Companies Bill introduced in Rajya Sabha

NEW DELHI: The much-awaited Companies Bill, which aims at protecting the interest of employees and small investors, was introduced in the Rajya Sabha today.

Moving the bill for consideration and passage, Corporate Affairs Minister Sachin Pilot said the legislation is progressive and forward looking.

Discussion on the Companies Bill, 2012, will take place tomorrow.

The Bill was moved amidst uproar created by some Andhra MPs protesting against creation of Telengana state.

Lok Sabha had passed the legislation in December 2012. The new legislation, which would replace the nearly 50-year-old Companies Act, would encourage companies to undertake social welfare voluntarily instead of imposing the same.

The proposed legislation would ensure setting up of special courts for speedy trial and stronger steps for transparent corporate governance practices and curb corporate misdoings.

The new law would require companies that meet certain set of criteria, to spend at least two per cent of their average profits in the last three years towards Corporate Social Responsibility (CSR) activities.

In case, entities are unable to comply with the CSR rules, they would be needed to give explanations. Otherwise, they would face action, including penalty.

The amended legislation also limits the number of companies an auditor can serve to 20 besides bringing more clarity on criminal liability of auditors.