Govt may bring 30 amendments to Companies Act in Budget session; CSR in focus

Govt may bring 30 amendments to Companies Act in Budget session; CSR in focus

 

New Delhi, Jun 27: The Centre is planning to bring 30 amendments to the Companies Act, 2013 in the ongoing Budget session of Parliament. The most important being the amendment to allow companies to spend their Corporate Social Responsibility (CSR) funds over a period of three years instead of the current year itself, reports said.
The proposal would be taken up in the ongoing session of the Parliament and, if it goes through, would provide relief to India Inc. Sources told the paper that at the end of the financial year, the company would have to transfer its unspent CSR funds to an escrow account.
Currently, companies with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more, have to direct two percent of their average three-year annual net profit towards CSR activities in a financial year.
It is one among the over 30 key amendments to the Act proposed by the Ministry of Corporate Affairs (MCA), which would improve the ease of doing business in India and industry compliance. A few more amendments have been added to the proposed bill apart from those made in the ordinance.
To amend the Companies Act, the government had first issued an ordinance in November, which would have ceased to be operational from January 21. It was then re-promulgated in January, since the Bill to amend the Act was pending in the Rajya Sabha.
The government again plans to introduce an amendment bill in the 40-day session of the Parliament ending July 27. The proposal will be placed before the Cabinet for approval. The amendments would help reduce the burden on courts and bring down penalties for small companies.
The ordinance amended as many as 16 sections of the Act, bringing about 16 corporate offences under the ambit of civil liability. Offences like non-filing of annual returns and financial statements within a specified time frame, accepting more than a certain prescribed number of directorships beyond a period and managerial remunerations in case of inadequate profits, which earlier attracted criminal punishments, are now liable for a penalty.