New Delhi: Finance Minister Nirmala Sitharaman Friday said government has de-registered 4 lakh shell companies as the Lok Sabha approved a bill seeking to tighten CSR norms and ensuring stricter action for non- compliance of the company law regulations.
Piloting the Companies Amendment Bill 2019, the minister said companies not spending the mandatory 2 per cent profit on Corporate Social Responsibility (CSR) activites for a total period of four years will be required to deposit the amount in a special account.
The amendments in the Companies Act, she added, were aimed at improving ease of doing business and also reducing compliance burden on the companies, especially the smaller ones.
The Bill was later passed by the Lower House unanimously after Congress leader Adhir Ranjan Chowdhury withdrew statutory resolution opposing it.
A key change in the Bill pertains to CSR spending, wherein companies would have to mandatorily keep unspent money into a special account.
Under the Act, companies earning profit of over Rs 5 crore, turnover of Rs 100 crore or networth of more than Rs 500 crore are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities. (PTI)
