Companies Bill introduced, to make ‘doing business’ easier

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New Delhi, Oct 23 : The much-awaited Companies Bill, 2008, was introduced in the Lok Sabha on Thursday. The Bill, once passed, would create an entirely new working environment for companies and will ensure lesser state controls, making it easier for them to incorporate and wind up businesses. The Bill seeks to replace the Companies Act, 1956.

The Bill is likely to be referred to the standing committee of Parliament for further deliberation. Now in public domain for discussion, the Bill has also been put up on the ministry of corporate affairs’ website.

Minister of corporate affairs Premchand Gupta, who presented the Bill in the Lower House amid objections raised by CPI (M) member Varkala Radhakrishnan, said, “I can assure once the Bill is passed and enacted, no changes would be required to be made for the next 20 years. It will give a relief to regulators like the Securities and Exchange Board of India (Sebi) as it provides simple framework and is easy to implement.”

The standing committee would examine the new Bill and invite opinions from the industry experts as well as the public. There are 400 provisions in the new Bill as compared to 650 in the Companies Act,1956.

Rajiv Memani, CEO and country managing partner Ernst & Young said, “The Bill has proposed some far-reaching changes in the statutory framework. It is expected to address the business and investor community’s desire for a more contemporary and effective regulatory environment. The Bill, primarily, seeks to reduce government control over corporate processes, impart greater transparency, focus on corporate governance, stricter compliance requirements and ensure greater accountability to stakeholders.”

The Companies Bill intends to modernise the structure for corporate regulation in India and represents a major reform statement by the government to promote the development of the Indian corporate sector through enlightened regulation. It seeks to enable the corporate sector to operate in a regulatory environment of best international practices that foster entrepreneurship, investment and growth.