Amendments to Companies Act passed; to ease compliance 

Amendments to Companies Act passed; to ease compliance 

Context

A bill to amend the companies law to strengthen corporate governance standards, initiate strict action against defaulting companies, and help improve the ease of doing business in the country, was passed by Parliament on Tuesday

New law will ensure better corporate governance: Minister

• The RajyaSabha passed the Companies (Amendment) Bill, 2017 by a voice vote. It was adopted by the LokSabha in July this year during the Monsoon Session
• Replying to issues raised by the members during a discussion on the Bill, Minister of State for Corporate Affairs P.P. Chaudhary said the amendment would ensure better corporate governance and improve the ease of doing business.

The Bill

• The Bill provides for more than 40 amendments to the Companies Act, 2013, which was passed during the previous UPA regime.
• The Bill was introduced in the LokSabha in March 2016 and then referred to the Standing Committee on Finance. After taking into consideration the recommendations of the panel, the Cabinet had cleared a revised Bill in March this year.
• The Companies Act, 2013 has already been amended once under the present government.

Procedures simplified

• The latest legislation would help in simplifying procedures, make compliance easy, and take stringent action against defaulting companies.
• The Minister dismissed apprehensions raised by members that the government was not doing enough to ensure that companies complied with the Corporate Social Responsibility (CSR) provisions.