Companies (Amendment) Act, 2015 – Simplified the Company Registration and compliances

Companies (Amendment) Act, 2015 – Simplified the Company Registration and compliances . The Companies Act, 2013 marked a significant overhaul in the corporate governance framework in India, aiming to facilitate business operations and enhance transparency. The Act and the Rules made under it provide robust provisions to strengthen corporate governance and management transparency, particularly in large corporations. These provisions emphasize accountability through clearly defined roles and responsibilities for key managerial personnel (KMP’s), Boards of Directors, and shareholders.
Companies are required under the Companies Act 2013 and Rules thereunder to maintain books of accounts, various statutory returns, and registers in prescribed formats, ensuring these documents are readily accessible at their registered offices of the company which shall be maintained as per section 12 of the companies act 2013. Compliance with applicable accounting standards is mandated, promoting financial transparency and accuracy. Companies must also distribute notices of general meetings along with detailed explanatory statements and necessary attachments, aiding informed decision-making by shareholders. Furthermore, the Act mandates that annual financial statements must be circulated among shareholders before shareholders meeting (AGM).
The Companies Act, 2013 further requires after company registration in India to submit various filings, including documents, resolutions, and returns, to the Registrar of Companies (ROC), MCA. Mandatory disclosures, such as DIR-8, MBP-1, risk management practices, detailed financial statements, and annual returns, are mandated within the Board’s reports to check the comprehensive stakeholder and regulatory access to pertinent information. When irregularities in financial reporting or compliance arise, regulatory actions are promptly undertaken in accordance with the Act.
The Companies (Amendment) Act, 2015 introduced substantial modifications intended to simplify business procedures, remove unnecessary compliance burdens, and ensure more effective enforcement mechanisms and the major changes included:
No Minimum Capital Needed to Start a Company
Previously, under the Companies Act, 2013, there was a mandatory minimum paid-up capital requirement for registering companies: Rs.1 lakh for private companies and Rs.5 lakh for public companies. This requirement meant that before starting operations, businesses needed to prove they had at least this amount as initial funding.
However, through amendments introduced by the Companies (Amendment) Act, 2015, the Government of India has removed this minimum capital requirement. Now, entrepreneurs can technically start a company with as little as Rs.1. The objective behind this amendment is to simplify business registration, reduce initial regulatory barriers, and make it easier and more affordable for startups and small businesses to enter the market.
Even though the law does not mandate any minimum capital now, practically speaking, businesses will still need funds to meet initial operational expenses. Expenses such as opening a corporate bank account, paying registration fees, office setup, day-to-day working capital needs, and other preliminary costs must be considered.
CCL Tip: 
Compliance Calendar LLP (CCL), therefore, recommends keeping the initial paid-up capital at around Rs.1 lakh. This recommendation is practical advice based on typical business needs.
Common Seal is Now Optional
Earlier, every company was required to have a common seal—a physical stamp used for validating official documents, such as share certificates, contracts, and resolutions. The use of a common seal was mandatory and considered a symbol of the company’s approval.
However, after the amendments introduced in the Companies (Amendment) Act, 2015, having a common seal is no longer compulsory. Now, companies can authorize two directors or one director and the company secretary to sign documents on behalf of the company, making the common seal optional.
CCL Tip:
At the time of company registration, while drafting the Articles of Association (AOA), it is advisable to clearly mention that the company will not adopt a common seal. This avoids any future legal complications or procedural requirements related to the seal. It also ensures operational ease, especially when executing documents, contracts, or banking-related paperwork that earlier needed to be stamped with the seal.
By opting out of using a common seal, companies can simplify document execution processes without compromising on legal validity or authenticity.
No Need to File a Declaration to Start Business
Earlier after the introduction of Companies Act 2013, companies had to file a declaration confirming that shareholders had paid for their shares before starting operations. Now, this rule has been removed, and companies can begin business right after getting their incorporation certificate. But make sure shareholders actually pay for their shares within 180 days, otherwise the company name can still be removed by MCA.
Later, this requirement was relaxed for a while, allowing companies to begin operations immediately after receiving their Certificate of Incorporation. However, with the reintroduction of Section 10A under the Companies (Amendment) Ordinance, 2019, the requirement to file Form INC-20A (commencement of business) has been brought back and is currently mandatory for all companies having share capital.Every company having share capital must file a declaration in Form INC-20A within 180 days of incorporation.Even though the company gets incorporated once the Certificate of Incorporation is issued, business cannot legally commence until Form INC-20A is filed
Strict Penalty for Illegal Collection of Deposits
Companies cannot accept money from the public as "deposit" unless they follow strict rules.
Now, if a company breaks this rule:

It must return the money with interest, and

It may face a fine starting from Rs.1 crore (can go up to Rs.10 crores).

Company officers may be jailed for up to 7 years or face a fine up to Rs.2 crores.

If done fraudulently, more serious punishment under fraud laws will apply.

Board Resolutions for Key Decisions Not Open for Public Viewing 
Important company decisions like raising money, issuing shares, taking loans, etc., taken by the board, must still be filed with the Registrar. But now, these documents will not be available for public inspection.
Dividend Can Be Paid Only After Adjusting Losses
A company can declare dividends even in years when it doesn’t make profits, by using its past reserves. But now, it must first cover all losses from the current financial year before paying any dividend.
Unclaimed Dividends and Related Shares Will Go to IEPF
As per Section 124(6) of the Companies Act, 2013, if a shareholder does unclaimed dividend on their shares for seven consecutive years, then:

The unclaimed dividend amount and

The corresponding shares

will both be transferred to the Investor Education and Protection Fund (IEPF), maintained by the Ministry of Corporate Affairs (MCA) and help the stakeholders for recovery of shares. However, if the shareholder claims even a single dividend during this seven-year period, the clock resets. In such cases, the shares will not be transferred to the IEPF, even if earlier dividends remained unclaimed. Hence, Always keep your bank account and contact details updated with the company or its RTA (Registrar and Transfer Agent) to ensure timely credit of dividends and communication regarding your holdings.
Learn here How to Recover shares from IEPF for unclaimed shares or dividends ?
Fraud Reporting by Auditors Only If Amount Is Big
Auditors must report fraud. Now, only frauds above a certain limit need to be reported to the Central Government. Smaller frauds still need to be shared with the company's audit committee and mentioned in the Board's Report.
Exemption for Loans to Wholly-Owned Subsidiaries
Under Section 185 of the Companies Act, 2013 (as amended), companies are now allowed to grant loans, provide guarantees, or offer securities to their wholly-owned subsidiaries without requiring prior approval of the shareholders through a special resolution.
However, this exemption is subject to an important condition: The funds must be used by the subsidiary exclusively for its principal business activities. This relaxation facilitates smoother intra-group financial support, especially for corporate structures with subsidiaries handling different verticals or operations.
Easier Rules for Related Party Transactions
Related party transactions (RPTs) are deals between the company and someone closely connected to it.
The changes are:

Ordinary resolution is enough (earlier special resolution was needed) for approval by non-related shareholders.

No shareholder approval needed for transactions between a holding company and its 100% subsidiary if their accounts are consolidated.

Audit Committees can now give bulk approval for RPTs once a year.

Bail Restrictions Apply Only to Serious Fraud Cases 
Under the earlier provisions of Section 447 of the Companies Act, 2013, strict bail conditions applied uniformly to all cases of corporate fraud, regardless of the scale or severity.
However, with the amendment, this has been rationalized. Now, bail restrictions apply only to cases involving "serious fraud"—that is, frauds involving significant public interest, large monetary amounts, or complex fraudulent schemes.
This means:

Minor or technical frauds are no longer subjected to the same harsh bail conditions.

The courts now have more discretion in granting bail for less severe offences.

This amendment ensures a more balanced and fair approach, protecting individuals involved in lesser non-material contraventions from the hardships of prolonged custody, while continuing to maintain strict treatment for major fraudsters.
The focus is now on proportional enforcement, improving the ease of doing business while safeguarding corporate accountability.
Winding-Up Cases Will Be Heard by 2 Members, Not 3
Company closure cases (winding up) will now be heard by a 2-member bench of the NCLT instead of 3.
Smaller Offences Handled by Lower Courts
As per the recent amendment, cases related to the winding up (closure) of companies under the Companies Act, 2013, will now be adjudicated by a 2-member Bench of the National Company Law Tribunal (NCLT) instead of the earlier requirement of a 3-member Bench.
Clarification on Exemptions to Certain Companies
The government can exempt specific types of companies (like startups or government companies) from some provisions of the Act. The rule now clarifies how and when such exemption notifications must be presented to Parliament. To facilitate ease of doing business and cater to different corporate structures, the Ministry of Corporate Affairs (MCA) issued specific MCA exemption notifications on 5th June 2015 to remove the practical difficulties in applicability of the provisions of the Companies Act, 2013 to various types of Companies, the Ministry of Corporate Affairs issued notifications on 05.06.2015 under Section 462 of the Companies Act, 2013 (Act), which provide exemptions under various provisions of the Act to (i) Government Companies; (ii) Private Companies; (iii) Section 8 Companies and (iv) Nidhis
These above changes not only lower the cost and burden of initial compliance but also give business owners the flexibility to focus on growth instead of legal formalities. As a result, company registration is now more accessible, faster, and aligned with the real needs of new-age entrepreneurs, making it the preferred choice for anyone serious about building a scalable and credible business in India.

The Companies Act, 2013 marked a significant overhaul in the corporate governance framework in India, aiming to facilitate business operations and enhance transparency. The Act and the Rules made under it provide robust provisions to strengthen corporate governance and management transparency, particularly in large corporations. These provisions emphasize accountability through clearly defined roles and responsibilities for key managerial personnel (KMP’s), Boards of Directors, and shareholders.

Companies are required under the Companies Act 2013 and Rules thereunder to maintain books of accounts, various statutory returns, and registers in prescribed formats, ensuring these documents are readily accessible at their registered offices of the company which shall be maintained as per section 12 of the companies act 2013. Compliance with applicable accounting standards is mandated, promoting financial transparency and accuracy. Companies must also distribute notices of general meetings along with detailed explanatory statements and necessary attachments, aiding informed decision-making by shareholders. Furthermore, the Act mandates that annual financial statements must be circulated among shareholders before shareholders meeting (AGM).

The Companies Act, 2013 further requires after company registration in India to submit various filings, including documents, resolutions, and returns, to the Registrar of Companies (ROC), MCA. Mandatory disclosures, such as DIR-8, MBP-1, risk management practices, detailed financial statements, and annual returns, are mandated within the Board’s reports to check the comprehensive stakeholder and regulatory access to pertinent information. When irregularities in financial reporting or compliance arise, regulatory actions are promptly undertaken in accordance with the Act.

The Companies (Amendment) Act, 2015 introduced substantial modifications intended to simplify business procedures, remove unnecessary compliance burdens, and ensure more effective enforcement mechanisms and the major changes included:

No Minimum Capital Needed to Start a Company

Previously, under the Companies Act, 2013, there was a mandatory minimum paid-up capital requirement for registering companies: Rs.1 lakh for private companies and Rs.5 lakh for public companies. This requirement meant that before starting operations, businesses needed to prove they had at least this amount as initial funding.

However, through amendments introduced by the Companies (Amendment) Act, 2015, the Government of India has removed this minimum capital requirement. Now, entrepreneurs can technically start a company with as little as Rs.1. The objective behind this amendment is to simplify business registration, reduce initial regulatory barriers, and make it easier and more affordable for startups and small businesses to enter the market.

Even though the law does not mandate any minimum capital now, practically speaking, businesses will still need funds to meet initial operational expenses. Expenses such as opening a corporate bank account, paying registration fees, office setup, day-to-day working capital needs, and other preliminary costs must be considered.

CCL Tip:

Compliance Calendar LLP (CCL), therefore, recommends keeping the initial paid-up capital at around Rs.1 lakh. This recommendation is practical advice based on typical business needs.

Common Seal is Now Optional

Earlier, every company was required to have a common seal—a physical stamp used for validating official documents, such as share certificates, contracts, and resolutions. The use of a common seal was mandatory and considered a symbol of the company’s approval.

However, after the amendments introduced in the Companies (Amendment) Act, 2015, having a common seal is no longer compulsory. Now, companies can authorize two directors or one director and the company secretary to sign documents on behalf of the company, making the common seal optional.

CCL Tip:

At the time of company registration, while drafting the Articles of Association (AOA), it is advisable to clearly mention that the company will not adopt a common seal. This avoids any future legal complications or procedural requirements related to the seal. It also ensures operational ease, especially when executing documents, contracts, or banking-related paperwork that earlier needed to be stamped with the seal.

By opting out of using a common seal, companies can simplify document execution processes without compromising on legal validity or authenticity.

No Need to File a Declaration to Start Business

Earlier after the introduction of Companies Act 2013, companies had to file a declaration confirming that shareholders had paid for their shares before starting operations. Now, this rule has been removed, and companies can begin business right after getting their incorporation certificate. But make sure shareholders actually pay for their shares within 180 days, otherwise the company name can still be removed by MCA.

Later, this requirement was relaxed for a while, allowing companies to begin operations immediately after receiving their Certificate of Incorporation. However, with the reintroduction of Section 10A under the Companies (Amendment) Ordinance, 2019, the requirement to file Form INC-20A (commencement of business) has been brought back and is currently mandatory for all companies having share capital.Every company having share capital must file a declaration in Form INC-20A within 180 days of incorporation.Even though the company gets incorporated once the Certificate of Incorporation is issued, business cannot legally commence until Form INC-20A is filed

Strict Penalty for Illegal Collection of Deposits

Companies cannot accept money from the public as "deposit" unless they follow strict rules.

Now, if a company breaks this rule:

It must return the money with interest, and
It may face a fine starting from Rs.1 crore (can go up to Rs.10 crores).
Company officers may be jailed for up to 7 years or face a fine up to Rs.2 crores.
If done fraudulently, more serious punishment under fraud laws will apply.

Board Resolutions for Key Decisions Not Open for Public Viewing

Important company decisions like raising money, issuing shares, taking loans, etc., taken by the board, must still be filed with the Registrar. But now, these documents will not be available for public inspection.

Dividend Can Be Paid Only After Adjusting Losses

A company can declare dividends even in years when it doesn’t make profits, by using its past reserves. But now, it must first cover all losses from the current financial year before paying any dividend.

Unclaimed Dividends and Related Shares Will Go to IEPF

As per Section 124(6) of the Companies Act, 2013, if a shareholder does unclaimed dividend on their shares for seven consecutive years, then:

The unclaimed dividend amount and
The corresponding shares

Learn here How to Recover shares from IEPF for unclaimed shares or dividends ?

Fraud Reporting by Auditors Only If Amount Is Big

Auditors must report fraud. Now, only frauds above a certain limit need to be reported to the Central Government. Smaller frauds still need to be shared with the company's audit committee and mentioned in the Board's Report.

Exemption for Loans to Wholly-Owned Subsidiaries

Under Section 185 of the Companies Act, 2013 (as amended), companies are now allowed to grant loans, provide guarantees, or offer securities to their wholly-owned subsidiaries without requiring prior approval of the shareholders through a special resolution.

However, this exemption is subject to an important condition: The funds must be used by the subsidiary exclusively for its principal business activities. This relaxation facilitates smoother intra-group financial support, especially for corporate structures with subsidiaries handling different verticals or operations.

Easier Rules for Related Party Transactions

Related party transactions (RPTs) are deals between the company and someone closely connected to it.

The changes are:

Ordinary resolution is enough (earlier special resolution was needed) for approval by non-related shareholders.
No shareholder approval needed for transactions between a holding company and its 100% subsidiary if their accounts are consolidated.
Audit Committees can now give bulk approval for RPTs once a year.

Bail Restrictions Apply Only to Serious Fraud Cases

Under the earlier provisions of Section 447 of the Companies Act, 2013, strict bail conditions applied uniformly to all cases of corporate fraud, regardless of the scale or severity.

However, with the amendment, this has been rationalized. Now, bail restrictions apply only to cases involving "serious fraud"—that is, frauds involving significant public interest, large monetary amounts, or complex fraudulent schemes.

This means:

Minor or technical frauds are no longer subjected to the same harsh bail conditions.
The courts now have more discretion in granting bail for less severe offences.

The focus is now on proportional enforcement, improving the ease of doing business while safeguarding corporate accountability.

Winding-Up Cases Will Be Heard by 2 Members, Not 3

Company closure cases (winding up) will now be heard by a 2-member bench of the NCLT instead of 3.

Smaller Offences Handled by Lower Courts

As per the recent amendment, cases related to the winding up (closure) of companies under the Companies Act, 2013, will now be adjudicated by a 2-member Bench of the National Company Law Tribunal (NCLT) instead of the earlier requirement of a 3-member Bench.

Clarification on Exemptions to Certain Companies

The government can exempt specific types of companies (like startups or government companies) from some provisions of the Act. The rule now clarifies how and when such exemption notifications must be presented to Parliament. To facilitate ease of doing business and cater to different corporate structures, the Ministry of Corporate Affairs (MCA) issued specific MCA exemption notifications on 5th June 2015 to remove the practical difficulties in applicability of the provisions of the Companies Act, 2013 to various types of Companies, the Ministry of Corporate Affairs issued notifications on 05.06.2015 under Section 462 of the Companies Act, 2013 (Act), which provide exemptions under various provisions of the Act to (i) Government Companies; (ii) Private Companies; (iii) Section 8 Companies and (iv) Nidhis

These above changes not only lower the cost and burden of initial compliance but also give business owners the flexibility to focus on growth instead of legal formalities. As a result, company registration is now more accessible, faster, and aligned with the real needs of new-age entrepreneurs, making it the preferred choice for anyone serious about building a scalable and credible business in India.