The government notified the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020, on 3 January 2020. As per these amended rules, the following changes have been brought about:
- Appointment of a full-time company secretary by private companies. Prior to the amendment, under rule 8A, the paid-up up share capital threshold for private companies for the appointment of a full-time company secretary was ₹50 million (US$704,350). The amended rules have relaxed this requirement and increased the paid-up up share capital threshold to ₹100 million.
- Secretarial audit. Prior to the amendment, only public companies with a paid-up share capital of ₹500 million or more, or a turnover of ₹2 billion or more, were covered under the ambit of rule 9 and required to carry out a secretarial audit. The amended rules have extended the ambit of rule 9 to every company that has outstanding loans and borrowings from banks or public financial institutions of ₹1 billion or more.
The business law digest is compiled by Nishith Desai Associates, a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley, Munich and New York. The firm specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.