Centre to decriminalise sections of Companies Act, drops 7 compoundable offenses
New Delhi, May 17: Finance Minister Nirmala Sitharaman announced decriminalisation of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board report, filing defaults and delay in holding AGM.
Under the Companies Act, Sitharaman said the government is trying to decriminalise most of the sections. Compoundable offences can now be tried under internal adjudicating mechanisms, she said.
Majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT.
Seven compoundable offences under the Companies Act altogether dropped and five to be dealt with under alternative framework, the finance minister said.
Earlier in the day, Finance Minister said reforms will be the focus of the fifth and final tranche of economic stimulus package to deal with the economic fallout of the COVID-19 pandemic.
She said the package would focus on MGNREGA, healthcare and education, businesses, de-criminalisation of the Companies Act, ease of doing business, public sector undertakings, and resources related to state government.