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The Union Cabinet on Wednesday approved an amendment to the existing Companies (Amendment) Bill, 2014. This will fast-track the process of exempting a certain class of companies from any of the provisions of the new company law.
The Bill is awaiting the Rajya Sabha’s nod.
The proposed amendment will rationalise the procedure for laying draft notifications — granting exemptions from provisions of the company law to various classes of companies — in Parliament to ensure speedier issue of a final notification.
The company law enacted in 2013 stipulates that companies could be exempted from the provisions of this law only when the “draft notification” providing such an exemption is laid in each House of Parliament for a minimum period of 30 days, during which both the Houses could either amend the notification or disapprove of it completely.
‘Significant change’ Lalit Kumar, Partner, J Sagar Associates, a law firm, said this is a significant change. However, one has to see the fineprint on how the procedure will be rationalised.
“If the Corporate Affairs Ministry decides to give some form of exemption to companies coming up in GIFT city (Gujarat), then this amendment could speed up the approval process in granting them exemption,” Kumar told BusinessLine .
No declaration needed The Cabinet on Wednesday also approved doing away with the requirement for filing a declaration by a company before commencement of business or exercising its borrowing powers.
An amendment to this effect is proposed to be undertaken in the Companies (Amendment) Bill, 2014. This will address issues relating to the ease of doing business, an official release said.
SN Ananthasubramanian, a practising Company Secretary, said the statement of intent seems to be laudable in the context of the ease of doing business in India. But, one has to see the fineprint for more details, he added.
Surbhi Kejriwal, Associate Partner, Khaitan & Co, said that rationalising the procedure for granting exemptions is a “welcome and positive” change. However, one will have to wait and watch for what “rationalising” the procedure would finally be, she said.
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