Finance and Corporate Affairs Minister Nirmala Sitharaman said the government has brought in all the provisions of the ordinance and has also added new amendments in the bill.
Parliament on Tuesday approved the Companies (Amendment) Bill which seeks to tighten CSR norms and ensure stricter action for non-compliance of the company law regulations. The legislation was passed in the Rajya Sabha with voice vote. Lok Sabha had passed the bill on July 26. Finance and Corporate Affairs Minister Nirmala Sitharaman said the government has brought in all the provisions of the ordinance and has also added new amendments in the bill.
A key change in the bill pertains to Corporate Social Responsibility (CSR) spending, wherein companies would have to mandatorily keep unspent money in a special account. Under the Act, companies earning profit of over Rs 5 crore, turnover of Rs 100 crore or networth of more than Rs 500 crore are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
The bill empowers the Registrar of Companies (ROC) to initiate action for removal of the name of the company from Register of companies if it is not carrying on any business or operation in according with the company law. Among other things, the bill also provides for re-categorisation of 16 minor offences as purely civil defaults and transferring of functions with regard to dealing with applications for change of financial year to Central government.
It also provides for shifting of powers for conversion from public to private companies from NCLT to the central government, as well as more clarity with respect to certain powers of the National Financial Reporting Authority (NFRA).