The Centre on Tuesday introduced the Companies Amendment Bill 2020 in the Lok Sabha to decriminalise procedural and technical lapses and allow direct listing of securities by Indian companies in permissible foreign jurisdictions.
The Bill has also laid down rules for incorporation, registration, amalgamation, and functioning of producer companies, apart from paving the way for the conversion of inter-state cooperatives into producer companies.
The proposed amendment is in line with the government’s aim to streamline the functioning of farmer-producer organisations in order to achieve the goal of promoting 10,000 new FPO in the next five years. A host of activities have been included into the ambit of producer companies that include financing the need of primary producers largely farmers.
The Bill has proposed to exclude certain class of companies from the definition of “listed company”, mainly for listing of debt securities in consultation with the Securities and Exchange Board of India (Sebi).
It has also proposed allowing payment of adequate remuneration to non-executive directors in case of inadequacy of profits, by aligning the same with the provisions for remuneration to executive directors in such cases. The Bill also provides a window within which companies will not have to pay any penalties for delay in filing annual returns and financial statements in certain cases.
To bring greater accountability and transparency, specific classes of unlisted companies have been proposed to prepare and file their periodical financial results.
The Bill has extended exemptions from filing certain resolutions to a particular class of non-banking financial companies and housing finance companies to reduce compliance burden for routine lending activities.