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New Companies Act Bill to be tabled in next session
April, 06th 2007

The Companies Act, 1956 is set to be overhauled with the ministry of company affairs planning to introduce a Bill containing recodification of the Act in Parliament in the Monsoon Session.

Sources said the ministry has almost finalised the Bill, which contains a comprehensive revision of the Act and aims to enable Indian corporate laws to keep pace with changes in the economic environment. A ministry official said, The Bill has been delayed mainly due to the complexity of the subject. But we hope the revisions will address all issues.
 
It has been under preparation since 2004 when the government appointed an expert committee to examine the present Companies Act. It submitted its report in May 2005.

Sources said the ministry has accepted most recommendations of the Irani Committee. The Bill is expected to be a simplified and shorter version of the present Act and proposes measures to speed up incorporation and liquidation of companies as well as to minimise government intervention in management of companies.

The Bill is also likely to propose stricter norms for the appointment of directors to company boards in order to check the incidence of financial irregularities. It is also likely to strengthen penal provisions and empower the Registrar of Companies and to contain provisions relating to members, meetings and resolutions.

Likely Changes
Measures to minimise government intervention in management of companies
Likely to propose stricter norms for the appointment of directors to company boards
Likely to strengthen penal provisions of the Registrar of Companies to impose penalties
Also expected to contain provisions relating to members, meetings and resolutions

 
 
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