Question: According to which section of the Company Act, 2013, there has been a ban on issuance of shares on the exemption?
(a) Article 54
(b) Article 53
(c) Article 197
(d) Article 247
Answer: (b)
Related facts:
- The company (Amendment) Act, 2017 (Amendment Act) was enacted by the Central Government on January 3rd, 2018.
- The provisions of this Act shall be effective from the date of the determination of notification in the Official Gazette by the Government.
- Some provisions of this amended Act will have a significant effect on the functioning of bankruptcy and bankruptcy code, 2016 (Code).
- As per Article 53 of the Companies Act, 2013, there has been a ban on issuance of shares on the exemption.
- Under the amended act, now the companies can provide shares to the lender on the exemption when converted loan will be converted into a debt restructuring plan or under any constitutional proposal under contract.
- Under Article 197 of the Companies Act, 2013, the company will have to get its permission in the General Body on payment of managerial salary of more than 11 percent of the gross profit.
- According to the amended act company will have to get get their approval before paying such type of managerial salary on payment of a mistake in payment to a bank or a public financial institution or non-convertible debenture holder or other secured lenders.
- It is known that this approval has to be taken before the General Assembly.
- The assesses of the value registered under Article 247 of the Companies Act, 2013 has been banned from assessing any direct or indirect interest property or assessment of asset during assessment or assessment of property after assessment.
- In the revised act, the Registered Value Assessor has now been banned from assessing the assets of interest, directly or indirectly, three years before his appointment, or three years after the assessment of the property.
Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=175458