Lok Sabha passes Bill to amend Companies Act, promote simple doing business

Lok Sabha passes Bill to amend Companies Act, promote simple doing business
The Bill allows direct listing of Indian companies on foreign stock exchanges and revokes the criminal provisions added to the businesses Act for violations of provisions of corporate social responsibility rules.

Finance and company Affairs Minister Nirmala Sitharaman said decriminalisation of varied provisions under the businesses law also will help small companies by reducing litigation burden on them.

The Lok Sabha on Saturday passed the businesses Act (Amendment) Bill, 2020, which decriminalises variety of technical and filing-related corporate offences. It also allows direct listing of Indian companies on foreign stock exchanges and revokes the criminal provisions added to the businesses Act for violations of provisions of corporate social responsibility rules.

The Bill is about to exchange an Ordinance that has already brought these changes into effect.

It also looks to market simple doing business.

Speaking on the Bill, Finance and company Affairs Minister Nirmala Sitharaman said decriminalisation of varied provisions under the businesses law also will help small companies by reducing litigation burden on them. Around 48 Sections of the businesses Act, 2013 are going to be amended to decriminalise various offences.

Sitharaman said there are currently around 124 penal provisions compared to 134 in 2013 under the businesses Act.

Stressing that there’ll be no relaxation for serious offences, including fraud and people that cause “injury to public interest or deceit”, the minister said the amount of “non-compoundable” offences under the Act remains an equivalent at 35.

Generally, compoundable offences are those which may be settled by paying specific amount of cash .

There will even be a replacement chapter on producer organisation, the minister said, adding that it’ll be particularly helpful for farmer producer organisations. For promoting “ease of doing business,” the minister said that 17 provisions are going to be amended.

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