Skip to main content

Bill to Amend Companies Act in Budget Session

By
Likely to replace ordinance on ease of doing business, corporate governance
The government has begun work to bring in legislation to replace an ordinance that it had promulgated to improve corporate governance, ease of doing business and reduce the caseload on company law tribunals. It will reintroduce the Companies (Amendment) Bill, 2019 in the upcoming budget session of Parliament starting June 17, said a senior official at the Ministry of Corporate Affairs. The Bill will replace the ordinance re-promulgated in February. The Bill seeks to help improve ease of doing business and reduce the caseload on the National Company Law Tribunal (NCLT). The ordinance, which first came into force in November last year, was re-promulgated in February after the replacement Bill was not ratified by the upper house of Parliament in the winter session because of time constraints.
Bills replacing ordinances need to be placed before Parliament within six weeks of the reassembly of Parliament to ensure continuity of the provisions of ordinances. The ordinance re-categorised 16 ‘criminal’ offences under the Companies Act, including failure to file annual returns and the issuance of shares at a discount, to civil offences, allowing government officers to levy penalties instead of initiating criminal proceedings against the offenders. It also granted power to the regional directors of the ministry to settle offences with a penalty of Rs.25 lakh, up from the previous ceiling of Rs.5 lakh.

As per the ordinance, the Centre has the authority to allow companies to take themselves private from public, and change their financial year. Previously, NCLT benches had cleared such proposals. It also sought to also strengthen corporate governance. Under this, companies must file a declaration that all subscribers to their memorandum have paid the value of the shares they have agreed to purchase within 180 days of incorporation and file verification of their registered office with the Registrar of Companies within 30 days of incorporation.
Besides, individuals holding at least 25% shares in a company or exercising significant control over it are required to declare themselves as significant beneficial owners. Failing to do so is punishable with imprisonment up to one year or a fine of up to Rs.10 lakh, or both. The ordinance also required that companies register charges such as mortgages on their property with the Registrar of Companies within 30 days.
The Economic Times, 05th June 2019

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more