The Companies Amendment Bill was passed on 22nd September 2020 by the Rajya Sabha. The essence of these amendments is primarily directed towards ease of conducting business, simplifying compliances, repealing the redundant provisions of the Act, and levying lesser penalties for companies that do not involve larger public interest.

In order to support the startup eco-system in India, the amendments allow direct listing in a foreign jurisdiction, which will give the companies wider access to the Investors and will provide a quicker exit to existing stakeholders.

Also, certain provisions of the erstwhile Companies Act 1956 which were applicable to Producer Companies are removed and a separate Chapter is added.

The change bought by this Bill enables payment of remuneration to Non-Executive and Independent Director even in case of inadequate profits, thereby aligning it with existing provisions applicable to Executive Directors.

Companies Amendment Bill 2020 - An Analysis

Changes are made to the provisions relating to CSR so that smaller companies with lesser CSR obligations are not required to constitute CSR committee and excess spending on CSR in a particular year could be used for subsequent years. 

To boost transparency certain specified classes of unlisted companies are now required to prepare and file their periodical financial results also as opposed to only annual financial results currently.


The above-mentioned amendments are a step in the right direction which will boost the morale of the Corporate Sector, especially in these distressing times, and would contribute towards improving India’s rankings globally in Ease of Doing Business. However, these would have to be supplemented with steps to ensure the swift revival of the economy.

Disclaimer -This document is circulated from the academic point of view only and is not intended to constitute professional advice on any matter. The views and opinions expressed in this newsletter are those of the author of this document and are based on the internal research done by the Author.

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Akansha Rathi
Category Corporate Law   Report

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