The Union Cabinet has approved 72 changes to the Companies Act 2013, with a thrust on decriminalising compoundable offences and allowing direct foreign listing for domestic companies to boost “Brand India”.
The nod for the Companies amendment Bill, likely to be tabled in the ongoing Parliament session, has been given to ease compliance burden related to corporate social responsibility (CSR) by exempting companies with obligation to spend Rs. 50 lakh or less. Such companies will not be required to have a CSR committee.
Also, if a company spends more than the required 2 per cent of its average profit in any given year, it can carry forward the excess amount to the subsequent financial years.
Cabinet approves Constitution of 22nd Law Commission of India for a term of three years
The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved Twenty-second Law Commission of India for a period of three years from the date of publication of the Order of Constitution in the Official Gazette.
The Government will have the benefit of recommendations from a specialised body on different aspects of law which are entrusted to the Commission for its study and recommendations, as per its terms of reference. The Law Commission shall, on a reference made to it by the Central Government or suo-motu, undertake research in law and review of existing laws in India for making reforms therein and enacting new legislations.
New Portal to SPICe Things Up
The government has rolled out a new simple application to make it further easier for incorporating a business in India. The new web form, Simplified Proforma for Incorporating Company Electronically Plus (SPICe+), which integrates 10 services from various ministries and departments has went online.
The simplified application provides for Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC) registration among other things. The ministry of corporate affairs and labour, department of revenue and the Maharashtra government have collaborated for the new offering.
The new form is split into two parts, one for reserving a company name, and one for a host of services such as PAN and TAN issue, DIN allotment, professional tax registration in Maharashtra, etc.
The reserve unique name (RUN) web service will now only be applicable for a change of name with SPICe+ coming in.
Mauritius on FATF ‘Grey List’
Mauritius, the tax haven that has been used by foreign investors for three decades to bet on Indian stocks, is now on the ‘grey list’ of Financial Action Task Force (FATF) — an inter-governmental policymaking body setting anti-money laundering (AML) standards. With the jurisdiction coming under FATF’s close monitoring, India will shut the doors to new foreign portfolio investors (FPIs) setting up shop in Mauritius but may allow existing FPIs registered with the Securities and Exchange Board of India (Sebi) to trade till the market regulator takes a final decision on the subject.
Cabinet approves Companies (Second Amendment) Bill, 2019
The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved the Companies (Second Amendment) Bill, 2019 to amend the Companies Act, 2013. The Bill would remove criminality under the Act in case of defaults which can be determined objectively and which, otherwise, lack the element of fraud or do not involve larger public interest. This would also lead to further de-clogging of the criminal justice system in the country. The Bill would also further ease of living for law abiding corporates. Earlier, the Companies (Amendment) Act, 2015 amended certain provisions of the Act to remove difficulties faced in implementation of various provisions of the Act.
Foreign pension funds may soon get more leeway
Deep reforms are on the anvil in the country´s pension market, with plans to permit foreign pension funds to set up independent pension trusts and make the Pension Fund Regulatory Development Authority (PFRDA) the sole authority to allow a pension product into the market. This could entail a thorough rewrite of the pension products that insurance companies and some mutual funds offer today in the fast expanding market for retirement products in India. These are part of some 30 changes that the finance ministry is planning to bring in by amending the PFRDA Act of 2013. The amendment will also involve a change in the name of the regulator. Instead of ´Pension Fund Regulatory Development Authority´, the regulator will be known as Pension Regulatory Development Authority. The word ´fund´ will be deleted from the name because, as a government source explained, “The regulator is in charge of the entire pension sector and not just of the funds.