Companies Law

The government will set up a Centre for Processing Accelerated Corporate Exit (C-PACE) to process and dispose of applications for removal of company names from the records under the companies law. In a written reply to Lok Sabha on Monday, Minister of State for Corporate Affairs Rao Inderjit Singh said the centre will be established at Manesar in Haryana. "This initiative is likely to provide ease to such companies for closing their business as per provisions of chapter XVIII and getting their names removed from the Register of Companies," he said. C-PACE will process and dispose of applications for removal of names from the Register of Companies filed by companies, including private limited companies, under Section 248 of the companies law. A notification regarding C-PACE was issued on March 17 and the same would come into force from April 1. Section 248 of the Companies Act, 2013 provides for removal of name of company from the Register of Companies, if it is not carrying on any

As many as 21,205 cases, including 12,963 cases under the insolvency law, were pending before the National Company Law Tribunal (NCLT) at the end of January this year, the government said on Monday. Currently, one principal bench and 15 other benches of NCLT are operational. In a written reply to Lok Sabha, Minister of State for Corporate Affairs Rao Inderjit Singh said the benches of NCLT and National Company Law Appellate Tribunal (NCLAT) are being set up in a phased manner depending on quantum of workload and other factors. As of now, he said no proposal to set up any new bench of NCLT and NCLAT is under consideration. "As per information provided by NCLT, 21,205 cases were pending with NCLT benches as on 31.01.2023, including 12,963 cases under Insolvency and Bankruptcy Code (IBC), 1,181 cases of Merger and Amalgamation (M&A), and 7,061 other cases," the minister said. Citing data provided by the Insolvency and Bankruptcy Board of India (IBBI), Singh said that since the ...

To ensure a faster response to corporates, the government will set up a central processing centre for handling forms filed with field offices under the companies law. Presenting the Union Budget for 2023-24, Finance Minister Nirmala Sitharaman on Wednesday also said that an integrated Investor Education and Protection Fund (IEPF) Authority will be set up to make the process of reclaiming shares and dividends easier. The Companies Act, 2013 is implemented by the corporate affairs ministry and the IEPF Authority also comes under the ministry. "A Central Processing Centre will be set up for faster response to companies through centralised handling of various forms filed with field offices under the Companies Act," Sitharaman said. According to the minister, for investors to reclaim unclaimed shares and unpaid dividends from the IEPF Authority with ease, an integrated IT portal will be established. Over the years, the government has been taking various measures to improve the ease of

More than 5.57 lakh companies were struck off the records in the last five years due to non-compliance with various provisions of the companies law, according to the government. Minister of State for Corporate Affairs Rao Inderjit Singh on Tuesday said that 5,57,055 companies were struck off under Section 248 of the Companies Act, 2013 read with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 in the country in the last five years. They were struck off due to non-compliance with provisions of the Act, he said in a written reply to Rajya Sabha. He also said that the term 'shell company' is not defined under the Act. It normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership and benami properties, he added. Further, the minister said the special task force set up by the government to look into the issue of

Insolvency professional agencies will have to designate/appoint a compliance officer

Sebi on Friday approved introduction of a new option for appointment and removal of independent directors from the boards of companies. The move will provide flexibility in the approval process for appointment or removal of independent directors. Once the amended rules are in place, the appointment and removal of independent directors could be done by way of two parameters -- threshold for ordinary resolution and threshold for majority of minority shareholders. Currently, the appointment, re-appointment or removal of independent directors is to be made through a special resolution. Sebi's board, during its meeting held here on Friday, approved an alternative method for the appointment and removal of independent directors appointed for the first term. Under the alternate mechanism, if the special resolution for appointment of an independent director does not get the requisite majority, then two other thresholds -- for ordinary resolution and for majority of minority shareholders --

The changes under the new wage code can only be implemented across the country once the centre receives draft guidelines from all the states and UTs

'Sub category' will help companies and clients in comparing various alternative investment funds.

Company law recently went through an overhaul, decriminalising more than 48 offences in one go, removing the prison sentence, and doing away with or reducing the fines.

Decriminalisation in Companies Act a move in the right direction? Explained

As government revisits all economic laws, decriminalisation experts have called for a calibrated approach to ensure we don't end with toothless legislations and maintain the standards

The corporate affairs ministry will now notify separately when various provisions would be coming into force, according to an official

Around 48 sections of the Companies Act, 2013 are being amended to decriminalise various offences

In a written reply to the Rajya Sabha, Minister of State for Corporate Affairs Anurag Singh Thakur also said the term "shell company" is not defined under the Companies Act

In a move that will help lessen the burden on the National Company Law Tribunal (NCLT), the government has notified the rules for winding up of companies under the companies law. The Corporate Affairs Ministry has notified the Companies (Winding Up) Rules, 2020, which would be effective from April 1. Petitions for winding up of companies are subject to various conditions, including thresholds on turnover and paid-up capital. Akila Agrawal, Partner & Head (M&A) at law firm Cyril Amarchand Mangaldas, said the rules seek to inter-alia reduce the burden of the NCLT by enabling summary procedures for liquidation to be filed with the central government. "Though the draft rules had made this available only for small companies, the final rules make it available to companies that have assets of book value not exceeding Rs 1 crore; and have not taken deposits beyond Rs 25 lakh or have no secured loans beyond Rs 50 lakh or turnover beyond Rs 50 crore or paid up capital beyond Rs 1 ...

The proposal to make violation of the requirements under Section 8 punishable only with fines is also being widely debated

The offences punishable with imprisonment, a fine, or both are compoundable, and offences punishable with imprisonment and a fine are non-compoundable

The corporate affairs ministry has issued amendments to the significant beneficial owners rules under the Companies Act, 2013