Lok Sabha passes bill to amend companies law
PrintListen to this Article
The Companies (Amendment) Bill, 2020 seeks to decriminalise various penal provisions, permit direct overseas listing of Indian corporates and introduce a new chapter related to producer organisations in the legislation.
Reduction in penalties for certain offences as well as in timeline for rights issues, relaxation in CSR compliance requirements and creation of separate benches at the National Company Law Appellate Tribunal (NCLAT) are also among the proposed changes.
Speaking on the bill, finance and corporate affairs minister Nirmala Sitharaman said decriminalisation of various provisions under the companies law will also help small companies by reducing litigation burden on them.
Around 48 sections of the Companies Act, 2013 will be amended to decriminalise various offences.
Sitharaman said there are currently around 124 penal provisions compared to 134 in 2013 under the Companies Act.
Stressing that there will be no relaxation for serious offences, including fraud and those that cause “injury to public interest or deceit”, the minister said the number of “non-compoundable” offences under the Act remains the same at 35.
Generally, compoundable offences are those which can be settled by paying certain amount of money.
A new chapter on producer organisation will be added, the minister said and noted that it will be particularly helpful for farmer producer organisations.
For promoting “ease of doing business,” the minister said that 17 provisions will be amended.
Amendment would be carried in Section 23 of the Act for including an enabling provision to allow direct listing of securities by Indian public companies in permissible foreign jurisdictions. This would provide alternative source of capital for domestic companies and also broaden their investor base.
Among others, companies with CSR obligation to spend Rs 50 lakh or less will not be required to constitute a committee in this regard.
Under the Act, certain class of profitable companies are required to shell out at least 2 per cent of their three-year annual average net profit towards CSR (Corporate Social Responsibility) activities. #casansaar (Source - HT)
Category : Companies Act | Comments : 0 | Hits : 462
In a bid to prevent Chinese companies from circumventing Indian laws to do business in the country, the government has come up with a notification that requires land border-sharing nations' citizens who are appointed as directors on boards of companies to obtain a security clearance. According to a notification issued by the Ministry of Home Affairs on June 1, if a person from countries that share a land border is seeking an appointment in an Indian company, "nece...
The Ministry of Corporate Affairs (MCA) has information of the companies which have violated the provisions of Company Law. This was stated by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs, in response to a written question in the Lok Sabha today. MCA either directly or through Regional Directors (RDs)/ Registrar of Companies (ROCs) receive complaints against companies from public (Individual/entities), from other Ministries etc., which are ex...
Government of India Ministry of Corporate Affairs (PI Section) Invitation for Public Comments on Draft Valuers Bill, 2020 Ministry of Corporate Affairs had constituted a Committee of Experts (CoE) under the Chairpersonship of Shri M. S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India (IBBI) on 30th August 2019 to examine the need for an institutional fra...
The Supreme Court has issued non-bailable warrants against managing directors of 32 companies for not complying with its order. The managing directors now face imminent arrest and will have to be produced in the top court by the Mumbai Police if they fail to get preventive orders. The list of defaulting companies includes Akshar Mercantile, Beta Trading, Vinay Mercantile, Anoop Multitrade, Anshul Mercantile, Everfame Trading, Highzone Trading, Inorbit Trading Co., Laksh Mercantile, M...
The government is set to decriminalise two-thirds of the Companies Act as it looks to do away with jail term in over 40 sections out of the 66 where compounding is permitted. Besides, the ministry of corporate affairs, which is pushing the change, is also seeking to lower the penalty for small companies, sources told TOI. The move is expected to benefit around eight lakh of the 11 lakh registered Indian companies which have a turnover of up to Rs 2 crore and a paid-up capital of Rs 50 lakh or...
Comments