Companies Bill 2011
- Will allow the country to have a modern legislation for growth and regulation of corporate sector in India.
- Salient Features:
- It will be compulsory for companies with Rs. 5 crore or more profits in
last three years to spend 2% of their average net profit towards
Corporate Social Responsibility.
- Remuneration of a director of a company should not be more than 5 % of the net profit.
- A new clause for punishment related to offence of falsely inducing banks for obtaining credit
- Companies which are winding up will have to make payment of two years’ salary to employees.
- Enable C&AG to perform audit of govt companies more effectively.
- Provide that the rate of interest on inter
corporate loans will be the prevailing rate of interest on dated
Government Securities.
- Restrictions on non audit services shall not apply to associate companies
and further to provide for transitional period for complying with such
provisions.
- Class of companies having multiple business and separate divisional MDs to appoint same person as chairman as well as MD.
- The number of companies an auditor can serve would be limited to 20
- Annual ratification of appointment of auditors for five years.
- ‘Whole-time director’ has been included in the definition of the term ‘key managerial personnel’.
- Provisions in respect of
removal of difficulty modified to provide that the power to remove
difficulties may be exercised by the Central Government up to ‘five
years’ (after enactment of the legislation) instead of earlier up to
‘three years’. This is considered necessary to avoid serious hardship
and dislocation since many provisions of the Bill involve transition
from pre-existing arrangements to new systems.
