Scrap the Companies Act, 2013 as it is un-constitutional I am making a white paper to be presented to the new PM and the concerned ministers. I have jotted the main points. You are requested to go through the same and suggest changes/ corrections/ additions/ deletions/ examples as you deem fit to make it effective to serve the purpose. It is the need of the hour to undo the wrong done by the previous government. Your help will be highly appreciated. The new company law i.e The Companies Act, 2013 is a defective piece of legislation. It needs to be scrapped right away and the Companies Act, 1956 should be restored right away for the following reasons: 1 It has drafting errors/ anomalies/ defects The independent director is defined as : ______________ however the actual definition is given in _______________. In table F clause 39(ii) reads as : _______________ . However, there is no clause (iii) in clause 39. 2. it is un-constitutional; The definition of private limited company is: _____________________. The restrictions of private company are continued as they were. However, almost all the exemptions enjoyed by private companies were taken away without any proper reasons. 3. It was implemented in a wrong way; A mammoth piece of business administration law was implemented in piece meal way, like an insignificant thing. First 98 sections (in part) were notified. The reason given was that these provisions did not need any rule making and therefore it was justified. It created more confusions as experts had no clue how to comply with or interpret the new law. When you are taking your lunch if roti and rice are served first and the dal and curry are served next day, would you be able to take your lunch? 4. it was implemented during the currency of election code of conduct; More than 180 sections were implemented wef 1st April, 2014 when the elections for the Lok sabha were underway and the election code of conduct was in operation. Even though the special permission of the election commission was obtained, it is not justified by an outgoing government to implement such an important legislation which affect the business. Already the businesses were looking down due to the wrong policies of the UPA2. 5. the rules are over-riding in many cases; In many cases the rules are over-riding the main law. A delegate cannot do something for which he has no power. However, the Central Government has overstepped its authority and did things for which it had no power to do. Examples: 6. the draft rules were changed without any reason; The draft rules were published for the comments of the public. However, many rules were changed without any reason. Example: 7. the forms are defective; The forms have not been drafted properly. 1. Form INC 1: An applicant seeking name for a new company need to provide his land line telephone number compulsorily. How come in an era or cell phones, it can be made to compulsory to have a land line number. 8. multiple forms are required to be filed for one single event; For appointment of KMP one needs to file three forms i.e. MR 1, MGT14 and DIR 12. In an electronic era of online filing and databases, it looks childish and highly un-acceptable as it requires companies to file multiple forms, pay more fees and incur liabilities on multiple points which are un-necessary and avoidable. Only a monopolist like a government can afford to do that and get away with it. 9. It was implemented to create fear in business community and punish them: It was implemented to create fear and to punish business community who was largely supporting the present PM. 10. It is unreasonable A new director contesting election is required to deposit Rs. 1 lakh as security. It is mandatorily applicable to private, public and listed companies, equally. However, all these categories are distinct and cannot be made to follow similar provisions. A better way would have been to give choice to the company to include a provision in its articles.
Posted on: Thu, 05 Jun 2014 23:36:15 +0000
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