Lok Sabha on 19 September 2020, passed a bill to further amend the Companies Act and decriminalise various non-compoundable offences and promote ease of doing business. The Companies (Amendment) Bill, 2020 –seeks to decriminalise various penal provisions and introduce a new chapter related to producer organisations in the legislation – was passed by the Lower House.
Finance and Corporate Affairs Minister Nirmala Sitharaman said decriminalisation of various provisions under the companies law will also help small companies by reducing litigation burden on them. Around 48 sections of the Companies Act, 2013 will be amended to decriminalise various offences. Sitharaman said there are currently around 124 penal provisions compared to 134 in 2013 under the Companies Act.
She stressed that there will however be no relaxations for serious offences such as fraud and those which cause injury to public interest. She said that the number of "non-compoundable" offences under the Act would remain the same at 35.
There will also be a new chapter on producer organisation that will be particularly of help for farmer producer organisations.
She added that for promoting "ease of doing business," 17 provisions of the Companies Act will be amended.