The government has made 45-odd changes in the Companies Act of 2013, through circulars, notifications or orders, ever since the provisions of the new company law came into effect on April 1 this year. Last week, the Union Cabinet cleared another 14 changes in the Act, paving the way for tabling amendments in the ongoing session of Parliament.
Over the last seven months, the bulk of the changes that have taken place pertain to provisions and rules in related-party transactions, corporate social responsibility (CSR) spend, easing rules for private companies, issue of consolidated financial statements, and the role of directors and key managerial personnel. Most of these changes were driven by calls from stakeholders -industry, auditors, consultants - to ease the environment to do business, while striking a balance for meeting a higher corporate governance threshold in the way business is conducted. Some of these changes were necessitated by avoidable drafting errors in the Act.