The Companies Act, 2013 (the Act) was enacted with a view to consolidate and amend the law relating to companies.
In order to review the existing provisions of the Act dealing with the offences and to make recommendations to promote better corporate compliance, the Government of India constituted a Committee in July, 2018. The said Committee, after taking the views of several stakeholders, submitted its Report in August, 2018.
The Committee recommended that the existing rigour of the law should continue for serious offences, whereas the lapses that are essentially technical or procedural in nature may be shifted to in- house adjudication process
Accordingly, it was proposed to amend certain provisions of the Companies Act, 2013.
However, in view of the urgency, the Companies (Amendment) Ordinance, 2018 was promulgated on 2nd day ofNovember, 2018.
To replace the aforesaid Ordinance, a bill, namely, the Companies (Amendment) Bill, 2018 was introduced in the Lok Sabha and passed in the said House on the 4th day of January, 2019.
However, the saidBill could not be taken up for consideration in the Rajya Sabha.
In order to give continued effect to the Companies (Amendment) O r d i n a n c e , 2018, the President promulgated the Companies (Amendment) Ordinance, 2019 and the Companies (Amendment) Second Ordinance, 2019 on the 12th day of January, 2019 and the 21stday of February, 2019 respectively.
The Companies (Amendment) Bill, 2019 was passed by the Rajya Sabha on the 30th day of July, 2019 and by Lok Sabha on the 27th day of July, 2019.