Committee to review Companies, LLP Acts

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News:Government of India has constituted the company law committee for examining and making recommendations on various provisions and issues related to implementation of the Companies Act.

Facts:

About the committee:

  • The committee will consist of 11-members which will be chaired by the Ministry of Corporate Affairs (MCA) secretary Injeti Srinivas.
  • The committee will submit its recommendations on offences both compoundable and non-compoundable which could be recategorised as civil offences under the Companies Act, 2013.
  • The panel will propose measures to improve the functioning of the National Company Law Tribunal.
  • The committee will also examine the feasibility of introducing settlement mechanism, deferred prosecution agreement within the fold of the Companies Act, 2013.
  • Further,it will also study the existing framework under the Limited Liability Partnership Act, 2008 and suggest measures to plug the gaps, if any, to enhance the ease of doing business.

Additional information:

Compoundable and non-compoundable offences:

  • Compoundable offences are those that are punishable with a fine or with a fine or imprisonment or both.
  • Non-compoundable offences are those offences which are punishable with imprisonment only or punishable with imprisonment and fine.

Companies Act,2013:

  • The Companies Act 2013 is an Act of the Parliament of India on Indian company law.Company means a company incorporated under this Act or under any previous Company Law.
  • The law regulates incorporation of a company, responsibilities of a company, directors and dissolution of a company. 

Limited liability partnership act,2008:

  • The Limited Liability Partnership Act,2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India.
  • A limited liability partnership(LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities.
  • In an LLP,each partner is not responsible or liable for another partner’s misconduct or negligence.
  • This is an important difference from the traditional unlimited partnership in which each partner has joint and several liability.