India Regulatory Brief: New Rules for Shifting a Registered Office, Companies Act (Amendment) Bill, 2017
Companies (Incorporation) Amendment Rules, 2017 Announced
The government announced new rules that will amend the Companies (lncorporation) Rules, 2014. These will come into effect once they are published in the official gazette.
Two changes have been made, by way of substituting Rule 28 and Rule 30 in the existing framework of the Companies (lncorporation) Rules. These regulate the shifting of a company’s registered office within the same state (Rule 28) and shifting of a company’s registered office from one state or union territory to another (Rule 30).
The new rules are notified on the Ministry of Corporate Affairs website, with an official circular dated July 27, 2017.
Lower House Passes Companies Act (Amendment) Bill, 2017
The lower house of India’s parliament passed the Companies Act (Amendment) Bill, 2017, last week. The Bill will amend the existing Companies Act, 2013, and is yet to be approved by the upper house.
Among the major changes proposed are: expanding the definition of ‘related party’ to include an investing company; change in the definition of a ‘subsidiary company’ that removes the qualification of holding share capital; change in the definition of an ‘associate company’; change in private placement issuances; change in rules for loan and investment by a company; regulations governing related party transactions; and the provisions governing independent directors.
Union cabinet clears minimum wage code bill for parliament discussion
The union cabinet of the government approved the wage code bill last week; it will now be taken up by parliament for discussion. The bill seeks to empower the federal government with the authority to establish a minimum wage across all sectors of the country’s economy, instead of the current system whereby each state and sector follows independent norms.
The cabinet approval signals the start of a long time-consuming process that will see the consolidation of 44 labor laws into four main codes of legislation. This has been discussed since the beginning of the Modi government; with the Goods and Service Tax (GST) now implemented, the government has now placed the pending labor law reform process at the top of its agenda. Labor reform in India is seen to be a massive challenge, requiring consensus of multiple federal and regional political parties, workers and trade union groups, as well as business and industry.
The reforms are, however, needed to improve India’s industrial productivity and job creation, besides boosting the country’s investment environment through simplified and clear laws that are implemented uniformly.
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An Introduction to Doing Business in India 2017 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to stay up-to-date with the most recent and relevant policy changes.
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