Govt proposes to keep new Company Bill flexible

The government is proposing to keep the new company legislation flexible so that rules and regulations governing companies can be updated quickly without following the cumbersome procedure of amendment through Parliament.

"We want to make sure that the regulations can be modified and updated continuously, as and when required. Amending a section would be time-taking and a long process, while change in regulations would be faster and we can keep modifying the law with the changing times," a senior official in the MCA told PTI.

The Ministry is considering revision of the Companies Bill, 2009, in light of the recommendations of the Parliamentary Standing Committee.

According to ministry sources, the focus would be on Rules and Regulations so that appropriate changes can be effected as and when required.

The new Companies Bill, which will replace a half-a-century old Act, is said to take a leaf out of the multi-crore accounting fraud at Satyam Computer Services that came to light in January 2009.

Besides a slew of new introductions, like class action suits and rotation of statutory auditors, the Bill seeks to fix more responsibility on independent directors.

The Bill will also protect the rights of the minority shareholders, bring about responsible self-regulation with adequate disclosure and accountability, and lesser government control over internal corporate processes.

The Companies Bill, 2009, which lapsed with the dissolution of the 14th Lok Sabha, was reintroduced in the Lok Sabha in August last year.