One of the top priorities of the ministry of corporate affairs (MCA) is to facilitate the setting up of the National Company Law Tribunals (NCLTs). In parallel, the draft rules of the new companies bill will be finalized through a process of consultation with all stakeholders.
The provisions of the Companies Act, 2013, which recently got Presidential assent, will be enforced in phases. While 98 sections of the new act are now in force, for which a notification for commencement was issued on September 12, the remaining sections will be notified in a phased manner.
"The new act is comprehensive with 470 sections. Those sections which require functioning of new bodies - such as the tribunal, or prescription of relevant rules/forms - will be brought in force after the preparatory action is completed. By 2013 end, a majority of the sections will be notified and the balance will be notified by the end of the fiscal year - March 31, 2014," said Sachin Pilot, minister of corporate affairs, replying to a question raised by TOI.
He further added that the relevant provisions pertaining to these newly notified sections, as contained in the earlier Companies Act, 1956, will stand repealed.
Many professionals are puzzled with the parallel existence of the earlier act of 1956 with the new act of 2013. "The main objective of notifying the 98 sections, which incidentally did not require any preparatory action, was to put the entire process of implementation of the new act on a fast track mode," M J Joseph, additional secretary, MCA, told TOI. Sections notified so far also cover the constitution of the NCLTs.
Pilot, addressing a CII conference in the city on Monday, sought to alleviate apprehensions raised by India Inc on some of the more stringent provisions of the new act, by calling for a consensus-based approach in finalizing the draft rules of the Companies Act, 2013.
MCA will, after suggestions from stakeholders, revisit the threshold in terms of share capital, turnover and other criteria, set down for compliance by the corporate sector, across a wide range of provisions. These also include provisions relating to appointment of independent directors and rotation of auditors.
Currently, draft rules require public companies with a paid-up share capital of Rs 100 crore or more, or a turnover of Rs 300 crore or more, or having outstanding loans or borrowings or debentures or deposits exceeding Rs 200 crore or more to have a composition of which at least a third are independent directors. These thresholds are open for discussion.
India Inc is apprehensive that rotation of auditors introduced by the new act would apply in all instances to all companies irrespective of their size, including private companies. Thresholds would also be set under a consultative approach to determine which companies would be required to implement auditor rotation.
"The new act and rules will ensure less regulation, more voluntary compliance and will facilitate doing business in India more efficiently," summed up Pilot.
Meanwhile, MCA Govt gets RoC report on NSEL Mumbai: The ministry of corporate affairs (MCA) on Monday obtained a technical report from the Registrar of Companies ( RoC) on the National Spot Exchange Limited ( NSEL) crisis. The report will be examined and action will be taken against NSE and its group companies for any violation. of the companies act, said Sachin Pilot., corporate affairs minister. NSEL has defaulted on payments totalling more than Rs 5,500 crore.
Pilot added that the government has already set up two committees to look into the irregularities. Agencies such as commodity market regulator Forward Markets Commission, Enforcement Directorate and tax authorities were also looking into the issue. On being quizzed on a key factor behind the irregularities, wherein produce traded through warehousing receipts allegedly did not exit, Pilot pointed out that this aspect is governed by a separate regulator, the Warehousing Development and Regulatory Authority.
The provisions of the Companies Act, 2013, which recently got Presidential assent, will be enforced in phases. While 98 sections of the new act are now in force, for which a notification for commencement was issued on September 12, the remaining sections will be notified in a phased manner.
"The new act is comprehensive with 470 sections. Those sections which require functioning of new bodies - such as the tribunal, or prescription of relevant rules/forms - will be brought in force after the preparatory action is completed. By 2013 end, a majority of the sections will be notified and the balance will be notified by the end of the fiscal year - March 31, 2014," said Sachin Pilot, minister of corporate affairs, replying to a question raised by TOI.
He further added that the relevant provisions pertaining to these newly notified sections, as contained in the earlier Companies Act, 1956, will stand repealed.
Many professionals are puzzled with the parallel existence of the earlier act of 1956 with the new act of 2013. "The main objective of notifying the 98 sections, which incidentally did not require any preparatory action, was to put the entire process of implementation of the new act on a fast track mode," M J Joseph, additional secretary, MCA, told TOI. Sections notified so far also cover the constitution of the NCLTs.
Pilot, addressing a CII conference in the city on Monday, sought to alleviate apprehensions raised by India Inc on some of the more stringent provisions of the new act, by calling for a consensus-based approach in finalizing the draft rules of the Companies Act, 2013.
MCA will, after suggestions from stakeholders, revisit the threshold in terms of share capital, turnover and other criteria, set down for compliance by the corporate sector, across a wide range of provisions. These also include provisions relating to appointment of independent directors and rotation of auditors.
Currently, draft rules require public companies with a paid-up share capital of Rs 100 crore or more, or a turnover of Rs 300 crore or more, or having outstanding loans or borrowings or debentures or deposits exceeding Rs 200 crore or more to have a composition of which at least a third are independent directors. These thresholds are open for discussion.
India Inc is apprehensive that rotation of auditors introduced by the new act would apply in all instances to all companies irrespective of their size, including private companies. Thresholds would also be set under a consultative approach to determine which companies would be required to implement auditor rotation.
"The new act and rules will ensure less regulation, more voluntary compliance and will facilitate doing business in India more efficiently," summed up Pilot.
Meanwhile, MCA Govt gets RoC report on NSEL Mumbai: The ministry of corporate affairs (MCA) on Monday obtained a technical report from the Registrar of Companies ( RoC) on the National Spot Exchange Limited ( NSEL) crisis. The report will be examined and action will be taken against NSE and its group companies for any violation. of the companies act, said Sachin Pilot., corporate affairs minister. NSEL has defaulted on payments totalling more than Rs 5,500 crore.
Pilot added that the government has already set up two committees to look into the irregularities. Agencies such as commodity market regulator Forward Markets Commission, Enforcement Directorate and tax authorities were also looking into the issue. On being quizzed on a key factor behind the irregularities, wherein produce traded through warehousing receipts allegedly did not exit, Pilot pointed out that this aspect is governed by a separate regulator, the Warehousing Development and Regulatory Authority.
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