Lok Sabha passes Companies (Amendment) Bill, 2016

The Lok Sabha on Thursday passed the Companies (Amendment) Bill 2016, making changes, thereby, to the Companies Act, 2013, in relation to structuring, disclosure and compliance requirements for firms.

The bill was passed through a voice vote with 43 amendments thereto moved by minister of state for finance Arjun Ram Meghwal.

Replying to the debate on the bill, Meghwal said the changes to the Companies Act would go a long way in improving the ease of doing business in India and help the country move higher in the "ease of doing business rankings".

He also said action is being taken against entities like NSEL, PUCL, Elder Pharma, Saradha Chitfunds and Rose Valey Chitfunds.

Besides, the government has taken all necessary steps to proceed against those who are not complying with corporate social responsibility (CSR) standards, he added.

The minister also informed the Lok Sabha that 9.1 million new taxpayers have come into the system after demonetisation.

During the debate earlier, Congress leader K.V. Thomas said the bill aimed at diluting many provisions of the act.

The Companies Act, 2013, set limits on the number of intermediary companies through which investments can be made in a company. Similarly, it also limits the number of layers of subsidiaries a company can have. The amendment bill removes these limits.

The Act also requires an individual who has a beneficial interest in the shares of a company to disclose these.

Moreover, this bill facilitates greater flexibility in incorporation of companies, simplifies procedure for raising capital and allows independent directors to have financial interest up to 10 per cent in companies.

Meanwhile, the Rajya Sabha today passed the National Institutes of Technology, Science Education and Research (NITSER) Amendment Bill.

Minister of state (HRD) Mahendra Nath Pandey informed the Rajya Sabha that the bill proposed to introduce two new institutions, namely, Indian Institute of Science Education and Research (IISER), to be set up at Tirupati and IISER Berhampur in the Second Schedule of the NITSER Act, 2007.

Five IISERs at Kolkata (2006), Pune (2006), Mohali (2007), Bhopal (2008) and Thiruvananthapuram (2008) are mandated with promoting quality education and research in the sciences were established. With the establishment of the two new IISERs there are now seven IISERs, the minister stated.