In what could be a relief for startups and smaller companies, the government is planning to bring amendments in the Companies Act offering them concessions and lower their penalty.
The Centre is expected to lower the penalty to half, of that levied charge on larger companies, for startups and smaller companies including farmer producer companies.
This is reportedly part of the Company Law Committee recommendations, which is set to be submitted soon, to the govt.
The 11-member committee, headed by corporate affairs secretary Injeti Srinivas, has identified about 60 amendments to the Companies Act, including around 45 related to dropping criminal prosecution, said an ET report.
The committee members include- Uday Kotak, Shardul S Shroff, Ajay Bahl, Sidharth Birla, Rajib Sekhar Sahoo, Amarjit Chopra, among others. Govt is expected to present the bill to amend the Companies Act during the winter session, which will start from November 18.
The move will come as a respite for new companies or startups under the Company Act, who often find it tough and need support to comply with some of the provisions.
In September, the govt had constituted the committee to review the provisions of the Companies Act 2013 and the Limited Liability Partnerships Act 2008 to improve corporate compliance and take essential steps to improve the ease of doing business.
Through this, the govt intends to do a comprehensive review of the LLP act including steep penalties for delays in filing of returns and other issues like recategorization of certain offences under these Acts in implementation.
Besides, the MCA is also mulling to reduce the number of returns companies file and decriminalising over 60 sections under the category of compoundable offences.
The step, as per the govt, is in line with its objective to provide ease of doing business to law-abiding corporates and facilitate improved corporate compliance for stakeholders.