New Delhi, Oct 23 (UNI) The Government today introduced in the Lok Sabha the new Companies Bill, 2008, making it easier for companies to start businesses and wind up operations, providing for introduction of a single forum of approval of mergers and acquisitions along with a shorter merger process and a revised framework for insolvency.
The Bill after being approved by Parliament will replace the existing Companies Act, 1956.
The Bill was introduced by Minister of Company Affairs Prem Chand Gupta, who said the economy has undergone a see change in the past few years adding that many investors are looking towards the statutory and regulatory framework for the corporate sector while deciding on their investment plans. The Bill seeks to achieve this goal.
The Bill will provide for basic principles for all aspects of internal governance of corporate entities and a framework for their regulations.
It provides for revised framework for regulation and insolvency, including rehabilitation, liquidation and winding up companies and the process is sought to be completed in a time bound manner.
The Bill provides for relaxation of restrictions limiting the number of partners in entities such as partnership firms, and banking companies to a maximum of 100, with no ceiling as to professional associations regulated by Special Acts.
It seeks to provide a single forum for approval of mergers and acquisitions along with a shorter merger process for holding the Wholly Owned Subsidiary Companies or between two or small companies as well as recognition of cross border mergers. The concept of deemed approval is also to be provided in certain situations.
Objecting to the introduction of bill, Mr V Radhakrishnan (CPI-M) said that a 250-odd page bill is almost like an encyclopedia and should have been given to Members at least two days in advance.
''It was given to us only this morning. Is this the way legislative business should be conducted by the government?" he asked.
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