Cabinet Approval: To amend Companies Act, 2013

On March 4, 2020, the Union Cabinet approved 72 changes to the Companies Act, 2013. The main aim of the amendment is to decriminalize the provisions in the act.

Highlights

The amendment aims to recategorize 23 offences and omit 7 compoundable offences. Under the amendment, the companies with Corporate Social Responsibility (CSR) obligation of less than Rs 50 lakhs need not constitute a CSR committee.

What is CSR?

The CSR is a concept through which a company takes volunteer efforts in philanthropical programmes and adopt businesses that benefit society. The Injeti Srinivas Committee was constituted to review existing frameworks of CSR and strengthen its ecosystem.

Section 129 A introduced

The act is to be amended to make filings more scientific. A new Section 129 A is to be included that will file results of unlisted companies (under the act) on a periodic basis. This is to be done in additional to annual filing.

Benefits

The amendments will help increase investments, especially foreign investments. This is mainly because, the amendment is to allow domestic firms to list on foreign exchanges. At present, Indian Companies have the option of GDR (Global Depository Receipt) and ADR (American Depository Receipt) alone.

Month: Current Affairs - March, 2020