New Delhi: The Bill seeking to make further amendments to the Companies Act has been referred to the Parliamentary Standing Committee, which is expected to prepare its report within three months.
Corporate Affairs Minister Arun Jaitley had introduced the Companies (Amendment) Bill, 2016 on March 16 in the Lok Sabha.
After taking into consideration suggestions made by a high level panel on further possible changes to the law, the government came up with the Bill as part of larger efforts to address difficulties faced by stakeholders and improve the ease of doing business in the country.
Lok Sabha Speaker Sumitra Mahajan has referred the Bill to the Standing Committee on Finance, which is chaired by senior Congress leader Veerappa Moily.
The Speaker has referred the Companies (Amendment) Bill, 2016, as introduced in the Lok Sabha to the Standing Committee on Finance for examination and report within three months, according to the latest Lok Sabha bulletin.
This would be the second time that Prime Minister Narendra Modi-led government would be amending the Companies Act, 2013 which was passed during the previous UPA regime.
Suggesting a host of changes to the Companies Act, 2013, the Bill seeks to simplify private placement process, remove restrictions on layers of subsidiaries and investment companies, amend CSR (Corporate Social Responsibility) provisions to bring greater clarity and exempt certain class of foreign entities from the compliance regime under this law.
“The proposed changes are broadly aimed at addressing difficulties in implementation owing to stringency of compliance requirements,” as per the ‘Statement of Objects and Reasons’ of the Bill.
Most provisions of the Act came into force from April 1, 2014. Out of 470 sections of the Companies Act, 284 have come into effect.
To address concerns raised by stakeholders, the Corporate Affairs Ministry has already made changes to various rules related to the Act.