Companies Act likely by May 2005

MUMBAI: The government on Thursday said it would introduce the Bill for the Companies Act in the Budget Session next year and the new Act was expected to be in place by May
2005.

"We will introduce the bill for the new Companies Act in the Parliament in the later session of the Union Budget and the new act was expected to come into being by May 2005," Union Company Affairs Minister PC Gupta said at the National Accounts Convention here.

The committee comprising chambers of commerce, Sebi, RBI and Ministry of Law and finance officials headed by JJ Irani would look into the comments and views received on the concept paper and submit a report to the consumer affairs ministry in 90 days.

Gupta said the government has proposed to reduce the provisions of the Companies Act to 289 from the present 781.

He said the government wanted to free the corporate world of bureaucratic hurdles and provide it with a level playing field for competition with multinational companies.

It was taking strong action against vanishing companies and would rope in the services of NGOs for building investor confidence and education.

Two major scams had hit the credibility of the stock market and had shaken investor confidence, he said, adding, without the two scams, there would have been 20 crore small
investors in the market.