Companies (Removal of Difficulties) Order, 2015

[To be published in the Gazette of India,
Extraordinary, Part II, Section3, Sub-section  (ii))

GOVERNMENT OF INDIA

MINISTRY OF CORPORATE AFFAIRS

ORDER

New Delhi, the 33th February,
2015

And whereas, clause (85) of section 2 of the said Act provides for definition of the term
“small company”;

And whereas, clause (b) of
sub-section (11) of
section 186 of the said Act provides
that the requirements of provisions of section 186 [except
sub-section (1) of the said
section] shall not apply to any acquisition made by a non-banking financial
company registered under Chapter IIIB of the Reserve Bank of India
Act, 1934 (2 of 1934)
and any other company whose principal business is
acquisition of securities;

And whereas, such provisions of clause (85) of section 2 and section 186 of the
said Act had come into force on the
1st day of April, 2014;

And whereas, the following difficulties have
arisen in giving effect to the above provisions of the said Act: –

(a) According to clause (85) of
section 2, a company may be treated as a ‘small company’ if it meets either of the conditions
provided therein thereby making the second limit unrestricted or inconsequential. Difficulties
have arisen in this regard as companies which, though, meet one of the criteria but exceed the
monetary limit in respect of second criteria excessively are
also getting classified as `small
companies’ and

(b) in
clause (b) of sub-section (11) of section 186, in the absence of provisions for
exemption to a banking company or an insurance company or a housing finance
company making acquisition of securities in its ordinary course of business, a
difficulty has arisen that such companies cannot make any acquisition of
securities in their ordinary course of business;

Now,
therefore, in exercise of the powers conferred by sub-section (1) of section
470 of the Companies Act, 2013 (18 of 2013), the Central Government hereby
makes the following Order to remove the aforesaid difficulties, namely:-

(1) Short
title and commencement.- (1) This Order may be called the Companies (Removal of
Difficulties) Order, 2015.

(2) It shall
come into force on the date of its publication in the Official Gazette.

2. In the
Companies Act, 2013 (hereinafter referred to as the said Act), –

(a) in
section 2, in clause (85), in sub-clause (i), for the word “or”
occurring at the end, the word “and” shall be substituted; and

(b) in
section 186 of the said Act, in sub-section (11), in clause (b), after item
(iii), the following item shall be inserted, namely :-

“(iv)
made by a banking company or an insurance company or a housing finance company,
making acquisition of securities in the ordinary course of its business.”.

[F. No. 1/
13 /2013-CI-V-Part]

SD/-

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