The Company Law Committee submitted a report on steps needed to be taken to further decriminalise the provisions of the Companies Act, 2013 to Union Finance Minister Nirmala Sitharaman.
The report was presented to the Union Minister by Injeti Srinivas, Secretary, Ministry of Corporate Affairs and the chairman of the Committee on Monday.
The Committee was constituted by the Ministry of Corporate Affairs in September 2019 "to decriminalise the provisions of the Companies Act, 2013 based on their gravity and to take other concomitant measures to provide further Ease of Living for corporates in the country."
"The Committee took note of the progress made consequent to the Companies (Amendment) Act, 2019, which had resulted in de-criminalisation of 16 minor procedural or technical lapses under the Companies Act, 2013 into 'civil wrongs', and adopted a principle-based approach to further remove criminality, in case of defaults which can be determined objectively and which, otherwise, lack the element of fraud or do not involve larger public interest," according to a release by the PIB on Monday.
"The Committee has proposed amendments in 46 penal provisions, so as to either remove criminality, or to restrict the punishment to only fine, or to allow rectification of defaults through alternative methods, which would lead to further de-clogging of the criminal justice system in the country," the release added.
In the report, the committee has also made recommendations aimed at providing further ease of living for law-abiding corporates, which include the power to exclude a certain class of companies from the definition of 'listed company', mainly for the listing of debt securities, in consultation with SEBI, among others.