Companies Bill likely to be re-introduced this week

Last Updated: Wednesday, July 29, 2009 - 17:40

New Delhi: The new Companies Bill, 2008, which lapsed after the 14th Lok Sabha was dissolved, is likely to be re-introduced in Parliament this week, official sources said.
The bill will be re-introduced in its present form and
amendments will be made after vetting by the
Parliamentary Standing Committee, the sources added.

Post Satyam fraud, which came to light after founder
chairman of the IT firm confessed manipulating the books of
accounts of his company for several years, the government is
planning to further strengthen various provisions of the Bill.

It plans to make amendments including incorporation of
class action suit and specifying accountability of independent
directors in the Bill. Further, the government also seeks to
make norms for auditors tougher and corporate governance norms
more stringent.

Former Corporate Affairs Minister Prem Chand Gupta had
said there was a case for re-looking at certain provisions of
the Bill to enable the government to take swift and more
effective action in cases of large scale frauds.

The Companies Bill, which seeks to replace the
52-year-old Companies Act 1956, was tabled last year in the
Lok Sabha paving the way for radical changes in the country’s
regulatory environment for corporates while limiting the
government’s role and empowering shareholders.

Providing for the appointment of a minimum of 33 per cent
independent directors on the boards of companies and placing
restrictions on corporate entities in raising deposits from
the public are the salient features of the Bill.

Introducing the concept of one-person company, the
Bill recognises the chief executive officer (CEO), the chief
financial officer (CFO) and the company secretary as the "key
managerial personnel" and provides for a single forum for
mergers and acquisitions.

Alongside, the Bill provides a wider choice on the number
of partners in partnership firms including banking companies
with a maximum limit of hundred partners.

Bureau Report

First Published: Wednesday, July 29, 2009 - 17:40

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