MCA vide notification dated 16th August, 2019 amended Companies (Share Capital and debentures) Rules, 2014. The major amendments included therein are as follows:
- Change in condition for issuance of equity shares with differential rights:
- The voting power in respect of shares with differential rights shall not exceed 74% of total voting power including voting power in respect of equity shares with differential rights issued at any point of time.
- The requirement to have consistent track record of distributable profits for last 3 years is dispensed.
- Change in signing requirement of physical share certificate in case of OPC- the certificate can be signed by director or the company secretary.
- Change in requirement of issuance of ESOP by unlisted Start-up Company – the relaxation given to start up companies in complying certain conditions is now extended to 10 years (earlier it was for 5 years) from date of its incorporation.
- The rule containing the conditions for creation of Debenture Redemption Reserve is substituted by a new rule.
The complete notification along with other amendments is attached herewith: