Expressing hope that the Companies Bill, 2009, will be passed by Parliament in 2011, the Corporate Affairs Minister, Veerappa Moily, today said his ministry was ready with the Cabinet note for the legislation. “Companies Bill will be passed, if not in this (monsoon) session, (then) definitely in the winter session,” Moily told reporters on the sidelines of a FICCI meet here.
The new Bill will replace a half-a-century old Act.
“We are ready with the Cabinet note. If the Government asks us, we will give it,” he added.
The Parliamentary Standing Committee on Finance had given its observations on the Bill in August 2010.
The new Companies Bill, which was tabled in the backdrop of the Rs 14,000-crore Satyam fraud, promises greater shareholder democracy and stricter corporate governance norms.
For the first time, the Bill has introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors.
Among other things, it also proposes to tighten the laws for raising money from the public. The Bill also seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
Further, it has proposed that companies should earmark two per cent of the average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.
The Companies Bill (2008), which lapsed with the dissolution of the 14th Lok Sabha, was re-introduced in August 2009.