The Companies (Amendment) Act, 2015, of India, was granted the assent of the President on May 25, 2015, but was published in the Official Gazette on May 26, 2015. This Amendment aims to swiftly bridge some of the most pressing concerns of stakeholders such as the need to align business exigencies with certain actions deemed punishable with criminal law under the original Act of 1956 but not yet amended in the new Companies Act of 2013.
The amended provisions of the new Act have done away with the requirement of minimum capital to establish a company. Under the original Act, every company required certain amounts of paid-up capital; a private company needed ₹100,000 (1 lakh) and a public company required ₹500,000 (5 lakh) as minimum paid-up capital to apply for incorporation. However, the Amendment of 2015 abolished these limits in order to increase India's ease of doing business rankings. The Amendment of 2015 also permitted substitution of company seals with Director signatures to sign company documents.
History.
Prior to being passed as an Act, the Companies (Amendment) Act was passed in the Lok Sabha as the Companies (Amendment) Bill on December 17, 2014. Later, specific provisions were revised on the recommendations of the Ministry of Corporate Affairs.
Impact.
This Amendment was one of the first steps toward easing restrictions and decriminalising regulations for companies and businesses in general. However, private placement processes for closely related companies, granting specific exemptions for insider trading to private companies, granting of stock options to promoters in the instance of a private limited company, etc., remain in contention and are still being addressed.
References.
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