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New company law coming: Minister

JAIPUR: Union Corporate Affairs Minister Prem Chand Gupta on Thursday said a Bill making comprehensive changes in the Companies Act, 1956, would be introduced in the winter session of Parliament. This would pave the way for flexibility and dynamism in the corporate sector, growth in business and enhancement in the investors’ confidence.

Inaugurating the 35th national convention of the Institute of Company Secretaries of India (ICSI) here, Mr. Gupta said the exercise for revision of the Companies Act – the biggest piece of legislation in the country – which started in 2004, was coming to a close after a prolonged consultation and participation process.

Calling for creation of a “level playing field” for corporate houses, Mr. Gupta said the Companies Act was too bulky and many of its provisions had become redundant in the present corporate scenario with Indian companies facing tough competition in economic globalisation.

The new Bill, after being tabled, may be referred to a select committee before enactment.

The Minister affirmed that the new company law, besides simplifying various procedures, would improve the environment for corporate governance and strengthen small and medium enterprises. “Companies, considered legal entities, can become good corporate citizens under the guidance of Company Secretaries,” he added.

Mr. Gupta called upon the ICSI to promote the concept of corporate social responsibility with vigour, while pointing out that the 9 per cent growth rate would be sustainable only if its benefits percolated to all sections “in the true spirit of inclusive development pursued by the United Progressive Alliance Government”.

Referring to the draft Limited Liability Participation Bill, Mr. Gupta said a Parliamentary Committee that was now examining it is likely to return it to the Ministry by this month-end. The Bill, which would also come up in the winter session, is expected to set new norms for professionalism and internal flexibility of corporate houses.

Among others, Rajya Sabha MP Prabha Thakur, Union Corporate Affairs Secretary Anurag Goel, and ICSI president Preeti Malhotra addressed the inaugural function. Union Railway Minister Lalu Prasad, who was scheduled to inaugurate the three-day convention, could not attend because of pressing engagements in Delhi.

Mr. Anurag Goel said the Indian Institute of Corporate Affairs (IICA), being established as a statutory body by the Centre, “would not replace, duplicate or replicate” the ICSI. He said the IICA, for which Rs.211 crore had been earmarked, would act as a think tank for the corporate sector and work for capacity enhancement of stakeholders.

Ms. Preeti Malhotra said that ICSI in its curriculum was laying emphasis on self-regulation and improvement of skills to enable the Company Secretaries to work globally.

The three-day convention, focusing on the theme of “Excellence through business value addition”, is being attended by Company Secretaries from all over India as well as from countries such as Kenya, Malaysia, Sri Lanka, Bangladesh, Pakistan and Hong Kong.

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