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Last updated: 23 Jul, 2018  

Law.9.thmb.jpg Review of Companies Act 2013: A welcome step

Companies.Act.jpg
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Bikky Khosla | 17 Jul, 2018

The Centre is setting the ground for another overhaul of the Companies Act 2013. According to a press statement released by the Ministry of Corporate Affairs last week, the government has constituted a committee to revisit several provisions of the Act. Under this arrangement, a 10-member expert group has been given 30 days to work out whether some offences punishable with fine only or punishable with fine or imprisonment may instead be considered 'civil wrongs' or 'defaults' only.

This is a welcome step. According to experts, there are several provisions related to strict penalties and imprisonment under the Act, and it has also been a long-drawn demand of the Indian industry for going off with them. While the government has been working vigorously to improve ease of doing business in the country, this step can certainly help boost the business environment significantly. Additionally, private sector investment, which is yet to pick up steam, can be expected to get encouragement from the move.

The official release adds that the committee will also review the provisions relating to non-compoundable offences and recommend whether any such provisions need to be re-categorised as compoundable offence. Additionally, it says the government will work on laying the broad contours of an in-house adjudicatory mechanism where penalty may be levied in a Mission Mode Project (MCA21) system driven manner so that discretion is minimised. Again, these proposals deserve applause.

When the Modi government came to power, review of the Companies Act was one of the top demands of the Indian industry, and so the measure proposed last week is a long overdue--but better late than never. Noticeably, it seems--considering the fact that the committee has been asked to submit its report within 30 days--the Centre now wants to quickly incorporate the proposed changes, giving relief to the Indian industry from blind application of the unduly harsh provisions of the Act.

I invite your opinions.

 
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About penality
Pavan Kumar | Sun Jul 22 03:47:59 2018
I am not interested in your industry. Beacuse you are condected penality for some mistake in business. Thank you.


Wrong specification material sale by corporte
Gautam roy | Wed Jul 18 12:10:55 2018
Corporate selling wrongly specified material but no action has been taken even after test by consumer forum on order of state consumer forum. Same wrongly specified material is being sold all over india. Asci has upheld add but then also material is being sold. Will this change in corporate act stop fraud with consumers


REVIEW OF COMPANIES ACT
MANOJ OZA | Wed Jul 18 11:20:05 2018
IT IS NECESSARY TO REVIEW FACTORIES ACT AND LABOR LAWS. EVERY DEFAULT OR NON COMPLIANCE OF OUTDATED RULES AND LONG LIST OF COMPLIANCES ARE TREATED AS CRIMINAL OFFENSE AND CHARGED UNDER CrPc. SME WITH LIMITED CAPABILITIES ARE AT MERCY OF INSPECTORS AND THEIR DEMANDS. RENEWALS OF VARIOUS LICENSES AND PERMITS ALSO NEED TO EXTEND PERIOD OF MINIMUM 5 YEARS OF AUTOMATIC RENEWALS UNLESS THERE IS GROSS VIOLATION. PROPRITOR, PARTNERS AND DIRECTORS ARE BOOKED UNDER CrPc. AND COURTS TAKE YEARS TO DEAL WITH SUCH CASES. RATIONALIZATION IS URGENTLY NEEDED.

  Re: REVIEW OF COMPANIES ACT
CK Murali | Wed Jul 18 13:12:15 2018
I fully agree with your statement. When we have regulation to pardon criminals, defaulted small company directors, who missed to file ROC document as not aware of 2013 law, are disqualified and not allowed to file for their other active companies. It is a punishment many folds of the offence. Will Fin Minister hear the cry of few lakhs disqualified directors who invested their life savings ?


Review of Companies Act 2013
A.V. Chandran | Wed Jul 18 10:38:29 2018
The very review must ensure that both profit and loss sharing of the company is made applicable to one and all employees and up to top management of the Company subject to continuous plan and review mechanism from time to time. Further Depreciation mechanism is one of the duplicate expenditure booking in practice hence it could be removed from balance sheet of the company once for all as this culture is part and parcel negative element with reference to Gross Profit and net profit of the Company. Both the above two items will contribute best health of an organisation in all respects.


Complexity in tax system
SATHEESHA M S | Wed Jul 18 05:15:28 2018
Government should act an a simplified tax system. present system is very complex one and makes room for all type of frauds and open for high corruption. Hence the "Banking transaction tax" may be implemented with a nominal about 1% on all receipts by each and every one. cash transactions may be banned.


Company Act 2013
Deepak KUMAR | Wed Jul 18 04:28:55 2018
Yes, indeed the system needs alignment with where the world is going. But we Indians, while in India, have a knack of ruining a good thing, before we undertake to take rectification actions.


Welcome move
Shashank | Wed Jul 18 04:18:28 2018
It indicates Modi govt has focus on corporate governance and accountability. India needs such regime for next 20 years to come out of mess created earlier.


 
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