MCA to propose Corporate Amendment Bill for LLP, Companies Act changes

The Ministry of Corporate Affairs is set to propose a Corporate Amendment Bill covering changes in the Companies Act and LLP Act, with a focus on easing compliance and processes for businesses

The Ministry of Corporate Affairs (MCA) is planning to propose a Corporate Amendment Bill covering changes in both the Companies Act and the Limited Liability Partnership Act, with the main focus on easing processes and the compliance burden on businesses, according to sources.

 

The MCA has finalised the cabinet note covering comprehensive changes across the two Acts.

 

“The forms are being rationalised, more action on decriminalisation is also being proposed for greater ease of doing business,” a senior official said.

 

The government is expected to table the Insolvency and Bankruptcy Code Amendment Bill, also under the MCA, in the second half of the ongoing Budget session.

 

“We have accepted most of the recommendations made by the select committee on the proposed Bill,” the senior official further added.

 

MCA to amend laws governing professional services

 

The ministry is also expected to propose changes in all the Acts governing professional services, including Chartered Accountants, Cost Accountants and Company Secretaries, soon. The amendments would be based on the recommendations of a high-level committee to create a global multidisciplinary practices firm in India.

 

Indian regulations, for instance, 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 government is likely to address these concerns by amending its legislations.

 

Companies Act amendments may expand NFRA powers

 

Through the amendments to the Companies Act, MCA sources said it is 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.

 

The MCA had amended the Competition Act in 2023, bringing in provisions to keep up with the new-age economy such as deal value thresholds and business-friendly measures such as settlement and commitment options for violators.

 

This would mean a major overhaul of all corporate legislations under the MCA is on the anvil.

 

Government pushes ‘light-touch’ regulatory framework

 

The changes are in keeping with the government’s view of having a “light-touch regulatory framework based on principles and trust” that will unleash productivity and employment.

 

The Companies Law Review Committee had finalised its recommendations for 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.