The revised draft of the Companies Bill 2011, was approved by the Cabinet on 4th October 2012 This will have far reaching consequences on Corporate. The revised draft was prepared based on recommendations of the Standing Committee and will now be introduced in the winter session of Parliament.
If approved, it will replace the archaic Companies Act, 1956.
Some major points
1. Mandatory expenditure of 2% of a company’s average profits in the three previous years on corporate social responsibility (CSR). Preference to be given to the local development where the Company is operating
2. Control managerial compensation. Salary to paid to MD , WTD etc
3. Make independent directors more accountable for the issues/non compliance of laws
4. Give more teeth to the serious fraud investigation officer
5. Mandatory rotation of auditors every five years,
6. Class action suits, which are lawsuits brought by a group of individuals, all having the same grievance.
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