Press Release for a Conference on Companies Bill 2013 organized by Indian Merchants' Chamber

Reading the Fine Print of Companies Bill 2013

Indian Merchants’ Chamber organizes Conference on Companies Bill 2013 to understand important issues arising out of the various provisions made in the Bill affecting the Corporate Sector

Online PR News – 01-September-2013 – Mumbai – Reading the Fine Print of Companies Bill 2013

Indian Merchants’ Chamber organizes Conference on Companies Bill 2013 to understand important issues arising out of the various provisions made in the Bill affecting the Corporate Sector

Mumbai, August 31, 2013: The rechristened new Companies Bill 2013 has had a tumultuous journey lasting the entire term of the current government. Introduced in Lok Sabha on August 03, 2009, it found common ground and acceptance only on December 18, 2012 and another seven months to win over the Rajya Sabha on August 08, 2013. Now it awaits the customary Presidential nod, to be enacted and become a law, replacing the old Companies Bill 1956. Reading the fine print, understanding and analyzing the implications of this new Bill, prompted the Indian Merchants’ Chamber under the auspices of its Law Committee, to organize a one-day Conference on Companies Bill 2013 on August 31, 2013, at Hotel ITC Grand Central, Mumbai.

The Conference was inaugurated by the Hon’ble Chief Justice of Bombay High Court Mr. Justice Mohit Shah in the presence of Mr. Shailesh Vaidya, President IMC, Mr. Prabodh Thakker, Vice President IMC, Mr. Shaunak Thacker, Chairman, Law Committee IMC, leading lights from the city’s top law firms, high profile corporate leaders and an august gathering of IMC members.

Addressing the gathering, Mr. Justice Mohit Shah said, “August 2013 marks a historic moment and the beginning of a new era for corporate India. I congratulate the President of IMC for taking the initiative to organize the Conference within the shortest possible time after the Rajya Sabha passed the Bill earlier on August 08, 2013. After about six decades we are finally close to the enactment of a new law. The new Companies Bill, on its enactment, will give this country a modern legislation, which will contribute to the growth and development of the corporate sector in India. The new law will attempt to meet the requirements of a dynamic economy and facilitate development of a business-friendly environment in India. It aims at creating a congenial atmosphere, which will foster the growth of business and add to investor confidence by creating a regime of certainty and clarity in the regulatory landscape. The new legislation will have far reaching consequences and the changes so brought about will affect various sections including companies both listed and unlisted, shareholders, directors, auditors and other players in the corporate milieu.”

The Hon’ble Chief Justice hit a lighter note with the gathering, on the provisions of the Bill changing gears for Company Lawyers by comparing them to the likes of Skin Specialists, saying “Like a skin specialist, the company lawyer till now never had to deal with emergencies and the patient never died on the table. The new Bill takes away these advantages.” Elaborating on the other salient features of the Bill he said, “This new legislation will align the Indian corporate laws with global standards, enhancing the standards of corporate governance, disclosure standards and regulatory oversight. It stresses on transparency in financial reporting, improvement in corporate governance norms, enhancement in accountability on the part of corporates and auditors and protection of the interest of small investors.”
Though amended 25 times, the new law has been rewritten extensively with several new provisions for investor protection, better corporate governance and corporate social responsibility among others. It defines 33 new terms that have come into vogue in recent times. As with all things new, there is a certain element of curiosity and the need to understand this Bill in its new avatar, implications, effects and entirety.

Earlier, in his opening remarks and welcome address, Mr. Shailesh Vaidya, IMC President said, “After independence the country set the objective of having a socialistic pattern of society and adopted the model of mixed economy with more emphasis on controlled economy. The emphasis in the Act of 1956 was on, “Control” of the Government/bureaucracy on large number of matters and provisions. Today the economy has become more diverse, complex and dynamic. The number of Companies has gone up from a mere 30,000 in 1956 to approx. 13 lakhs as on 30th June 2013.Changes in the Companies Act 1956 became necessary. The Indian Merchants’ Chamber welcomes this path breaking law which will assist in revolutionalising the administration and management of corporates in the times to come. We commend the bill as it aims to meet with global standards vis-à-vis disclosure requirements, increased democratic rights for shareholders, self regulation and accountability. I would also like to add, we have information from reliable sources that the President has signed the Companies Bill 2013, which will now be known as the Companies Act 2013. Formal announcement and notification in this regard is expected in a day or two.”

The provisions for the definition and role of Independent Directors in the new Bill have raised many concerns among the head honchos in the corporate sector. A sense of wariness and unease has crept in with the new code of accountability laid out in the new Bill. The other debatable point is related to Corporate Social Responsibility (CSR) hitherto deemed as the prerogative of company policies and management decisions. The new Bill envisages and rules that every company having net worth of INR 500 crore or more, or turnover of INR 1000 crore or more or a net profit of INR 5 crore or more during any financial year has to constitute a Corporate Social Responsibility (CSR) Committee consisting of three or more directors, with at least one independent director. The CSR Committee to formulate CSR Policy and also recommend the amount of expenditure to be incurred on the CSR activities. At least 2% of the average net profits of the company made during the three immediately preceding financial years to be spent on CSR activities. The Conference proposes to study, evaluate and analyze the implications and repercussions of such provisions on the corporate sector.

The Conference dwelt on these and a multitude of judiciously selected subjects through the day, which saw eminent speakers like Mr. Bharat Vasani, Group General Counsel Tata Sons Limited, talk on “Inter Corporate Loans & Investments”; Mr. Cyril Shroff, Managing Partner Amarchand & Mangaldas & Suresh A Shroff & Co. spoke on “Capital Raising”. Post lunch, a panel discussion on ‘Corporate Governance, Mergers & Acquisitions, and Minority Actions & Class Action’, moderated by Mr. Anand Desai, Co-Chairman, Law Committee IMC and Managing Partner DSK Legal, saw renowned panelists like Mr. Cyril Shroff, Mr. Sharad Abhyankar, and Mr. Bharat Vasani presenting their views. Another interesting topic covered was “Accounts, Audit and Tax implications” by Mr. Sudhir Soni Partner, S.R. Batliboi & Associates LLP and Mr. Amrish Shah Partner, Ernst & Young LLP. Post tea, sessions like “Duties and responsibilities of Directors including Independent Directors” by Mr. Mahendra Chouhan, Chairman, Mahendra & Young Knowledge Foundation; “Corporate Social Responsibility and Tax implications” by Mr. Chaitanya Kaliya and Mr. Sunil Kapadia, Partners, Ernst & Young LLP, were held. The concluding session covered the topic “Restructuring & Liquidation” presented by Mr.L Viswanathan, Partner, Amarchand & Mangaldas & Suresh A. Shroff & Co.