Penalties in Companies Act cut
Lok Sabha on Saturday passed a bill to further amend the Companies Act and decriminalise various compoundable offences as well as promote ease of doing business in the country.
The Companies (Amendment) Bill, 2020 seeks to decriminalise certain penal provisions, permit direct overseas listing of Indian corporate houses and introduce a new chapter related to producer organisations in the legislation.
Reduction in penalties for certain offences as well as in timeline for rights issues, relaxation in CSR compliance requirements and creation of separate benches at the National Company Law Appellate Tribunal are also among the proposed changes.
Finance minister Nirmala Sitharaman said decriminalisation of various provisions will also help small companies by reducing the litigation burden on them.
Around 48 sections of the Companies Act, 2013 will be amended. Sitharaman said there are around 124 penal provisions compared with 134 in 2013 under the Companies Act.
The minister said the number of “non-compoundable” offences under the Act remains the same at 35. Generally, compoundable offences are those which can be settled by paying certain amount of money.