Lok Sabha passes Bill to amend Companies Act 2013

• Lok Sabha passed a bill to further amend the Companies Act 2013.

• The bill seeks to amend Companies Act, 2013 aiming to improve ease of doing business and will also reduce litigation burden on small businesses.

• Companies Act 2013 regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.

Key features:

• Decriminalise various compoundable offences which can be determined objectively and do not involve large public interest.

• Generally, compoundable offences are those which can be settled by paying a certain amount of money.

• Removes penalty for certain offences, reduces the amount of fine payable in certain offences.

• Permit direct overseas listing of Indian corporates securities in permissible foreign jurisdictions.

• Under current legal framework, Indian companies cannot directly list their securities abroad without getting themselves listed in domestic market.

• Relax corporate social responsibility 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.

• Setting up of additional benches of the National Company Law Appellate Tribunal in locations specified by the Centre.

• Introduce a new chapter related to producer organisations- particularly beneficial to farmers.

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Mains Paper 2: Polity

Prelims level: Companies Act 2013

Mains level: Key findings relating to amending the Companies Act 2013

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