MCA to propose Corporate Amendment Bill for LLP, Companies Act changes | Industry News
The Ministry of Corporate Affairs (MCA) is considering proposing a bill to amend the Companies Act and the Limited Liability Companies Act, with the main focus on easing processes and compliance burden on companies, according to sources.
The MCA finalized the cabinet note covering comprehensive changes in both laws.
“Forms are being streamlined and more actions on decriminalization are also being proposed for ease of doing business,” a senior official said.
The government is expected to introduce the Insolvency and Bankruptcy Code Amendment Bill, also under the MCA, in the second half of the current budget session.
“We have accepted most of the recommendations made by the select committee on the proposed bill,” the senior official added.
MCA to change laws governing professional services
The ministry is also expected to soon propose amendments to all laws governing professional services, including chartered accountants, cost accountants and company secretaries. The amendments would be based on the recommendations of a high-level committee to establish a global multidisciplinary practice in India.
Indian regulations, for example, do not allow professionals such as CAs, CSs, lawyers and actuaries to work together within a single firm structure, limiting collaboration and the ability to offer integrated services like those provided by international firms. The government will likely address these concerns by changing its legislation.
Changes to Corporations Act could expand NFRA powers
With the amendments to the Companies Act, MCA sources said it was considering giving more powers to the National Financial Reporting Authority to delegate some of its functions outside its board to create a division of its investigative and disciplinary functions.
The MCA had amended the Competition Act in 2023, introducing provisions to keep pace with the new economy, such as transaction value thresholds and business-friendly measures such as settlement and commitment options for violators.
This would mean that a major overhaul of all company laws under the MCA is about to be launched.
The government favors a “light” regulatory framework
The changes are in line with the Government’s vision of having a “light-touch regulatory framework based on principles and trust” that will unlock productivity and employment.
The Company Law Review Committee finalized its recommendations for changes to the Companies Act more than two years ago.
Subsequently, other amendments were made to the bill, sources said. These changes were also incorporated into the cabinet note finalized by the MCA.
