Key takeaways from the Companies Amendment Bill passed by Rajya Sabha

One point of debate in Parliament over the provisions of the Bill was about independent directors of companies being allowed up to 10 percent monetary interest in their respective company.

Listed below are some of the key amendments proposed by the bill:

• Simplification of the process through which companies raise funds through a private placement of shares.


• Rationalisation of provisions pertaining to loans given to directors of companies


• Replacing the need to get approval from the central government for managerial pay above the prescribed limit, after getting it approved from the company’s shareholders


• Aligning disclosure requirements in the prospectus with SEBI regulations


• Making it a non-compoundable offence to flout provisions pertaining to deposits.

The provisions of the Companies (Amendment) Bill, 2016 was passed in the Lok Sabha by a voice vote in July.

Apart from the above-mentioned provisions, the Bill also included a provision to remove the restriction on number of layers of investment companies and one to remove restrictions on the number of layers of subsidiaries.

It also proposed making it compulsory for those who hold beneficial interest of more than 25 percent of a company’s shares. There was also a proposal to ease compliance burden for unlisted companies by allowing them to hold annual general meetings in place other than their registered offices as well.