More changes in Companies Act likely: MoS finance

Move will help cos raise more investments

Minister of State for Finance Jayant Sinha on Tuesday pitched for more changes in the Companies Act. His comments come within days of a government-appointed panel suggested sweeping reforms in the Companies Act, 2013, making it easier for companies to raise funds.

“We are seeing major changes on corporate governance, (and) major changes in the nature of capitalism. This is well established within the framework that we are following, being a pro-poor as well as pro-market government,” he said at an industry event here.

A government-appointed panel had last week suggested sweeping changes to the Companies Act, 2013, making it easier for companies to raise funds and reward senior management, and ensuring that steps to enhance shareholder democracy do not cripple the functioning of firms, and the businesses they run.

Corporate governance
Sinha too said that corporate governance was important for the government at the Centre.
Among the major recommendations of the panel are a change in the definition of associate company and subsidiary company to ensure that only “equity share capital” is the basis for deciding holding-subsidiary relationship, instead of “both equity and preference share capital”.

It also proposed simplification of the private placement process and doing away with separate offer letter and pitched for easing of the process of incorporation and reducing the number of filings to the Registrar of Companies (RoC).