MCA plans to introduce frequent filing for large unlisted companies: Report
According to the reports the Ministry of Corporate Affairs is planning an amendment to the Companies Act that will mandate large unlisted companies to file as frequently as listed ones.
The companies are, at present, required to file annual reports.
The companies may have to submit half-yearly or quarterly reports. The government’s decision to consider the amendment is influenced by the IL&FS collapse, the report stated.
IL&FS did not attract much scrutiny until it caved in. That is why the MCA plans to minimise the risks of such collapse by introducing periodic disclosures.
A nine-member committee is expected to take a decision on a number of amendments. While Home Minister Amit Shah will chair the committee, it comprises Law & Justice Minister Ravi Shankar Prasad, Commerce & Industry Minister Piyush Goyal and Finance & Corporate Affairs Minister Nirmala Sitharaman, sources told the paper.
The said considerations, however, will not target smaller companies but rather focus on ‘systemically important’ ones, the report said.
As per the government’s assessment, there is a massive lag at present as it often takes up to 18 months for many companies to submit annual filings.
“It will be an enabling amendment and MCA will decide on timing and extent of disclosures later,” a source told the paper.