The Companies (Amendment) Bill, 2020 was introduced by the Minister for Corporate Affairs, Ms Nirmala Sitharaman, in Lok Sabha dated September 19, 2020. The Bill was introduced with the purpose to amend the Companies Act, 2013.
After a long discussion in the Lower House session of parliament, The Lok Sabha has passed the Companies (Amendment) Bill, 2020.
The key features introduced via amendment bill are:
1. The major objective was to Decriminalize certain offences under Companies Act 2013, which could be identified objectively and also otherwise lack an element of frauds or do not involve public interest at large.
2. The amendment proposes the establishment of Benches of the National Company Law Appellate Tribunal.
3. The amendment also empowers the Central Government to exclude a certain class of companies from the definition of Listed Company, in consultation with the Securities and Exchange Board of India.
4. In order to provide clarification for the Jurisdiction of Trial Court on the basis of place of commission of an offence under section 452 that states an act for wrongfully withholding the property of a company by its officers/employees, as the case may be.
5. The purpose is also to provide relaxation relating to charging of higher additional fees in case of any default on two or more occasions in submitting, filing registering or recording any document related to fact or information as provided under section 403.
6. The amendment is to Extends the Applicability of section 44-6B, which is to impose lesser penalties for companies covered under the definition of Small companies & One Person Companies and also to benefit to Producer Companies & Start-ups.
7. In order to provide provisions for enabling Payment of Adequate Remuneration for Nonexecutive directors in cases of insufficient profits subject to the provisions for remuneration to executive directors, as the case may be.
8. To provide an exemption for any class of persons from complying with the requirements of section 89 which states the Declaration of a beneficial interest in shares and also exempted any class of Foreign companies or companies incorporated outside India.
9. In order to reduce the timelines in case of applying for Rights Issue, the purpose is to fasten such issues under section 62.
10. The aim is to provide exemptions to certain classes of companies covered under the definition of Non-Banking Financial companies & Housing finance companies from filling certain resolutions under section 117.
11. In order to provide that the companies which have Corporate Social Responsibility spending obligation up to fifty Lakh rupees shall not be required to constitute the corporate Social responsibility Committee.
12. To provide a window within which penalties shall not be imposed in cases of delay in filing of Financial Statements & Annual Returns.
13. The amendment allows direct listing of securities by Indian companies in permissible foreign jurisdictions, subject to the rules prescribed.
In accordance with the above amendments, it is considered as a welcoming initiative for the small companies facing so much of difficulties in order to comply with the compliances. The initiative taken by decriminalizing certain sections of the Companies Act will enable the small Companies to grow by reducing their litigation burden. The amendments also stated that their will be no relief in the cases of serious offences including fraud and those that work against the public interest in any possible way.
eStartIndia is the professional tech-based online business and legal services providing a platform that helps the clients to simplify the procedures of all kinds of registration, implementation, tax concerns, and any other compliance and services related to the business in India.