New laws follow global corporate standards

The new amended Companies Bill 2008 and the Competition Law had been drafted in line with international standards to curb corruption and corporate malpractices in the country while fostering growth at such trying times, feel experts.

Speaking at an interactive session on Companies Bill 2008 and Competition Law and its impact on the India economy, Warsha Kale, associate director, Berwin Leighton Paisner, said, “Both legislations already in place in over 90 countries globally have a direct contribution to consumer welfare and ensuring competitive regime.”

The Competition Act would help fight cartelisation as defined in UK, European Union and USA, and was a major threat to a consumer welfare.

Heavy penalties would be levied to check non-compliance and cartelization.

The new Competition bill treated mergers in a way designed to prevent anti-competition agreement between enterprises or association of enterprises or persons, all of which adversely impacted consumer and stakeholders in India.

The Competition Act and Competition Commission would could check cartelisation and evolution of anti-competitive agreements, since these harmed the consumers the most, said Kale.

Competition Commission would have a leniency regime, rewarding entities owning up to having participated in a cartelisation, she added.

The Companies Bill would have stringent measures and heavy penalties on non-compliance besides having features like norms for ‘One Person Company’ and the ‘small company’ aimed to boost entrepreneurship.

It offered extension of time period for claiming of unpaid dividends and laws on consolidated results.

The concept of Independent Directors had been made mandatory for all companies, listed or otherwise.

The proposals to set up a National Company Law Tribunal or National Company Law Appellate Tribunal in the place of Company Law Board and Board of Industrial and Financial Reconstruction, and greater focus on e-governance tools to enable board meetings through video conference and electronic voting were expected to improve transparency.