Coalgate stalemate buries Companies Bill 2011 | SupportBiz

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Coalgate stalemate buries Companies Bill 2011

 
The Coalgate logjam in the Parliament is causing much heartburn to the Indian business community. The much anticipated Companies Bill 2011 was expected to be passed in the current monsoon session of the 15th Lok Sabha but given that India's political leaders could only manage 23 hours - it just didn't happen.

The Companies Bill 2011, which is expected to be a major update of the existing Companies Act 1956, was presented in the Parliament in December 2011 by Corporate Affairs Minister Veraappa Moily.

Parliament has seen disruptions for a week now, after the Opposition has taken the Prime Minister Manmohan Singh to task for the irregularities in allotting coal blocks. Both houses of the Parliament have been adjourned repeatedly.  

The UPA’s second term has repeatedly seen major disruptions of Parliament proceedings as a result of issues such as CWG scandal, 2G scam, Telengana issue, Lokpal Bill and inflation.

Given the precarious position of the Indian growth story, the latest impasse is delaying some much needed reforms to the coutnry’s paramount company regulation edict.

Some of the suggested (major) changes (as researched by Vakil Search) are:

  • Additional judicial powers will be given to the National Company Law Tribunal
  • More powers to the executive to legislate through notifications
  • Changes relating to managerial remuneration
  • Changes in the role of Company Secretaries
  • Compulsory rotation of auditors every five years
  • Changes in provisions with regard to ‘independent directors'
  • Introduction of the ‘one person company' concept
  • Online business has been recognized to encompass an extended range of activities
  • Inclusion of the expression ‘Corporation Sole' within the definition of Company
  • Corporate Social Responsibility is now a compulsory undertaking
  • Changes in legal positions with regard to 'Oppression' and 'Mismanagement'

The Companies Bill 2011 seeks to bring India's archaic company regulation format up to speed to the current global norms. It has gone through several rounds of consideration before the Parliament Standing Committee. But, the worst disruption to Lok Sabha since the first general election of 1952 has ensured that one of the most crucial pieces of legislation in recent times will have to wait till the Winter session of Parliament.

You can access the complete transcript of the proposed bill at: http://www.mca.gov.in/Ministry/pdf/The_Companies_Bill_2011.pdf