The Rajya Sabha on Wednesday cleared amendments to the Companies Act, 2013 to enhance ease of doing business in India.
The bill had obtained the nod of the Lok Sabha in the last session. Replying to the debate on amending the Act, Finance and Corporate Affairs Minister said the law will be reviewed further by an expert committee to be set up shortly to see where the shoe pinches.
As many as 16 amendments were made to the law, correcting issues with provisions relating to winding up of companies, board resolutions, bail provisions and utilisation of unclaimed dividends to bring the law in tune with the global standards. It also does away with the need to secure certificate of commencement before starting operations.
Jaitley said the amendments were necessitated as there have been complaints from companies about the problems ever since the law was enacted in 2013. Among the major concerns of stakeholders was protecting confidentiality of board resolutions.
Stakeholders were also concerned that stringent regulations for related party transactions could hurt routine business activity.
The finance minister, observing that the existing law had some stringent and difficult provisions which made doing business in India difficult, said the amendments were aimed at simplifying bail provisions.
“Now, except in various issues of serious frauds, normal CrPC (code of criminal procedure) provisions would apply, Jaitley said. The amendments also include provision to ensure that frauds beyond a certain threshold would need to be mandatorily reported by the auditors to the government. The changes have also been cleared to fast-track the approval process for draft notifications aimed at granting exemptions from various provisions of the Companies Act.
The Companies (Amendment) Bill, 2014 can be accessed below.