Inter Amendments Nov 2021

Chapter CA Inter Amendments Nov 2021
CA Inter LAW 1.1
AMENDMENTS for NOV 2021

Amendment No 1: Sec 2(52) Listed Company
Amendment & reference
for section 2(52), the following clause shall be inserted, namely:
" Provided that such class of companies, which have listed or intend to list such class of securities, as
may be prescribed in consultation with the Securities and Exchange Board, shall not be considered as
listed companies.".
Implication
[The amendment is newly inserted.]
Earlier Now Addition
Listed company means a Provided that such class of companies, which have listed or
company which has any of its intend to list such class of securities, as may be prescribed in
securities listed on any consultation with the Securities and Exchange Board, shall not
recognised stock exchange; be considered as listed companies.
Amendment No 2: Sec.2(52) [Rule 2A of The Companies (Specification of Definitions

Details) Rules, 2014] – Listed Company
in clause (52), the following proviso shall be inserted, namely:
In the Companies (Specification of definitions details) Rules, 2014, after rule 2, the following rule shall
be inserted,
Implication
Provision
“2A. Companies not to be considered as listed companies.- For the purposes of the proviso to clause
(52) of section 2 of the Act, the following classes of companies shall not be considered as listed
companies, namely:-
a) Public companies which have not listed their equity shares on a recognized stock exchange but
have listed their –
(i) non-convertible debt securities issued on private placement basis in terms of SEBI (Issue and
Listing of Debt Securities) Regulations, 2008; or
(ii) non-convertible redeemable preference shares issued on private placement basis in terms of
SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013;
or
(iii) both categories of (i) and (ii) above.
b) Private companies which have listed their non-convertible debt securities on private placement
basis on a recognized stock exchange in terms of SEBI (Issue and Listing of Debt Securities)
Regulations, 2008;
Amendment No 3: Sec 2(85): Small Company

In the Companies (Specification of Definitions Details) Rules, 2014, in the rule 2, in sub-rule (1), after
clause (s), the following clause shall be inserted, namely:-
© CA Darshan D. Khare’s WowClass.com

Implication
1.2
Provision of new clause
a) For the purposes of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up
capital and turnover of the small company shall not exceed rupees two crores and rupees twenty
crores respectively.”.
Amendment No 4: Sec 2(62)

Rule 3 of The Companies (Incorporation) Rules, 2014 – One Person Company
The Central Government has amended the Companies (Incorporation) Rules, 2014, by the Companies
(Incorporation) Second Amendment Rules, 2021.
In rule 3,
a) in sub-rule (1),-
(i) for the words, ―’and resident in India’ the words ―’whether resident in India or otherwise’ shall
be substituted;
(ii) in Explanation I, for the words ―’one hundred and eighty two days’ the words ―’one hundred
and twenty days’ shall be substituted;
b) sub-rule (7) shall be omitted
Implication
[The amendment is regarding substitution]
Earlier Now
Only a natural person who is an Indian Only a natural person who is an Indian citizen
citizen and resident in India- Whether resident in India or Otherwise -
a) shall be eligible to incorporate One c) shall be eligible to incorporate One Person
Person Company (OPC); Company (OPC);
b) shall be a nominee for the sole member d) shall be a nominee for the sole member of One
of One Person Company (OPC). Person Company (OPC).
Explanation I - For the purposes of this rule, Explanation I - For the purposes of this rule, the
the term "resident in India" means a term "resident in India" means a person who has
person who has stayed in India for a period stayed in India for a period of not less than 120 days
of not less than 182 days during the during the immediately preceding financial year.
immediately preceding financial year.
(7) No such company can convert (7) No such company can convert voluntarily into
voluntarily into any kind of company unless any kind of company unless two years is expired
two years is expired from the date of from the date of incorporation of One Person
incorporation of One Person Company, Company, except threshold limit (paid up share
except threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its
capital) is increased beyond fifty lakh average annual turnover during the relevant period
rupees or its average annual turnover exceeds two crore rupees.
during the relevant period exceeds two
crore rupees.
Amendment No 5: Sec 8: Non-Profit Organisation/ Charitable Organisation

In section 8 of the principal Act, in sub-section (11),—
a) the words "with imprisonment for a term which may extend to three years or" shall be omitted;
b) for the words "twenty-five lakh rupees, or with both", the words "twenty-five lakh rupees" shall be
substituted.

Implication
[The amendment is regarding Omission & Substitution]
1.3
Earlier Now
If Company makes any default in complying If Company makes any default in complying any
any provisions of the section then the company provisions of the section then the company will
will be liable to: be liable to:
a) Fine of minimum 10 lakhs up to Rs. 1 crores, a) Fine of minimum 10 lakhs up to Rs. 1 crores,
and and
b) Every director and any other officer who is b) Every director and any other officer who is
found guilty for such default will be found guilty for such default will be
punishable with: punishable with:
i. Imprisonment to the maximum of 3 years, Fine of Rs. 25000 to 25 lakhs
or
ii. Fine of Rs. 25000 to 25 lakhs or with Both.
Amendment No 6: Sec 16: Rectification of Name

In sub-section (1), in clause (b), for the words "period of six months", the words "period of three
months" shall be substituted;
Implication
[The amendment is regarding Substitution]
Earlier Now
Company shall change name within 6 Company shall change name within 3 months of
months of order but change should be order but change should be supported by an
supported by an ordinary resolution of ordinary resolution of general meeting approving
general meeting approving such change in such change in name.
name.
Amendment No 7: Sec 16: Rectification of Name

For sub-section (3), the following sub-section shall be substituted, namely:—
"(3) If a company is in default in complying with any direction given under sub-section (1), the Central
Government shall allot a new name to the company in such manner as may be prescribed and the
Registrar shall enter the new name in the register of companies in place of the old name and issue a
fresh certificate of incorporation with the new name, which the company shall use thereafter:
Provided that nothing in this sub-section shall prevent a company from subsequently changing its
name in accordance with the provisions of section 13.".
Implication
Earlier Now
If a company makes default in If a company is in default in complying with any direction
complying with any direction given given under sub-section (1), the Central Government shall
under sub-section (1), the company allot a new name to the company in such manner as may
shall be punishable with fine of one be prescribed and the Registrar shall enter the new name
thousand rupees for every day during in the register of companies in place of the old name and
which the default continues and every issue a fresh certificate of incorporation with the new
officer who is in default shall be name, which the company shall use thereafter:
punishable with fine which shall not Provided that nothing in this sub-section shall prevent a

be less than five thousand rupees but company from subsequently changing its name in
1.4 which may extend to one lakh rupees. accordance with the provisions of section 13.
Amendment No 8: Sec 26: Contents of Prospectus

The Central Government has amended the following sections of the Companies Act, 2013, through the
Companies (Amendment) Act, 2020, as follows:
In section 26 of the Companies Act, 2013 in sub-section (9),—
b) for the words "three lakh rupees, or with both", the words "three lakh rupees'' shall be substituted.
Implication
Earlier Now
If a prospectus is issued in contravention If a prospectus is issued in contravention of the
of the provisions of section 26, provisions of section 26,
Company shall be punishable with Company shall be punishable with fine fifty thousand
imprisonment for a term which may rupees to three lakh.
extend to three years or with fine which Every person who is knowingly a party to the issue of
shall not be less than fifty thousand such prospectus shall be punishable with fine which
rupees but which may extend to three shall not be less than fifty thousand rupees but which
lakh rupees, or with both. may extend to three lakh rupees.
Amendment No 9: Sec 40: Securities to be dealt in stock exchanges

a) the words "with imprisonment for a term which may extend to one year or" shall be omitted;
b) for the words "three lakh rupees, or with both", the words "three lakh rupees" shall be substituted.
Implication
Earlier Now
Penalty for default will be as under- Penalty for default will be as under-
For Company-Rs.5,00,000 ≤ Fine ≤ For Company-Rs.5,00,000 ≤ Fine ≤ Rs.50,00,000
Rs.50,00,000
For every officer in default –
For every officer in default – Rs.50,000 ≤ Fine ≤ Rs.3,00,000.
With imprisonment for a term which
may extend to one year or
Rs.50,000 ≤ Fine ≤ Rs.3,00,000 or with
both.
Amendment No 10: Sec 48: Variation of Shareholder’s Rights

In section 48 of the Companies Act, 2013 sub-section (5) shall be omitted.
Implication
Provision Omitted
Punishment for Default: According to Section 48 (5), where any default is made in complying with

the provisions of this section, the punishment shall be as under:

a) company: It shall be punishable with fine which shall not be less than twenty-five thousand 1.5
rupees but which may extend to five lakh rupees;
b) every officer of the company who is in default: He shall be punishable with imprisonment for a
term which may extend to six months or with fine which shall not be less than twenty-five
thousand rupees but which may extend to five lakh rupees, or with both.
Amendment No 11: Sec 56: Transfer & Transmission of Securities

In section 56 of the Companies Act, 2013 for sub-section (6), the following sub-section shall be
substituted, namely:-
"(6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company
and every officer of the company who is in default shall be liable to a penalty of fifty thousand
rupees.".
Implication
Earlier Now
where any default is made in complying with Where any default is made in complying with the
the provisions of sub-sections (1) to (5), the provisions of sub-sections (1) to (5), the company
punishment shall be as under: and every officer of the company who is in default
a) company: It shall be punishable with fine shall be liable to a penalty of fifty thousand
varying from 25,000 rupees to 5 lakh rupees.".
rupees
b) every officer of the company who is in
default: He shall be punishable with
minimum fine of 10,000 rupees and
maximum of one lakh rupees.
Amendment No 12: Sec 59: Rectification of Register of Members [ROM]

In section 59 of the Companies Act, 2013 sub-section (5) shall be omitted.
Implication
Provision Omitted
Default in complying with the Order of Tribunal: As per Section 59 (5), if any default is made in
complying with the order of the Tribunal under Section 59, the punishment shall be as under:
a) company: It shall be punishable with fine which shall not be less than one lakh rupees but
which may extend to five lakh rupees, and
b) every officer of the company who is in default: He shall be punishable with imprisonment for a
term which may extend to one year or with fine which shall not be less than one lakh rupees
but which may extend to three lakh rupees, or with both.
Amendment No 13: Sec 62: Further Issue of Share Capital

In section 62 of the Companies Act, 2013 in sub-section (1), in clause (a), in sub-clause (i), after the
words "less than fifteen days", the words "or such lesser number of days as may be prescribed" shall
be inserted.

1.6
Implication
[The words are newly inserted]
Earlier Now
the offer shall be made by notice the offer shall be made by notice specifying the number
specifying the number of shares of shares offered and limiting a time not being less than
offered and limiting a time not being fifteen days "or such lesser number of days as may be
less than fifteen days and not prescribed" but not more than thirty days from the date
exceeding thirty days from the date of of the offer. within which the offer, if not accepted, shall
the offer within which the offer, if not be deemed to have been declined
accepted, shall be deemed to have
been declined.
Amendment No 14: Sec 64: Notice to Registrar for Alteration of Share Capital
a) for the words "one thousand rupees", the words "five hundred rupees" shall be substituted;
b) for the words "or five lakh rupees whichever is less", the words "subject to a maximum of five lakh
rupees in case of a company and one lakh rupees in case of an officer who is in default" shall be
substituted.
Implication
Earlier Now
Where any company fails to comply Where any company fails to comply with the provisions of
with the provisions of sub-section sub-section (1), such company and every officer who is in
(1), such company and every officer default shall be liable to a penalty of Rs.500 for each day
who is in default shall be liable to a during which such default continues, subject to a
penalty of Rs.1000 for each day maximum of five lakh rupees in case of a company and one
during which such default continues, lakh rupees in case of an officer who is in default
or five lakh rupees whichever is less.
Amendment No 15: Sec 66: Reduction of Share Capital

In section 66 of the Companies Act, 2013 sub-section (11) shall be omitted
Implication
Provision Omitted
Failure to Publish the Order of Confirmation of the Reduction of Share Capital: Section 66 (11)
states that if a company fails to comply with the provisions of sub-section (4), it shall be
punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-
five lakh rupees.
Amendment No 16: Sec 68: Buy Back of Shares/ Power of company to purchase its
own shares
b) for the words "three lakh rupees, or with both", the words "three lakh rupees" shall be substituted.

Implication
1.7
Earlier Now
If a company makes any default in If a company makes any default in complying with the
complying with the provisions of this provisions of this section or with SEBI regulations,
section or with SEBI regulations, penalty penalty shall be as under-
shall be as under- For Company-
For Company- Rs.1,00,000 ≤ Fine ≤ Rs.3,00,000
Rs.1,00,000 ≤ Fine ≤ Rs.3,00,000 For Every officer in default-
For Every officer in default- Rs.1,00,000 ≤ Fine ≤ Rs.3,00,000
With Imprisonment for term which
extends to 3 years or
Rs.1,00,000 ≤ Fine ≤ Rs.3,00,000
Amendment No 17: Sec 71: Debenture

In section 71 of the Companies Act, 2013 sub-section (11) shall be omitted
Implication
Provision Omitted
According to Section 71 (11), if any default is made in complying with the order of the Tribunal
under this section, every officer of the company who is in default shall be punishable as under:
with imprisonment for a term which may extend to three years or with fine which shall not be less
than two lakh rupees but which may extend to five lakh rupees, or with both.
Amendment No 18: Sec 86: Punishment for Contravention

In section 86 of the Companies Act, 2013 for sub-section (1), the following sub-section shall be
"(1) If any company is in default in complying with any of the provisions of this Chapter, the company
shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall
be liable to a penalty of fifty thousand rupees.".
Implication
Earlier Now
if a company contravenes any of the If any company is in default in complying with any of
provisions relating to the registration of the provisions of this Chapter, the company shall be
charges or modification or satisfaction of liable to a penalty of five lakh rupees and every
charges, the punishment shall be as under: officer of the company who is in default shall be
a) the company shall be punishable with liable to a penalty of fifty thousand rupees.".
minimum fine of ` one lakh and maximum
fine of ` ten lakhs; and
b) every defaulting officer of the company
shall be punishable with imprisonment
maximum up to six months or with
minimum fine of ` twenty-five thousand
and maximum of ` one lakh, or with both.

1.8 Amendment No 19: Sec 88: Register of Members

In section 88 of the Companies Act, 2013, for sub-section (5), the following sub-section shall be
"(5) If a company does not maintain a register of members or debenture-holders or other security
holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section
(2), the company shall be liable to a penalty of three lakh rupees and every officer of the company who
is in default shall be liable to a penalty of fifty thousand rupees.".
Implication
Earlier New
Section 88(5) of the Act provides that Section 88(5) If a company does not maintain a register
company and every officer of the of members or debenture-holders or other security
company who is in default shall be holders or fails to maintain them in accordance with the
punishable with fine which shall not be provisions of sub-section (1) or sub-section (2), the
less than ` 50,000 but which may extend company shall be liable to a penalty of three lakh
to ` 3,00,000 and where the failure is a rupees and every officer of the company who is in
continuing one, with a further fine default shall be liable to a penalty of fifty thousand
which may extend to ` 1,000 per day. rupees.".
Amendment No 20: Sec 89: Declaration in respect of beneficial interest in any share
In section 89 of the Companies Act, 2013—
for sub-section (5), the following sub-section shall be substituted, namely:—
"(5) If any person fails to make a declaration as required under sub-section (1) or sub-section (2) or
sub-section (3), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure,
with a further penalty of two hundred rupees for each day after the first during which such failure
continues, subject to a maximum of five lakh rupees.";
Implication
Earlier Now
If any person fails to make a declaration as If any person fails to make a declaration as required
required under section 89, without any under sub-section (1) or sub-section (2) or sub-
reasonable cause, he shall be punishable section (3), he shall be liable to a penalty of fifty
with fine which may extend to fifty thousand rupees and in case of continuing failure,
thousand rupees and where the failure is a with a further penalty of two hundred rupees for
continuing one, with a further fine which each day after the first during which such failure
may extend to one thousand rupees for continues, subject to a maximum of five lakh
every day after the first during which the rupees.";
failure continues.
"(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the
time specified therein, the company and every officer of the company who is in default shall be liable
to a penalty of one thousand rupees for each day during which such failure continues, subject to a

maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is
in default.";
1.9
Implication
Earlier Now
If a company, required to file a return u/s If a company, required to file a return under sub-
89(6), fails to do so within 30 days of receipt section (6), fails to do so before the expiry of the
of declaration by it, the company and every time specified therein, the company and every
officer of the company who is in default shall officer of the company who is in default shall be
be punishable with fine which shall not be less liable to a penalty of one thousand rupees for
than five hundred rupees but which may each day during which such failure continues,
extend to one thousand rupees and where the subject to a maximum of five lakh rupees in the
failure is a continuing one, with a further fine case of a company and two lakh rupees in case of
which may extend to one thousand rupees for an officer who is in default.";
every day after the first during which the
failure continues.
In section 89 of the Companies Act, 2013, after sub-section (10), the following sub-section shall be
inserted, namely:-
Implication
New Provision inserted
"(11) The Central Government may, by notification, exempt any class or classes of persons from
complying with any of the requirements of this section, except sub-section (10), if it is considered
necessary to grant such exemption in the public interest and any such exemption may be granted
either unconditionally or subject to such conditions as may be specified in the notification.".
Amendment No 23: Sec 90: Investigation of beneficial ownership of shares in certain

cases
"(10) If any person fails to make a declaration as required under sub-section (1), he shall be liable to a
penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one
thousand rupees for each day after the first during which such failure continues, subject to a maximum
of two lakh rupees.";
Implication
Earlier Now
If any person fails to make a declaration as If any person fails to make a declaration as
required under sub-section (1), he shall be required under sub-section (1), he shall be liable to
liable for : a penalty of fifty thousand rupees and in case of
a) Imprisonment for a term which may continuing failure, with a further penalty of one
extend to one year or thousand rupees for each day after the first during
b) With fine which shall not be less than one which such failure continues, subject to a
lakh rupees but which may extend to ten maximum of two lakh rupees.";

lakh rupees or
1.10 c) With both
d) Where the failure is continuous, with a
further fine which may extend to one
thousand rupees for every day after the
first day during which the failure
continues.
Amendment No 24: Sec 90: Qualification of NCLT members

"(11) If a company, required to maintain register under sub-section (2) and file the information under
sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies
inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case
of continuing failure, with a further penalty of five hundred rupees for each day, after the first during
which such failure continues, subject to a maximum of five lakh rupees and every officer of the
company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of
continuing failure, with a further penalty of two hundred rupees for each day, after the first during
which such failure continues, subject to a maximum of one lakh rupees.".
Implication
Earlier Now
If a company, required to maintain If a company, required to maintain register under sub-
register under sub-section (2) and file section (2) and file the information under sub-section (4)
the information under sub-section (4) or required to take necessary steps under sub-section
or required to take necessary steps (4A), fails to do so or denies inspection as provided
under sub-section (4A) fails to do so or therein then :
denies inspection as provided therein, a) The company shall be liable to a penalty of one lakh
the company and every officer of the rupees and in case of continuing failure, with a further
company who is in default shall be penalty of five hundred rupees for each day, after the
punishable with fine which shall not be first during which such failure continues, subject to a
less than ten lakh rupees but which maximum of five lakh rupees and
may extend to fifty lakh rupees and b) every officer of the company who is in default shall be
where the failure is a continuing one, liable to a penalty of twenty-five thousand rupees and
with a further fine which may extend in case of continuing failure, with a further penalty of
to one thousand rupees for every day two hundred rupees for each day, after the first during
after the first during which the failure which such failure continues, subject to a maximum of
continues. one lakh rupees.".
Amendment No 25: Sec 92: Annual Return

Rule 11 – Annual Return
In the Companies (Management and Administration) Rules, 2014,
in rule 11, for sub-rule (1), the following sub-rule shall be substituted, namely:-
“(1) Every company shall file its annual return in Form No.MGT-7 except One Person Company (OPC)
and Small Company. One Person Company and Small Company shall file annual return from the
financial year 2020-2021 onwards in Form No.MGT-7A”;

Implication
1.11
Earlier Now
Every company shall prepare Every company shall file its annual return in Form No.MGT-7
an annual return in Form No. except One Person Company (OPC) and Small Company. One
MGT 7 as prescribed in Rules Person Company and Small Company shall file annual return from
the financial year 2020-2021 onwards in Form No.MGT-7A”;

in sub-section (5),—
(i) for the words "fifty thousand rupees", the words "ten thousand rupees" shall be substituted;
(ii) for the words "five lakh rupees", the words "two lakh rupees in case of a company and fifty
thousand rupees in case of an officer who is in default" shall be substituted;
Implication
Earlier Now
Where company fails to file even within 270 Where company fails to file even within 270days
days from the expiry of 60days time limit from the expiry of 60days time limit (i.e., fails to
(i.e., fails to file within 330 days of date of file within 330 days of date of holding AGM/date
holding AGM/date on which AGM should on which AGM should have been held),penalty
have been held),penalty shall be as under- shall be as under-
such company and its every officer who is in such company and its every officer who is in
default shall be liable to a penalty of fifty default shall be liable to a penalty of ten thousand
thousand rupees and in case of continuing rupees and in case of continuing failure, with
failure, with further penalty of one hundred further penalty of one hundred rupees for each
rupees for each day during which such failure day during which such failure continues, subject to
continues, subject to a maximum of five lakh a maximum of two lakh rupees in case of a
rupees. company and fifty thousand rupees in case of an
officer who is in default.

in sub-section (6), for the words "punishable with fine which shall not be less than fifty thousand
rupees but which may extend to five lakh rupees", the words "liable to a penalty of two lakh rupees"
shall be substituted.
Implication
Earlier Now
If a company secretary in practice, When a Company Secretary in practice certifies an Annual
certifies the annual return which is Return which is not in conformity with the requirements of
not in conformity with the this section or the applicable rules, he shall be liable to a
requirements of this section or the penalty of two lakh rupees punishable.
applicable rules, he shall be
punishable with fine which shall not
be less than ` 50,000 but which may
extend to ` 5,00,000

1.12 Amendment No 28: Sec 92: Annual Return

In sub-section (1),-
a) clause (c) shall be omitted;
b) in clause (j), the words "indicating their names, addresses, countries of incorporation, registration
and percentage of shareholding held by them" shall be omitted;
c) after the proviso, the following proviso shall be inserted, namely:-
'Provided further that the Central Government may prescribe abridged form of annual return for "One
Person Company, small company and such other class or classes of companies as may be prescribed".'.
Implication
Earlier Now
(1) Every company shall prepare a return (1) Every company shall prepare a return (hereinafter
(hereinafter referred to as the annual referred to as the annual return) in the prescribed
return) in the prescribed form containing form containing the particulars as they stood on the
the particulars as they stood on the close of close of the financial year regarding—
the financial year regarding— (a) its registered office, principal business activities,
(a) its registered office, principal business particulars of its holding, subsidiary and associate
activities, particulars of its holding, companies;
subsidiary and associate companies; (b) its shares, debentures and other securities and
(b) its shares, debentures and other shareholding pattern;
securities and shareholding pattern; (c) Its indebtedness
(c) Its indebtedness (d) its members and debenture-holders along with
(d) its members and debenture-holders changes therein since the close of the previous
along with changes therein since the close of financial year;
the previous financial year; (e) its promoters, directors, key managerial personnel
(e) its promoters, directors, key managerial along with changes therein since the close of the
personnel along with changes therein since previous financial year;
the close of the previous financial year; (f) meetings of members or a class thereof, Board and
(f) meetings of members or a class thereof, its various committees along with attendance details;
Board and its various committees along with (g) remuneration of directors and key managerial
attendance details; personnel;
(g) remuneration of directors and key (h) penalty or punishment imposed on the company,
managerial personnel; its directors or officers and details of compounding of
(h) penalty or punishment imposed on the offences and appeals made against such penalty or
company, its directors or officers and details punishment;
of compounding of offences and appeals (i) matters relating to certification of compliances,
made against such penalty or punishment; disclosures as may be prescribed;
(i) matters relating to certification of (j) details, as may be prescribed, in respect of shares
compliances, disclosures as may be held by or on behalf of the Foreign Institutional
prescribed; Investors "indicating their names, addresses,
(j) details, as may be prescribed, in respect countries of incorporation, registration and
of shares held by or on behalf of the Foreign percentage of shareholding held by them" and
Institutional Investors "indicating their (k) such other matters as may be prescribed,
names, addresses, countries of and signed by a director and the company secretary,
incorporation, registration and percentage or where there is no company secretary, by a
of shareholding held by them" and company secretary in practice:
(k) such other matters as may be prescribed, Provided that in relation to One Person Company and
and signed by a director and the company small company, the annual return shall be signed by
secretary, or where there is no company the company secretary, or where there is no

secretary, by a company secretary in company secretary, by the director of the company.

practice: Provided further that the Central Government may 1.13
Provided that in relation to One Person prescribe abridged form of annual return for "One
Company and small company, the annual Person Company, small company and such other
return shall be signed by the company class or classes of companies as may be prescribed.
secretary, or where there is no company
secretary, by the director of the company.
Amendment No 29: Sec 105: Proxies

a) for the words "who knowingly issues the invitations as aforesaid or wilfully authorises or permits
their issue shall be punishable with fine which may extend to one lakh rupees", the words "who
issues the invitation as aforesaid or authorises or permits their issue, shall be liable to a penalty of
fifty thousand rupees" shall be substituted;
b) in the proviso, for the word "punishable", the word "liable" shall be substituted.
Implication
Earlier Now
When, for the purpose of meeting, When, for the purpose of meeting, invitations to
invitations to appoint as proxy are sent at appoint as proxy are sent at the company`s expense
the company`s expense to any member to any member entitled to have a notice of the
entitled to have a notice of the meeting, meeting,
Every officer of the company who Then every officer of the company who knowingly
knowingly issues the invitations as issues the invitations or permits such issue shall be
aforesaid or willfully authorises or permits punishable with fine up to Rs.50,000
their issue shall be punishable with fine Provided that an officer shall not be liable under this
which may extend to one lakh rupees. sub-section by reason only of the issue to a member
Provided that an officer shall not be at his request in writing of a form of appointment
punishable under this sub-section by naming the proxy, or of a list of persons willing to act
reason only of the issue to a member at as proxies, if the form or list is available on request in
his request in writing of a form of writing to every member entitled to vote at the
appointment naming the proxy, or of a list meeting by proxy.
of persons willing to act as proxies, if the
form or list is available on request in
writing to every member entitled to vote
at the meeting by proxy.
Amendment No 30: Sec 117: Report on Annual General Meeting

for sub-section (2), the following sub-section shall be substituted, namely:-
"(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry
of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in
case of continuing failure, with a further penalty of one hundred rupees for each day after the first
during which such failure continues, subject to a maximum of two lakh rupees and every officer of the
company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten
thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for

each day after the first during which such failure continues, subject to a maximum of fifty thousand
1.14
rupees.";
Implication
Earlier Now
If filed after 30 days but within 300 days, If filed after 30 days but within 300 days,
additional filing fee as prescribed shall be additional filing fee as prescribed shall be payable
payable as per sec 403. as per sec 403.
Penalty for filing beyond 300 days -For the Penalty for filing beyond 300 days -For the
Company- Company-
penalty of One lakh rupees and in case of penalty of ten thousand rupees and in case of
continuing failure, with further penalty of continuing failure, with further penalty of one
five hundred rupees for each day after the hundred rupees for each day after the first during
first during which such failure continues, which such failure continues, subject to a
subject to a maximum of twenty five lakhs maximum of two lakh rupees.
rupees. For every officer in default(including liquidator if
For every officer in default(including any)- penalty of ten thousand rupees and in case
liquidator if any)- penalty of fifty thousand of continuing failure, with further penalty of one
rupees and in case of continuing failure, with hundred rupees for each day after the first during
further penalty of five hundred rupees for which such failure continues, subject to a
each day after the first during which such maximum of fifty thousand rupees
failure continues, subject to a maximum of
five lakh rupees
Amendment No 31: Sec 117: Report on Annual General Meeting

In sub-section (3), in clause (g), for the second proviso, the following proviso shall be substituted,
namely:-
"Provided further that nothing contained in this clause shall apply in respect of a resolution passed to
grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3)
of section 179 in the ordinary course of its business by,-
(a) a banking company;
(b) any class of non-banking financial company registered under Chapter IIIB of the Reserve Bank of
India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;
(c) any class of housing finance company registered under the National Housing Bank Act, 1987, as may
be prescribed in consultation with the National Housing Bank; and".
Implication
Earlier Now
Provided further that nothing "Provided further that nothing contained in this clause shall
contained in this clause shall apply apply in respect of a resolution passed to grant loans, or
to a banking company in respect of give guarantee or provide security in respect of loans under
a resolution passed to grant loans, clause (f) of sub-section (3) of section 179 in the ordinary
or give guarantee or provide course of its business by,-
security in respect of loans under (a) a banking company;
clause (f) of sub-section (3) of (b) any class of non-banking financial company registered
section 179 in the ordinary course of under Chapter IIIB of the Reserve Bank of India Act, 1934, as
its business; and may be prescribed in consultation with the Reserve Bank of
India;

(c) any class of housing finance company registered under

the National Housing Bank Act, 1987, as may be prescribed 1.15
in consultation with the National Housing Bank; and".
Amendment No 32: Sec 124: Unpaid Dividend Account

"(7) If a company fails to comply with any of the requirements of this section, such company shall be
liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five
hundred rupees for each day after the first during which such failure continues, subject to a maximum
of ten lakh rupees and every officer of the company who is in default shall be liable to a penalty of
twenty-five thousand rupees and in case of continuing failure, with a further penalty of one hundred
rupees for each day after the first during which such failure continues, subject to a maximum of two
lakh rupees.".
Implication
Earlier Now
If a company fails to comply with If a company fails to comply with any of the requirements of
any of the requirements relating this section, such company shall be liable to a penalty of one
to unpaid dividend account, it lakh rupees and in case of continuing failure, with a further
shall be punishable with penalty of five hundred rupees for each day after the first
minimum fine of rupees five during which such failure continues, subject to a maximum of
lakhs which may extend to ten lakh rupees and every officer of the company who is in
rupees twenty-five lakhs. default shall be liable to a penalty of twenty-five thousand
Further, every officer of the rupees and in case of continuing failure, with a further penalty
company who is in default shall of one hundred rupees for each day after the first during which
be punishable with minimum fine such failure continues, subject to a maximum of two lakh
of rupees one lakh which may rupees.".
extend to rupees five lakhs.
Amendment No 33: Sec 128: Maintenance of Books by Company

Rule 3 – Manner of Books of Account to be Kept in Electronic Mode
In the Companies (Accounts) Rules, 2014,-
In rule 3, in sub-rule (1), the following proviso shall be inserted, namely:-
Implication
[The Proviso is newly inserted.]
New Proviso in Sub-rule
“Provided that for the financial year commencing on or after the 1st day of April, 2021, every
company which uses accounting software for maintaining its books of account, shall use only such
accounting software which has a feature of recording audit trail of each and every transaction,
creating an edit log of each change made in books of account along with the date when such
changes were made and ensuring that the audit trail cannot be disabled.”


1.16 Amendment & reference
In the Companies (Accounts) Rules, 2014, in proviso to sub-rule (1) of rule 3, for the figures, letters and
words “1st day of April, 2021”, the figures, letters and words “1st day of April, 2022” shall be
substituted.
Implication
Earlier Now
“Provided that for the financial year “Provided that for the financial year commencing on or
commencing on or after the 1st day of after the 1st day of April, 2022, every company which
April, 2021, every company which uses uses accounting software for maintaining its books of
accounting software for maintaining its account, shall use only such accounting software which
books of account, shall use only such has a feature of recording audit trail of each and every
accounting software which has a feature transaction, creating an edit log of each change made in
of recording audit trail of each and every books of account along with the date when such
transaction, creating an edit log of each changes were made and ensuring that the audit trail
change made in books of account along cannot be disabled.”
with the date when such changes were
made and ensuring that the audit trail
cannot be disabled.”

In section 128 of the Companies Act, 2013, in sub-section (6),-
a) the words "with imprisonment for a term which may extend to one year or" shall be omitted;
b) the words "or with both" shall be omitted.
Implication
[The amendment is regarding Omission]
Earlier Now
Normally the duty of maintenance of books of Normally the duty of maintenance of books of
accounts is of the MD / WTD / BOD. But if they accounts is of the MD / WTD / BOD. But if they
feel so they can transfer the duty to CFO / any feel so they can transfer the duty to CFO / any
other qualified person. other qualified person.
In case of contravention the officer in default In case of contravention the officer in default
will be as follows: will be as follows:
a. MD,WTDin charge of finance/ BOD (if a. MD,WTDin charge of finance/ BOD (if
qualified person or CFO is not qualified person or CFO is not
appointed). appointed).
b. CFO / Qualified person appointed. (in b. CFO / Qualified person appointed. (in
case if the CFO / Qualified Person is case if the CFO / Qualified Person is
appointed for maintenance of books.) appointed for maintenance of books.)
The officer in default in above case will be liable The officer in default in above case will be liable
to the following penalty of to the following penalty of
with imprisonment for a term which may with imprisonment for a term which may
extend to one year or extend to one year or
Fine of Rs. 50,000 – Rs. 5,00,000 Fine of Rs. 50,000 – Rs. 5,00,000
[or with both]

Amendment No 36: Sec 129A: Periodical financial results

Amendment & reference 1.17
After section 129 of the Companies Act, 2013 the following section shall be inserted, namely :
Implication
[The Section is newly inserted.]
Provision
The Central Government may, require such class or classes of unlisted companies, as may be
prescribed,—
a) to prepare the financial results of the company on such periodical basis and in such form as may
be prescribed;
b) to obtain approval of the Board of Directors and complete audit or limited review of such
periodical financial results in such manner as may be prescribed; and
c) file a copy with the Registrar within a period of thirty days of completion of the relevant period
with such fees as may be prescribed.
Amendment No 37: Sec 134: Financial Statement, Board’s report, etc.

"(8) If a company is in default in complying with the provisions of this section, the company shall be
liable to a penalty of three lakh rupees and every officer of the company who is in default shall be
liable to a penalty of fifty thousand rupees.".
Implication
Earlier Now
If a company contravenes the provisions of If a company is in default in complying with the
this section, the company shall be provisions of this section, the company shall be
punishable with fine which shall not be less liable to a penalty of three lakh rupees and every
than fifty thousand rupees but which may officer of the company who is in default shall be
extend to twenty-five lakh rupees and liable to a penalty of fifty thousand rupees.
every officer of the company who is in
default shall be punishable with
imprisonment for a term which may extend
to three years or with fine which shall not
be less than fifty thousand rupees but
which may extend to five lakh rupees, or
with both
Amendment No 38: Sec 134: Financial Statement, Board’s report, etc. –

Rule 8 - Matters to be Included in Board’s Report
in rule 8, in sub-rule (5), after clause (x), the following clauses shall be inserted namely:-
Implication
[The Clause is newly inserted.]
New Provision
(xi) the details of application made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the

financial year.
1.18 (xii)the details of difference between amount of the valuation done at the time of one time
settlement and the valuation done while taking loan from the Banks or Financial Institutions
along with the reasons thereof.”
Amendment No 39: Sec 135: Corporate Social Responsibility

in sub-section (5), —
(i) after the words “three immediately preceding financial years,”, the words “or where the company
has not completed the period of three financial years since its incorporation, during such immediately
preceding financial years,” shall be inserted;
(ii) in the second proviso, after the words “reasons for not spending the amount” occurring at the end,
the words, brackets, figure and letters “and, unless the unspent amount relates to any ongoing project
referred to in sub-section (6), transfer such unspent amount to a Fund specified in Schedule VII, within
a period of six months of the expiry of the financial year” shall be inserted;
Implication
[The amendment is regarding Insertion]
Earlier Now
The company satisfying any The company satisfying any condition of sec 135(1) for any
condition of sec 135(1) for any FY FY shall make CSR expenditure of 2% of average net profit of
shall make CSR expenditure of 2% last 3 financial years. Or where the company has not
of average net profit of last 3 completed the period of three financial years since its
financial years in pursuance of its incorporation, during such immediately preceding financial
Corporate Social Responsibility years in pursuance of its Corporate Social Responsibility
Policy. Policy.
The CSR expenses shall be made at Provided that, If the company fails to make the CSR the BOD
the local areas around the shall disclose the same in BOD’s Report with the reasons of
company. the failure and unless the unspent amount relates to any
Provided that, If the company fails ongoing project referred to in sub-section (6), transfer such
to make the CSR the BOD shall unspent amount to fund specified in Schedule VII, within a
disclose the same in BOD’s Report period of 6 months of the expiry of the financial year.
with the reasons of the failure

After sub-section (5), the following sub-sections shall be inserted, namely:—
Implication
[The sub-section is newly inserted.]
New Provision
(6) Any amount remaining unspent under sub-section (5), pursuant to any ongoing project,
fulfilling such conditions as may be prescribed, undertaken by a company in persuance of its
Corporate Social Responsibility Policy, shall be transferred by the company within a period of
thirty days from the end of the financial year to a special account to be opened by the
company in that behalf for that financial year in any scheduled bank to be called the Unspent
Corporate Social Responsibility Account, and such amount shall be spent by the company in
pursuance of its obligation towards the Corporate Social Responsibility Policy within a period
of three financial years from the date of such transfer, failing which, the company shall transfer
the same to a Fund specified in Schedule VII, within a period of thirty days from the date of

completion of the third financial year.

(7) If a company contravenes the provisions of sub-section (5) or sub-section (6), the company shall 1.19
be punishable with fine which shall not be less than fifty thousand rupees but which may
extend to twenty-five lakh rupees and every officer of such company who is in default shall be
punishable with imprisonment for a term which may extend to three years or with fine which
shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with
both.
(8) The Central Government may give such general or special directions to a company or class of
companies as it considers necessary to ensure compliance of provisions of this section and such
company or class of companies shall comply with such directions.”

In sub-section (5), after the second proviso, the following proviso shall be inserted, namely:—
Implication
New Provision
"Provided also that if the company spends an amount in excess of the requirements provided
under this sub-section, such company may set off such excess amount against the requirement to
spend under this sub-section for such number of succeeding financial years and in such manner, as
may be prescribed.";

"(7) If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the
company shall be liable to a penalty of twice the amount required to be transferred by the company to
the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case
may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall
be liable to a penalty of one-tenth of the amount required to be transferred by the company to such
Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may
be, or two lakh rupees, whichever is less.";
Implication
Earlier Now
If a company contravenes the provisions If a company is in default in complying with the
of sub-section (5) or sub-section (6), the provisions of sub-section (5) or sub-section (6), the
company shall be punishable with fine company shall be liable to a penalty of twice the
which shall not be less than fifty amount required to be transferred by the company to
thousand rupees but which may extend the Fund specified in Schedule VII or the Unspent
to twenty-five lakh rupees and every Corporate Social Responsibility Account, as the case
officer of such company who is in default may be, or one crore rupees, whichever is less, and
shall be punishable with imprisonment every officer of the company who is in default shall be
for a term which may extend to three liable to a penalty of one-tenth of the amount required
years or with fine which shall not be less to be transferred by the company to such Fund
than fifty thousand rupees but which may specified in Schedule VII, or the Unspent Corporate
extend to five lakh rupees, or with both. Social Responsibility Account, as the case may be, or
two lakh rupees, whichever is less.


After sub-section (8), the following sub-section shall be inserted, namely:—
Implication
New Provision
"(9) Where the amount to be spent by a company under sub-section (5) does not exceed fifty lakh
rupees, the requirement under sub-section (1) for constitution of the Corporate Social
Responsibility Committee shall not be applicable and the functions of such Committee
provided under this section shall, in such cases, be discharged by the Board of Directors of such
company.".

The Companies (Corporate Social Responsibility Policy) Rules, 2014
The Ministry of Corporate Affairs Vide NOTIFICATION G.S.R. 40(E), dated 22nd January, 2021, in
exercise of the powers conferred by section 135 and sub-sections (1) and (2) of section 469 of the
Companies Act, 2013, the Central Government hereby makes the following rules further to amend the
Companies (Corporate Social Responsibility Policy) Rules, 2014, namely:-
1. Short title and commencement. - (1) These rules may be called the Companies (Corporate Social
Responsibility Policy) Amendment Rules, 2021. They shall come into force on the date of their
publication in the Official Gazette unless explicitly provided elsewhere in this notification.
2. In the Companies (Corporate Social Responsibility Policy) Rules, 2014 (hereinafter referred to as the
said rules), for rule 2, the following rule shall be substituted, namely:-
“2. Definitions. - (1) In these rules, unless the context otherwise requires,-
(a) "Act" means the Companies Act, 2013 (18 of 2013);
(b) “Administrative overheads” means the expenses incurred by the company for ‘general
management and administration’ of Corporate Social Responsibility functions in the company
but shall not include the expenses directly incurred for the designing, implementation,
monitoring, and evaluation of a particular Corporate Social Responsibility project or
programme;
(c) "Annexure" means the Annexure appended to these rules;
(d) “Corporate Social Responsibility (CSR)” means the activities undertaken by a Company in
pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the
provisions contained in these rules, but shall not include the following, namely:-
(i) activities undertaken in pursuance of normal course of business of the company:
Provided that any company engaged in research and development activity of new vaccine,
drugs and medical devices in their normal course of business may undertake research and
development activity of new vaccine, drugs and medical devices related to COVID-19 for
financial years 2020-21, 2021-22, 2022-23 subject to the conditions that
a. such research and development activities shall be carried out in collaboration with any
of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act;
b. details of such activity shall be disclosed separately in the Annual report on CSR
included in the Board’s Report;
(ii) any activity undertaken by the company outside India except for training of Indian sports
personnel representing any State or Union territory at national level or India at
international level;

(iii) contribution of any amount directly or indirectly to any political party under section 182 of
the Act;
1.21
(iv) activities benefitting employees of the company as defined in clause (k) of section 2 of the
Code on Wages, 2019 (29 of 2019);
(v) activities supported by the companies on sponsorship basis for deriving marketing benefits
for its products or services;
(vi) activities carried out for fulfilment of any other statutory obligations under any law in force
in India;
(e) "CSR Committee" means the Corporate Social Responsibility Committee of the Board referred
to in section 135 of the Act;
(f) "CSR Policy" means a statement containing the approach and direction given by the board of a
company, taking into account the recommendations of its CSR Committee, and includes guiding
principles for selection, implementation and monitoring of activities as well as formulation of
the annual action plan;
(g) “International Organisation” means an organisation notified by the Central Government as an
international organisation under section 3 of the United Nations (Privileges and Immunities)
Act, 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply;
(h) "Net profit" means the net profit of a company as per its financial statement prepared in
accordance with the applicable provisions of the Act, but shall not include the following,
namely:-
(i) any profit arising from any overseas branch or branches of the company, whether operated
as a separate company or otherwise; and
(ii) any dividend received from other companies in India, which are covered under and
complying with the provisions of section 135 of the Act:
Provided that in case of a foreign company covered under these rules, net profit means the net
profit of such company as per profit and loss account prepared in terms of clause (a) of sub-
section (1) of section 381, read with section 198 of the Act;
(i) “Ongoing Project” means a multi-year project undertaken by a Company in fulfilment of its CSR
obligation having timelines not exceeding three years excluding the financial year in which it
was commenced, and shall include such project that was initially not approved as a multi-year
project but whose duration has been extended beyond one year by the board based on
reasonable justification;
(j) “Public Authority” means ‘Public Authority’ as defined in clause (h) of section 2 of the Right to
Information Act, 2005 (22 of 2005);
(k) “section” means a section of the Act.
(2) Words and expressions used and not defined in these rules but defined in the Act shall have
the same meanings respectively assigned to them in the Act. ”.
3. In the said rules, in rule 3, in sub-rule (2), in clause (b), for the words, brackets and figure “sub-
section (2) to (5)”, the words, brackets and figure “sub-section (2) to (6)” shall be substituted.
4. In the said rules, for rule 4, the following rule shall be substituted, namely:-
“4. CSR Implementation. –
(1) The Board shall ensure that the CSR activities are undertaken by the company itself or through -
(a) a company established under section 8 of the Act, or a registered public trust or a registered
society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961),
established by the company, either singly or along with any other company, or
(b) a company established under section 8 of the Act or a registered trust or a registered
society, established by the Central Government or State Government; or
(c) any entity established under an Act of Parliament or a State legislature; or

(d) a company established under section 8 of the Act, or a registered public trust or a registered
1.22
society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an
established track record of at least three years in undertaking similar activities.
(2)
(a) Every entity, covered under sub-rule (1), who intends to undertake any CSR activity, shall
register itself with the Central Government by filing the form CSR-1 electronically with the
Registrar, with effect from the 01st day of April 2021:
Provided that the provisions of this sub-rule shall not affect the CSR projects or programmes
approved prior to the 01st day of April 2021.
(b) Form CSR-1 shall be signed and submitted electronically by the entity and shall be verified
digitally by a Chartered Accountant in practice or a Company Secretary in practice or a Cost
Accountant in practice.
(c) On the submission of the Form CSR-1 on the portal, a unique CSR Registration Number shall
be generated by the system automatically.
(3) A company may engage international organisations for designing, monitoring and evaluation of
the CSR projects or programmes as per its CSR policy as well as for capacity building of their
own personnel for CSR.
(4) A company may also collaborate with other companies for undertaking projects or
programmes or CSR activities in such a manner that the CSR committees of respective
companies are in a position to report separately on such projects or programmes in
accordance with these rules.
(5) The Board of a company shall satisfy itself that the funds so disbursed have been utilised for
the purposes and in the manner as approved by it and the Chief Financial Officer or the person
responsible for financial management shall certify to the effect.
(6) In case of ongoing project, the Board of a Company shall monitor the implementation of the
project with reference to the approved timelines and year-wise allocation and shall be
competent to make modifications, if any, for smooth implementation of the project within the
overall permissible time period.”.
5. In the said rules, in rule 5, for sub-rule (2), the following sub-rule shall be substituted, namely:-
“(2)The CSR Committee shall formulate and recommend to the Board, an annual action plan in
pursuance of its CSR policy, which shall include the following, namely:-
(a) the list of CSR projects or programmes that are approved to be undertaken in areas or
subjects specified in Schedule VII of the Act;
(b) the manner of execution of such projects or programmes as specified in sub-rule (1) of rule
4;
(c) the modalities of utilisation of funds and implementation schedules for the projects or
programmes;
(d) monitoring and reporting mechanism for the projects or programmes; and
(e) details of need and impact assessment, if any, for the projects undertaken by the company:
Provided that Board may alter such plan at any time during the financial year, as per the
recommendation of its CSR Committee, based on the reasonable justification to that effect. ”.
6. In the said rules, rule 6 shall be omitted.
“7.CSR Expenditure. –
(1) The board shall ensure that the administrative overheads shall not exceed five percent of total
CSR expenditure of the company for the financial year.
(2) Any surplus arising out of the CSR activities shall not form part of the business profit of a
company and shall be ploughed back into the same project or shall be transferred to the

Unspent CSR Account and spent in pursuance of CSR policy and annual action plan of the
company or transfer such surplus amount to a Fund specified in Schedule VII, within a period of
1.23
six months of the expiry of the financial year.
(3) Where a company spends an amount in excess of requirement provided under sub-section (5)
of section 135, such excess amount may be set off against the requirement to spend under sub-
section (5) of section 135 up to immediate succeeding three financial years subject to the
conditions that –
(i) the excess amount available for set off shall not include the surplus arising out of the CSR
activities, if any, in pursuance of sub-rule (2) of this rule.
(ii)the Board of the company shall pass a resolution to that effect.
(4) The CSR amount may be spent by a company for creation or acquisition of a capital asset, which
shall be held by -
(a) a company established under section 8 of the Act, or a Registered Public Trust or Registered
Society, having charitable objects and CSR Registration Number under sub-rule (2) of rule 4;
or
(b) beneficiaries of the said CSR project, in the form of self-help groups, collectives, entities; or
(c) a public authority:
Provided that any capital asset created by a company prior to the commencement of the Companies
(Corporate Social Responsibility Policy) Amendment Rules, 2021, shall within a period of one
hundred and eighty days from such commencement comply with the requirement of this rule, which
may be extended by a further period of not more than ninety days with the approval of the Board
based on reasonable justification.”.
“8. CSR Reporting .-
(1) The Board's Report of a company covered under these rules pertaining to any financial year shall
include an annual report on CSR containing particulars specified in Annexure I or Annexure II, as
applicable.
(2) In case of a foreign company, the balance sheet filed under clause (b) of sub-section (1) of
section 381 of the Act, shall contain an annual report on CSR containing particulars specified in
Annexure I or Annexure II, as applicable.
(3)
(a) Every company having average CSR obligation of ten crore rupees or more in pursuance of
subsection (5) of section 135 of the Act, in the three immediately preceding financial years,
shall undertake impact assessment, through an independent agency, of their CSR projects
having outlays of one crore rupees or more, and which have been completed not less than
one year before undertaking the impact study.
(b) The impact assessment reports shall be placed before the Board and shall be annexed to the
annual report on CSR.
(c) A Company undertaking impact assessment may book the expenditure towards Corporate
Social Responsibility for that financial year, which shall not exceed five percent of the total
CSR expenditure for that financial year or fifty lakh rupees, whichever is less. ”.
9. In the said rules, for rule 9, the following rules shall be substituted, namely:-
“9. Display of CSR activities on its website. - The Board of Directors of the Company shall
mandatorily disclose the composition of the CSR Committee, and CSR Policy and Projects approved
by the Board on their website, if any, for public access.
10. Transfer of unspent CSR amount. - Until a fund is specified in Schedule VII for the purposes of
subsection (5) and (6) of section 135 of the Act, the unspent CSR amount, if any, shall be transferred
by the company to any fund included in schedule VII of the Act.”.
10. In the said rules,-

(i) The Annexure shall be numbered as “Annexure –I” and in the heading of Annexure I as so
1.24
numbered, after the words “BOARD’S REPORT”, the words and figures “FOR FINANCIAL YEAR
COMMENCED PRIOR TO 1ST DAY OF APRIL, 2020” shall be inserted;
Amendment No 45: Sec 140: Removal, resignation of auditor & giving of special notice
In section 140 of the Companies Act, 2013, in sub-section (3), for the words "five lakh rupees", the
words "two lakh rupees" shall be substituted.
Implication
Earlier Now
If the auditor fails to file form ADT-3 If the auditor fails to file form ADT-3 statement of
statement of resignation as stated above resignation as stated above the auditor will be liable for
the auditor will be liable for the penalty of the penalty of Rs. 50,000 or an amount equal to the
Rs. 50,000 or an amount equal to the remuneration of the auditor, whichever is less. And in
remuneration of the auditor, whichever is case of continuing failure, with further penalty of five
less. And in case of continuing failure, with hundred rupees for each day after the first during
further penalty of five hundred rupees for which such failure continues, subject to a maximum of
each day after the first during which such two lakh rupees.
failure continues, subject to a maximum of
Five lakh rupees.
Amendment No 46: Sec 143: Powers and Duties of auditors and auditing standards
Rule-11 : Other Matters to be Included in Auditors Report
In the Companies (Audit and Auditors) Rules, 2014, in rule 11,-
Clause (d) shall be omitted.
Implication
Earlier Now
whether the company had provided Whether the company had provided requisite
requisite disclosures in its financial disclosures in its financial statements as to holdings as
statements as to holdings as well as well as dealings in Specified Bank Notes during the
dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December,
period from 8th November, 2016 to 30th 2016 and if so, whether these are in accordance with
December, 2016 and if so, whether these the books of accounts maintained by the company.
are in accordance with the books of
accounts maintained by the company.
After clause (d), the following clauses shall be inserted, namely:-
Implication
[The Clause is newly inserted.]
New Clauses

(e)
(i) Whether the management has represented that, to the best of its knowledge and belief, 1.25
other than as disclosed in the notes to the accounts, no funds have been advanced or loaned
or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other persons or entities, including foreign entities
(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
(ii) Whether the management has represented, that, to the best of its knowledge and belief,
other than as disclosed in the notes to the accounts, no funds have been received by the
company from any person(s) or entities, including foreign entities (“Funding Parties”), with
the understanding, whether recorded in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(iii) Based on such audit procedures that the auditor has considered reasonable and appropriate
in the circumstances, nothing has come to their notice that has caused them to believe that
the representations under sub-clause (i) and (ii) contain any material mis-statement.
(f) Whether the dividend declared or paid during the year by the company is in compliance with
section 123 of the Companies Act, 2013.
(g) Whether the company has used such accounting software for maintaining its books of account
which has a feature of recording audit trail (edit log) facility and the same has been operated
throughout the year for all transactions recorded in the software and the audit trail feature has
not been tampered with and the audit trail has been preserved by the company as per the
statutory requirements for record retention.”.
In the Companies (Audit and Auditors) Rules, 2014, in rule 11, in clause (g), for the words “Whether the
company”, the words, figures and letters “Whether the company, in respect of financial years
commencing on or after the 1st April, 2022,” shall be substituted.
Implication
Earlier Now
Whether the company has used such Whether the company, in respect of financial years
accounting software for maintaining its commencing on or after the 1st April, 2022 has used
books of account which has a feature of such accounting software for maintaining its books of
recording audit trail (edit log) facility and account which has a feature of recording audit trail
the same has been operated throughout (edit log) facility and the same has been operated
the year for all transactions recorded in throughout the year for all transactions recorded in the
the software and the audit trail feature software and the audit trail feature has not been
has not been tampered with and the audit tampered with and the audit trail has been preserved
trail has been preserved by the company by the company as per the statutory requirements for
as per the statutory requirements for record retention.”.
record retention.”.

"(15) If any auditor, cost accountant, or company secretary in practice does not comply with the
provisions of sub-section (12), he shall-
a) in case of a listed company, be liable to a penalty of five lakh rupees; and
b) in case of any other company, be liable to a penalty of one lakh rupees.".
Implication
Earlier Now
If any auditor, cost auditor or the If any auditor, cost accountant or company secretary
Secretarial auditor, as mentioned above, in practice do not comply with the provisions of sub-
do not comply with the provisions of this section (12), he shall
section (i.e. section 143(12), he shall be a) in case of a listed company, be liable to a penalty
punishable with fine which shall not be of five lakh rupees; and
less than `1 lac but which may extend to b) in case of any other company, be liable to a penalty
`25 lakhs. of one lakh rupees.

in sub-section (1),—
(i) the words "with imprisonment for a term which may extend to one year or" shall be omitted;
(ii) for the words "one lakh rupees, or with both", the words "one lakh rupees" shall be substituted;
Implication
Earlier Now
If any provision of section 139 – 146 is If any provision of section 139 – 146 is contravened
contravened the consequences will be as the consequences will be as follows.
follows. a) The company will be punishable for the fine of
a) The company will be punishable for Rs.25000 to Rs.5 lakhs; and
the fine of Rs.25000 to Rs.5 lakhs; and b) Every officer in default will be liable-
b) Every officer in default will be liable- i. with imprisonment for a term which may extend
i. with imprisonment for a term which to one year or
may extend to one year or ii. For fine which shall not be less than ten
ii. For fine which shall not be less than thousand rupees but which may extend to one
ten thousand rupees but which may lakh rupees
extend to one lakh rupees iii. or with both
iii. or with both

In sub-section (2), the word and figures, "section 143" shall be omitted.
Implication
Earlier Now
If an auditor of a company contravenes If an auditor of a company contravenes any of the

any of the provisions of section 139, provisions of section 139, section 143, section 144 or
section 143, section 144 or section 145, section 145, the auditor shall be punishable with fine 1.27
the auditor shall be punishable with which shall not be less than ` 25,000 but which may
fine which shall not be less than ` extend to ` 5 lacs or four times the remuneration of the
25,000 but which may extend to ` 5 lacs auditor, whichever is less.
or four times the remuneration of the
auditor, whichever is less.
Important Note:
The Same effect of penalty will be applicable in Section 148 -
Central Government to Specify Audit of Items of Cost in Respect of Certain Companies.

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Chapter CA Inter Amendments Nov 2021

CA Inter LAW 1.1

AMENDMENTS for NOV 2021

Amendment No 2: Sec.2(52) [Rule 2A of The Companies (Specification of Definitions

Amendment No 3: Sec 2(85): Small Company

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Amendment No 4: Sec 2(62)

Amendment No 5: Sec 8: Non-Profit Organisation/ Charitable Organisation

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Amendment No 6: Sec 16: Rectification of Name

Amendment No 7: Sec 16: Rectification of Name

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Amendment No 8: Sec 26: Contents of Prospectus

Amendment No 9: Sec 40: Securities to be dealt in stock exchanges

Amendment No 10: Sec 48: Variation of Shareholder’s Rights

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the provisions of this section, the punishment shall be as under:

Amendment No 11: Sec 56: Transfer & Transmission of Securities

Amendment No 12: Sec 59: Rectification of Register of Members [ROM]

Amendment No 13: Sec 62: Further Issue of Share Capital

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Amendment No 15: Sec 66: Reduction of Share Capital

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Amendment No 17: Sec 71: Debenture

Amendment No 18: Sec 86: Punishment for Contravention

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1.8 Amendment No 19: Sec 88: Register of Members

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Amendment No 23: Sec 90: Investigation of beneficial ownership of shares in certain

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Amendment No 24: Sec 90: Qualification of NCLT members

Amendment No 25: Sec 92: Annual Return

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Amendment No 26: Sec 92: Annual Return

Amendment No 27: Sec 92: Annual Return

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1.12 Amendment No 28: Sec 92: Annual Return

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secretary, by a company secretary in company secretary, by the director of the company.

Amendment No 29: Sec 105: Proxies

Amendment No 30: Sec 117: Report on Annual General Meeting

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Amendment No 31: Sec 117: Report on Annual General Meeting

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(c) any class of housing finance company registered under

Amendment No 32: Sec 124: Unpaid Dividend Account

Amendment No 33: Sec 128: Maintenance of Books by Company

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Amendment No 34: Sec 128: Maintenance of Books by Company

Amendment No 35: Sec 128: Maintenance of Books by Company

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Amendment No 36: Sec 129A: Periodical financial results

Amendment No 37: Sec 134: Financial Statement, Board’s report, etc.

Amendment No 38: Sec 134: Financial Statement, Board’s report, etc. –

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Amendment No 39: Sec 135: Corporate Social Responsibility

Amendment No 40: Sec 135: Corporate Social Responsibility

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completion of the third financial year.

Amendment No 41: Sec 135: Corporate Social Responsibility