The Parliament passes the Companies (Amendment) Bill, 2017
The Parliament passes the Companies (Amendment) Bill, 2017

The Companies (Amendment) Bill, 2017 which seeks to bring about major changes in the Companies Act, 2013, was passed by the Rajya Sabha by a voice vote. The bill will now have to receive the assent of the President to become law.

The amendment seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country. The amendments under the Companies (Amendment) Bill, 2017, are broadly aimed at:

  • addressing difficulties in implementation owing to stringent compliance requirements;
  • facilitating ease of doing business in order to promote growth with employment;
  • harmonisation with accounting standards, the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder, and the Reserve Bank of India Act, 1934 and the regulations made thereunder;
  • rectifying omissions and inconsistencies in the Act. 

The major changes include simplification of the private placement process; rationalization of provisions related to loans to directors; replacing the requirement of approval of the central government for managerial remuneration above prescribed limits by approval through special resolution of shareholders; aligning disclosure requirements in the prospectus with the regulations made by SEBI; providing for maintenance of register of significant beneficial owners; and making offence for contravention of provisions relating to deposits as non-compoundable.

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