EC allows Corp Affairs Min to notify new rules

The Corporate Affairs Ministry Thursday received Election Commission's approval for notifying rules related to various sections of the new Companies Act, paving the way for its implementation from April 1.

The legislation, which provides for significant changes in the way corporates are governed and regulated in the country, replaces the Companies Act 1956.

Sources said EC today conveyed that it has no objections to the ministry coming out with notifications related to the new Companies Act.

The voluminous legislation is spread across 29 chapters, seven schedules and 470 sections. So far about 99 sections, including CSR norms, have been notified by the ministry.

With the Election Commission of India announcing the schedule for the Lok Sabha polls, the Model Code of Conduct came into force from March 5. Consequently, the ministry sought the Commission's nod for notifying the rules.

Primarily, the Code aims at ensuring that the ruling party at the Centre does not use its official position for the purpose of furthering its election campaign.

Sources said that while rules for most parts of the legislation would be notified before April 1, those for National Company Law Tribunal (NCLT) and new institutions such as National Financial Reporting Authority (NFRA) and Investor Education and Protection Fund (IEPF) would be notified later.

In late February, the ministry notified rules for CSR (Corporate Social Responsibility) spending. Under the legislation, certain class of companies have to shell out at least 2 per cent of their 3-year annual average net profit towards social welfare activities.

The Companies Bill 2013 had received approval from the Parliament in August. (PTI)