The Rajya Sabha on Thursday passed the Companies Bill, which is aimed at protecting the interest of employees and small investors.
The Minister for Corporate Affairs, Sachin Pilot, said the historic measure will give impetus to growth and bring transparency.
The Companies Bill was passed by voice vote.
Since the Companies Bill has already been passed by the Lok Sabha in December 2012, it now only needs Presidential assent before the new legislation comes into effect.
The Bill, which replaces the 1956 Companies Law, seeks to enhance the accountability of companies by shifting the onus of regulation and oversight over management away from the government and towards shareholders.
On some issues, the Bill provides for tighter control by shareholders over management decisions by requiring 75 percent majority of shareholder approval rather than a simple majority. In cases where companies in financial distress have to be rehabilitated, the Bill gives much greater powers to creditors to supervise a rescue plan and restrict the powers of company management.
In a first, the Bill also allows shareholders and creditors to file class action suits against the company. The Bill also further protects the interests of small investors while encouraging companies to undertake social welfare activities.
