RS passes bill to amend companies law; various offences decriminalised

Parliament on Tuesday 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 was passed by a voice vote in Rajya Sabha, amid several opposition MPs boycotting the proceedings of the House to protest suspension of eight members. The Lok Sabha had given its approval to the bill on September 19.

The Companies (Amendment) Bill, 2020 seeks to decriminalise various penal provisions, permit direct overseas listing of Indian corporates 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 (NCLAT) are also among the proposed changes.

Speaking on the bill after a brief discussion in Rajya Sabha, Finance and Corporate Affairs Minister Nirmala Sitharaman said the government keeps coming to Parliament with amendments as the Companies Act 2013 still has issues.

She said the stakeholders keep giving inputs as they say the law was not still helping them and they were facing issues related to compliances.

Around 48 sections of the Companies Act, 2013 are being amended to decriminalise various offences.

Sitharaman said there are currently around 124 penal provisions compared to 134 in 2013 under the Companies Act.

The minister, however, stressed that those engaged in fraud, deceit and injuries to public interest, will be dealt with firmly.