Companies (Amendment) Bill, 2017: Why layering restrictions remain

Govt has stepped up efforts to curb the use of shell firms for money laundering & diverting funds

The much-awaited relief from restrictions on layers of subsidiaries and investment companies a business could create is conspicuous by its absence in the Companies (Amendment) Bill, 2017, recently passed by Lok Sabha. Much to the surprise of India Inc., the Bill omitted the draft proposal to remove the cap on investments through layers of companies. This, despite a recommendation to that effect by a high-powered Companies Law Committee, which looked at issues concerning the execution of the Companies Act, 2013.

Experts say this change in stance is owing to the aftermath of demonetisation.

“The tax authorities, especially at the time of the