Companies Amendment Bill passed by Parliament
NEW DELHI : The Companies (Amendment) Bill, 2017 which seeks to bring about major changes in the Companies Act, 2013, was passed by the Rajya Sabha on Tuesday by a voice vote.
The bill, which was adopted by the Lok Sabha in July, will now have to receive the assent of the President to become law. The amendment seeks to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country. The Companies Act, 2013 has already been amended once under the current government.
It was passed after much debate in the winter session of the Parliament as members raised concerns about independent directors being allowed up to 10% pecuniary interest in a company.
The bill, which was adopted by the Lok Sabha in July, will now have to receive the assent of the President to become law.
Under the Act, certain classes of profitable companies are required to shell out at least 2% of their three-year annual average net profit towards corporate social responsibility (CSR) activities. In case of non-expenditure, such entities are required to provide reasons for it to the ministry.
R. Ramakrishna of the BJP supported passing of the bill and said there was no provision of carrying forward the CSR funds and companies should be given more time to use these funds. He added that the upper limit of 300 days for filing returns under the Act led to non-compliance and hence, changes have been made in the law to improve timely filings.
This was opposed by former finance minister P. Chidambaram, who said a company should not give loans to the director or to those of interest to a director.
