The Lok Sabha on Friday passed the Companies (Amendment) Bill, 2019 which seeks to amend the Companies Act, 2013 and is aimed at tightening the Corporate Social Responsibility (CSR) compliance, transferring certain responsibilities to the National Company Law Tribunal and re-categorising certain offences as civil offences. It replaced an ordinance promulgated earlier.
Finance Minister Nirmala Sitharaman told the House that the Bill would ensure further ease of doing business for companies.
“This will ensure better governance and is company-friendly,’’ she said.
“The government has so far de-registered four lakh shell companies. Also companies not spending the mandatory 2% profit on CSR activities for a total period of four years will be required to deposit the amount in a special account,’’ she said.
The Bill was passed unanimously after Congress leader Adhir Ranjan Chowdhury withdrew statutory resolution opposing it.
“India has become the first country to make CSR spending mandatory through a law. The companies will have one year to firm up the CSR proposal and another three years to spend funds. In case money remains unspent for one plus three years, it will have to be moved to an escrow account,’’ said the Minister.
The bill will also empower the Registrar of Companies (ROC) to initiate action for the removal of the name of the company from the Register of companies if it is not carrying on any business or operation in according with the company law.
