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Highlights of the Companies Amendment Act
The Companies Amendment Act, 2017
The Companies Amendment Act, 2017 (Amendment Act) was notified on 3rd January 2018. The highlights of the Amendment Act are as follows:
1) Minimum number of persons of a company– The Amendment Act provides that if the minimum number of persons falls below 7 for
a public company and below 2 for a private company and the company continues to carry on business for more than 6 months, then every
person who is a member of the company during that time, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued.
2) Holding Company– For the definition of the term ‘holding company’, the expression “company” has been expanded to include any body corporate.
3) Associate Companies– The term ‘significant influence’ under the definition of an associate company has been redefined to control of atleast 20% of the voting power or control or participation in business decision under an agreement, as opposed to the earlier control of at least 20% total share capital held, irrespective of the resulting voting capacity.
4) Small Company paid up capital– The maximum paid-up share capital amount for a small company has been increased from five crore rupees to ten crore rupees and prescribed turnover amount from twenty crore rupees to one hundred crore rupees.