Parliament Question: Deregulation of Offences under the Companies Act, 2013

GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA UNSTARRED QUESTION NO. 2546 ANSWERED ON MONDAY, MARCH 09, 2026 PHALGUNA 18, 1947 (SAKA) DEREGULATION OF OFFENCES UNDER THE COMPANIES ACT, 2013 QUESTION 2546. Shri Pradeep Kumar Singh: Shri Yaduveer Wadiyar: Shri Vijay Kumar Dubey: Shri Lumbaram Choudhary: Shri Kota Srinivasa Poojary: Shri Yogender Chandolia: Shri Tejasvi Surya: Shri Haribhai Patel: Shri Krishna Prasad Tenneti: Shri Bhartruhari Mahtab: Dr. Sanjay Jaiswal: Shri Rajkumar Chahar: Shri Dharambir Singh: Will the Minister of CORPORATE AFFAIRS be pleased to state: (a) the status of deregulation of offences under the Companies Act, 2013 as part of the Government’s trust-based regulatory reforms; (b) the number and categories of offences shifted to civil penalties or in-house adjudication mechanisms, if so, the details thereof; (c) the impact of these measures on litigation burden, compliance costs and enforcement efficiency; (d) whether any review or assessment has been undertaken to evaluate the outcomes of these reforms in terms of ease of business and improved voluntary compliance, if so, the details thereof; and (e) whether the Government proposes to establish a Corporate Compliance Facilitation Centre for MSMEs and startups in Bhiwani– Mahendragarh Lok Sabha Constituency in Haryana to support emerging industries in the region and if so, the details thereof?ANSWER THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS [SHRI HARSH MALHOTRA] (a) to (c): In keeping with the Government’s objective of providing greater ease of doing business to law abiding corporates, process of de-criminalization of technical & procedural violations under Companies Act, 2013 was carried out in phased manner. In the first phase, through the Companies (Amendment) Act, 2019, 16 compoundable offences under the Companies Act, 2013 were shifted to an In-house Adjudication Mechanism. In the second phase, through the Companies (Amendment) Act, 2020, 35 more compoundable offences under the Companies Act, 2013 were de-criminalized. In addition, through this amendment, in case of 11 compoundable offences, provisions for imprisonment were removed and only fines were retained. This initiative has reduced litigation burden and compliance costs and has strengthened the enforcement efficiency. (d): No such specific assessment has been carried out by the Ministry. However, the de-criminalization of various offences under Companies Act, 2013 has reduced the burden on criminal courts and the number of cases under In-house Adjudication Mechanism have increased. (e): No such proposal is under consideration. ******