The Lok Sabha on Wednesday passed the Companies amendment Bill, 2014, which provides for severe punishment for those raising illegal deposits from the public.

The Union Cabinet had approved the amendments earlier this month.

Under the new norms proposed, the paid-up capital criteria has been scrapped while threshold limits for various transactions for getting shareholders' nod has now been stipulated.

Another amendment approves prescribing specific punishment for deposits accepted, a condition that was left out in the act inadvertently, the ministry said.

Towards meeting a "corporate demand," an amendement proposes "prohibiting public inspection of Board resolutions filed in the registry".

Among the major concerns of stateholders were protecting confidentiality of board resolutions, as well as the provision of auditors being required to report suspected frauds at the companies audited by them.

Stakeholders were also concerned that stringent regulations for related party transactions, or those transactions between the company and another in which a board member or members are interested, could hurt routine business activity.

The amendment also proposes to exempt corporates from the need to get shareholders' nod in the case of related party transactions valued lower than Rs 100 crore or 10 percent of net worth.

Under the old system, shareholders' permission through a special resolution was required in case of related party transactions for all firms with a paid up capital of Rs 10 crore or more.

Another amendment exempts related party transactions between holding companies and wholly owned subsidiaries from the requirement of approval of non-related shareholders.  (Zee News)