companies amendment act 2020

Few sections of the companies amendment act 2020 has been notified from 22nd January, 2021. Given below some important amendments likely to affect corporates.


Section 129A – being introduced into the companies act, 2013 to provide for financial statements on periodical basis for unlisted companies. The provision for audit or limited review of such financial statement and their filings with the ROC will be notified in the Rules. 

This pre-supposes that certain unlisted public limited companies or big private companies based upon turnover criteria would be required to submit their quarterly or half yearly accounts also. What purpose it serves to have such micro management of small companies, it is not clear.


Section 135 – Corporate Social Responsibility – some major amendments here

A proviso is added to section 135(5) that if a company spends in excess of the requirements under the Act, then such excess can be set off against future years. How many number of financial years it can be carried forward and the manner of doing so, will be notified in the Rules. 


Sec 135(7) is amended which provides that if the company is in contravention of sub-sections (5) or (6) then the company is laible to penalty of twice the amount required to be transferred by the company to a Fund specified in Schedule VII or Unspent Corporate Social Responsibility account or Rs.1 crore whichever is less. Every officer in default shall be liable to a penalty of 1/10th of the above two amounts or Rs.2 lakhs whichever is less. Section 135(5) pertains to spending of the CSR amount in a year i.e. two % of the average net profits during the immediately preceding 3 financial years. Sec 135(6) pertains to the CSR amount to be transferred to Unspent CSR a/c or to the fund specified in Schedule VI. But the changes specified in section 135(6) is not notified yet. 


Further a new sub-section (9) has been added in section 135 which specifies that where the amount of CSR to be spent does not exceed Rs.50 lakhs, then there is no need to constitute a separate CSR Committee in such case and the Board of Directors shall perform the functions of the CSR Committee. 

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