Companies (Amendment) Bill, 2019
After much deliberations, the Lok Sabha passed The Companies (Amendment) Bill, 2019. This Bill seeks to amend the Companies Act, 2013 and replaces an earlier replace the ordinance promulgated earlier in this regard.
What is the bill?
- The Companies (Amendment) Bill, 2019 seeks to tighten the corporate social responsibility (CSR) compliance of companies and reduce a load of cases on the National Company Law Tribunal (NCLT).
- It transfers certain responsibilities to National Company Law Tribunal and has recategorized certain offenses as civil offenses.
- As per this Bill, any fund of CSR which is left unspent has to compulsorily transferred to one of the funds under Schedule 7 of the Act.
- These may include the Prime Minister?s Relief Fund and the transfer must be effected within six months of the financial year.
- The bill also seeks to empower the Registrar of Companies (RoC) to initiate action for removal of a company?s name if the company is not carrying out business activities as per the charter specified in the act.
- The bill will ensure more accountability and hence better enforcement of laws which will strengthen the corporate governance norms and improve compliance management in the corporate sector.
What had happened in the past?
A bill which was to replace the first ordinance had already been passed in Lok Sabha on January 2019. However, it did pass in the? Rajya Sabha. Thus, a second ordinance was promulgated in February and the current bill has been brought to replace the second ordinance.