The Ministry of Corporate Affairs (MCA) constituted a Company Law Committee (CLC) to further review sections on offences under the Companies Act, 2013 (2013 Act).
The Ministry of Corporate Affairs (MCA) constituted a Company Law Committee (CLC) to further review sections on offences under the Companies Act, 2013 (2013 Act). The CLC contemplated on various matters in addition to review of offences under the 2013 Act i.e. introducing a mechanism to reduce burden on courts and for effective disposal of cases, improving functioning of authorities under the 2013 Act and changes aimed at promoting the ease of doing business in India.
Accordingly, on 14 November 2019, CLC submitted its report to MCA, recommending changes in the 2013 Act. The CLC provided recommendations to further decriminalise provisions of 2013 Act and to boost ease of doing business and ease of living to law abiding corporates.
Based on the recommendations of the CLC in its report, the Ministry of Finance introduced the Companies (Amendment) Bill 2020 (the Bill) which proposed extensive amendments in the 2013 Act. On 19 September 2020, Lok Sabha passed the Companies (Amendment) Bill, 2020 and on 22 September 2020 it was passed by the Rajya Sabha.
On 28 September 2020, the Companies (Amendment) Act, 2020 (the 2020 Amendment Act) received the assent of the President of India. The 2020 Amendment Act incorporates amendments suggested by CLC report.
The 2020 Amendment Act will come into force on such a date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of the 2013 Act and any reference in any provision to the commencement of the 2013 Act should be construed as a reference to the coming into force of that provision.
This issue of First Notes provides an overview of the amendments introduced by the 2020 Amendment Act.
To access the text of the Companies (Amendment) Act, 2020, please click here.
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