Finance minister Nirmala Sitharaman on Sunday said the Companies Act would be further decriminalised. The number of compoundable offenses that can be dealt by an internal adjudication mechanism will go up to 58 from 18.
She said the amendments would be brought in through an ordinance but did not give any details on the timeline.
Some of these offenses relate to shortcomings in CSR reporting, inadequacies in board reports, filing defaults and delay in holding AGMs.
According to industry observers, most of the announced changes are already pending in Parliament and the government is using the Covid-19 situation to expedite these changes by bringing the ordinance
“The Companies(Amendment) Bill, 2020 already has the provisions which were announced on Sunday. However, as Parliament is not in session, to speed up the passing of the law, the government plans to bring an ordinance to amend Companies Act 2013,” said Ranjeet Pandey, central council member, the Institute of Company Secretaries of India (ICSI).
The bill marks a second attempt by the Union ministry of corporate affairs to decriminalise offenses under the Companies Act, 2013. The first attempt was the passing of Companies (Amendment) Act, 2019 which had recategorised 16 of 81 compoundable offenses as civil defaults that can be dealt with adjudicating officers appointed by the central government.
