Business

Govt to decriminalise minor violations of companies act: FM Nirmala Sitharaman

Union finance minister Nirmala Sitharaman said on Sunday the government will decriminalise most of the sections of the companies act as she gave details of the last tranche of the economic stimulus package.

The finance minister said seven compoundable offences will be dropped and five will be dealt with under alternative framework through the ordinance mode.

The compoundable offence can be tried under internal adjudication mechanism rather than going to courts and this will de-clog the criminal courts and National Company Law Tribunal (NCLT), Nirmala Sitharaman added.

The decriminalisation of companies act violations involving minor technical and procedural defaults—shortcomings in CSR reporting, inadequacies in board report, filing defaults, delay in holding AGM.

A majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM) and powers of RD for compounding enhanced and 58 sections to be dealt with under IAM as compared to 18 earlier.

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