The Rajya Sabha has passed the Companies (Amendment) Bill, 2017. It was adopted by the Lok Sabha in July this year. The Bill provides for more than 40 amendments to the Companies Act, 2013.
Features of the Bill:
The amendment seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country.
The major changes include simplification of the private placement process; rationalization of provisions related to loans to directors; replacing the requirement of approval of the central government for managerial remuneration above prescribed limits by approval through special resolution of shareholders and aligning disclosure requirements in the prospectus with the regulations made by Sebi (Securities and Exchange Board of India).
The Bill also provides for maintenance of register of significant beneficial owners and makes offence for contravention of provisions relating to deposits as non-compoundable.
It also provides for stringent penalties in case of non-filing of balance sheet and annual return every year, which will act as deterrent to shell companies. This would facilitate ease of doing business, and result in harmonization with Sebi, RBI (Reserve Bank of India) and rectify certain omissions and inconsistencies in the existing Act.
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