Companies law amendment passed
Lok Sabha passed the companies law amendment bill, which proposed 72 changes to the Companies Act, 2013 to decriminalise and reduce or remove penalties of various offences, aimed at improving the ease of doing business. There are 48 sections we have amended to decriminalise them and 17 sections have been amended to improve the ease of living, finance minister Nirmala Sitharaman said.
- As part of the Companies (Amendment) Bill, 2020, almost 23 compoundable offences would be recategorised out of 66 compoundable offences under the Act, to be dealt with an in-house adjudicating mechanism. Besides, seven compoundable offences would be omitted.
- According to the government, these offences were minor, technical or procedural defaults and did not involve fraud, injury to public interest or any non-compoundable offences. This would also reduce the burden on the National Company Law Tribunal.
- The important point is that serious offences, called non-compoundable offences, from 2013 and today, the number of such offences will remain 35. These include fraud, injury to public interest or deceit.
- Provisions under the bill allowed companies to roll over excess corporate social responsibility (CSR) spends to succeeding years and exempted companies with a CSR obligation below Rs 50 lakh from the need to set up a CSR committee.
- The bill also included enabling provisions for the direct listing of securities of Indian public companies in permissible foreign jurisdictions and empowered the government, in consultation with the Securities and Exchange Board of India, to exempt private companies issuing specified classes of securities on exchanges from the definition of a listed company.
- Further, the exemption provided to key managerial posts from government-mandated restrictions on compensation in case a company is facing liquidation, is proposed to be expanded to include independent directors as well.
- It also provides for setting up of additional benches of the National Company Law Appellate Tribunal in locations specified by the Centre.