The Rajya Sabha passed the Companies (Amendment) Bill, 2017 by a voice
vote. It was adopted by the Lok Sabha in July this year during the
monsoon session.
A bill to amend the companies law to strengthen corporate governance
standards, initiate strict action against defaulting companies and help
improve ease of doing business in the country, was passed by parliament
on Tuesday. The Rajya Sabha passed the Companies (Amendment)
Bill, 2017 by a voice vote. It was adopted by the Lok Sabha in July this
year during the monsoon session.
Replying to issues raised by the
members during a discussion on the bill, minister of state for corporate
affairs P.P. Chaudhary said the amendment would ensure better corporate
governance and improve the ease of doing business in the country
The bill provides for more than 40 amendments to the Companies Act,
2013. The Companies Act, 2013 has
already been amended once under the present government. The latest
legislation would help in simplifying procedures, make compliance easy
and take stringent action against defaulting companies.
Under the Act, certain classes
of profitable companies are required to shell out at least 2% of their
3-year annual average net profit towards CSR activities. In case of
non-expenditure, such entities are required to provide the reasons for
it to the ministry.
There is an amendment to delete section 195
and 196 which provide for prohibition of insider and forward trading as insider and forward trading is barred under the
Securities and Exchange Board of India (Sebi) law and therefore there
was no need of this provision in the Act which would anyway is
superseded by the Sebi law.
Now its time to get Presidents ascent for the bill to become effective.
