Corporate Affairs Minister Veerappa Moily today expressed hope that the new Companies Bill, which seeks to update business laws in the country, will be passed in the ongoing Winter Session of Parliament.
"Our Companies Bill was very old and needed reform. We hope to get it (new Bill) passed during the Winter Session," Moily told reporters on the sidelines of a CII event here.
Cabinet yesterday approved the Companies Bill, 2011, which aims to introduce modern concepts like mandatory corporate social responsibility (CSR), class action suits and a fixed term for independent directors, among other things.
"We have included a clause 'endeavour to ensure 2% CSR' in the Bill. Those corporates who can't do it can always come to the government and disclose," Moily said.
He said the provisions of the Bill on mandatory CSR were crafted after much consultation and the clause to spend 2% of profits was finally accepted.
"We have only institutionalised CSR to promote the culture. We have accepted 165 recommendations out of 172," Moily added.
Intended to replace the existing half-a-century-old Companies Act, the Companies Bill, 2011, has undergone several modifications in view of the Rs 14,000 crore Satyam accounting fraud.
Among other things, it proposes to tighten laws for raising money from the public. The Bill also seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
Furthermore, it has proposed that companies should earmark 2% of their average profits of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.
