Parliament passes Companies (Amendment) Bill, 2019
Parliament passed Companies (Amendment) Bill, 2019 aimed at tightening Corporate Social Responsibility (CSR) compliance and ensuring stricter action for non-compliance of the company law regulations. It amends the Companies Act, 2013. It was first passed by Lok Sabha on July 26, 2019 and then by Rajya Sabha by July 30, 2019.
Salient Features of Bill
- It aims to ensure greater accountability and better enforcement of the corporate governance norms.
- Corporate Social Responsibility (CSR): It brings key change related to CSR spending, wherein companies would have to mandatorily keep unspent money into a special account. The companies will have one year to firm up CSR proposal and another three years to spend funds. In case money remains unspent for one plus three years, then the money will have to be moved to an escrow account, could even be Prime Minister’s Relief Fund.
- Registrar of Companies (RoCs): It empowers RoC to initiate action for removal of name of a company from Register of Companies if it is not carrying on any business or operation in according with Company Law.
- Re-categorisation of 16 minor offences: It re-categories 16 out 81 compoundable offences mentioned in the parent Act as civil defaults, where adjudicating officers (appointed by the central government) may now levy penalties instead. These offences include: (i) failure to file annual return (ii) issuance of shares at a discount. Further, it also amends the penalties for some other offences.
- Change in approving authority: It shifts powers for conversion from public to private companies from National Companies Law Tribunal to central government.
Categories: Constitution & Law