KEY TAKEAWAYS FROM COMPANIES (AMENDMENT) BILL, 2020 PASSED BY LOK SABHA ...

MAIN AMENDMENTS TO COMPANIES ACT
2013 TO ENABLE 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.

Decriminalisation of Companies Act

·      
48 sections  have been amended to decriminalise  and 17 sections have been amended to improve
the ease of living,

·      
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 66  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.

·      
35 serious offences, called non-compoundable will
include fraud, injury to public interest or deceit.

Corporate Social Responsibility
(CSR)

·      
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.

Direct Listing in Foreign
Jurisdiction

Enabling provisions for the
direct listing of securities of Indian public companies in permissible foreign
jurisdictions

Change in Definition of Listed Company

 Empowering the government, in consultation
with the Securities and Exchange Board of India, to exempt private companies
issuing specified classes of securities on exchanges from the definition of a
listed company.

Remuneration to Independent Director and NED

Further, the exemption provided
to key managerial posts from government-mandated restrictions on compensation
in case a company is facing liquidation, is proposed to be expanded to include
independent directors as well.

New NCLAT Bench

It also provides for setting up of additional benches
of the National Company Law Appellate Tribunal in locations specified by the
Centre.

New Chapter for Producer Company

To incorporate
a new Chapter XXIA in the Act relating to Producer Companies, which was earlier
part of the Companies Act, 1956;

Reduced Penalty for Small Companies, OPC and Start-Up
Companies

To extend applicability of section 446B, relating to
lesser penalties for small companies and one person companies, to all
provisions of the Act which attract monetary penalties and also extend the same
benefit to Producer Companies and start-ups