New Companies Rules, 2013 will be out, once the Companies Bill, 2013 gets the consent from President
"While we wait for this new bill to be signed into a law, a process has already begun to frame the detailed subordinate rules and the same would be finalised in a very transparent manner and not through a bureaucratic exercise," Corporate Affairs Minister Sachin Pilot said.
Most of the provisions in the Companies Bill, 2013 would need detailed subordinate rules for their implementation and compliance.
"We already have a rule making committee, which includes people from industry bodies, legal fraternity and private sector. it is a Government-headed committee, but has got enough participation from all segments of the business world, as well as from among other private citizens," Pilot said.
"The committee has already started the work on making draft rules. Once the President gives his consent, I intend to put the draft rules on the Internet so that the whole world can see, review, consider and opine about the various aspects of rule making," the 36-year-old Minister said.
"The real detailing is very very crucial. The law is what it is, but the rules are very critical. Therefore, I want to make sure that it as transparent as possible and not done behind the closed doors.
With the new Companies Bill "self-regulated with disclosure/transparency rather than government/regulatory approval based regime"
"The Companies Bill, 2013 which has been passed by the Parliament incorporates certain important provisions...to facilitate ease of doing business in India," Corporate Affairs Minister Sachin Pilot informed the Rajya Sabha in a written reply.
The new Companies Bill has certain provisions like faster registration through fully electronic MCA-21 and allowing firms to hold meetings through e-governance mode, that would "facilitate ease of doing business in India", the Parliament was informed today.
Moreover, the Bill empowers firms to function in a manner which is 'self-regulated with disclosure/transparency' rather than 'government/regulatory approval based regime', Pilot said.
The Bill recognizes concepts of 'One Person Company' and 'Small Company' to allow new entrepreneurs to take advantage of corporate form of business, he added.
It also permits faster mergers and acquisitions including short form of merger and cross border mergers, time bound approvals through 'National Company Law Tribunal' and a summary liquidation process for a class of companies.
To a query on whether the Damodaran panel has submitted its report on improving the business climate to the government, Pilot said: "The Chairman of the Committee has circulated the draft report for comments, if any by August 26, 2013,"
"The report will be submitted to the government soon thereafter," he added.
Chaired by capital market regulator Sebi's former chief M Damodaran, the panel was set up in August 2012 amid concerns among industry and investors, about perception of policy paralysis and lack of required economic reforms.
Companies Bill, 2012 - Interaction on Corporate Social Responsibility by Minister of State (IC) for Corporate Affairs
The Rajya Sabha passed the Companies Bill, 2012, which was passed by the Lok Sabha on 18th December, 2012. After the assent of the President of India, the new legislation is going to replace the 57-year-old law, i.e., the Companies Act, 1956.
One of the paradigm change is inclusion of clauses on Corporate Social Responsibility. Companies having net worth of Rs. 500 crore or more or turnover of Rs. 1000 crore or more or net profit of Rs. 5 crore or more during any financial year will be required to spend at least 2% of average net profits of immediately three preceding years on CSR activities in a year.
Shri Sachin Pilot, Hon'ble Minister of State (IC) for Corporate Affairs is hosting a Google Hangout interaction on CSR on Youtube. The details are as follows:
Date: 14th August, 2013
Time: 11 AM
Relevant link: http://www.youtube.com/user/indiaconversation
You may watch the programme to get better idea about the new changes.
Rajyasabha passed the much awaited new Companies Bill on 08th August 2013. The Companies Bill 2012 passed by the Lok Sabha on 18th December 2012. Finally, today the new Bill moved out of Parliament and awaiting for the President's nod to become the Law.
The new Companies Bill replaces the existing Companies Act, 1956. The existing Act has been amended more than 25 times. But still most of the provisions in the Companies Act, 1956 are outdated.
The highlights of the new Companies Bill are as follows:
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