{"id":13830,"date":"2020-10-08T17:33:32","date_gmt":"2020-10-08T12:03:32","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=13830"},"modified":"2020-10-12T15:00:06","modified_gmt":"2020-10-12T09:30:06","slug":"companies-amendment-bill-2020","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/companies-amendment-bill-2020\/","title":{"rendered":"The Companies (Amendment) Bill 2020- A Change to Business and Commerce"},"content":{"rendered":"\n<p class=\"has-drop-cap\">It seems to appear that 2020 has been the year of changes and one such amendment was made for the corporate. The Companies (Amendment) Bill 2020 with amendments brought under the provisions of Corporate Social Responsibility, Incorporation of Companies etc., the Central Government further laid down the amendments before the Lok Sabha on 17<sup>th<\/sup> March,2020 by the way of The Companies (Amendment) Bill,2020. The same was passed by the Lok Sabha on 19<sup>th<\/sup> September 2020 and then by the Rajya Sabha on 22<sup>nd<\/sup> September,2020.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image.png\" alt=\"Bill passed Lok Sabha\" class=\"wp-image-13832\" width=\"570\" height=\"260\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image.png 633w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image-300x137.png 300w\" sizes=\"(max-width: 570px) 100vw, 570px\" \/><\/figure><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3b5e045cd09\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3b5e045cd09\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-amendment-bill-2020\/#Objective\" title=\"Objective \">Objective <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-amendment-bill-2020\/#Company_Law_Committee_Report\" title=\"Company\nLaw Committee Report\">Company\nLaw Committee Report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-amendment-bill-2020\/#Major_Highlights_of_the_Companies_Amendment_Bill_2020\" title=\"Major Highlights of the Companies (Amendment) Bill 2020\">Major Highlights of the Companies (Amendment) Bill 2020<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/companies-amendment-bill-2020\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Objective\"><\/span>Objective <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Based on the report\nsubmitted by CLC, the Ministry of Finance has introduced the Companies\n(Amendment) Bill, 2020 which seeks to make amendments under the Companies Act, 2013.\nThe bill has primarily two objectives:-<\/p>\n\n\n\n<ol><li>It decriminalizes\n\u201cminor procedural or technical lapses&#8230;.into civil wrong\u201d thus approaching to\nprinciple <strong>\u201c<\/strong><em><strong>to further remove\ncriminality in case of defaults, which can be determined objectively and which\notherwise lack any element of fraud or do not involve larger public\ninterest&#8221;<\/strong><\/em><em>and<\/em><em><\/em><\/li><li>Focuses on providing certain relaxation and benefits for greater ease of\nliving for law abiding corporate.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Company_Law_Committee_Report\"><\/span>Company\nLaw Committee Report<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under the\nchairmanship of Shri InjetiSrinivas in September, 2019 CLC was constituted with\na view to decriminalize offences as well as provide ease of doing business for\ncorporate and stakeholders. It further provided the guideline of revoking 46\npenal provisions in the following manner:-<\/p>\n\n\n\n<ol><li>Re-categorising of\n23 offences out of 66 compoundable offences to in-house adjudication framework\nwherein penalty will be levied by an adjudication officer.<\/li><li>Omitting 7\ncompoundable offences.<\/li><li>Restricting 11\ncompoundable offences to fine only (exclusion of imprisonment).<\/li><li>Recommending 5\noffences to be dealt with an alternative framework.<\/li><\/ol>\n\n\n\n<p>Furthermore, the\nCompanies (Amendment) Bill, 2020 provides majorly the following:-<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"580\" height=\"340\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image-1.png\" alt=\"Law Committee Report\" class=\"wp-image-13833\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image-1.png 580w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/image-1-300x176.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Major_Highlights_of_the_Companies_Amendment_Bill_2020\"><\/span>Major Highlights of the Companies (Amendment) Bill 2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/Major-Highlights-of-the-Companies-Amendment-Bill-2020-heading.png\" alt=\"Amendment Bill 2020\" class=\"wp-image-13835\" width=\"477\" height=\"477\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/Major-Highlights-of-the-Companies-Amendment-Bill-2020-heading.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/Major-Highlights-of-the-Companies-Amendment-Bill-2020-heading-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/Major-Highlights-of-the-Companies-Amendment-Bill-2020-heading-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/10\/Major-Highlights-of-the-Companies-Amendment-Bill-2020-heading-768x768.png 768w\" sizes=\"(max-width: 477px) 100vw, 477px\" \/><\/figure><\/div>\n\n\n\n<p>While several\nchanges has been proposed by the Company Law Committee (CLC), the key changes\nare as follows:-<\/p>\n\n\n\n<ol><li>Decriminalization Of Certain Offences &#8211; The bill proposes changes to certain offences in relation to technical and procedural defaults which can be determined objectively or otherwise lack any element of fraud or do not involve larger public interest. Speaking on the bill, Sitaraman said \u201cthere are currently around 124 penal provisions compared to 134 under Companies Act 2013\u201d. The said amendment will be carried out in <strong>Section 23<\/strong> of the Companies Act.<\/li><li>Producer Companies &#8211; The Companies (Amendment) Bill, 2020<a rel=\"noreferrer noopener\" href=\"http:\/\/www.mca.gov.in\/Ministry\/pdf\/AmendmentAct_29092020.pdf\" target=\"_blank\"><strong><span style=\"text-decoration: underline;\">[1]<\/span><\/strong><\/a><strong>  <\/strong>proposes a new chapter XXIA relating to \u201cproducer companies and its incorporation\u201d. This chapter has been introduced for the benefit of farmers, handloom, agriculture as well as cottage industries. The CLC Report defines a <strong><em>\u201c<\/em><\/strong><em>Producer Companies as, \u201ca body corporate comprising of farmers and agriculturists who work in cooperation with each other to promote better standard of living and gain easier access to credit, technology, market, etc.\u201d<\/em><\/li><li>Corporate Social Responsibility &#8211; The bill exempts the companies with a CSR liability of up to Rs. 50 lakh a year from setting up CSR committee. Furthermore, the Bill allows eligible companies to set off the excess amount towards there CSR obligations in the subsequent financial years.<\/li><li>Direct Listing &#8211; The Companies (Amendment) Bill,2020 is to allow direct listing of securities by Indian companies in permissible foreign jurisdiction as per rules to be prescribed. This would be considered <em>beneficial for start-ups to tap overseas market for raising capitals.<\/em><\/li><li>Reduced Timeline For Issue Of Rights &#8211; As per section 62 of the Act the timeline of providing offer letter to the existing shareholder has been reduced to 15 days to not more than 30 days, beyond which the offer is to be deemed declined.<\/li><li>Exemption of Filing Resolutions and Agreements-Section 117 requires the filing of resolution with the ROC. As per Companies Act, 2013 it exempts banking companies providing loan, guarantee, and security in connection of providing loan from filing the resolution in e-Form MGT-14. The current bill now proposes to extend such exemption to registered <span style=\"text-decoration: underline;\"><strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\">NBFC license<\/a><\/strong><\/span> and HFCs.<\/li><li>Benches Of NCLAT &#8211; The Companies (Amendment) Bill,2020 proposes section 418A for setting up benches of the National Company Law Appellate Tribunal in order to ease the burden and also to decrease the pendency of cases. The ceiling of the maximum strength of NCLAT under section 410 of the Act has been proposed to be removed in the bill.<\/li><li>Periodical Financial Results &#8211; This is a newly inserted clause in the bill under section 129A. The Central Government shall require such class or classes of Unlisted companies as may be prescribed- <\/li><li>To prepare financial results on periodical basis<\/li><li>Obtain approval of the Board of Directors<\/li><li>File a copy of periodical financial results with the ROC within 30 days of the completion of the relevant period with such fees as may be prescribed.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Thus, the\nCompanies (Amendment) Bill,2020 gives effect to decriminalization of certain\noffences under the Companies Act, 2013 in order to provide greater ease of\nliving and doing business for companies. This would further lead to de-clogging\nof NCLT and lesser applicability of penalty would thus reduce the burden of the\nstart-ups and producer companies which would ultimately lead to a healthy\nbusiness. Thus the bill can be stated and considered to be a big step in the\ndirection of growth of companies in India.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/foreign-contribution-regulation-amendment-bill-2020\/\">Foreign Contribution Regulation Amendment Bill 2020<\/a><\/mark>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It seems to appear that 2020 has been the year of changes and one such amendment was made for the corporate. The Companies (Amendment) Bill 2020 with amendments brought under the provisions of Corporate Social Responsibility, Incorporation of Companies etc., the Central Government further laid down the amendments before the Lok Sabha on 17th March,2020 [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":13834,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[675],"tags":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13830"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=13830"}],"version-history":[{"count":17,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13830\/revisions"}],"predecessor-version":[{"id":14253,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13830\/revisions\/14253"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/13834"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=13830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=13830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=13830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}