Companies Act rules likely to be sent to Law Min this month

The Corporate Affairs Ministry, which is in the process of preparing rules for the new companies legislation, is expected to send the final norms to the Law Ministry for approval this month.

 

The Companies Act, 2013, replaces the nearly six decade old legislation governing corproates in the country.

 

The rules are expected to be decided by the Ministry soon and then the same would be send to the Law Ministry for vetting this month, according to an official.

 

Social welfare spending, stricter disclosure requirements and stronger investor protection measures, are among the features of the new companies law.

 

Corporate Affairs Ministry, which is implementing the law, has already sought views on draft rules for the new legislation.

 

More than 26,000 comments have been received on the draft rules, with over 10,000 suggestions pouring in for the norms related to auditors.

 

The government started seeking comments from stakeholders as well as public from September 9 onwards.

 

Draft rules have been issued in four tranches covering 29 chapters. The first tranche covered 16 chapters while the second one comprised nine chapters. The deadline for providing comments on third and fourth tranches, for four chapters, ends on November 10.

 

Under the new law, certain class of companies are required to shell out at least two% of their three-year average annual profit towards social welfare activities.

 

The Companies Bill 2013 received assent from President Pranab Mukherjee on August 29.