Government relaxes norms to boost ease of doing business
In order to foster ease of doing business in India, the government notified the relaxation of norms under the Companies Act 2013 for private and public companies. For private companies, the Ministry of Corporate Affairs has relaxed the provision from entering into related party transactions. Moreover, companies can also provide a shorter period for offering securities to members through right offers and approve the issue of employee stock option plans through a simple majority and allow an easier procedure and flexibility in holding general meeting, said the ministry in a press release today. Private firms have been allowed to accept deposits from members without the requirement of offer circular and creation of a deposit repayment reserve, etc. The notification also permits flexibility in the types of share capital that can be issued and an exemption has been in the types of share capital that can be issued. Furthermore, mandatory consent of entities with regards to certain transactions relating to sale of undertaking, investments, borrowings etc. will not be required. Firms having paid up share capital less than Rs. 100 crore have been also been omitted for calculating the limit of 20 companies for audit by an auditor, stated the press release. If a private company does not have investment by anybody, corporate have been allowed to extend loans to directors etc subject to certain conditions relating to bank borrowings and default. In case for PSUs, limits for managerial remuneration are omitted. The provisions for the nomination and remuneration committee have also been relaxed in respect of their applicability to the directors/managerial persons. Further, provisions relating to loans to directors, loans and investments by companies and related party transactions have been modified.
June 08, 2015 | 7:33 pm IST.
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