Business Reforms & Enablers under Govt. Scheme – SELF RELIANT INDIA
Corporate Law measures to boost Ease of Doing Business:
- Timely Action during COVID–19 to reduce compliance burden under various provisions of the Companies Act, 2013 as well as enable companies to conduct Board Meetings, EGMs & AGMs, Rights issue by leveraging the strengths of Digital
- Decriminalization of Companies Act violations involving minor technical and procedural defaults (shortcomings in CSR reporting, inadequacies in board report, filing defaults, delay in holding AGM).
- Majority of the compoundable offenses sections to be shifted to internal adjudication mechanism (IAM) and powers of RD for compounding enhanced (58 sections to be dealt with under IAM as compared to 18 earlier).The Amendments will de-clog the criminal courts and
- 7 compoundable offenses altogether dropped and 5 to be dealt with under alternative (Details of such offenses not available yet)
- Withdrawal of more than 14,000 prosecutions under the Companies Act,
- Lower penalties for all defaults for Small Companies, One Person Companies, Producer Companies & Start
Enhancement of Ease of Doing business through IBC related measures:
- The minimum threshold to initiate insolvency proceedings raised to 1 crore (from Rs. 1 lakh, which largely insulates MSMEs).
- Special insolvency resolution framework for MSMEs under Section 240A of the Code to be notified
- Suspension of fresh initiation of insolvency proceedings up to one year depending upon the pandemic
- Empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency
Other Miscellaneous Key-Points:
- Direct listing of securities by Indian public companies impermissible foreign
- Private companies which list NCDs on stock exchanges not to be regarded as listed
- Power to create additional/specialized benches for NCLAT.