Govt approves amendments to Companies Act

2 min read

News:The Union Cabinet has approved the Companies (Second Amendment) Bill, 2019.

Facts:

Key Provisions of the Bill:

  • It amends the Companies Act to enable listing of Indian firms on foreign stock exchanges.
  • It decriminalises several existing compoundable offences under the companies Act,2013 to promote ease of doing business.
  • It ensures that companies which have an obligation to spend Rs. 50 lakh per annum or less on corporate social responsibility(CSR) are no longer required to have a CSR committee. 
  • Companies which spend over the obligated 2% on CSR in a particular year can carry it forward as credit for fulfilment of CSR obligations for the next few years as well.

Additional information:

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.

About CSR:

  • Corporate social responsibility (CSR) was initiated through the Companies Act, 2013.
  • The act mandates companies and government organisations with a) turnover of Rs1,000 crore or more b) net worth exceeding Rs 500crore or c) having more than Rs 5 crore in net profits to spend 2% of average net profit of the preceding three years on CSR.