Government considering amendments to Companies Act: Arun Jaitley

NEW DELHI,March,8,2016

To further improve ease of doing business, the government is considering amendments to the Companies Act, Corporate Affairs Minister Arun Jaitley today said.

The Companies Law Committee, which submitted its report to the government on February 1, has suggested amendments to 78 sections of the Act, excluding consequential amendments in other sections.

The panel had looked into issues arising from the implementation of the Companies Act, 2013.

To a query on whether the government is considering amending the Companies Act so as to make doing business easier, Jaitley replied in the affirmative.

He said around 1,200 comments were received on the report submitted by the Companies Law Committee(CLC).

"The comments were considered by the government while finalising its views on accepting the recommendations of the CLC. As per requirements, inter-ministerial consultation has to be completed before any further action," Jaitley said in a written reply to the Lok Sabha on March 4.

Key recommendations made by the panel include simplifying private placement process, easing incorporation process and removing the restriction on layers of subsidiaries and investment companies.

Most provisions of the Act came into force from April 1, 2014.

The Corporate Affairs Ministry has set up a Central Registration Centre (CRC) for faster processing of applications for availability of names and it is being planned to extend the services to incorporation of companies after necessary modifications in the MCA 21 system.

MCA 21 is the e-platform for companies to make their statutory filing to the ministry.

To facilitate ease of doing business, the ministry has introduced an integrated form (INC-29) for incorporation of companies, omitted requirement for minimum paid-up capital, made mandatory common seal for companies optional and did away with filing for commencement of business, Jaitley said.

"Other departments have also taken steps with emphasis on simplification of existing rules and procedures and use of information technology for ease of doing business and to make governance more effective and efficient," the minister noted.

To a separate query, Jaitley said that unclaimed and unpaid dividend amount of Rs 1,273.66 crore has been transferred to the Investor Education and Protection Fund (IEPF) after expiry of the mandatory seven-year period for the period from 2001-02 to 2015-16, till February 26.

As many as 3,74,727 companies have not filed their annual and balance sheet for 2015, according to data from the MCA 21 system.

Jaitley said that 3,86,103 companies did not file their balance sheet while 3,89,503 firms did not submit their annual return.

"As per provisions of the Section 403 of the Companies Act, 2013, any document can be filed on payment of such additional fee for delay as prescribed within a period of 270 days from the date by which it should have been filed," the minister said in another written reply to the Lok Sabha dated March 4.