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- Lok Sabha has passed The Companies (Amendment) Bill, 2019.The Bill seeks to amend The Companies Act,2013.
- Under the 2013 Act,there were 81 compoundable offences that carry punishments of a fine and/or prison terms.These offences were heard by courts.
- The Bill makes 16 of these offences civil defaults where government appointed adjudicating officers may levy penalties.Some of these offences are the issuance of shares at a discount and the failure to file annual returns.
- Currently,companies that are required to budget for Corporate Social responsibility(CSR) must disclose in their annual reports the reasons why they were unable to fully spend these funds.
- However,the bill now says that any unspent annual CSR funds must be transferred to one of the funds under Schedule 7 of the Act (for example, the Prime Minister’s Relief Fund) within six months of the financial year.
- Under the Act, the National Financial Reporting Authority can debar a member or firm from practising as a Chartered Accountant for six months to 10 years in case of proven misconduct.
- The Bill amends this punishment to provide for debarment from appointment as an auditor or internal auditor of a company or performing a company’s valuation for the same period.
- Under the Act,change in period of financial year for a company associated with a foreign company has to be approved by the National Company Law Tribunal (NCLT).Under the Bill,these powers have been transferred to the central government.
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