The Government in Parliament introduced a bill to amend the Companies Act to further improve the ease of doing business and ensure better compliance levels.
The bill would replace the Companies (Amendment) Ordinance, 2018 that was promulgated in November.
The amendments will help reduce the burden on special courts and bring down applicable penalties for small companies, among others.
The bill will amend 16 sections of the Act “so as to modify the punishment as provided in the said sections from fine to monetary penalties to lessen the burden upon the Special Courts,” Corporate Affairs Minister Arun Jaitley said in the Statement of Objects and Reasons.
Apart from enhancing the jurisdiction of Regional Director for compounding offences, the bill would provide for empowering the central Government to allow certain companies to have a different financial year instead of being determined by the National Company Law Tribunal.
Last month, the Government said the ordinance amending the Companies Act, 2013, was promulgated with twin objectives of “promotion of ease of doing business along with better corporate compliance”.
The amendments through the ordinance were effected on the basis of recommendations made by a Government-appointed panel that reviewed the offences under the Act.
With the latest amendments, jurisdiction of 16 types of corporate offences would be shifted from the special courts to in-house adjudication.
This is “expected to reduce the case load of special courts by over 60 per cent, thereby enabling them to concentrate on serious corporate offences. With this amendment, the scope of in-house adjudication has gone up from 18 sections at present to 34 Sections of the Act,” the Ministry said last month.