Cabinet approves promulgating ordinance to amend companies law

The Union Cabinet on Thursday approved promulgating an ordinance to amend the Companies Act, according to a source. The Corporate Affairs Ministry, which is implementing the Act, has been looking at ways to promote ease of doing business as well as ensure better compliance levels.

The proposal to promulgate an ordinance for amending the Companies Act, 2013, was approved by the Cabinet, the source said. Details about the proposed amendments could not be immediately ascertained.

In August, a government-appointed panel suggested various changes to the Act, including restructuring of corporate offences under the companies law and an in-house adjudication mechanism to ensure that courts get more time to deal with serious violations.

Apart from restructuring of corporate offences to relieve special courts from adjudicating routine offences, the panel has mooted "re-categorisation of 16 out of the 81 compoundable offences" under the Act.

The committee had also recommended disqualification of directors in case they have directorships beyond permissible limits and capping an independent director's remuneration.