Companies (Amendment) Bill, 2017 passed in Parliament

Parliament has passed the Companies (Amendment) Bill, 2017 with the Rajya Sabha adopting it today. The Lok Sabha had passed it earlier in the monsoon session. The bill seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business. It provides for more than 40 amendments to the Companies Act, 2013, which was passed during the previous UPA regime. 

Replying to issues raised by the members during a discussion on the bill in the Rajya Sabha, Minister of State for Corporate Affairs P P Chaudhary said the amendment would ensure better corporate governance and improve the ease of doing business in the country. 

The minister dismissed the apprehensions raised by members that the government was not doing enough to ensure that companies comply with the Corporate Social Responsibility, CSR, provisions. The minister said the government has already issued notices to many companies for not complying with CSR provisions under the Companies Act.

On the government's promptness in taking action against companies at fault, Mr Chaudhary said the government has taken several step against such firms which were not taken in last several years. He said the government has taken action against over two lakh shell companies and Special Fraud Investigation Office was looking into it.

Earlier, initiating the discussion on the bill, Congress leader and former Finance Minister P Chidambaram suggested a separate law for protecting the interests of small and medium companies. He said the proposed amendments may be used by larger companies as well, which is not the objective of the bill. 

Mr Chidambaram said that the provisions incorporated in the bill are undesirable and may have negative impact on the economy. He also expressed concern that the bill seeks to give powers to executive which should have been allowed to remain in the purview of Parliament. Mr Chidambaram also called for regulation of joint stock companies. He insisted that the provisions of forward and insider trading must be harmonized with the SEBI provisions. #casansaar (Source - NewsonAir)