Rajya Sabha on Tuesday cleared the Companies (Amendment) Bill, 2020 after it received Lok Sabha's nod on Saturday. Finance Minister Nirmala Sitharaman said at the Upper House today that the amendments are divided in two compartments and focus on decriminalisation and enhance ease of living.
"The Companies Act was passed in 2013, and since then it has undergone so many amendments because the stakeholders kept giving inputs on its various aspects... It essentially consists of two different compartments, the first one consists of 48 amendments all of which aim at decriminalisation and related matters," Sitharaman said.
The minister said that compliance-related issues have been made simpler. In the second compartment, 13 amendments have been made including the addition of a chapter and insertion of three new sections.
The Companies (Amendment) Bill, 2020 removes penalty, imprisonment for nine offences that pertain to orders of the National Company Law Tribunal (NCLT). It also reduces the amount of fine payable in certain cases.
Speaking on the bill, Nirmala Sitharaman had said at the Lower House that the decriminalisation of various provisions under the companies law will help small companies by reducing litigation burden on them. Stressing that there will be no relaxation for serious offences, including fraud and those that cause "injury to public interest or deceit", the minister said the number of "non-compoundable" offences under the Act remains same at 35. Compoundable offences are ones that can be settled by paying a certain amount of money.
Separately, the parliament also passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020. This bill will ensure that no fresh insolvency proceedings would be initiated against companies for defaults arising during six months from March 25. Rajya Sabha had passed the bill on September 19. Additionally, the Banking Regulation (Amendment) Bill 2020 was also passed in the parliament. This bill brings co-operative banks under the regulatory framework of Reserve Bank of India.