‘Companies Bill will open new avenues’

The Government has said that the proposed Companies Bill will update the Company Law in line with the best global practices. Addressing a seminar in New Delhi Minister of State for Corporate Affairs, Mr. R. P. N. Singh said once an Act, the Bill would introduce new ideas such as corporate social responsibility, class action suits and a fixed term for independent directors.

The Bill is likely to be placed before Parliament in the current Session. 

The minister said the Bill also proposed to tighten laws for raising money from the public besides prohibiting any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.

The minister elaborated that the Bill would also make mandatory for companies to earmark 2 per cent of their average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.