Updates to India’s Companies Act 2013

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DELHI – The Ministry of Corporate Affairs in India recently released more updates to the Companies Act 2013. There were changes to the limits of video conferencing for Audit Committee Meetings and to the limits on contractual agreements by companies with other parties.

On video conferencing:

  • Audit committees can no longer conduct meetings for the consideration of consolidated financial statement through video conferencing or other audio visual means.
  • Other matters also not allowed for board meetings through video conferencing and other audio visual means include approval of annual financial statements, Board’s report, prospectus and matters relating to amalgamation, merger, demerger, acquisition and takeover.
  • Such things include approval of the annual financial statements, board’s report, prospectus and matters relating to amalgamation, merger, demerger, acquisition and takeover.
  • The location of board meetings through video conferencing can now be outside of India.

On transactions with related party:

  • Companies with paid up share capital of ten crore rupees or more are no longer restricted from entering into a contract or agreement with any related party, conditioned upon requirements of a Board Meeting and Special Resolution as stipulated under Section 188 of the Companies Act.
  • However, limits to the allowable value of the transactions with related parties were lowered.

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