Wednesday, 19 December 2012

India: Lok Sabha passes Companies Bill

The Companies Bill was passed, with amendments, by the Lok Sabha yesterday and now proceeds to the Rajya Sabha. The purpose of the Bill is to modernise the company law framework in India. The record of debate, beginning at page 465, is available here (pdf) and continues here (pdf), here (pdf) and here (pdf).

Amongst other things, the Bill contains provisions that will: [a] limit to five years the auditor's period of tenure, [b] set a maximum that can be paid as directors' remuneration by reference to company profits, [c] require (albeit subject to a 'comply or explain' rule) companies of a certain size to spend a proportion of profits in pursuit of their corporate social responsibility policy. A copy of the Bill, as amended, has not yet been published (an earlier draft is available here).

Update (2 January 2013): a copy of the Bill, as passed by the Lok Sabha, has been published by the Ministry of Corporate Affairs: see here (pdf).

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