Corp Affairs Min seeks EC approval for notifying new rules

The Corporate Affairs Ministry is seeking Election Commission's nod to notify many sections of the new companies law which will be operational from April 1.

The new companies legislation, providing for sweeping changes in the way corporates operate and are regulated in the country, replaces the Companies Act 1956.

Sources said the ministry has approached the EC seeking approval for notifying rules related to various sections of the new legislation.

With the Election Commission of India announcing the schedule for the Lok Sabha polls, the Model Code of Conduct has come into force from March 5.

Among other things, the Code aims at ensuring that the ruling party at the Centre does not use its official position for the purpose of furthering its election campaign.

Sources said the Law Ministry has already given its nod for most of the rules pertaining to the Companies Act 2013.

The voluminous legislation is spread across 29 chapters, seven schedules and 470 sections.

Nearly 100 sections as well as rules for spending on Corporate Social Responsibility (CSR) activities have already been notified by the ministry.

While most rules are expected to be notified soon, those related to National Company Law Tribunal (NCLT) and Investor Education and Protection Fund (IEPF), among others, would take more time, sources said.

Till the new rules are notified, the existing ones would be applicable, they added.

In late February, the ministry notified rules for CSR spending. Under the legislation, certain class of companies have to shell out at least 2% of their 3-year annual average net profit towards social welfare activities.

The Companies Bill 2013 had received approval from the Parliament in August.