Bill in Lok Sabha to amend companies law

Seeking to facilitate ease of doing business, government today introduced a bill in Lok Sabha to amend the companies law to provide stringent punishment for illegal money pooling activities, among other things.
The Companies (Amendment) Bill 2014, introduced by Finance Minister Arun Jaitley, proposes as many as 14 changes in various provisions of the new companies law, which was passed by the previous UPA regime.
"Some of the amendments are also required with a view to further facilitate 'ease of doing business' and deal with certain difficulties in this behalf brought out by the industry chambers and others," the statement on objects and reasons of the bill said.

The bill proposes punishment for illegal money pooling activities, amid rising instances of people getting duped by such fraudulent schemes.
The legislation is among the major initiatives of Prime Minister Narendra Modi government to make the country a more friendlier place to do business.
Besides the changes pertain to related party transactions, fraud reporting by auditors, public inspection of board resolutions, responsibilities of audit committee, requirement of minimum paid-up share capital and strengthening of benches for hearing winding up cases.

Amendments have been proposed with regard to restrictions on bail, making common seal optional and jurisdiction of special courts to try offences.

Most provisions of the Companies Act, 2013 -- which replaces the nearly six-decade old legislation that govern corporates in the country -- came into effect from April 1 this year.
The statement said various stakeholders have expressed "practical difficulties in complying with some of the requirements laid down in the commenced provisions". The stakeholders include industry chambers, professional institutes, legal experts, ministries and departments.
"It was noted that some of the issues raised and suggestions made can be addressed only by way of amendment in the Act and their immediate resolution is also considered to be necessary," it said.