MCA, stakeholders discuss concerns over new companies law

Seeking to address concerns over the new companies law, the Ministry of Corporate Affairs today held another round of deliberations with stakeholders.
In less than two weeks, this is the second time that the Ministry is holding discussions with stakeholders including industry chambers.
The Ministry is implementing the Companies Act, 2013, many of whose provisions came into effect from April 1.
The industry has raised many concerns about the new legislation including on provisions related to granting loans, social welfare spending, independent directors, financial reporting & auditing, related party transactions and making investments in regular course of business.
Apart from senior Ministry officials, representatives from the four industry groupings -- CII, PHD Chamber, Assocham and Ficci --, among others, participated in today's meeting.

The Ministry would prepare a report after having discussions on the concerns over the new Companies Act. Once finalised, the report would be submitted to Corporate Affairs Minister Arun Jaitley, according to an official.

"There could be changes in the norms," the official said.
During the June 21 meeting with stakeholders, the Ministry had indicated that it was willingness to review the rules to address the difficulties in implementing the new law.
In a statement issued today, PHD Chamber of Commerce and Industry said that "net profit for CSR spending should be after tax profit".
Under the legislation, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities.

Besides, PHD Chamber has said that banks and NBFCs should be exempted from the requirement to file board resolution pertaining to granting loans, making investments and borrowings which are in their regular course of business activities.
During the meeting today, Assocham sought clarity on various aspects of the law including norms pertaining to raising funds through private placement, among others.