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Corporate offenders will not face imprisonment for procedural, technical or minor offences

NEW DELHI: Corporate offenders will no longer have to face imprisonment for procedural, technical or minor offences with the government notifying changes to the Companies Act on Monday. The latest amendments aimed at decriminalising the Act are part of the ease of doing business initiative.

So far, 48 sections of the Act have been decriminalised and 23 of the remaining 66 compoundable offences can be dealt with by an in-house adjudicating mechanism. Total penal provisions under the Act have been brought down to 124 from 134 earlier. Fines for various offences have also been brought down in the latest set of changes.

The amendments allow companies to go in for direct overseas listing. However, the government will have to specify the class of companies that will be allowed to list overseas along with the permissible foreign jurisdictions.

The amendments also removed the requirement of instituting a corporate social responsibility (CSR) committee for companies whose CSR obligation is below ₹50 lakh per year. Additionally, companies can roll over surplus CSR spends for the year.

Extension of relaxations

The ministry of corporate affairs (MCA) allowed companies to conduct board meetings by video conferencing or other audio visual means till year-end while it extended the deadline by three months for independent directors to register with its online data bank.

Relaxation on the requirement of physical board meetings, granted by the MCA in light of restriction arising from the pandemic, ends on Wednesday. The new deadline is December 31.

The MCA had amended the rules for appointment of directors in December last year, requiring them to register with an online data bank and consequently take a self-assessment exam to qualify them as eligible for such posts. The deadline, which was October 1, has been extended to January 1, 2021.



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