The Ministry of Corporate Affairs, vide its order dated September 18, 20191, constituted the Company Law committee with the object to amend the existing Companies Act 2013, to Promote 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. As per the World Bank's Report for 2020, India is currently in 63rd position2 for ease of doing business.

Based on the report of the Company Law committee dated November 14, 20193, the Companies (Amendment) Bill, 2020, was introduced in the lower house of the Parliament on March 17, 2020, by the Minister of State for Finance and Corporate Affairs - Shri Anurag Singh Thakur to further amend the Companies Act, 2013, with the sole object of Promoting Ease of Doing Business4.


1. To decriminalize the minor procedural, technical and minor non-compliances under the Act which lack any element of fraud or which do not involve larger public interest and which can be dealt through civil jurisdiction instead of criminal.

2. To exclude certain class of companies from the definition of "listed company" under Section 2(52) of the Companies Act 2013, in consultation with the Securities and Exchange Board of India (SEBI) in order to facilitate listing of their debt securities.

3. To clarify the jurisdiction of trial court on the basis of place of commission of offence for wrongful withholding of property of a company by its officers or employees under the section 452 of the Act.

4. To insert a new chapter to include certain provisions relating to the regulation of the Producer Companies, which was earlier part of the Companies Act, 1956, such as provisions relating to membership, conduct of meetings and maintenance of accounts of the Producer Companies.

5. To establish additional special benches of the National Company Law Appellate Tribunal in places other than New Delhi, due to the heterogeneity of matters that are dealt by the NCLAT and as it exercises the appellate powers under three key economic legislations such as the Competition Act, 2002, the Insolvency and Bankruptcy Code, 2016, and the Companies Act, 2013.

6. To make provisions for Allowing Payment of Remuneration to Non-Executive Directors in case of Inadequacy of Profits, by aligning the same with the provisions for remuneration to executive directors. Non-executive directors, including independent directors who devote their valuable time and have experience to give critical advice to the company must be appropriately compensated for the same even in case of inadequacy of profits or losses as is permissible for executive directors.

7. Relaxation of provisions relating to charging of higher additional fees for default on two or more occasions in submitting, filing, registering or recording any document, fact or information as provided in section 403.

8. To extend the applicability of section 446B, relating to lesser penalties for small companies and one person companies, to extend the same benefit to the Producer Companies and start-ups.

9. To exempt certain class of persons from complying with the requirements of section 89 relating to declaration of beneficial interest in shares and exempt any class of foreign companies or companies incorporated outside India from the provisions of Chapter XXII relating to companies incorporated outside India.

10. To amend the Section 62(1) with reference to Reduction of Timelines for Speeding up the Rights Issue by providing shorter period of time than the mandatory 15 days' time period provided in this provision.

11. Extending exemptions for filing of certain resolutions under Section 117 to certain classes of non-banking financial companies and housing finance companies in consultation with the RBI. As NBFCs now engage in lending activities in their regular course of business, similar to the manner in which banks engage in such activities and since such lending takes place in their ordinary course of business, filing resolutions for all lending related matters may be burdensome and also affects their confidentiality.

12. Companies which have Corporate Social Responsibility liability up to fifty lakh rupees shall not be required to constitute the Corporate Social Responsibility Committee and to allow eligible companies to set off any amount spent in excess of their Corporate Social Responsibility Liability in a particular financial year towards such obligation in subsequent financial years

13. To provide for a window within which penalties shall not be levied for delay in filing annual returns and financial statements in certain cases. 14. To require certain class of unlisted public companies to prepare and file their periodical financial results.

15. To allow certain class of public companies to directly list certain class of securities on stock exchanges in permissible foreign jurisdictions.



2 Economies.pdf



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