The panel is also divided over the proposed relaxation in Corporate Social Responsibility (CSR) norms. While the Bill raises the CSR applicability threshold from ₹5 crore to ₹10 crore in annual net profit, many MPs are pushing for companies in the ₹5-10 crore bracket to remain under the CSR regime with simplified compliance, while few support the original proposal.
The 107-clause Bill, seeking to amend the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, was referred for parliamentary panel scrutiny in March. The JPC, led by BJP MP Sudhir Gupta, was constituted on May 22.
The Bill creates an enabling framework for specified trusts registered with the Securities and Exchange Board of India (SEBI) or the International Financial Services Centres Authority (IFSCA) to convert into LLPs. However, it provides that only trustees of the specified trust can become partners in the LLP following conversion.
The JPC is examining a proposal to instead make investors in the AIF trust partners in the LLP, arguing that the legal ownership structure should reflect the economic ownership of the investment vehicle. Sources said trustees merely discharge fiduciary responsibilities, while investors are the actual economic stakeholders in the fund.
The JPC actively considering an IFSCA proposal to introduce an inward re-domiciliation framework – dubbed “Ghar Wapsi” by some MPs – to enable companies incorporated overseas, such as Singapore, Dubai and Mauritius, to shift their domicile to India without winding up and reincorporating. India currently permits cross-border mergers under the Companies Act and RBI regulations but does not have a comprehensive inward re-domiciliation regime.
Another major issue before the JPC is the proposal to strengthen the National Financial Reporting Authority (NFRA). The Institute of Chartered Accountants of India (ICAI) has opposed expanding the regulator’s powers.
Speaking to ET, Gupta said the committee is expected to adopt its report in the first week of August before tabling it in Parliament. With the Monsoon Session concluding on August 13, the government could consider taking up the Bill after the report is presented.