Wednesday, November 10, 2010

Companies Bill to be Deferred

A few weeks ago, newspaper reports had suggested that the Companies Bill, 2009 may be presented in amended form during the winter session of Parliament and that it may even be enacted by the end of the year. That was somewhat intriguing considering the magnitude of the discussions before the Parliamentary Standing Committee on Finance (SCF) and the drastic changes suggested by it to the Bill in relation to certain matters.

It has now been reported in the Mint that the Bill will after all not be presented in Parliament in the winter session. Instead, it is likely to be presented in the budget session early next year. That will provide more opportunity and lead time to iron out issues, many of which have substantial implications on the corporate sector. While the effort to overhaul the Companies Act began over a decade ago (with the Companies Bill, 1997) and the wait for a streamlined legislation continues, any enactment of the law in haste would certainly be counterproductive (and to that extent this development is understandable).

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