The government on Friday said the new Companies Bill, which seeks to modernise corporate laws, will be taken up for consideration in the Winter session of Parliament in November. “The Standing Committee has given its report. By the next session of Parliament we expect to table the amended bill after which it will go to the Law Ministry for vetting,” Corporate Affairs Secretary R Bandyopadhayay said while addressing a global leadership programme organised by SCOPE.
The Companies Bill 2009, which seeks to replace the half-a-century-old Act, was introduced in the Lok Sabha in August last year.
The standing committee report on the new Companies Bill was presented in the Lok Sabha last week after nearly eight months of deliberation. According to the report, the MCA has accepted suggestions made by the panel in about 500 cases and even suggested revised formulations in about 125 cases.
“I am confident of enacting the Bill into Law by the end of this fiscal,” Bandyopadhayay added.
The Bill also introduces for the first time in India the concept of class action suits, which would empower investors to sue a company for “oppression and mismanagement” and claim damages.
Also, the Serious Fraud Investigation Office, which played a active role in investigating the bungling of account books at Satyam Computer Services, will also get statutory existence.
Besides other things, the Bill also proposes to tighten the laws for raising money from the public.
There will be a single forum for approval of mergers and acquisitions, whether domestic or with foreign entities. Also, the procedure for merger of holdings and wholly-owned subsidiaries will be shortened.
The Bill also seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
To check the menace of vanishing companies, under the proposed law, every director would be given a unique Director Identification Number that would make their identification and tracking easier.
The bill will also make it mandatory for listed companies to have 33 per cent independent directors and provide for formation of a One Person Company (OPC), while empowering the government to have a simpler compliance regime for small companies.