The Ministry of Corporate Affairs Ministry has decided to launch a public consultation process on the suggested changes and has invited comments from all concerned stakeholders till February 15 in this regard.
A government-appointed panel on Monday suggested nearly 100 amendments to the new Companies Act to make it easier to do business in India, including for simpler laws for incorporating a company and for raising funds, as also for insider trading and dealings with top executives.
The Ministry of Corporate Affairs Ministry has decided to launch a public consultation process on the suggested changes and has invited comments from all concerned stakeholders till February 15 in this regard.
The Ministry had constituted the Companies Law Committee in June 2015 for examining and making recommendations on the issues arising out of implementation of the Companies Act, 2013.
The Committee, chaired by Corporate Affairs Secretary, submitted its report today. The panel also had nominees from RBI, Sebi, industry bodies, as also from Institute of Cost Accountants of India, Institute of Chartered Accountants of India and Institute of Company Secretaries of India.
The committee held extensive consultations with stakeholders before making its recommendations and received more than 2000 suggestions during the process.
The stakeholders consulted included all industry chambers, professional institutes, law firms, financial sector entities and other regulators.
The panel said that its endeavour has been to address difficulties and challenges expressed by various stakeholders and also to further the government's objective of improving ease of doing business, encouraging start-ups and the need for harmonising various laws.
The suggestions also include measures to bring in greater clarity in the Act and Rules and harmonising the various provisions thereof while making its recommendations.
The panel has proposed changes in 78 sections of the Companies Act, 2013, which along with consequential changes, would result in about 100 amendments to the Act.
Approximately 50 amendments to the Rules have also been proposed. The recommendations cover significant areas of the Act, including definitions, raising of capital, accounts and audit, corporate governance, managerial remuneration, companies incorporated outside India and offences/penalties.
Changes have been suggested for easier regulations for shareholders' approval to the managerial remuneration. It has also been suggested to change definition of associate company and subsidiary company to ensure that 'equity share capital' is the basis for deciding holding-subsidiary relationship rather than 'both equity and preference share capital'.
The panel further said that private placement process be substantially simplified, while doing away with separate offer letter and reducing the number of filings to Register. It also suggests making valuation details public.
Another suggestion relates to making incorporation process easier and allowing greater flexibility to companies.
"An unrestricted objects clause (needs) to be allowed in the Memorandum of Association dispensing with detailed listing of objects," the panel suggested while suggesting self-declarations to replace affidavits from subscribers to memorandum and first directors. It also wants changes in various forms.
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