The Government of India introduced various economic measures and reforms on May 17, 2020 as a consequence of the COVID-19 pandemic. Pursuant to such economic reforms, several amendments to the Indian Companies Act, 2013 (the “Act”) have been proposed by the Government for ease of doing business for corporates and other stakeholders. Consequently, the Companies (Amendment) Bill, 2020 (the “Bill”) has been put to the Lok Sabha, (the lower house of the Parliament). The Bill is yet to be passed as an Act.
The key amendments proposed in the Bill are set forth below:
1. Decriminalization and Re-categorization of certain offenses
The Bill proposes changes to certain offenses in relation to technical and procedural defaults such as shortcomings in the company's social responsibilities reporting, inadequacies in the board report, filing defaults, delay in holding of annual general meetings which lack any element of fraud or do not involve larger public interest:
(i) Removal of imprisonment: Imprisonment for certain offenses has been removed. For instance, to omit the punishment of imprisonment prescribed in Section 68(11) of the Act for non-compliance with procedure for buyback prescribed under Section 68 of the Act, the rules framed thereunder and the SEBI (Buy-Back of Securities) Regulations, 2018.
(ii) Reduction in fine amount: Fine payable in certain offenses has been reduced. For instance, the penalty amount of the Significant Beneficial owner (SBo) prescribed in Section 90 (1) of the Act, the penalty for each day when the default continues is proposed to be reduced from ₹10,000 to ₹1,000, subject to a maximum of ₹200,000.
This story is from the August 2020 edition of Legal Era.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 2020 edition of Legal Era.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
If You Think Positive Covid Is A Big Opportunity
Senior Vice President and Head of Legal, ESSAR CAPITAL, Badrinath Durvasula, holds forth on his professional journey, the essence of leadership, working from home, books and more…
PROJECT DEVELOPMENT
JOINT VENTURE TRANSACTIONS
NEW ARBITRATION RULES
PUBLISHED BY THE LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA) AND INTERNATIONAL CHAMBER OF COMMERCE (ICC)
M&A in the time of COVID and beyond
What is clear for those engaging in cross-border M&A is that countries around the world are becoming increasingly protective of their economies and industries, with new rules being introduced and existing rules being more widely applied
SWITZERLAND A DIFFERENTIATED APPROACH TO FRAUD
Swiss law interprets the offense of fraud in a special way where in addition to the characteristics of deception and damage as known in many jurisdictions, a qualified lie, i.e. a malicious approach, is required
JOINT VENTURE DISPUTES MEDIATING
Mediation has shown itself to be a powerful tool for bringing a speedy and effective end to crossborder disputes while preserving the commercial relationship between them.
Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA
A TEST CASE IN THE MAKING?
CONFIDENTIALITY IN ARBITRATION: RECENT DEVELOPMENTS IN SINGAPORE
Two recent developments in Singapore case law and legislation reflect a willingness to preserve confidentiality related obligations in all arbitrations
ESSENTIAL GOODS SERVICES UNDER IBC
WHAT DOES IT ESSENTIALLY MEAN?
A BIDEN ADMINISTRATION'S NEW VISION FOR THE AMERICAN WORKPLACE
A LOOK AT THE KEY CHANGES PRESIDENT-ELECT BIDEN IS LIKELY TO MAKE ONCE HE TAKES OFFICE
