Amendments to ‘The Companies Bill 2011’- Clauses wise =================================== The Bill has 470 clauses and 7 schedules as against 658 Sections and 15 schedules in the existing Companies Act, 1956. The important amendments (approved ) in proposed Companies Bill 2011 are given below- -Clauses 143(5) and (6): Provision relating to audit of Government Companies by Comptroller and Auditor General of India (C&AG) modified to ensure effective audit by C&AG. -Clause 186: This clause amended to provide that the rate of interest on inter corporate loans at prevailing rate of interest on dated Government Securities. -Clause 36: Provision on ‘Corporate delinquency’ amended, to include punishment for falsely inducing a person to enter into any agreement with bank or financial institution, with a view to obtaining credit facilities. -Clause 203: Provisions relating to separation of office of Chairman and MD modified to allow, in certain cases, a class of companies having multiple business and separate divisional MDs to appoint same person as `chairman as well as MD. -Clause 135: The words `make every endeavor to` omitted from Clause 135(5). The company shall give preference to local areas where it operates, for spending the amount set aside for Corporate Social Responsibility (CSR) activities. No change in words `implement or cite reasons for non implementation’. -Clause 144: Provisions relating to restrictions on non audit services modified so that such restrictions shall not apply to associate companies and further to provide for transitional period for complying with such provisions. -Clause 147 and 245: More clarity on provisions relating to extent of criminal liability of auditors including power of central govt. -Clause 141 (3)(g): Maximum number of companies in which a person can be appointed as auditor – 20 companies. -Clause 139 (1): Members to ratify at every AGM, appointment of auditors for 5 years. -Clause 139 (3): Provisions relating to voluntary rotation of auditing partner of audit firm- members may rotate the partner `at such interval as may be resolved by members`{in stead of `every year`}. -Clause 2(51): ‘Key Managerial Personnel’ (KMP) shall include ‘Whole-time director` -Clause 42: More clarity to definition of `private placement`. -Clause 61 (1)(b): Approval of the Tribunal shall be sought for consolidation and division of share capital only if the voting percentage of shareholders changes resulting from such consolidation. -Clause 152: Independent directors shall be excluded for the purpose of computing `one third of retiring Directors. (Clarification introduced in the Bill to bring together provisions of Clause 149(12) and rotational norms (clause 152) -Clause 470: Removal of difficulty with respect to any provisions of the bill may be exercised by the Central Government upto 5 years (after enactment of the legislation) instead of 3 years.
Posted on: Tue, 03 Sep 2013 09:53:51 +0000