Centre announced that it has notified the Companies (Amendment) Act 2017, which is set to ease the implementation of the Insolvency and Bankruptcy Code 2016.
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The provisions of this Amendment Act shall come into force on the date or dates as the Central Government may appoint by notification(s) in the Official Gazette.
A few provisions in the Amendment Act have important bearing on the working of the Insolvency and Bankruptcy Code 2016.
Key changes
The new Act has changed the current Section 53 of the Companies Act 2013 that prohibits the issuance of shares at a discount
Similarly, Section 197 of the Companies Act 2013 requires the approval of the company in a general meeting for the payment of managerial remuneration in excess of 11% of the net profits.
The amended Act says that in case of payment default, “... the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders... for such payment of managerial remuneration shall be obtained by the company before obtaining the approval in the general meeting.”
Section 247 of the Companies Act 2013 prohibits a registered valuer from undertaking valuation of assets in which he has a direct or indirect interest. Amendments limit the prohibition to three years prior to a valuer’s appointment or three years after the valuation was conducted.
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