Parliament passes Companies Bill
Empowers investors against fraud; makes social spending a must; introduces transparency in firms
New Delhi: Parliament passed the much- awaited Companies Bill which is aimed at protecting the interest of employees and small investors. The government said the “historic” measure will give impetus to growth and bring transparency.
New Delhi, Aug. 8: Parliament on Thursday approved the new Companies Bill that will make sweeping changes in the way firms operate and are regulated and replace a nearly six- decade- old legislation.
The new Bill, which now needs the President’s nod to become law, makes it mandatory for companies to spend on social welfare, empowers investors against frauds committed by promoters, encourages companies to have women directors, and seeks to bring in greater transparency in corporate governance.
Corporate affairs minister Sachin Pilot termed the passage of the legislation a “historic feat” and said that it will give impetus to the country’s growth momentum by ushering in a regime of “less regulations and more compliance.”
The new Bill replaces the existing Companies Act, 1956, which has been amended at least 25 times in the past 57 years, with many of its provisions found to be outdated.
The Bill, which is spread across nearly 30 sections and over 300 pages, was passed by the Lok Sabha more than seven months ago. Since then, its passage in the upper house has been delayed by disruptions in Parliament. It has been almost three years since the submission of first report on Bill.