The Companies Bill

The Government on Friday said it hopes to clear the new Companies Bill in the ongoing winter session of Parliament. After the bill is made into a law, it will replace the decades-old law passed in 1956. The Union cabinet headed by prime minister Manmohan Singh on Thursday cleared the draft proposal for the bill. The new bill would bring several changes such as giving exemption to a category of Indian companies from detailed quantitative disclosures, which are onerous and may reveal competitive secrets to companies in other countries, which do not require such disclosures, under section 211 of the Companies Act 1956.
The new law will also make it mandatory for companies to spend on corporate social responsibility (CSR). Moily said provisions of the bill on mandatory CSR were crafted after consultation and the clause to spend 2 per cent of profits was finally accepted. The new bill will have better disclosure norms, mandatory rotation of auditors and auditing companies.