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20-Feb2019

Cabinet approves promulgation of amendments in Companies Ordinance 2019

In order to incentivize compliance with law and to extend greater Ease of Doing Business, the Union Cabinet has given green signal to the promulgating an ordinance for companies law amendments. A bill to replace the Companies (Amendment) Ordinance, 2018, that was promulgated in November could not be passed during the last session of the current Parliament. Hence, the government has decided to promulgate the Companies (Second Amendment) Ordinance, 2019.

The amendments have been brought in to address the need to impose civil liability for technical and procedural defaults of a minor nature. Further, the changes have been made to plug gaps in the corporate governance and enforcement framework covering a wide range of issues. As many as 16 minor offences have been re-categorised as 'purely civil defaults' which would help de-clog special courts.

Besides, certain routine functions from the National Company Law Tribunal (NCLT) would be transferred to the central government. These include dealing with applications for change of financial year and conversion from public to private companies. A total of 29 sections were amended and two new sections were inserted through the earlier ordinances, which were promulgated on November 2, 2018 (Ordinance 9 of 2018) and on January 12, 2019 (Ordinance 3 of 2019).


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