Lok Sabha passes Companies Act (Amendment) Bill, 2016
It amends provisions related to the composition of the Selection Committee of the National Companies Law Tribunal and the National Companies Law Appellate Tribunal.
The Lok Sabha on 27 July 2017 passed the Companies Act (Amendment) Bill, 2016 that seeks to amend Companies Act, 2013 to remove complexities and improve ease of doing business.
The bill was passed with a voice vote and was moved by Union Minister of Finance and Corporate Affairs Arjun Ram Meghwal.
Provisions of the Bill
• It removes the limit on layers of subsidiaries and intermediaries. This is in line with the Companies Law Committee’s (CLC) recommendations which noted that imposing such limits would affect the company’s structuring and ability to raise funds.
• It calls for a group of people who exercise beneficial control (above 25 per cent) in a company to disclose such interest.
• It removes the requirement of offer letter that is issued to individuals to whom a private offer of shares has been made, but retains the provision related to notifying the Registrar of the return of allotment.
• It calls for appointment of a technical member who must be at least of the level of an Additional Secretary.
• It permits an Independent Director to have a financial relationship of up to 10 per cent of his total income with the company.
• It amends provisions related to the composition of the Selection Committee of the National Companies Law Tribunal and the National Companies Law Appellate Tribunal.