The Companies Amendment Bill, 2020: Noting The Changes

The Company Law Committee under the Chairmanship of Mr. Injeti Srinivas was constituted with the mandate to recommend re-categorization of certain "acts" punishable as compoundable offences to "acts" carrying civil liabilities and improving the in-house adjudication mechanism. The recommendation of this Committee became the basis of the Companies Amendment Bill 2020 ("CAB 2020") as introduced by the Ministry of Finance and passed by the Lok Sabha on September 19, 2020.

Major Changes

1. De-criminalization: The CAB 2020 proposes 72 amendments to the Companies Act, 2013 ("Act") to decriminalise those defaults which could be determined objectively, lack any element of fraud or do not involve larger public interest and all minor procedural or technical lapses been converted into civil wrongs. The CAB 2020 has re-categorized at least 23 out of 66 compoundable offences under the Act to be now dealt with an in-house adjudication framework. These measures are aimed