Union Cabinet approves changes to Companies Act

To make it easy to do business in India, the union cabinet on Wednesday rationalised certain documentation procedures required for companies. The cabinet approved “doing away with the requirement of filing a declaration by a company before commencement of business or exercising its borrowing powers”, a cabinet communique said.

It also approved “rationalizing the procedure for laying draft notifications granting exemptions to various classes of companies or modifying provisions of the act in Parliament,” the statement added.

These amendments to the Companies (Amendment) Bill, 2014 “will address issues related to ease of doing business and put in place a speedier process for approval of draft notifications for providing exemptions etc. from specific provisions of the act to a class of companies”, the ministry of corporate affairs said in a statement here.

Commenting on the cabinet decision, Yogesh Sharma, partner, Grant Thornton India, said: “As per 2014 World Bank data, India ranked at 142 out of 189, which is disappointing at best and the proposed amendment will move us a small step closer to fulfilling the prime minister’s ‘Make in India’ campaign.”

“The second amendment relates to fast-tracking the procedure for notifications issued under the Companies Act but the complete details of the proposed changes have not been made available. The proposal to ensure speedier issue of final notifications should be certainly favorable for all,” he said in a statement issued in New Delhi. (IANS)