New bill could impact ease of doing business in India

Author: Karry Lai | Published: 8 Jan 2018

Recent amendments to India’s Companies Act to facilitate disclosure and compliance have been met with a mixed reaction.

Businesses called for the government to eliminate dual or divergent requirements under different sets of legislation by harmonising company law with other regulations in India, prompting the creation of the Company Law Committee to review and recommend changes to the Companies Act. One of the primary reasons for the reform were the issues experienced by businesses in implementing the provisions of the 2013 act that significantly added to the cost of doing business.

The changes, which received the President’s assent on January 3, aim to facilitate doing business but new requirements on the registration of significant beneficial interests and the definition of an associate company have caused some head-scratching in the legal and business communities. Suggestions have also been made that the bill could be improved by removing investment restrictions.