{"id":16807,"date":"2020-09-23T16:29:10","date_gmt":"2020-09-23T10:59:10","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=16807"},"modified":"2020-09-24T11:27:05","modified_gmt":"2020-09-24T05:57:05","slug":"lok-sabha-passes-companies-amendment-bill-2020","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/lok-sabha-passes-companies-amendment-bill-2020\/","title":{"rendered":"Lok Sabha passes Companies (Amendment) Bill, 2020"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Lok Sabha on 19<sup>th<\/sup> September, 2020 has passed <strong><em>The Companies (Amendment) Bill, 2020 <\/em><\/strong>that decriminalizes several compoundable offenses. It also allows direct listing of Indian companies on Foreign Stock Exchanges and withdraws the criminal provisions in the Companies Act for violations of provisions of CSR rules. It also promotes ease of doing business. In this article we described about Lok Sabha passes Companies Amendment Bill, 2020.<\/p>\n\n\n\n<p>Around 48 Sections of\nCompanies Act, 2013 will be amended for decriminalizing compoundable offenses\nand 17 Sections for ease of doing business. The bill has come at a time\nwhen&nbsp;companies&nbsp;are stumbling under stress due the COVID-19 pandemic.\nThe (4th amendment) Bill was introduced in the Lok Sabha in May, 2020 by\nFinance and Corporate Affairs Minister&nbsp;Nirmala Sitharaman.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><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><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/lok-sabha-passes-companies-amendment-bill-2020\/#Company_Law_Committee_Report\" >Company Law\nCommittee Report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/lok-sabha-passes-companies-amendment-bill-2020\/#Major_Changes_in_Companies_Amendment_Bill_2020\" >Major Changes in Companies (Amendment) Bill, 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/lok-sabha-passes-companies-amendment-bill-2020\/#Changes_in_Companies_Amendment_Bill_2020\" >Changes in Companies (Amendment) Bill, 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/lok-sabha-passes-companies-amendment-bill-2020\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Company_Law_Committee_Report\"><\/span>Company Law\nCommittee Report<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Company Law Committee Report in November 2019 has provided for revoking of 46 penal provisions in the following way-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Re-classifying of 23 offences out of 66 compoundable offences to in-house&nbsp;adjudication framework in which penalty will be imposed by adjudication officer<\/li><li>Exclude 7 compoundable offences<\/li><li>Restricting 11 compoundable offences to fine (by eliminating imprisonment part)<\/li><li>Recommending 5 offences to deal with an alternative framework<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/implementation-of-delinking-credit-debit-notes-on-the-gstn-portal\/\">Implementation of Delinking Credit\/Debit Notes on the GSTN Portal<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Major_Changes_in_Companies_Amendment_Bill_2020\"><\/span>Major Changes in Companies (Amendment) Bill, 2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong> The Major Changes in the Companies (Amendment) Bill, 2020 are \u2013 <\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"615\" height=\"431\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-94.png\" alt=\"Major Changes in Companies (Amendment) Bill, 2020\" class=\"wp-image-16808\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-94.png 615w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-94-300x210.png 300w\" sizes=\"(max-width: 615px) 100vw, 615px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Changes_in_Companies_Amendment_Bill_2020\"><\/span>Changes in Companies (Amendment) Bill, 2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The<\/strong><\/em><strong><em> Companies (Amendment) Bill,<\/em><\/strong><em><strong> 2020 based on the Company Law committee report, which provides the following changes-<\/strong><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Decriminalize\nOffenses<\/h3>\n\n\n\n<p>The Amendment Bill seeks to\ndecriminalize various offenses under The Companies Act, 2013 in relation to\ndefaults which can be determined objectively or otherwise lack any element of\nfraud and does not include large public interest.<\/p>\n\n\n\n<p>The Finance\nMinister Nirmala Sitharaman said that the Government is paying attention on\ndecriminalizing provisions in companies act to promote ease of doing business; mainly\nfor small companies. The penal provisions will be brought down from 134 to 124.\nOn the other hand, there will be no transformation in the non-compoundable\noffences provisions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Corporate\nSocial Responsibility<\/h3>\n\n\n\n<p>The Amendment Bill provided\nthat spending obligation up to INR 50 lakhs will not be required to form a CSR\nCommittee. Eligible Companies under Section 135 (Corporate Social\nResponsibility Provision) are allowed to set off any amount spend in excess of\nCSR funding obligation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Direct Listing\nof Securities<\/h3>\n\n\n\n<p>The Companies Amendment Bill has enabled the provisions for direct listing of securities of Public Companies with consultation of Securities Exchange Board of India. It was done to exempt the Private Companies to issue specific securities on exchange from the definition of listed Companies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Reduce penalty\nfor Offense<\/h3>\n\n\n\n<p>The amendment bill extends\nthe applicability of Section 446B that is related to fewer penalties for small\nand One Person Company with relation to all the provisions of the act that\nallows monetary penalties.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Jurisdictions<\/h3>\n\n\n\n<p>The Amendment bill clarifies\nthe jurisdiction of Trial Court on basis of place of commission of the offense\n(Section 452) for wrongful withholding of the property by the employees or\nofficers of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Incorporation\nof a New Chapter related to Producer Company<\/h3>\n\n\n\n<p>A New chapter XXIA related\nto Producer Company has been incorporated, which was earlier part of Companies\nAct, 1956.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">NCLAT Benches<\/h3>\n\n\n\n<p>The Amendment bill seeks to\nestablish more benches in the National Company Appellate Tribunal (NCLAT) to\nease the burden and to decrease the delay in cases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Relaxation in\nthe Provisions related to additional fees<\/h3>\n\n\n\n<p>The Amendment Bill clarifies\nrelaxation in provisions related to charging of higher fees for default in\nregistering, submitting, and recording or filing any fact, information as well\nas documents as provided in Section 403 of the said Act.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Exemptions from\nComplying <\/h3>\n\n\n\n<p>The Amendment Bill has\nexempted any class of persons from complying with the requirements of Section\n89 related to the concept of beneficial interest of the shares. It has also exempted\ncompanies incorporated outside India or any Foreign Company from Provisions of\nChapter XXII.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Further issuance\nof shares<\/h3>\n\n\n\n<p>The Amendment Bill reduced timelines for applying for rights issued to speed up the process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Exemptions from\nfiling resolutions related to NBFCs <\/h3>\n\n\n\n<p>The Companies Act required\ncompanies to file some resolutions with the Registrar of Company (ROC),\nexcluding NBFCs from filing resolutions passed to provide guarantees for a loan\nor to grant loan. The Amendment Bill has extended these exemptions from filing\nresolutions under Section 117.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">&nbsp;Periodical Financial Results filing<\/h3>\n\n\n\n<p><em><strong>The Amendment Bill requires the following-<\/strong><\/em><\/p>\n\n\n\n<ul><li>Specific classes\nof unlisted companies are required to prepare and file periodical financial\nreports;<\/li><li>Unlisted\nCompanies are required to obtain approval from Board of Directors;<\/li><li>Unlisted\nCompanies are required to file a copy for financial reports within 30 days of\ncompletion of specified period.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Provides window\nfor delay in filing<\/h3>\n\n\n\n<p>The Amendment Bill provides a window within which penalties should not be imposed for delay in filing <a href=\"https:\/\/corpbiz.io\/learning\/basic-financial-statements\/\"><strong>financial statements<\/strong><\/a> and annual return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Companies to\nhave Board of Directors<\/h3>\n\n\n\n<p>The Amendment Bill provides\nfor a new insertion for Independent as well as Non-Executive Directors can\nreceive any sort of remuneration, excluding when there is no profit or\ninadequate profits in the company. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Rectification\nof Company name<\/h3>\n\n\n\n<p>The Amendment Bill says that if any company was registered involuntarily with any <a href=\"https:\/\/corpbiz.io\/trademark-registration\"><strong>registered trademark<\/strong><\/a> and the name is identical or similar to an existing trademark then the company is required changing the name within 3 months from the issue of the direction by the <em><strong>Central Government<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Central_government\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Central Government by virtue of stable amendments through Act or Ordinances or is determined to constantly keep the Law dynamic and compliant to changing conditions. The Lok Sabha on Saturday night passed The Companies Amendment Bill, 2020 to decriminalize several compoundable offenses and to promote ease of doing business in India. <\/p>\n\n\n<a href=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/Amendment_18032020.pdf\" class=\"pdfemb-viewer\" style=\"\" data-width=\"max\" data-height=\"max\"  data-toolbar=\"bottom\" data-toolbar-fixed=\"off\">Amendment_18032020<br\/><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/supreme-court-recommends-comprehensive-system-of-advance-tax-ruling-to-reduce-litigation\/\">Supreme Court Recommends Comprehensive System of Advance Tax Ruling to Reduce Litigation<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Lok Sabha on 19th September, 2020 has passed The Companies (Amendment) Bill, 2020 that decriminalizes several compoundable offenses. It also allows direct listing of Indian companies on Foreign Stock Exchanges and withdraws the criminal provisions in the Companies Act for violations of provisions of CSR rules. It also promotes ease of doing business. In [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":16822,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,153],"tags":[1030],"acf":{"service_id":"1"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":3753,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16807"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=16807"}],"version-history":[{"count":23,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16807\/revisions"}],"predecessor-version":[{"id":16847,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16807\/revisions\/16847"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/16822"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=16807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=16807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=16807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}