Promulgation of the Companies Amendment (Ordinance), 2018
GS 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth
Why in News?
- The recommendation of the Union Cabinet for promulgation of the Companies Amendment (Ordinance), 2018 has been assented to by the President of India.
- The Ordinance is promulgated to review offences under the Companies Act, 2013.
- Shifting of the jurisdiction of 16 types of corporate offences from the special courts to in-house adjudication, which is expected to reduce the case load of Special Courts by over 60%, thereby enabling them to concentrate on serious corporate offences.
- The penalty has been reduced to half for small companies and one person companies of that applicable to normal companies.
- Instituting a transparent and technology driven in-house adjudication mechanism on an online platform and publication of the orders on the website.
- Strengthening in-house adjudication mechanism by necessitating a concomitant order for making good the default at the time of levying penalty, to achieve the ultimate aim of achieving better compliance.
- Declogging the NCLT by:
- enlarging the pecuniary jurisdiction of Regional Director by enhancing the limit up to Rs. 25 Lakh as against earlier limit of Rs. 5Lakhunder Section 441 of the Act;
- vesting in the Central Government the power to approve the alteration in the financial year of a company under section 2(41); and
- vesting the Central Government the power to approve cases of conversion of public companies into private companies.
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