Efforts to clear Company Bill this Parliament session

Government today said all efforts will be made to get Parliamentary approval for Companies Bill 2009, in the ongoing session itself.

The bill will replace a half-a-century old Act.

"Companies Bill 2009 will shortly come to the Cabinet. I am trying to ensure that this Bill is presented before this Parliament session ends," Corporate Affairs Minister Veerappa Moily said at an ICSI event here.

The Parliamentary Standing Committee on Finance had given its observations on the Bill in August 2010. The new Companies Bill, which was tabled in the backdrop of the Rs 14,000 crore Satyam fraud, promises greater shareholder democracy and stricter corporate governance norms. 

For the first time, the bill, has introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors.

"CSR disclosure needs to be done in audit reports. CSR can no more be a charitable proposition, it has to be a business proposition. There will be lots of change in independent directors," Moily said.

Among other things, it also proposes to tighten the 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.

Further, it has proposed that companies should earmark 2% of the average profit of the preceding three years for CSR activities, and make a disclosure to shareholders about the policy adopted in the process.

The Companies Bill (2008), which lapsed with dissolution of the 14th Lok Sabha, was re-introduced in August 2009.