Companies Bill, 2008 has been introduced in the Lok Sabha recently. The Bill mainly aims at the consolidation and amendment of the laws relating to companies. The Bill will focus towards modernization of the structure for corporate regulation in India and thus represents a major reform statement by the Government to promote the development of the Indian corporate sector.
On the 21.10.2008 Companies (Amendment) Bill, 2003 was withdrawn, which had been introduced in the Rajya Sabha way back on 7.5.2003. And the reason forwarded for the withdrawal was that the Companies (Amendment) Bill, 2003 was no more in tune with the present day requirements of corporates in India.
The comprehensive revision of the Companies Act, 1956 was necessitated because the number of companies in India have expanded from about 30,000 in 1956 to above 7 lakhs today. Today, Indian companies have expanded and grown into global entities, continuously entering into and bringing new activities into the fold of the Indian economy. In doing so, they are emerging internationally as efficient providers of a wide range of goods and services while increasing employment opportunities at home.But alongside, there is a growing need to enable corporate regulation in an effective and efficient manner with reasonable costs of compliance so that Indian companies are competitive in attracting investment for growth.
In a changed scenario like this, Companies Bill, 2008 seeks to enable the corporate sector in India to operate in a regulatory environment of best international practices that foster entrepreneurship, investment and growth.The Bill reinforces shareholders democracy, facilitates e-Governance in company processes; recognizes the liability of Boards, directors and senior management personnel of companies; provides for a new scheme for penalties and punishment for non compliance or violation of the law; harmonizes corporate regulation with action by sectoral regulators; incorporates a new framework for mergers and amalgamations of companies and provides an extensive Insolvency Code based on the latest principles recommended by the United Nations Commission on International Trade Law (UNCITRAL).