[pib] Promulgation of the Companies Amendment (Ordinance), 2018PIBPriority 1


Note4students

Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Particulars of the Ordinance

Mains level: Easing norms for minor corporate offences


News

Context

  • The recommendation of the Union Cabinet for promulgation of the Companies Amendment (Ordinance), 2018 has been assented to by the President of India.
  • The Ordinance is promulgated to review offences under the Companies Act, 2013.

Key Amendments

  1. Shifting of the jurisdiction of 16 types of corporate offences from the special courts to in-house adjudication, which is expected to reduce the case load of Special Courts by over 60%, thereby enabling them to concentrate on serious corporate offences.
  2. The penalty has been reduced to half for small companies and one person companies of that applicable to normal companies.
  3. Instituting a transparent and technology driven in-house adjudication mechanism on an online platform and publication of the orders on the website.
  4. Strengthening in-house adjudication mechanism by necessitating a concomitant order for making good the default at the time of levying penalty, to achieve the ultimate aim of achieving better compliance.
  5. Declogging the NCLT by:
  • enlarging the pecuniary jurisdiction of Regional Director  by enhancing the  limit up to Rs. 25 Lakh as against earlier limit of Rs. 5Lakhunder Section 441 of the Act;
  • vesting in the Central Government the power to approve the alteration in the financial year of a company under section 2(41); and
  • vesting the Central Government the power to approve cases of conversion of public companies into private companies

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