Cabinet okays changes in Companies Act

The Union Cabinet on Tuesday approved the introduction of Companies (Amendment) Bill, 2014 in Parliament to make certain changes to the existing Act to create a better business environment.

It also approved introduction of the comprehensive Anti-Hijacking Bill 2014, besides amendments in the Regional Rural Banks Act.

Companies Bill 2014 The changes proposed in the Companies (Amendment) Bill include scrapping the requirement for minimum paid-up share capital and consequential changes, making a common seal optional, prohibition of public inspection of board resolution filed in the registry and inclusion of provision for writing off past losses/depreciation before declaring a dividend for the year.

The changes proposed in the Bill, if approved, will also exempt related-party transactions between holding companies and wholly-owned subsidiaries from the requirement of approval of non-related shareholders. The audit committee has been empowered to give approvals for such transactions on an annual basis.

Regional Rural Banks Act 1976 The Cabinet approved amendments in the RRBs Act 1976 to enhance authorised and issued capital to strengthen their capital base and to bring flexibility in the shareholding between Central and State Governments and the sponsor bank. The term of non-official directors appointed by the Centre will be fixed at not exceeding three years.

“The amendments will ensure financial stability of RRB, which will enable them to play a greater role in financial inclusion and meeting credit requirements of rural areas; the Board of RRBs will be strengthened,” an official statement said.

Anti-Hijacking Bill 2014 It also approved introduction of the comprehensive Anti-Hijacking Bill 2014 as the current law, the anti-hijacking Act 1982, was last amended in 1994. The Cabinet has approved repealing this Act and withdrawal of the anti-hijacking Bill 2010.

“After the hijacking of Indian Airlines Flight IC-814 in December, 1999, it was felt necessary to provide for the death penalty to perpetrators of hijacking. The incident of 9/11, where aircraft were used as weapons, also highlighted the need to amend the existing Act,” an official statement said.

The Cabinet has also approved ratification of the Beijing Protocol, 2010, to which India is a signatory.

“The Bill provides death punishment for the offence of hijacking, where such offence results in the death of a hostage or of security personnel; or with imprisonment for life; the moveable and immoveable property of such persons shall also be liable to be confiscated,” an official statement said.