Rajya Sabha passes New Companies Bill, 2012

The much-awaited Companies Bill aimed at protecting the interest of employees and small investors and introduced in the Rajya Sabha on Wednesday, amid much din was passed on Thursday, reports CNBC-TV18. The Lok Sabha had passed the Companies Bill in 2012.

Corporate affairs minister Sachin Pilot said the legislation was progressive, forward-looking, encourages more disclosures and better governance. “After 100 years, this is the second time that a new companies law has been legislated,” he said.

Around 193 recommendations have been included in the Companies Bill by the Parliamentary Standing Committee and with passing of this Bill, the Companies Act of 1956 will be replaced. The new Companies Bill also paves the way for early winding up of entities and a quick of merger process. The Bill will create a regulatory environment to promote growth and is a new push for growth and prosperity, Pilot said.

“We have to align global best practices into our laws and the focus of new Companies Bill is to enhance corporate governance. We must be very severe on noncompliance. The Bill is compliant with innovations in technology and markets.”

The Bill also intends to nurture entrepreneurs, artisans, craftsman and ensures that no effort is spared to consult every single stakeholder. “The Companies Bill will usher in a new era for our economy.”

Sachin Pilot added that he will seek comments on forming rules and address imbalance towards women in the corporate sector. “For the first time CSR is part of the statute.”

The 2-percent CSR mandate is not a tax or a cess and corporate India is more than willing to spend money on CSR initiaitives, he highlighted.

The Bill allows companies the freedom to choose areas of work for CSR and the mandate of a rotation in auditors every 5 years gives the process added credibility.

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