Thursday, August 8, 2013

Companies Bill Passed by the Rajya Sabha

In a significant development, the Companies Bill, 2012 was passed by the Rajya Sabha (the Upper House of Parliament). The press release of the Government, which terms the event as “historic”, is available here. The new law will come into force once it receives the assent of the President. The Bill had already received the approval of the Lok Sabha (the Lower House) in December 2012.

The background to and salient features of the Bill have been described as follows:

The new Companies Bill, on its enactment, will allow the country to have a modern legislation for growth and regulation of corporate sector in India. The existing statute for regulation of companies in the country, viz. the Companies Act, 1956 had been under consideration for quite long for comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. The new law will facilitate business-friendly corporate regulation, improve corporate governance norms, enhance accountability on the part of corporates/ auditors, raise levels of transparency and protect interests of investors, particularly small investors.

The salient features of the new Companies law are: Business friendly corporate Regulation/ pro-business initiatives; e-Governance Initiatives; Good Corporate Governance and CSR; Enhanced Disclosure norms; Enhanced accountability of Management; Stricter enforcement; Audit accountability; Protection for minority shareholders; Investor protection and activism; Better framework for insolvency regulation; and Institutional structure.

Once it comes into force, it will usher in a new regime. It is the first overhaul of company legislation in India in more than 50 years, and comes at least two decades after the proposal for the current round of reenactment was mooted.

1 comment:

Anonymous said...

We look forward to analytical articles on the Bill on this blog. Most of the other coverage has been simply to highlight the provisions: we would love to see the members of this blog placing the provisions in the conceptual context and carrying out a detailed analysis of how the statutory changes will be seen in the background of existing law and legal concepts.