Amended Companies Act ready; waits Cabinet nod

Mumbai, Apr 24: The draft of the amended Companies Act is almost ready and will be presented to the Union Cabinet soon, said Ministry of Company Affairs (MCA) Secretary Komal Anand, here today.

Interacting with journalists after the launch of the ministry's e-governance initiative, MCA-21, Ms Anand said that the amended Act has drawn heavily on the Dr. Irani committee recommendations besides incorporating its own inputs and ''will be a more enabling act, based on disclosures and transparency.'' ''It will have to be discussed by the Cabinet which will then probably refer it to an expert committee,'' she said, adding that it was unlikely to be tabled in Parliament this session.

According to Ms Anand, the sections presently numbering 660 will be nearly halved in the amended Act and the responsibility given to the board of a company and its shareholders to fix remuneration for directors.

Regarding provisions relating to liquidation of companies, Ms Anand said the amended Act provides a three-year timeline on the issue.

''Presently, liquidation is a time-consuming process, having to go through the High Courts and taking as much as 15-years. The amended Act will make liquidation easier and reduce the time-frame for the entire process to two-to-three years,'' she said.

''The first year will be taken up with restructuring to see if the company can be made viable failing which liquidation proceedings can be started,'' she averred.

The National Companies Law Tribunal (NCLT) which will come into being after the Companies Act is amended will take over the work presently done by the BIFR and High Courts, she disclosed.

Stating that the Limited Liability Partnership Act was drafted and likely to be presented before Parliament in the coming session, Ms Anand said that the Competition Act, already introduced in Parliament would taken up for discussion in the coming session.

The Ministry of Company Affairs has also notified 29 accounting standards to be followed by Indian corporates, which would enhance the disclosure and transparency levels in Indian industry and which, in turn, will facilitate investment inflow, she stated.

UNI