The government will consider a slew of proposals including paying higher salaries for key management roles and decriminalisation of about 44 offenses under the companies Act.

Share Market Live

NSE

If the proposals put forward by the Ministry of Corporate Affairs (MCA) are cleared by the Cabinet then companies in sectors like infrastructure, telecom, and power will get a big relief.

Sources told CNBCTV18 if Cabinet approves the MCA proposal then loss-making companies will be allowed to pay higher remuneration to key management roles provided there is an approval from bankers or creditors and after that a special resolution is passed by the shareholders.

Currently, loss-making companies are restricted from paying higher remuneration and salaries to high-level personnel under the companies Act.

After reviewing various representations from industries, MCA has proposed to change this provision with riders.

Apart from this, Cabinet is also likely to consider decriminalisation of about 44 offenses under the companies Act.

"Based on detailed analysis, about 44 offenses are proposed for decriminalisation including, violations of CSR norms, disclosure norms, non-obedience of court, NCLT orders and many more," sources said.

Cabinet will also consider special norms for tighter corporate governance at systemically important non-listed companies.

Sources also added that Cabinet nod was being sought to consider mandatory quarterly disclosures from systemically important non-listed companies.

Currently, non-listed companies need to make disclosures annually. Cabinet is also likely to consider special benches at NCLT to deal with competition law and IBC, they said. Besides that Cabinet will also take up the proposal to cut down penalties for small companies, producers companies and 1-person companies.

First Published:Jan 15, 2020 7:55 PM IST