Proposals of the Companies (Amendment) Bill 2016 as introduced in the Lok Sabha on 16th March, 2016
The Companies Act 2013 was enacted to improve corporate governance and to further strengthen regulations for the companies, keeping in view the changing economic environment as well as the growth of our economy. The Ministry of Corporate Affairs has notified 284 Sections of the Act. However, there were difficulties in smooth implementation of the Companies Act 2013. The Ministry of Corporate Affairs has issued various notifications, circulars, Removal of difficulty orders and amendment in Rules for resolving the issues and to help in smooth implementation. Further, certain amendments were also brought through the Companies (Amendment) Act 2015.
While presenting the Companies (Amendment) Act 2015 to the Rajya Sabha, the Finance Minister mentioned that various queries were received that are being addressed through issuance of Notifications! Amendment in Rules and some of them have been addressed through these amendments. However, these 16 amendments are not enough to cover everything. The Finance Minister stated that “a broad-based committee will continue to go into this question for the next few months as to where the shoe pinches, and this may not be the last amendments which we are bringing in.”
Consequently, the Government of India constituted The Companies Law Committee in June 2015 for making recommendations on the issues arising out of implementation of the Companies Act 2013. The Committee submitted its Report to the Government on 1st February 2016.
Based on the report of the Companies Law Committee and comments received from the stakeholders and Ministries! Departments, it has been decided by the Government to amend the Companies Act, 2013 and to bring out another Amendment Bill, 2016.
Through the Companies (Amendment) Bill 2016 which was introduced in the Lok Sabha on 16th March, 2016, around 100 amendments have been proposed. The proposed changes are broadly aimed at addressing difficulties in implementation owing to stringency of compliance requirements; facilitating ease of doing business in order to promote growth with employment; harmonisation with accounting standards, the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder, and the Reserve Bank of India Act, 1934 and the regulations made thereunder; rectifying omissions and inconsistencies in the Act.