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Dec 19, 2017

Amended cos law:Non-filing of returns to attract strict action

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The amendments to the companies law provide for stringent penalties in case of non-filing of annual returns which would act as a deterrent against shell entities, according to an expert.

Parliament today passed a bill to amend the Companies Act to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business.

The Rajya Sabha passed the Companies (Amendment) Bill, 2017 by a voice vote. It was cleared by the Lok Sabha in July this year.

"The bill while rationalising and simplifying certain provisions, also provides for stringent penalties in case of non-filing of balance sheet and annual return every year, which will act as deterrent to shell companies.

"The changes will facilitate ease of doing business, result in harmonisation with Sebi and RBI and rectify certain omissions and inconsistencies in the existing Act," Ankit Singhi, Partner at advisory firm Corporate Professionals said in a statement.