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ECONOMY

De-Minimis exemption under Competi- of long-term value for shareholders, name reservation and incorporation
tion Act 2002 for speeding up Mergers even as they raise equity capital from of companies & LLPs within 1-2 days as
& Acquisitions of firms in the country. global investors. Also the enabling provi- opposed to an average of at least 15 days
Another step is introduction by CCI sions with regard to Mediation and Con- earlier has been set up in the motion.
of an automatic system of approval for ciliation under the Companies Act, 2013
combinations under Green Channel. enforced. Another step is harmonising uring the last three years more
Under this process, the combination is norms with SEBI by reducing the time than 1,25,000 companies have
deemed to have been approved upon fil- limits of public offers so that investors D been incorporated every year in
ing the notice in the prescribed format. get securities within three days of appli- the country in this manner, as compared
This system would significantly reduce cation instead of earlier six days. to 50-60,000 companies in earlier years.
time and cost of transactions. Another The import of section 232(6) of the Act Then there is dematerialization of Secu-
step is exemptions from various provi- has been clarified which would result rities of Unlisted Public Companies, Com-
sions of Companies Act to Private com- into harmonisation of practices in ascer- panies (Adjudication of Penalties) Rules
panies, Government Companies, Chari- taining the “appointed date” of merger/ have been amended making the pro-
table companies, Nidhis and IFSC (GIFT amalgamation and provide due clar- cess transparent and non-discretionary.
city) companies. ity on the accounting treatment, thereby National Guidelines on Responsible Busi-
The provisions relating to issue of allowing stakeholders to align the “ap- ness Conduct have been issued while
shares with Differential Voting Rights process for withdrawal of more than
(DVRs) modified with the objective of 14,000 prosecutions under the Compa-
enabling promoters of Indian compa- As per the latest Report in nies Act, 2013 initiated.
nies to retain control of their companies the Resolving Insolvency The Insolvency and Bankruptcy Code
in their pursuit for growth and creation (Second Amendment) Bill, 2019 was
Index, India’s ranking introduced in the Lok Sabha on Decem-
jumped 56 places to 52 ber 12, 2019. The Statement of objects and
reasons of the Bill states that a need was
in 2019 from 108 in 2018. felt to give the highest priority in repay-
Recovery rate increased ment to last mile funding to corporate
debtors to prevent insolvency, in case
from 26.5 per cent in 2018 the company goes into corporate insol-
vency resolution process or liquidation,
to 71.6 per cent in 2019 to prevent potential abuse of the Code by
and time taken in recovery certain classes of financial creditors, to
provide immunity against prosecution of
improved from 4.3 years in the corporate debtor and action against
2018 to 1.6 years in 2019 the property of the corporate debtor and
successful resolution applicant subject to
fulfillment of certain conditions.
pointed date” of merger/amalgamation The Insolvency and Bankruptcy
in accordance with their business con- (Insolvency and Liquidation Proceed-
siderations or legal requirements. Provi- ings of Financial Service Providers and
sions relating to creation of Debenture Application to Adjudicating Author-
Redemption Reserve (DRR) have been ity) Rules, 2019 were issued on 15th
revised with the objective of deepening Nov, 2019 which provide a generic
the bond market and reducing the cost framework for insolvency and liqui-
of capital by removing the requirement dation proceedings of Financial Ser-
for creation of a DRR of 25 per cent of vice Providers (FSPs) other than banks.
the value of outstanding debentures in Moody’s Investors Service has said it
respect of listed companies. has lowered its 2019 GDP growth fore-
The government has launched Inde- cast for India to 5.6 per cent as slow
pendent Director’s Databank to provide employment growth weighs on con-
an easy to access & navigate platform for sumption. It expects economic growth to
the registration of existing Independent pick up in 2020 and 2021 to 6.6 per cent
Directors as well as individuals aspiring and 6.7 per cent respectively.
to become independent directors. Set-
ting up Central Registration Centre for LETTERS@TEHELKA.COM

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