The Companies Bill, which enhances accountability, introduces the concept of corporate social responsibility and encourages e-governance, was introduced in the Lok Sabha today. The 2011 Bill was introduced by Corporate Affairs Minister M Veerappa Moily after he withdrew a similar legislation of 2009 on the ground that the revised measure incorporating several recommendations and suggestions made by the Parliamentary Standing Committee on Finance and various stakeholders.
For the first time, the Bill makes it mandatory for firms to maintain their documents in electronic format, introduces the concept of e-governance, makes provision for encouraging ethical corporate behavior and rewards employees for their integrity.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Among the measures proposed in the fresh bill to enhance accountability are those which provide for additional disclosure norms, facilitate raising of capital, mergers and acquisition and protection of investors and minority shareholders, the Statement on Objects and Reasons of the Bill said. The original Companies Act was enacted way back in 1956 and has been in operation ever since.
In view of changes in the national and international economic environment and growth in the economy, the need was felt to enact a new law, it said. The Companies Bill 2009 was then introduced in Parliament and sent to the Standing Committee, which presented its report in August 2010. A large number of recommendations were made by it and suggestions came in from several stakeholders.
Many of these were accepted by the government, which then decided to withdraw the 2009 measure and introduce a fresh legislation incorporating the recommendations.