Within a span of one year, the Govt. has amended the Companies Act 2013 again to bring in several changes. The Minister of Corporate Affairs Smt. Nirmala Sitharaman has informed that the Govt. has approved the amendments in Companies Act in the Cabinet Meeting held on 4th March 2020 which makes it the second change in last one year.
Some of the key changes are highlighted below:
- Cabinet has approved Seventy two (72) changes to 65 sections of the Companies Act 2013
- Out of compoundable offences under the Act, Twenty three (23) will get recategorised so that they can be dealt with through in-house adjudication framework
- Seven (7) offences have been omitted altogether
- Eleven (11) will have limited punishment in the form of fines alone by removing imprisonment provision
- Five (5) offences will be dealt with under different frameworks
- Six (6) offences which had earlier been decriminalised will now have reduced quantum of penalties
- Companies which have an obligation to spend Rs. 50 lakh (Rupees Fifty Lakhs) per annum or less on Corporate Social Responsibility (CSR) are no longer required to have a CSR committee.
- Companies which spend over the obligated 2% on CSR in a particular year can carry it forward as credit for fulfillment of CSR obligations for the next few years as well.
The entire changes being brought by the Govt. is to facilitate the ease of doing business in India, said Smt. Nirmala Sitharaman. And the Govt. has earlier also amended the Companies Act to decriminalize the offences. The Govt. is working on removing the imprisonment angle and reducing the punishment and the quantum of penalty.
The Companies (Second Amendment) Bill, 2019 removes the criminality under the Act and eases living for law-abiding corporate and de-clogs the criminal justice system in the country.