New Delhi: The Union Cabinet on Thursday cleared the Companies Bill, 2011 and decided to take up the Bill in the Winter Session itself for approval by Parliament. Once approved by Parliament, it will replace half-a-century-old Companies Act. The Cabinet has cleared Companies Bill, 2011. It is likely to be tabled (for consideration and passage) in the ongoing Winter Session, a Corporate Affairs Ministry official said after the Cabinet meeting.
The Bill, which has already been vetted by the Parliamentary Standing Committee of Finance and also by different ministries, seeks to update the company law in line with the best global practices.
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 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 2 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 Bill, which was originally introduced in Lok Sabha in 2008, lapsed because of change of government. It was reintroduced in August 2009.
Cabinet approval on the Companies Bill, 2009, was pending as the Finance Ministry and MCA failed to reach a common ground on powers to be delegated to the Securities and Exchanges Board of India (SEBI) in case of regulatory overlaps.
Finance Minister Pranab Mukherjee, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Corporate Affairs Minister Veerappa Moily were asked to discuss and iron out issues. The ministers have come to a consensus on the issue, sources in the know said.
According to them, the Finance Ministry and SEBI have sought review of the provisions which conflicted with the SEBI Act. Apparently, it has been decided that SEBI’s view will be upheld in cases where jurisdictions conflict.
(With additional information from PTI)
Surprise ! Surprise ! No need to pass the Companies Bill 2011. We will work on Century Old Companies Act . Why the Bill was pass by the Cabinet Committee , and have not properly consulted with All regulators ? We have learn, relearn. In this way tossing confidence upon those MPs.Ministers Etc,
CA .S.C.Podder
Kolkata
24/12/2011
Email
Dear Sir,
The Companies Amendment Bill 2011 is proposed to be placed before the
Parliament in the Winter Session 2011.
If yes, why the Amendment to said Act taken up on 2009 need to be notified?
Pl reply.
Regards.
Sathyaprakash K S
Pl note that the copy of Companies Bill 2011 posted by you on the website is Bill of Secychelles and not of India. It should be removed from site to avoid confusion. Text of Indian Companies Bill will be made public only after it is introduced in Parliament.
Thanks