The government on Monday re-introduced the new Companies Bill in the Lok Sabha, which will eventually replace a five-decade-old corporate law with a sophisticated one that reflects the current economic realities. The proposed new law promises simplified regulations relating to formation, mergers and winding-up of companies, while empowering investors to take prompt and collective acting against their companies'' errant moves.
The Bill is similar in content to the one that was introduced in October 2008, which got lapsed early this year with the change in government. While the Companies Bill 2008 had promised companies greater breathing space on their operational freedom, many provisions in the bill come under intense debate after the Satyam Computer scandal and the global economic downturn highlighted a need for greater state oversight. The provisions of Companies Bill, 2008, are broadly considered to be suitable for addressing various contemporary issues relating to corporate governance, including those recently noticed during the investigation into the affairs of erstwhile Satyam Computer Services, the government said. The bill has now been re-christened as Companies Bill 2009, and will be forwarded to a Parliamentary Standing Committee for recommendations. With the standing committee set with no time frame for giving its recommendations, the passage of the new law is likely to take over an year, a government official said on conditions of anonymity. The bill was introduced in the lower house by minister for corporate affairs Salman Khurshid. The bill proposes to make it mandatory for all companies above a particular size to have 33% independent directors on their board. With the Satyam scandal highlighting the need to make independent directors accountable for their work, the final form of the law is expected to have substantial changes than what it is proposed in the Bill. The new legislation will try to promote shareholder democracy with protection of rights of minority shareholders, responsible self-regulation with adequate disclosure and accountability and lesser government control over internal corporate process, said statement of objects and reasons of the new Bill. (04-Aug-09) Economic Times thanks, mukesh jain. -- email: [email protected] mob: 919977165123 to read articles, circulars, books, titorials, and lot more related to PWD's visit my site: http://www.mukesh.myehome.in to know about my efforts of sketching the life of mumbai visit: http://www.themumbaicity.webs.com To unsubscribe send a message to [email protected] with the subject unsubscribe. To change your subscription to digest mode or make any other changes, please visit the list home page at http://accessindia.org.in/mailman/listinfo/accessindia_accessindia.org.in
