Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Wednesday, January 9, 2013

Basic Introduction to Companies Bill, 2012

The Companies Bill, 2012 was passed by Lok Sabha on the 18th of December 2012. The following are a few highlights from the same.

The objectives kept in mind while drafting the Companies Bill were:
·         Protecting the interests of Employees and Small Investors
·         Voluntary adoption of Social Welfare Schemes
·         Clearing cumbersome procedures and making India an attractive and safe destination for Investment

Differences between the Companies Bill, 2012 and the Companies Act, 1956:
·         Introduction of “One Person Company” concept
·         More powers conferred upon the Serious Fraud Investigation Office (SFIO) to tackle issues of corporate frauds.
·         Setting up of special courts for speedy trials, thereby assuring quick relief to investors.
·         Corporate Social Responsibility mandated through a statutory provision. The Companies Bill is said to make CSR spending compulsory for companies that meet certain criteria.
·         Annual ratification of appointment of Auditors for 5 years, i.e. every company will be required to mandatorily obtain the consent of its shareholders every year in order to continue with its auditors.
·         Limits the number of companies an auditor can serve to 20, while also increasing the criminal liability of auditors.
·         New Clause has been inserted related to offence of falsely inducing banks for obtaining credit.
·         Companies are allowed to have only two layers of subsidiaries for investment.
·         Companies are encouraged to create Employees’ Welfare Fund
·         Whistle Blower policies and Class Action Suites are other areas brought into light.

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