Parliament approves Companies Amendment Bill

The parliament on Tuesday approved the Companies (Amendment) Bill which seeks to tighten Corporate Social Responsibility (CSR) norms and ensure strict action for non-compliance of the company law regulations.

New Delhi:A Bill that seeks to tighten CSR norms and ensure stricter action for non-compliance of company law regulations was on Tuesday approved by the parliament with the Rajya Sabha passing it by voice vote.

Replying to the debate on the bill, Finance and Corporate Affairs Minister Nirmala Sitharaman said the bill will ensure ease of doing business for companies effectively.

"Four lakh shell companies have been de-registered and now it has been made mandatory that a company while carrying out business should have a physical address and physical maintenance of a register, " she said.

The Bill also aims to tighten CSR compliance, transfer certain responsibilities to National Company Law Tribunal and recategorise certain offences as civil offences.

The legislation has the provision that any unspent annual CSR funds must be transferred to one of the funds under Schedule 7 of the Act like Prime Minister's Relief Fund within six months of the financial year.

The bill also seeks to empower Registrar of Companies to initiate action for removal of a company's name if the latter is not carrying out business activities as per the Act.

The bill will replace the ordinance promulgated earlier in this regard.