The proposed amendment will be carried out in Section 23 of the Companies Act, 2013
The Lok Sabha on September 19 passed the Companies (Amendment) Bill to amend some 48 sections of the Companies Act, 2013 to decriminalise various offences and promote ease of doing business in India.
The proposed amendment will be carried out in Section 23 of the Companies Act. The Bill seeks to:
> Decriminalise various compoundable offences,
> Reduce penalty for certain offences, reduces timeline for rights issues,
Permit direct overseas listing of Indian corporates securities in permissible foreign jurisdictions through an enabling provision,
> Relax corporate social responsibility (CSR) requirement for companies with an obligation to spend Rs 50 lakh or less – where they will now not be required to constitute a committee for the same,
> Introduce a new chapter related to producer organisations – particularly beneficial to farmers,
> Create of separate benches at the National Company Law Appellate Tribunal (NCLAT),
> Amend 17 provisions to improve ease of doing business.
Speaking on the house floor, Finance Minister Nirmala Sitharaman said this will reduce litigation burden on small businesses. She noted the amendment keeps 124 penal provisions compared to 134 in the original Act.
“There will be no relaxation for serious offences, including fraud and those that cause injury to public interest or deceit,” the finance minister sought to reassure, pointing out that the number of “non-compoundable” offences under the Act remains unchanged at 35.
Compoundable offences are those which can be dealt with via monetary sums.
