Lok Sabha passes Bill to amend Companies Act, promote ease of doing business

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  Lok Sabha passes Bill to amend Companies Act, promote ease of doing business

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  1. The bill 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.
  2. The Companies (Amendment) Bill, 2020 seeks to help small companies by reducing litigation burden on them.
  3. 48 sections have been amended to decriminalise them and 17 sections have been amended to improve the ease of living.
  4. 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.
  5. These offences were minor, technical or procedural defaults and did not involve fraud, injury to public interest or any non-compoundable offences. 
  6. This would also reduce the burden on the National Company Law Tribunal.
  7. 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.
  8. 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.
  9. 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.
  10. It also provides for setting up of additional benches of the National Company Law Appellate Tribunal in locations specified by the Centre.
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PT's IAS Academy: Lok Sabha passes Bill to amend Companies Act, promote ease of doing business
Lok Sabha passes Bill to amend Companies Act, promote ease of doing business
Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
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