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Panel for softer penalty under company law
Why is it in the news?
- The government has set up the committee to further decriminalise the provisions of the Companies Act, 2013.
More in the news
- Aim: To take other measures to provide further ease of living for corporates in the country.
- The government had earlier, through the Companies (Amendment) Act 2019, decriminalised 16 minor procedural or technical lapses and had categorised them as ‘civil wrongs’.
- Key Recommendations:
(1) Amendments to 46 provisions under the company law to reduce or remove criminality and declog the criminal justice system.
(2) Omission of seven compoundable offences, limiting the punishment for 11 compoundable offences to only a fine, and also recommended that five offences be dealt with under alternative frameworks.
- The committee has recommended to reduce penalties on following:
(1) Category A offences pertain to non-compliance of the orders of the Central Government, National Company Law Tribunal.
(2) Category B offences that have to do with default in respect of maintenance of certain records in the registered office of the company.
(3) Category C offences that are defaults on account of non-disclosures of interest of persons to the company, which vitiates the records of the company.
(4) Category E offences - Technical defaults relating to intimation of certain information by filing forms with the Registrar of Companies or in sending of notices to the stakeholders.
(5) Category F offences- Defaults involving substantial violations which may affect the going concern nature of the company, or are contrary to the larger public interest.
Source
The Hindu.