MCA finalises cabinet note on Companies Amendment Bill, eyes winter session

MCA finalises cabinet note; Bill to streamline rules, permit multi-disciplinary firms and widen NFRA's powers

The Ministry of Corporate Affairs has finalised the Cabinet note for the Companies Amendment Bill, which is expected to be introduced in the winter session of the Parliament, official sources said.

 

The focus of the amendment bill, sources said, was on bringing about ease of doing business, decriminalisation and clarifications.

 

The bill is also expected to ease provision related to setting up of a domestic multidisciplinary practices firm by allowing varied professionals to be part of the firm.

 

The committee on the creation of an Indian version of the Big Four, led by MCA secretary Dipti Gaur Mukherjee, is discussing the way forward to support the expansion of domestic smaller accounting and audit firms. The government in a concept note had said that the restriction on firms to partner with other professionals has put them at a disadvantage. 

Indian regulations do not allow professionals such as CAs, CSs, lawyers, and actuaries to work together under a single firm structure, limiting collaboration and the ability to offer integrated services like those provided by international firms.

 

The MCA is also considering giving more powers to the National Financial Reporting Authority to delegate some of its functions outside its executive board in order to create a division of its investigative and disciplinary functions, sources said.

 

The Delhi High Court, in an order earlier this year, had said that the absence of a bifurcation of functions exposes NFRA to allegations of bias, a tendency to dismiss challenges to pre-formed opinions, and disregard for arguments aimed at review and reappraisal.

 

Finance Minister Nirmala Sitharaman in her Budget speech on February 1, 2025 had said that the government is determined to ensure that regulations keep up with technological innovations and global policy developments.

 

Talking of a “light-touch regulatory framework based on principles and trust” that will unleash productivity and employment, Sitharaman had said, “Through this framework, we will update regulations that were made under old laws.”

 

The Companies Law Review Committee had finalised its recommendations for the changes in the Companies Act over two years ago.

 

Following that, more changes have been made in the bill, sources said. These changes have also been incorporated in the Cabinet note finalised by the MCA. 

What Bill focuses on

• Bringing about ease of doing business, decriminalisation and clarifications
• Easing provision related to setting up a domestic multidisciplinary practices firm
• Will be done by allowing varied professionals to be part of the firm