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The Companies (Amendment) Bill, 2016, to amend the Companies Act, 2013, was passed by a voice vote in the Lok Sabha on Thursday. Photo: PTI
The Companies (Amendment) Bill, 2016, to amend the Companies Act, 2013, was passed by a voice vote in the Lok Sabha on Thursday. Photo: PTI

Lok Sabha passes bill to amend Companies Act

The amendment to Companies Act 2013 aims to strengthen corporate governance, initiate strict action against defaulters and improve ease of doing business in India

New Delhi: The Lok Sabha on Thursday passed a bill to amend the Companies Act, 2013, seeking to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve the ease of doing business in the country.

Piloting the Companies (Amendment) Bill, 2016, minister of state for corporate affairs Arjun Ram Meghwal also said that NSEL and PACL scams were a legacy of the previous regime which the current government is trying to address. The bill, which was passed by a voice vote, provides for more than 40 amendments to the Companies Act, 2013, which was passed during the previous UPA regime.

“The passage of this bill will help in increasing the size of the country’s economy," Meghwal said, adding that investor protection and corporate governance were the two main objectives of the measure. It would also help in simplifying procedures, make compliance easy and take strigent action against defaulting companies, he said. Replying to the discussion on the bill, Meghwal sought to allay concerns raised by some opposition members that the latest amendments would dilute the objectives of the Companies Act, 2013.

“We have not done that (diluting the law)," the minister said in response to concerns expressed by some members and stressed that the bill would provide relief for small investors. The amendments would strengthen corporate governance standards and improve transparency. It would also help in improving the country’s position in ease of doing business, Meghwal said.

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