Govt to Amend Companies Act in Winter Session for Faster Mergers, E-Documentation and Stronger Corporate Oversight

The proposed changes are to speed up mergers, promote e-documentation, and simplify compliance for companies. One of the key reforms will allow faster approval of mergers between start-ups, unlisted companies, and parent firms with their wholly-owned subsidiaries.

At present, Section 233 of the Companies Act requires 90% shareholder approval for such mergers. The government plans to ease this requirement, making it quicker and simpler for companies to restructure.

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Another major proposal seeks to reduce paperwork by allowing companies to serve documents to shareholders and regulators only in electronic format. Currently, while e-filing is permitted, companies must still provide physical copies if shareholders request them.

The amendment will make electronic documentation sufficient for certain categories of companies, cutting costs and improving efficiency. The amendments also propose to enable administrative restoration of companies that have been struck off from the register without having to approach tribunals.

This move is expected to save time and help small firms revive operations more easily.

The government is considering strengthening the powers of the National Financial Reporting Authority (NFRA), particularly in dealing with cases where auditors fail to file mandatory returns or comply with reporting requirements. The expanded powers would allow the NFRA to take stronger action against audit-related violations beyond just “professional misconduct.”

The overall goal of these reforms is to make Indian companies more globally competitive, improve governance standards, and boost the country’s position in the World Bank’s Business-Ready Index.

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