Companies (Amendment) Act, 2019: Sections 14, 26, 29, 35, 53 and 64

1. Section 14: Alteration of articles and conversion to a private company

Section 5 of the 2019 Amendment Act amended section 14 of the Companies Act, 2013. Section 14 governs alteration of a company's articles of association by special resolution, subject to the Act and conditions in its memorandum.

Under the substituted provisos to section 14(1), an alteration converting a public company into a private company is not valid without approval by order of the Central Government, on an application in the prescribed form and manner. Applications already pending before the National Company Law Tribunal (NCLT) on the relevant commencement date were to be disposed of by the Tribunal under the earlier provisions. Section 14(2) was also amended to replace the reference to the Tribunal with the Central Government.

Companies should refer to the applicable Companies (Incorporation) Rules, 2014, including the prescribed conversion application process, and complete associated filings with the Registrar of Companies (ROC).

2. Section 26: Matters to be stated in a prospectus

Section 6 of the 2019 Amendment Act changed the references to registration in section 26(4), (5) and (6) to filing, and omitted section 26(7). Section 26 concerns disclosures and prescribed particulars in a prospectus, together with the applicable filing requirements.

The amendment distinguishes filing a prospectus with the Registrar from the former statutory wording requiring its registration. It does not remove the company's obligation to comply with prospectus disclosure, signature, filing and securities-law requirements. The applicable commencement notification and current version of section 26 should be consulted for transactions involving a prospectus.

3. Section 29: Securities in dematerialised form

Section 7 of the 2019 Amendment Act omitted the word public from section 29(1)(b) and inserted section 29(1A). The latter empowers the Government to prescribe classes of unlisted companies whose securities must be held or transferred only in dematerialised form, in accordance with the Depositories Act, 1996 and regulations made under it.

Dematerialisation means holding securities electronically through a depository instead of relying on physical certificates. The Companies (Prospectus and Allotment of Securities) Rules, 2014 provide more detailed requirements. Rule 9A covers unlisted public companies, while rule 9B, introduced in 2023 and subsequently amended, covers specified private companies other than exempt categories, notably small companies and government companies.

For private companies covered by rule 9B, the rules address conversion of existing securities, electronic issuance, transfers, and dematerialisation of promoters', directors' and key managerial personnel's holdings before specified corporate actions. Compliance dates depend on the company's relevant financial year and applicable extensions; the special extended deadline for the initial cohort was 30 June 2025, while other cohorts may have different dates. Producer companies have a distinct timeline. The definition of a small company and relevant exemptions should be checked under the rules in force at the time.

4. Section 35: Civil liability for misstatements in a prospectus

Section 8 of the 2019 Amendment Act amended section 35(2)(c) by replacing the expression delivery of a copy of the prospectus for registration with filing of a copy of the prospectus with the Registrar.

Section 35 provides for civil liability where a person subscribes for securities on the basis of a misleading statement or misleading inclusion or omission in a prospectus and suffers loss or damage. The statutory defences in section 35(2), including those relating to consent and knowledge before filing, must be read with the entire section. The amendment aligns the defence wording with the prospectus filing terminology in section 26.

5. Section 53: Prohibition on issue of shares at a discount

Section 9 of the 2019 Amendment Act substituted section 53(3) to introduce a civil penalty for prohibited discounted share issues. Section 53 generally prohibits issuing shares at a discount, subject to the exceptions provided by law, including sweat equity shares under section 54 and qualifying debt conversion arrangements under section 53(2A).

Under section 53(3), the company and each officer in default may face a penalty up to the lower of the amount raised through the discounted issue or Rs. 5 lakh. In addition, the company must refund the money received to the persons allotted the shares, with interest at 12% per annum from the date of issue. Section 53(2) also provides that a share issued at a prohibited discount is void.

6. Section 64: Notice of alteration of share capital

Section 10 of the 2019 Amendment Act substituted section 64(2), introducing a penalty for failure to give the prescribed notice of share-capital changes. Section 64(1) requires a company to file a notice with the ROC, together with the altered memorandum, within 30 days of specified alterations or increases of share capital or redemption of redeemable preference shares.

Important subsequent amendment: The Companies (Amendment) Act, 2020 further revised section 64(2), effective 21 December 2020. The current provision imposes Rs. 500 for each day of continuing default, capped at Rs. 5 lakh for the company and Rs. 1 lakh for each officer in default. The earlier 2019 figure of Rs. 1,000 per day, with a different cap, should not be used as the current penalty.

Official legislation and compliance resources

The Companies (Amendment) Act, 2019 (Gazette PDF) provides the enacted wording of sections 5 to 10. For subsequent amendments, rules, notifications, commencement dates, forms and circulars, consult the MCA portal and its Acts and Rules e-book, India Code and the NCLAT official Acts and Rules repository.

This article describes the statutory framework as reviewed on 7 October 2026. Where commencement, exemptions or procedural rules matter, verify the applicable official notification for the relevant transaction date.