News By/Courtesy: Lia Jils | 20 Sep 2020 10:17am IST

HIGHLIGHTS

  • Imprisonment substituted with monetary penalty
  • Reduction in the amount of penalty.
  • contribution towards CSR for certain profitable companies.

All the companies in India are incorporated under the companies act. The Lok Sabha passed a bill on Saturday to make changes in the company's activities to promote and make the business easier in the country. The main aims of The Companies Amendment Bill, 2020 is to allow various legal provisions, giving permits for the direct overseas listing of Indian Corporates and to introduce something new in the producer organizations in the legislation. There are also other changes including the reduction of penalties for certain offenses, bringing relaxation in CSR compliance requirements, and the creation of separate judicial benches at the National Company Law Appellate Tribunal.

According to finance and corporate affairs minister, Nirmala Sitharam legitimization of various provisions under companies law helps small companies to reduce their litigation burden. The amendment affects around 48 sections of the Companies Act,2013 to decriminalize various offenses. There are 124 penal provisions compared to 134 in 2013 under the Companies Act. In the meantime opposition parties like Congress, DMK, TMC opposed LokSabha for the decision of setting up the PM CARES fund because it lacked transparency. All of them were participating in the debate on the bill which made various compliance relief measures for taxpayers which includes extending the time for filing returns at the time of coronavirus and all the tax benefits donated to the fund. No one could understand the logic behind the trust fund.

Sitharam said that there will be no relaxation for serious crimes, including fraud and those who cause injury to the public interest. She said that the number of " non - compoundable" offenses under the act remains the same at 35. Compoundables offenses are those which can be settled by paying a certain amount of money. There will also be changes in the producer organization and this would be helpful for farmer producer organizations. 17 provisions will be amended for promoting the ease of doing business. To provide an alternative source of capital for domestic companies and help them to broaden their investor base the section 23 of the Act will be amended including a provision to allow direct listing of securities by Indian public companies in permissible foreign jurisdictions. India is the first country to legally mandate corporate social responsibility. The companies with CSR obligation to spend 5o lakhs or less than that will not be required to constitute a committee. According to the act, a group of profitable companies is required to give 2 percent of their annual average net profit towards corporate social responsibility.

 
This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 20 Sep 2020 20:47pm IST


Tags : #loksabha #companiesamendmentbill2020

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