C law amendments (may 2010)= aniruddha rathi

AMENDMENTS TO THE COMPANIES ACT 1956

(1 of 1956)

AMENDMENTS

1. In section 2, after clause (45A), the following clause shall be inserted, namely:-

`(45B) "Securities and Exchange Board of India" means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992.'

2. Interpretation of certain words and expressions

After section 2, the following section shall be inserted, namely:-

"2A. Words and expressions used and not defined in this Act but defined in the Depositories Act, 1996 shall have the same meanings respectively assigned to them in that Act".

3. In section 41, after sub-section (2), the following sub- section shall be inserted, namely:-

"(3) Every person holding equity share capital of company and whose name is entered as beneficial owner in the records of the depository shall be deemed to be a member of the concerned company."

4. In section 49, in sub-section (5), after clause (b), the following clause shall be inserted, namely:-

"(c) from holding investments in the name of a depository when such investment are in the form of securities held by the company as a beneficial owner."

5. In section 51, the following proviso shall be inserted, namely:-

"Provided that where the securities are held in a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs.

6. Section 83 shall be omitted.

7. In section 108, after sub-section (2), the following sub- section shall be inserted, namely:-

"(3) Nothing contained in this section shall apply to transfer of security effected by the transferor and the transferee both of whom are entered as beneficial owners in the records of a depository."

8. In section 111, after sub-section (13), the following sub- section shall be inserted, namely:-

`(14) In this section "company" means a private company and includes a private company which had become a public company by virtue of section 43A of this Act.'

9. Rectification of register on transfer

After section 111, the following section shall be inserted, namely:-

`111A. (1) In this section, unless the context otherwise requires, "company" means a company other than a company referred to in sub-section (14) of section 111 of this Act.

(2) Subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable.

(3) The Company Law Board may, on an application made by a depository, company, participant or investors or the Securities and Exchange Board of India within two months from the date of transfer of any shares or debentures held by a depository or from the date on which the instrument of transfer or the intimation of transmissions was delivered to the company, as the case may be, after such enquiry as it thinks fit, direct any company or depository to rectify register or records if the transfer of the shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985.

(4) The Company Law Board while acting under sub-section (3), may at its discretion make such interim order as to suspend the voting rights before making or completing such enquiry.

(5) The provisions of this section shall not restrict the right of a holder of shares or debentures, to transfer such shares or debentures and any person acquiring such shares or debentures shall be entitled to voting rights unless, the voting rights have been suspended by an order of the Company Law Board.

(6) Notwithstanding anything contained in this section, any further transfer, during the pendency of the application with the Company Law Board, of shares or debentures shall entitle the transferee to voting rights unless the voting rights in respect of such transferee have also been suspended.

(7) The provisions of sub-sections (5), (7), (9), (10) and (12) of section 111 shall, so far as may be, apply to the proceedings before the Company Law Board under this section as they apply to the proceedings under that section'.

10. In section 113, after sub-section (3), the following sub- section shall be inserted, namely:-

"(4) Notwithstanding anything contained in sub-section (1), where the securities are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on allotment of such securities".

11. In section 150, in sub-section (1), in clause (b), the words "distinguishing each share by its number" shall be omitted.

12. In section 152, in sub-section (1), in clause (b), the words "distinguishing each debenture by its number" shall be omitted.

13. After section 152, the following section shall be inserted, namely:-

"152A. Register and index of beneficial owners. - The register and index of beneficial owners maintained by a depository under section 11 of the Depositories Act, 1996, shall be deemed to be an index of members and register and index of debenture holders, as the case may be, for the purposes of this Act."

14. In Schedule II, in Part II, in clause C, after sub-clause 9, the following sub-clause shall be inserted, namely:-

"9A. The details of opinion to subscribe for securities to be dealt with in a depository".