Management of Risks Under the Companies Act, 2013: Companies Act, 2013, Rules and Secretarial Standards

The Hon. Minister of Finance and Corporate Affairs introduced on 6th March 2020 in the Lok Sabha, the Companies (Amendment) Act, 2020 {Bill No.88 of 2020}. In the statement of Objects and Reasons for introducing the Bill, she stated, inter alia that as part of the constant endeavor of the Government to facilitate greater ease of living to law abiding corporates certain provisions of the Act are proposed to be decriminalized to provide further ease of living for corporates in the country. Several provisions of the Act related to defaults which lacked any element of fraud or do not involve larger public interest were decriminalized.

Yet the continuing "less serious punishments" are serious enough for the Directors to be complacent.

There are still 26 sections providing for punishment under section 447 as Cognizable Offence; 20 sections attracting Imprisonment and Fine; 8 sections imposing Imprisonment or Fine or Both; and 1 section providing for Imprisonment or Fine.

This book can guide those Directors who have less knowledge on the compliance requirements under the Act, its rules and secretarial procedures. It is believed that this handbook shall enthuse them to adopt personal risk mitigation measures such as good reading of the agenda papers, seek additional information from companies to prepare and effectively participate at the meetings and where considered appropriate obtain expert independent advice...