By CA Harsh Gupta IGP

Amendments in Business Law, Ethics and Communication

[For May 2018 exams (Old Syllabubs) as per RTP]

(Note – The below mentioned amendments are the changes proposed by RTP for the period 1st May
2017 to 31st October 2017.)

Part Weightage Proposed changes

Ethics 20 marks No change
Communication 20 marks No change
Business Law 30 marks Refer below
1. Change is only there in The Employees’ Provident Fund and Miscellaneous Provisions Act,
1952 which was introduced by Finance Act, 2017 (w.e.f. May 26, 2017)

Section
Changed law
amended
2(m) Tribunal means the Industrial
Tribunal referred to in section 7D
7D The Industrial Tribunal constituted
by Central Government under
section 7A(1) of the Industrial
Disputes Act, 1947 shall be Tribunal
for the purpose of this Act.
7E, 7F, 7G and Omitted
7H
18A The authorities referred to in section
7A and every inspector shall be
deemed to be a public servant within
the meaning of section 21 of the
India Penal Code.
Previous law
Tribunal means the Employees’
Provident Funds Appellate
Tribunal (“EPF-AT”) constituted
under section 7D
Section 7D of previous law used to
talk about the constitution of EPF-
AT
Study Material earlier contained
only the citation of these sections
Earlier the employees and officers
of EPF-AT were deemed to be
public servants.

Company Law 30 marks Refer below

Amendments in COMPANY LAW

Exemption to Government Companies (Notification June 13, 2017)

1.

Section Requirement under the Act Exemption by Amendment by Notification June

Notification 13, 2017
June 5, 2015
96(2) Every AGM shall be shall be Government Government company may hold
held company can AGM
 either at the registered hold AGM at  at such other place within the
office of the company or such other place city, town or village in which
 at some other place within as CG may registered office of the
the city, town or village in approve in this company is situated or
which the registered office behalf.  such other place as the CG
of the company is situate. may approve in this behalf.
By CA Harsh Gupta IGP

2. Exemption under Notification June 5, 2015 shall be applicable to a Government company which
has not committed a default in filing of its financial statements u/s 137 or Annual return u/s 92 of
the Act with the Registrar.

Exemption to Private Companies (Notification June 13, 2017)

1.
Section Requirement Exemption by Amendment by Notification June 13, 2017
under the Act Notification
June 5, 2015
73(2) This section lays Clause (a) to (e) Clause (a) to (e) of sub-section (2) shall NOT apply
down 6 conditions shall NOT apply to a Private company
for acceptance of to a Private (A) which accepts from its members
deposits from company monies ≤ 100% of (paid up share
members in clause capital + free reserves + securities premium
(a) to (f)  Which accept account)
from its
members, (B) which is a start-up, for 5 years from the date of
monies  100% its incorporation.
of (paid-up share (C) which fulfils ALL of the following conditions,
capital + free namely –
reserves, and
i. which is not an associate or a subsidiary
company of any other company;
 such company
shall file the ii. if the borrowings of such a company from
details of monies banks or financial institutions or any body
so accepted to corporate is less than
the Registrar in
such manner as  twice of its paid-up whichever is
may be specified

share capital or
INR 50 crore,
} LOWER,
and

iii. such a company has not defaulted in the

repayment of such borrowings subsisting at
the time of accepting deposits under this
section
Provided that the company referred to in clauses (A),
(B) or (C) shall file the details of monies accepted to
the Registrar in such manner as may be specified.
92(1)(g) A company shall --- silent --- A small company shall only disclose
disclose in annual ‘remuneration drawn by directors’
return
Remuneration of
Directors and KMP
Proviso  Annual return is --- silent --- The benefit is extended to a start-up company as well
to 92(1) signed by a i.e. in start-up company, return shall be signed by CS,
director and CS, or where there is no CS, by the director of the
or where there company.
is no CS, by CS
in practice
 But in case of
OPC and a
small company
shall be signed
by CS, or where
there is no CS,
by the director
of the company

2. Exemption under Notification June 5, 2015 shall be applicable to a Private company which has not
committed a default in filing of its financial statements u/s 137 or Annual return u/s 92 of the Act
with the Registrar.
By CA Harsh Gupta IGP

3. First proviso to section 2(87) has been notified w.e.f. September 20, 2017

"Subsidiary company" or "Subsidiary", in relation to any other company (that is to say the holding company), means
a company in which the holding company –
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the TOTAL SHARE CAPITAL either at its own or together with
one or more of its subsidiary companies;

Provided that such class or classes of holding companies as may be prescribed shall NOT have layers of
subsidiaries beyond such numbers as may be PRESCRIBED. (“2”)

The Companies (Restriction on Number of Layers) Rules, 2017

(1) On and from the date of commencement of these rules, no company, other than a company belonging to
a class specified in sub-rule (2), shall have more than 2 layers of subsidiaries.

Provided that the provisions of this sub-rule shall not affect a company from acquiring a company
incorporated outside India with subsidiaries beyond 2 layers as per the laws of such country:

Provided further that for computing the number of layers under this rule, one layer which consists of one
or more wholly owned subsidiary or subsidiaries shall NOT be taken into account.

(2) The provisions of this rule shall NOT apply to the following classes of companies, namely -
(a) a BANKING COMPANY;
(b) a NBFC;
(c) an INSURANCE COMPANY;
(d) a GOVERNMENT COMPANY

(3) The provisions of this rule shall not be in derogation of the proviso to sub-section (1) of section 186 of the
Act.

(4) Every company other than a company referred to in sub-rule (2) existing on or before the commencement
of these rules, which has number of layers of subsidiaries in excess of the layers specified in sub-rule (1)
(i) shall file, with the Registrar a return in Form CRL- 1 disclosing the details specified therein, within
a period of 150 days from the date of publication of these rules in the official Gazette;
(ii) shall not, after the date of commencement of these rules, have any additional layer of subsidiaries
over and above the layers existing on such date; and
(iii) shall not, in case one or more layers are reduced by it subsequent to the commencement of these
rules, have the number of layers beyond
 the number of layers it has after such reduction or
 maximum layers allowed in sub-rule (1), whichever is MORE.
(5) If any company contravenes any provision of these rules

Who is liable? Fine If contravention is a continuing one

- the company Further fine up to INR 1,000/ day after the first
Up to INR 10,000
- every officer in default day during which contravention continues