

Section 119

Section 2(78) Remuneratio n Section 197

Section 129 Financial statement

Section 212

Balance sheet of holding company to include certain particulars as to subsidiaries

Nil

Section 217

boards Report

Section 134 Financial Statement, Boards report etc.

Additional / New disclosures Extracts of annual return Number of board meetings A statement on declaration by independent director that he meets the criteria of independence Company policy on appointment , remuneration of director and criteria for determining qualification, attitudes, independence of director Explanations/comments by board on remarks made by CS in his secretarial audit report Particulars of loans, guarantees or investments Particulars of contracts or arrangements with related parties A statement indicating development and implementation of a risk management policy Corporate Social Responsibility (CSR) initiatives details For listed and public companies need to give statement for formal evaluation by Board of its performance , committees and individual directors

Section Directors 217 (2AA) Responsibility Statement

134

Section 219

Rights of members to copies of Balance sheet and auditors report

Section 136 Right of member to copies of audited financial statement

Section 224

Appointment & Remuneration of Auditors

Section 139 Appointment of Auditor Section 142 Remuneratio n of auditors no change

Additional declarations Directors of Listed company had laid internal financial controls to be followed by company and that such are adequate and operating effectively. Directors had devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively. New provisions introduced Right of members to audited financial statement includes consolidated financial statements Listed company shall place financial statements, consolidated and other documents on website Company having subsidiary or subsidiaries (i) place separate audited accounts on website (ii) provide copy to any shareholders who ask for it. Central Government prescribed manner of circulation of financial statements Provisions of appointment of auditors divided into two classes Auditors of Govt. company (i) time bound annual appointment or reappointment (ii) appointment of auditors done by Comptroller and Auditor General of India (CAG) (iii) if CAG does not appoint Board will appoint in next 30 days and if case of failure by Board it should inform members in 30 days and members will appoint within 60 days in EGM 2

(iv) casual vacancy filled by CAG within 30 days Other than Govt. company (i) appointment for 5 years tenure and subject to ratification at every AGM (ii) at any AGM auditor not appointed, existing auditor will continue For the both the class companies having audit committee should consider recommendation of committee to fill casual vacancy. Compulsory rotation of auditors by listed companies At least one director shall be stayed in India for 182 days or more in previous calendar year Women director for class or classes of companies Listed companies shall have 1/3rd of total directors as independent. Maximum number of directors is 15. For appointing more than 15 need special resolution. Independent director and non executive director not being promoter or KMP shall be held liable only in respect of acts, omission or commission by company occurred with his knowledge attributable through board process and with his consent or connivance or where he had not acted diligently. Applicable to all companies Refund of deposit even if candidate gets more than 25% votes in favour. Amount of deposit increased from Rs. 500/- to Rs. 1,00,000/-

Section 252 Section 253

Minimum number of Directors Only individuals to be directors

Section 257

Rights of persons other than retiring directors to stand for directorship

Section 2(10) Board of Directors or Board Section 149 Company to have Board of Directors Section 151 Appointment of director elected by small shareholders Section 160

Section 258

Section 274(1)(g) Section 276

Rights of company to increase or reduce the number of directors Disqualification of Director Choice to be made by director of more than 15 companies at commencement of Act board to meet at least once in every 3 calendar months

NIL

omitted

Section 164

Defaulting company may or may not public director will be disqualified. Maximum number of directorships can be 20 including alternate directorships out of which not more than 10 can be of public.

Section 165 Number of directorships

Section 285

Section 173 Meetings of Board

First board meeting within 30 days of its incorporation. Participation in board meeting through video conferencing 3

Section 291 Section 292

General powers of the board Certain powers to be exercised by board only at meeting

Section 179

7 days notice required. Shorter notice may be given for urgent matter but for such meeting presence of one independent director is must. If independent director is absent then decision taken must be ratified by at least one independent director. Notice can be given by electronic means. Separate provisions for OPC / small / dormant company. Not more than 120 days shall lapsed between two consecutive meetings. Notice of the meeting should be given to every director at his address. Penalty increased from Rs.1000/- to Rs.25000/The new powers added to the list to be exercised only at meeting To give guarantee or provide security in respect of loans To approve financial statement and boards report To diversify the business of the company To approve amalgamation, merger and reconstruction To take over a company or acquire a controlling or substantial stake in another company

Sec 292A Section 293

Audit Committee Restrictions on powers of the board

Section 177 Section 180 Applicable to all companies Requires Special resolution earlier its ordinary resolution Covers power to invest amount of compensation received as a result of merger or amalgamation. Even private companies now covered. Companies not to make loans, investments or provide guranatee or security except as provided in the Act. Loans to be given at rate of interest not less than yield on rated Govt. Securities Scope of transactions enhanced. Limit of transactions raised to Rs.5 lakhs in a year. Arms length transactions exempted.

Section 295

Loans to Directors etc

Section 185

Section 297

Section 314 Section 299

boards sanction to be required for certain contracts in which particular directors are interested Director, etc., not to hold office or place of profit Disclosure of interest by directors

Section 188 Related party transactions

Section 184

Extended disclosures - Needs to disclose any concern or interest in any company or bodies corporate, firms or other association of individuals including the shareholding and disclosure of interest in proposed contract or arrangement.

Section 300

Section 301

Interested directors not to participate or vote in boards proceedings Register of contracts, companies and firms in which directors are interested

Section 2(49) Interested director Section 189 Register of contracts or arrangement in which directors are interested Section 196 Appointment of managing director, whole-time director, manager Section 241 Section 242 Powers of Tribunal Register of contracts or arrangements in which directors are interested be produced at every AGM and shall remain open and accessible throughout the meeting.

Section 317

Managing director not to be appointed for more than 5 years at a time

MD, WTD or manager shall not be reappointed earlier than one year before the expiry of the his term. Disqualification for appointment as MD and manager introduced on age i.e. minimum 21 years and maximum 70 years. Power transferred from CLB to Tribunal for granting relief against oppression and mismanagement. New Act grants relief against past acts of oppression which are not continuing. Members can seek relief against conduct of affairs in manner prejudicial to him or any other member or members even though it may not amount to oppression.

Section 397 Section 398

Application to Tribunal for relief in cases of oppression Application to Tribunal for relief in cases of mismanagement