The enactment of the Companies Act, 2013 (the 'Companies Act, 2013' or the 'Act') was one of the most significant legal reforms in India in the recent past, that aimed at bringing the Indian company law in line with global standards. The Act introduced substantial changes in the company law in India, especially in relation to accountability, disclosures, investor protection and corporate governance. Given the extent and scope of changes, the stakeholders took some time to come to terms with the new regime and new provisions, and encountered some difficulties in the process. Several representations were made before the government on the practical challenges faced during implementation.
In view thereof, the Companies Law Committee, constituted by the Ministry of Corporate Affairs, proposed the Companies (Amendment) Bill, 2017 (the Bill) before the Lok Sabha, which was passed by the Lok Sabha and Rajya Sabha on 27 July 2017 and 19 December 2017, respectively. The same has also received the President's assent on 3 January 2018. The Ministry of Corporate Affairs has notified certain sections with effect from 9 February 2018 and the remaining sections shall be notified in due course of time.
The amendments under the Bill are broadly aimed at:
- Addressing difficulties in implementation owing to stringent compliance requirements;
- Facilitating ease of doing business to promote growth with employment;
- Harmonization with accounting standards, the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder, and the Reserve Bank of India Act, 1934 and the regulations made thereunder.
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