The Companies (Amendment) Ordinance, 2018 promulgated on November 02, 2018 thereby amending some of the sections of the Companies Act, 2013.
Giving effect to the recommendations placed in the Report of the Committee to review Offences under the Companies Act, 2013, the Companies (Amendment) Ordinance, 2018 provides much needed relief to the corporates and professionals alike by decriminalising a host of offences. Considering re-categorisation of certain ‘acts’ punishable as compoundable offences to ‘acts’ carrying civil liabilities, the Ordinance further promotes the Indian Government’s intent to promote ease of doing business.
The main reforms undertaken through the Ordinance include the following:
• Re-categorising of offences which are in the category of compoundable offences to an in-house adjudication framework. However, no change has been made in respect of any of the non-compoundable offences.
• Ensuring compliance of the default and prescribing stiffer penalties in case of repeated defaults.
• De-clogging the NCLT by:
o Enlarging the jurisdiction of Regional Director (“RD”) by enhancing the pecuniary limits up to which they can compound offences under section 441 of the Act.
o Vesting in the Central Government the power to approve the alteration in the financial year of a company under section 2(41); and
o Vesting the Central Government the power to approve cases of conversion of public companies into private companies.
• Other corporate governance-related reforms include re-introduction of declaration of commencement of business provision; greater accountability with respect to filing documents related to creation, modification and satisfaction of charges; non-maintenance of registered office to trigger de-registration process; holding of directorships beyond permissible limits to trigger disqualification of such directors.
To know more in details, find the enclosed attachment
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