NEW DELHI: The government has created a committee to look at recategorization of certain offences under the Companies At as civil offences as well as review other provisions of the Companies Act and the Limited Liability Partnerships Act 2008.
The company law committee which will be chaired by Injeti Srinivas, secretary of the corporate affairs ministry will look into key issues including the introduction of a settlement mechanism for offences under the companies act as well as de-clogging the National Company Law Tribunals and measure to improve the functioning of statutory bodies under the Companies Act including the Serious Frauds Investigations Office (SFIO), The Investor Education and Protection Fund Authority (IEPFA) and the National Financial Reporting Authority (NFRA).
The government had recategorized 13 offences under Companies act as civil offences through an amendment passed in the budget session of Parliament. Finance and Corporate affairs minister Nirmala Sitharaman had also announced that the government would not seek to pursue criminal against individuals for violations of CSR provisions.
A release by the government said that this measure was in line with the government’s objective of providing “ease of doing business to law abiding corporates, fostering improved corporate compliance for stakeholders at large and also to address emerging issues having impact on the working of corporates in the country”.
The Committee will also examine the feasibility of a mechanism through which the government could settle cases involving violations under the Companies Act.
The release also said that the committee would look to identify specific provisions under the Companies Act and the LLP act that could be amended to improve ease of doing business and that the committee would not be restricted to only reviewing the forms that companies and LLPs are require to file under the acts.
ET had in its April 16 edition reported that the government was set to do a comprehensive review of the LLP act including steep penalties for delays in filing of returns and other issues in the implementation of the Act.
The committee will also look into measures to further de-clog the National Company Law Tribunals which deals with offences under the Companies Act, the Competition Act and insolvency cases under the Insolvency and Bankruptcy Code. The government had in an amendment in the budget session transferred the power to grant approval for the conversion of public company to a private company or a change of a financial year of a company to the corporate affairs ministry from the NCLT.
Source- Economic Times.