Companies Act

http://182.18.138.130:8009/PgDecoding/cb_difference_New.aspx?3#...

Language

Until launch of this website unlearning the old and

Act

| Rules | Notifications | Circulars | All

Search Key Word!!

Decoding the Provisions

Old Vs New Law

Historical Preview Necessity of New Law Committee Report Concept Paper Highlights-Companies Bill 2011 What's New & Modified Old vs New Law

Old vs New Law

Like

Under this section, we have made comparison between the Companies Bill 2011 and Companies Act 1956 on various topics under different chapters of the bill. This section , can you help you in finding out in quick manner, the changes in the new or old law. Please click the relevant chapter, to read the comparison . Chapter -II - Incorporation of Company and matters incidental thereto Chapter III - Prospectus and allotment of securities

People's Verdict

Chapter -IV - Share Capital and Debentures Chapter V - Acceptance of Deposits by Companies Chapter VI - Registration of Charges Chapter VII - Management and Administration Chapter VIII - Declaration and Payment of Dividend Chapter IX - Accounts of Companies Chapter X - Audit and Auditors Chapter XI - Appointment and Qualification of Directors Chapter XII - Meetings of Board and its Power Chapter XIII - Appointment and Management of Managerial personnel Chapter XV - Compromise, Arrangements and Amalgamations Chapter XVI - Prevention of Oppression and Mismanagement Chapter XIX - Revival and rehabilitation of Sick Companies Other Chapters

Submit Now

Chapter IV : Share Capital and Debentures Basis of Difference

Kind of Shares

Companies Bill, 2011

Equity share capital (with voting rights or with differential rights as to dividend, voting, etc.) and preference share capital The proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders shall be in the same proportion as the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the preference shares

Companies Act, 1956

Equity share capital (with voting rights or with differential rights as to dividend, voting, etc.) and Preference Share Capital. No provision with respect to proportion of voting rights between equity and preference shareholders was provided.

Voting Rights

Classifications between cumulative and non cumulative preference shares for purpose of identification of voting rights has been dispensed with Preference shareholders

The preference shares were classified between cumulative and non cumulative preference shares for purpose of identification of voting rights. In case of cumulative preference shares if the dividend has remain unpaid for an aggregate period of not less than 2 years preceding the date of commencement of meeting

1 of 4

23, Oct 2013 03:58 pm

Companies Act

http://182.18.138.130:8009/PgDecoding/cb_difference_New.aspx?3#...

can exercise such voting rights only when dividends payable in respect of a class of preference shares are in arrears for a period of 2 years or more

Application of Premium

Premium may be utilized for Issue of unissued shares of the company as fully paid bonus shares Writing off preliminary expenses

Premium may be utilized for Issue of unissued shares of the company as fully paid bonus shares

People's Verdict

writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company purchase of its own shares or other securities

Writing off preliminary expenses Submit

Now

writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company

providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company

Additional provision has been provided for certain Companies to be prescribed whose financial statement comply with the accounting standards prescribed for such class of companies.

Issue of Shares at Discount

Company cannot issue shares at discount other than as sweat equity, no provision has been provided for any approval under the Companies Bill. A Company having share capital proposes to increase its subscribed capital by the issue of further shares, such shares apart from existing shareholder may also be offered to employees by way of ESOP subject to approval of shareholders by way of special resolution and complying with such other conditions as may be prescribed. In case of ESOP allotment, either in cash or for consideration other than cash, the price shall be arrived on the base of the report of the registered valuer subject to

A company may issue shares at a discount subject to the conditions specified and approval of the Central Government

ESOP

Provision for ESOP has been dealt under Unlisted Public Companies (Preferential. Allotment) Rules, 2003

2 of 4

23, Oct 2013 03:58 pm

Companies Act

http://182.18.138.130:8009/PgDecoding/cb_difference_New.aspx?3#...

such condition as may be prescribed.

Bonus Shares

Company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of its free reserves, securities premium account or the capital redemption reserve account subject to the conditions provided therein. Sweat Equity cannot be granted to employee of subsidiary company incorporated outside India Company may issue preference shares redeemable after 20 years for such infrastructure projects as may be specified subject to redemption of specified % of preference shares on annual basis at the option of the preference shareholder The provisions of clause related to further issue of capital will now be applicable to all types of Companies. No time limit has been prescribed, Company can anytime increase its share capital by issue of further shares Provision introduced for offer of shares to employees for ESOP Prescribed Conditions have to be followed when a company proposes to increase its subscribed capital by offering the same to existing shareholders

Provision for bonus issue has been dealt under the Companies Act, 1956

Sweat Equity

Sweat Equity was allowed to be granted to employee of subsidiary company incorporated outside India

Preference Shares for More than 20 years

No Company limited by shares shall issue any preference shares which is redeemable after the expiry of a period of 20 years from the date of issue.

Further Issue of Share Capital

Private Companies are out of the preview of provisions of further issue of Capital.
Submit Such provision shall be applicable 8 Now at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier.

People's Verdict

No direct provision for ESOP, company may issue shares to employees in the category of other persons not being members of the Company by way of special resolution.

Reduction of Share Capital

No reduction of capital will be allowed if the company is in arrears for payment of deposits, accepted either before or after the commencement of this Act. The tribunal will give notice of the application of the reduction of the share capital to the Central Government, SEBI (in case of the listed company) and every creditor. If no representation is received then it shall be presumed that there is no objection.

No condition with regard to payment of deposits was prescribed.

No provision was mentioned in the act for asking the representation from Central Government, SEBI for reduction of share Capital

Time Period for issue of share certificate

The time period for issue of share or any other certificates is 2 months in case of allotment of shares, 1 month in case of transfer and transmission and 3 months in case of allotment of debentures A company can make buyback even if any default regarding repayment of deposit or interest payable thereon, redemption of debentures or prefer-

The time period for issue of share or any other certificates is 3 months in case of allotment of shares, 2 months in case of transfer and transmission and 6 months in case of allotment of debentures.

Prohibition on Buyback in certain cases

A company cannot make buyback if default regarding: repayment of deposit or interest payable thereon, redemption of debentures or preference shares or

3 of 4

23, Oct 2013 03:58 pm

Companies Act

http://182.18.138.130:8009/PgDecoding/cb_difference_New.aspx?3#...

ence shares or payment of dividend to any shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank

payment of dividend to any shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank

is subsisting

Debenture Trustee

have been remedied and a period of 3 years must have lapsed after such default ceased to subsist The Company is required to appoint debenture trustee only when the company issues prospectus or make an offer or invitation to the public or to its members exceeding five hundred for the subscription of its debentures In case where the Company is unable to discharge the principal amount as and when it becomes due, than the debenture trustee may file a petition before the Tribunal

The Company is required to appoint debenture trustee when the company issues prospectus or make an offer or invitation to the public, irrespective of the number. In case where the Company is unable to discharge the principal amount as and when it becomes due, than the debenture trustee may file a petition before the Central Government

People's Verdict

Submit Now

Name
Facebook Twitter Linkedin

Email Subject

Subscribe our inst-alerts to catch the pluse of news and other happening related to Companies Bill 2011 and corporet, forex and securites law

ENTER YOUR EMAIL HERE :

Home | Disclaimer | Privacy Policy Corporate Professionals | All Rights reserved

4 of 4

23, Oct 2013 03:58 pm