Companies Bill introduced in Rajya Sabha
The much-awaited Companies Bill, which aims at protecting the interest
of employees and small investors, was introduced in theRajya Sabha today
amid din. Moving the bill for consideration and passage, Corporate
Affairs Minister Sachin Pilot said the legislation is progressive and
forward looking. Discussion on the Companies Bill, 2012, will take place
tomorrow. The Bill was moved amidst uproar created by some Andhra MPs
protesting against creation of Telengana state. Lok Sabha had passed the
legislation in December 2012.
The new legislation, which
would replace the nearly 50-year-old Companies Act, would encourage
companies to undertake social welfare voluntarily instead of imposing
the same. The proposed legislation would ensure setting up of special
courts for speedy trial and stronger steps for transparent corporate
governance practices and curb corporate misdoings. The new law would
require companies that meet certain set of criteria, to spend at least
two per cent of their average profits in the last three years towards
Corporate Social Responsibility (CSR) activities. In case, entities are
unable to comply with the CSR rules, they would be needed to give
explanations. Otherwise, they would face action, including penalty. The
amended legislation also limits the number of companies an auditor can
serve to 20 besides bringing more clarity on criminal liability of
auditors.
