Lok Sabha passes companies law bill to decriminalise various offences, promote ease of doing business

Lok Sabha passed the companies law amendment bill on Saturday, which proposed 72 changes to the Companies Act, 2013 to decriminalise and reduce or remove penalties of various offences, aimed at improving the ease of doing business. “There are 48 sections we have amended to decriminalise them and 17 sections have been amended to improve the ease of living,” finance minister Nirmala Sitharaman said during a debate on the bill. As part of the Companies (Amendment) Bill, 2020, almost 23 compoundable offences would be recategorised out of 66 compoundable offences under the Act, to be dealt with an in-house adjudicating mechanism. Besides, seven compoundable offences would be omitted. According to the government, these offences were minor, technical or procedural defaults and did not involve fraud, injury to public interest or any non-compoundable offences. This would also reduce the burden on the National Company Law Tribunal. “The important point is that serious offences, called non-compoundable offences, from 2013 and today, the number of such offences will remain 35. These include fraud, injury to public interest or deceit,” Sitharaman said.Provisions under the bill allowed companies to roll over excess corporate social responsibility (CSR) spends to succeeding years and exempted companies with a CSR obligation below Rs 50 lakh from the need to set up a CSR committee.