Committee to Review the Offences Under the Companies Act
- 16 Jul 2018
- 3 min read
The Ministry of Corporate Affairs has constituted a 10-member committee to review the penal provisions under the Companies Act, 2013 and examine
Recently, the government also raised the monetary threshold for filing appeals in various courts on tax disputes aimed at lowering tax litigation.
Terms of reference of the Committee
- To examine the nature of all ‘acts’
categorisedas compoundable offencesunder the Companies Act, 2013 (CA-13) and recommend if any of such ‘acts’ may be re-categorisedas ‘acts’ which attract civil liabilities wherein the company and its ‘officers in default’ are liable for penalty.
- To review the provisions relating to non-compoundable
offencesand recommend whether any such provisions need to be re-categorisedas compoundable offence.
- To examine the existing mechanism of levy of penalty under the CA-13 and suggest any improvements thereon.
- To lay down the broad contours of an in-house adjudicatory mechanism where
penaltymay be levied in a MCA21system driven manner so that discretion is minimised.
NOTE: MCA21 is the portal for stakeholders to submit statutory filings under the Companies Act.
- To take necessary steps in
formulationof draft changes in the law.
- Any other matter which may be relevant in this regard.
- Simple violations will not attract disproportionate punishment.
- This would allow the trial courts to pay more attention to
offencesof serious nature because it will reduce the number of cases in the courts.
- It will improve the ease of doing business in India.