Companies Amendment Act, 2015 has brought in certain provisions making way for Ease of doing business in India.
The Cabinet, chaired by Prime Minister Narendra Modi, had approved the changes in various provisions of the new Companies Act, 2013, which came into force with effect from April 1, 2014.
Minimum Capital requirement scrapped.
In the previous system, every company has to give a declaration to the Registrar of Companies (RoC), stating its paid-up capital is not less than Rs 500,000 in the case of public companies and not less than Rs 100,000 in the case of private companies, before commencement of business and exercising borrowing powers. The minimum paid-up capital requirement compliance and getting the certificate of commencement of business based on the above have been a hindrance for many small businesses.
Now, the minimum paid-up capital criteria have been scrapped, as per the Companies Amendment Act, 2015. Thus, a company can be formed even for small paltry amount of Rs. 10,000 and go ahead with doing business. The need to get the business commencement certificate based on the above compliance, is also dispensed with as per the Companies Amendment Act, 2015.
Common Seal made optional
Another provision under the Companies Amendment Act, 2015, towards Ease of doing business in India, is making Common Seal optional.
As a consequence, changes have been made with regards to authorization for execution of documents [Sections 9, 12, 22, 46 and 223], which made execution of documents, in the past, with signatures of 2 directors under a Common Seal.