THE COMPANIES AMENDMENT ORDINANCE – 2018 [9 of 2018] – A REVIEW
All are aware that the provisions of the Companies Act, 2013, came in to force with effect from 12.09.2013, and with other provisions notified in a phased manner from 01.04.2014.
With in a period of 15 months of the commencement, on the pretext of ease of doing business in India, and to overcome some practical difficulties as to implementation of the provisions, some amendments were proposed to the Companies Act, 2013, and accordingly, the Companies Amendment Act, 2015, and the provisions of the same were made effective from 29.05.2015, in a phased manner.
Even after the above amendment, there were lot of provisions which required amendments/relaxations, and accordingly the Ministry had come with 4 notifications Dt:05.06.2015, giving exemptions/relaxation from the applicability of various provisions of the Act to Government Companies, Private Companies, Section 8 Companies and Nidhi Companies.
To sort out any further difficulties, the Ministry had constituted a Corporate Law Committee, to obtain opinion from the various sections in the industry and recommend amendments to the Act, and the Companies Amendment Bill, 2016, was introduced in the parliament for its consideration. After taking their own sweet time, finally the Companies Amendment Bill, 2016, become Companies Amendment Act, 2017, and noticed effect from 26.01.2018, in a phased manner.
With in a span of 4 years of its notification, the Companies Act, 2013, has got amended two times, and don’t even talk about the plethora of notifications, circulars, exemption notifications.
Now again, the policy makers had felt it appropriate to amendment the Companies Act, 2013, and as the parliament is not in session, the same has been done through an Ordinance. The said Ordinance, received the assent of the Hon’ble President of India on 02.11.2018.
From the above, it can be seen that major amendments relate to change of wordings in the section, relating to de-criminalisation of offences, i.e., change of terminology from “punishable with fine” to “Liable to a penalty”, replacing the provisions as to imprisonment with only to fines, and in some extreme offences, the imprisonment provision are retained.
Even after the above ordinance, the Ministry of Corporate affairs, has noted that certain 20 other amendments of urgent nature would be required to strengthen the corporate governance and enforcement framework, and has sought for /comments recommendations from the public at large, and such comments/recommendations are to be submitted on or before 20.11.2018. So, there is every possibility of another amendment to the Act.
