Amendments to Companies Bill okayed

The cabinet on Thursday approved amendments to a new Companies Bill, 2009, aimed to modernise the structure for corporate regulation in the country.

The cabinet on Thursday approved amendments to a new Companies Bill, 2009, aimed to modernise the structure for corporate regulation in the country.

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The proposed legislation will define the basic principles for all aspects of internal corporate governance and a framework for their regulation from incorporation to liquidation and winding up, in a single, comprehensive, framework.

The Bill has proposed to relax the restrictions limiting the number of partners in entities such as partnership firms, banking companies etc., to a maximum 100, with no ceiling as to professional associations regulated by special legislations.

The Bill would lay out the duties and liabilities of directors of companies. It also provides for protection of rights of minority stakeholders while bringing in responsible self-regulation with disclosure and accountability.

The bill will also facilitate joint ventures and protect the independent directors, who have come under the scanner after the Satyam fiasco. That apart, insider trading by company directors would be considered a criminal offence.

Minister of corporate affairs Salman Khurshid (56) told HT that the Bill would be introduced in Parliament at the earliest. “I want to move fast on this and our aim is to introduce the Bill during the current session of Parliament,” Khurshid said, adding that once the Bill is passed, there would be greater degree of accountability and transparency.