Cabinet nod to Companies Bill

Posted on September 3, 2008. Filed under: Business | Tags: , , , , , , , , , , , , , , , , |

A liberal regulatory set up for corporates is on the anvil with the Union cabinet approving the introduction of new Company Bill that will replace the present archaic Companies Act of 1956. The Companies Bill 2008 also paves the way for the formation of a one person company (OPC) that would help start up entrepreneurs operating as a company without facing the liabilities attached to a sole partnership firm. Corporate affairs minister Prem Chand Gupta said “Against the 800-odd provisions in the existing act, the proposed law aims at pruning this to almost half.” Gupta had initiated the process to revamp the existing Companies Act in 2004 and the government has formed a committee headed by JJ Irani, to draft the new law for which it also held consultations with the Industry bodies as well as professional organizations like ICAI and ICSI. The Bill aims at cutting down many of the approvals companies need to take from the government at present. These include matters like remuneration of directors, related party transactions etc. The proposed bill also states that 33% of directors on a company’s broad should be independent, which is a relaxation from the previous 50% issued by market regulator SEBI. The bill also proposes to raise the number of partners in a firm to 100 from the present of 20. It also recognizes board meetings held through video conferencing and accepts communication and voting through emails and books of accounts in electronic form

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