The Ministry of Corporate Affairs ( MCA ) has notified amendment in exemptions given to Government Companies including paid-up share capital of Government Companies.
The new amendment inserts an explanation to Chapter l, clause (45) of section 2 of Companies Act,2013 signifying that the “paid-up share capital” shall be construed as “total voting power”, where shares with differential voting rights have been issued.
Paid-up capital is the amount of money a company has received from its shareholders in exchange for shares of stock sold directly to investors. Total voting power is the right to vote in regard to the matters on the poll at a meeting of a company. This amendment gives power to shareholders to call the shots in company matters.
Another amendment that has been made in Chapter Xll, first and second proviso to sub-section (1) of section 188 states that any contract or arrangement with a related party with respect to sale, purchase or supply of any goods or materials shall not apply to a Government company in respect of contracts or arrangements entered into by it with any other Government company, or with Central Government or any State Government or any combination of that.
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