In a bid to make it easier for corporates to do business in India and to ensure punishment for those raising illegal deposits from public, the government has cleared a slew of changes to the new Companies Act within months of this law coming into force from April 1.
As India has been ranked very low at 142nd position in the latest World Bank report, this move will be seen as the first major initiative by the government to make changes in the country’s regulatory framework to improve its global ranking for ease of doing business.
The Companies (Amendment) Bill, 2014, cleared by Union Cabinet chaired by Prime Minister Narendra Modi, would now go to the Parliament to bring into effect necessary amendments to the existing Act.
The government said in a statement that these amendments have been proposed to address issues raised by stakeholders such as chartered accountants and professionals.
To improve ease of doing business, the proposed amendments include omitting requirement for minimum paid up share capital, and consequential changes and making common seal optional, and consequential changes for authorization for execution of documents.
Besides, specific punishment will be prescribed for non-compliance to norms governing deposits taking activities. Such a provision was "left out in the (existing) Act inadvertently.