Budget 2016: Companies Act to be amended for greater ease of business

New Delhi: A bill to amend the Companies Act will be introduced in the current session of Parliament for greater ease of doing business, including for facilitating registration of a new company in just one day, Finance Minister Arun Jaitley said Monday.

Presenting the Union Budget for 2016-17, Jaitley said the proposed bill to amend the Companies Act 2013 will remove the difficulties and impediments to ease of doing business.

"The Bill would also improve the enabling environment for start-ups. The registration of companies will also be done in one day," he added.

Earlier this month, a government-appointed panel had suggested nearly 100 amendments to the new Companies Act to make it easier to do business in India, including for simpler laws for incorporating a company and for raising funds, as also for insider trading and dealings with top executives.

The Ministry of Corporate Affairs Ministry had initiated a public consultation process on the suggested changes and had invited comments from all concerned stakeholders till February 15 in this regard.

The Ministry had constituted the Companies Law Committee in June 2015 for examining and making recommendations on the issues arising out of implementation of the Companies Act, 2013.

The Committee, chaired by Corporate Affairs Secretary, submitted its report on February 1. The panel also had nominees from RBI, Sebi, industry bodies, as also from Institute of Cost Accountants of India, Institute of Chartered Accountants of India and Institute of Company Secretaries of India.

The committee held extensive consultations with stakeholders before making its recommendations and received more than 2000 suggestions during the process.

The stakeholders consulted included all industry chambers, professional institutes, law firms, financial sector entities and other regulators.

The panel had said that its endeavour has been to address difficulties and challenges expressed by various stakeholders and also to further the government's objective of improving ease of doing business, encouraging start-ups and the need for harmonising various laws.

The suggestions also included measures to bring in a greater clarity in the Act and Rules and harmonising the various provisions thereof while making its recommendations.

The panel had proposed changes in 78 sections of the Companies Act, 2013, which along with consequential changes, would result in about 100 amendments to the Act.

Approximately 50 amendments to the Rules were also proposed. The recommendations cover significant areas of the Act, including definitions, raising of capital, accounts and audit, corporate governance, managerial remuneration, companies incorporated outside India and offences/penalties.