The Department of Revenue, Central Board of Direct Taxes (CBDT), vide notification no. 61/2017 dated 12th July, 2017, has notified Income-tax (20th Amendment), Rules, 2017 for Sections 56(2)(x) and 50CA prescribing 'fair market value' method for valuation of unquoted shares (shares in companies which are not traded on any stock exchange). The final rules state that the fair market value of unquoted equity shares will include the book value of all assets (other than jewelry, artistic works, shares, securities and immovable property) and the open market value of jewelry or artistic trust and shares/ securities, value adopted for payment of stamp duty for immovable properties, excluding any amount paid as income tax and the book value of liabilities.
The Ministry of Commerce and Industry vide its notification G.S.R 501(E) dated 23rd May, 2017 broadened the definition of a start up for the purpose of government schemes taking into account the long gestation period in establishing start ups. Further, start ups would no longer need a letter of recommendation from an incubator or an Industry Association for either recognition or for claiming tax benefits under the Start up India program. The present notification is in supersession of the earlier notification dated 17th February, 2016.
MCA has notified the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2017 and shall come into force on the 13th July, 2017. Amendments have been carried out to provide more clarity to Rule 3(3)(e), where in any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year. Further, such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person.
The Ministry of Corporate Affairs has notified a significant amendment on 29th June, 2017 regarding the time-period within which a combination is to be notified to the Competition Commission of India (CCI). Parties to a combination are now exempt from filing a notification within 30 days of the execution of the relevant trigger document (Exemption). The Exemption however, remains subject to gun-jumping provisions of the Competition Act, 2002.
The Ministry of Corporate Affairs has vide its notification dated 5th July, 2017 exempted joint venture companies, wholly owned subsidiaries and dormant companies from appointing independent directors under Section 149 of the Companies Act, 2013.
The Lok Sabha on 27th July, 2017 passed the Companies (Amendment) Bill, 2016 which proposes to introduce 40 amendments to the Companies Act, 2013. The eye-catcher of the amendments include (i) removal of prohibition to advance loans to companies with common directors by introducing procedural restrictions and (ii) relaxations of procedural restrictions in case of private placement of securities viz. allowing more than one offer to be made at the same time, etc. It is pertinent to note that the Bill is yet to receive the Presidential assent and shall become effective once the same is granted.
