Govt hopes to get cos bill passed in Budget Session

Govt hopes to get cos bill passed in Budget Session

The government today said it hopes to get the new Companies Bill, which will replace the half-a-century old Act, passed in the upcoming Budget Session.

"I had a meeting with Pranab Mukherjee, L K Advani, Sushama Swaraj. It was decided that the Bill should be send back to the Parliamentary Standing Committee (on Finance)."

"So we have done. They were quite positive and so I am hopeful that in the Budget session it should be passed," Corporate Affairs Minister Veerappa Moily told reporters on the sidelines of the PHD Chamber function here.

The Companies Bill, 2011, which was listed for passage in the Winter Session, was strongly opposed by the Opposition and UPA ally Trinamool Congress as they said this was virtually a new Bill with considerable alterations to the earlier version.

As a result, it had to be sent back to the Committee.

The Bill will introduce new rules, covering areas such as corporate social responsibility (CSR), class action suits and a fixed term for independent directors. It also proposes to tighten laws for raising money from the public.

The Bill also seeks to strongly check insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.

Further, it has proposed that companies earmark 2 per cent of their average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.

The new legislation seeks to replace the half-a-century- old Companies Act, 1956, and modernise corporate practices in line with global developments.