It was stated by Minister of State for Finance & Corporate Affairs, in a written reply to a question in Rajya Sabha on the first phase report of Company Law Committee.


  • The Company Law Committee was constituted by the Ministry of Corporate Affairs (MCA) on 18th September 2019.
  • It was constituted for examining and making recommendations to the Government on various provisions and issues pertaining to the implementation of the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 and other related matters.
  • The MCA has undertaken several reforms towards easing the business environment in the country by providing Ease of Doing Business to law-abiding corporates, fostering improved corporate compliance for stakeholders at large and also to address emerging issues having an impact on the working of corporates in the country.
  • It proposed amendments in the Companies Act, 2013 for further decriminalising the offences under the said Act on 18th November, 2019.

Key Findings -

The main recommendations of the Committee with regard to the decriminalization of compoundable offences are as under:-

  • Re-categorising 23 offences out of the 66 remaining compoundable offences under the Act, to be dealt with in the in-house adjudication framework wherein these defaults would be subject to a penalty levied by the adjudicating officer.
  • Omitting, altogether, 7 compoundable offences; limiting punishment for 11 compoundable offences to only fine by removing the provision for imprisonment and recommending that 5 offences be dealt under alternative frameworks;
  • Reducing the quantum of penalties in respect of certain provisions, which were shifted to the in-house adjudication framework through the recently passed Companies (Amendment) Act, 2019;
  • Retention of status-quo in case of the non-compoundable offences.


  •  In compoundable offence, charges against the accused can be withdrawn. While in the non-compoundable offence, the charges against the accused cannot be withdrawn.
  • In compoundable offence, the nature of the crime not so serious. While, in the non-compoundable offence, the nature of the crime is serious.
  •  In compoundable, offence compoundable by with permission or without permission of the court. While in the non-compoundable offence, the offence cannot be compounded. It's only quashed.
  •  In compoundable, impacts an only private person. While in the non-compoundable offence, affects both, private person as well as the society at large.
  •  In compoundable offence, the case generally filed by a private person. While in the non-compoundable offence, the case generally filed by the state.

These recommendations will help to facilitate and strengthen the ease of doing business and ease of living in the country.

Also readGovernment Will Reduce Provisions To Prosecute Under Companies Act