Definition Of Small Company Changed & insertion of Banking company in Sec 186

Com­pa­nies (Removal Of Dif­fi­cul­ties) Order, 2015 — Dat­ed 13–2‑2015

13^th Feb­ru­ary, 2015

S.O. (E).- Where­as, the Com­pa­nies Act, 2013 (18 of 2013) (here­inafter referred to as the said Act) received the assent of the Pres­i­dent on the 29th August, 2013;

And where­as, clause (85) of sec­tion 2 of the said Act pro­vides for def­i­n­i­tion of the term “small company”;

And where­as, clause (b) of sub-sec­tion (11) of sec­tion 186 of the said Act pro­vides that the require­ments of pro­vi­sions of sec­tion 186 [except sub-sec­tion  (1) of the said sec­tion[ shall not apply to any acqui­si­tion made by a non-bank­ing finan­cial com­pa­ny reg­is­tered under Chap­ter IIIB of the Reserve Bank of India Act, 1934 (2 of 1934) and any oth­er com­pa­ny whose prin­ci­pal busi­ness is acqui­si­tion of securities;

And where­as, such pro­vi­sions of clause (85) of sec­tion 2 and sec­tion 186 of the said Act had come into force on the 1st day of April, 2014;

And where­as, the fol­low­ing dif­fi­cul­ties have arisen in giv­ing effect to the above pro­vi­sions of the said Act: -

(a) Accord­ing to clause (85) of sec­tion 2, a com­pa­ny may be treat­ed as a ‘small com­pa­ny’ if it meets either of the con­di­tions pro­vid­ed there­in   there­by   mak­ing   the   sec­ond   lim­it   unre­strict­ed   or incon­se­quen­tial. Dif­fi­cul­ties have arisen in this regard as com­pa­nies which, though, meet one of the cri­te­ria but exceed the mon­e­tary lim­it in respect of sec­ond cri­te­ria exces­sive­ly are also get­ting clas­si­fied as ‘small com­pa­nies’; and

(b) in clause (b) of sub-sec­tion (11) of sec­tion 186, in the absence of pro­vi­sions for exemp­tion to a bank­ing com­pa­ny or an insur­ance com­pa­ny  or  a  hous­ing  finance  com­pa­ny  mak­ing acqui­si­tion of secu­ri­ties in its ordi­nary course of busi­ness, a dif­fi­cul­ty has arisen that such com­pa­nies can­not make any acqui­si­tion of secu­ri­ties in their ordi­nary course of business;

Now, there­fore, in exer­cise of the pow­ers con­ferred by sub-sec­tion (1) of sec­tion 470 of the Com­pa­nies Act, 2013 (18 of 2013), the Cen­tral Gov­ern­ment here­by makes the fol­low­ing Order to remove the afore­said dif­fi­cul­ties, namely:-

(1)    Short title and com­mence­ment.- (1) This Order may be called the Com­pa­nies (Removal of Dif­fi­cul­ties) Order, 2015.

(2)    It shall come into force on the date of its pub­li­ca­tion in the Offi­cial Gazette.

2.    In the Com­pa­nies Act, 2013 (here­inafter referred to as the said Act), -

(a) in sec­tion 2, in clause (85), in sub-clause (i), for the word “or” occur­ring at the end, the word “and” shall be sub­sti­tut­ed; and

(b) in sec­tion 186 of the said Act, in sub-sec­tion (11), in clause (b), after item (iii), the fol­low­ing item shall be insert­ed, namely :-

“(iv) made by a bank­ing com­pa­ny or an insur­ance com­pa­ny or a hous­ing finance com­pa­ny, mak­ing acqui­si­tion of secu­ri­ties in the ordi­nary course of its business.”.

[F. No. 1/13/2013-CL.V‑Part]

AMARDEEP SINGH BHATIA, JOINT SECRETARY