Concept Paper on Companies Bill 2004: CII's Views

The Companies Act, 1956, has been in force now for nearly five decades. The present Companies Act, 1956, has been amended in the past, for more than 20 times. The proliferation and diversity of amendments aggravated the complexities of the Law and its comprehensive review became inevitable.

The main objective of re-enacting the Companies Act is to facilitate a healthy growth of the Indian corporate sector under a liberalized, fast changing and highly competitive environment. An endeavor has been made to adopt a balanced approach that recognized an international trend, i.e., flexibility and greater self-regulation by companies, subject to better disclosure, more efficient enforcement of law, and prompt and deterrent punishment to those who violate the law.

Thus one of the core objectives of the bill is to provide effective protection to the different sections of society, leaving management free to direct its energies to the pursuit of the Company’s objectives.

The Concept paper also is an attempt to simplify and rationalise the Companies Act, 1956. In the present Act, several provisions concerning a particular aspect which are scattered in different parts of the Act have now been grouped together in a logical sequence, one after the other, besides many redundant provisions have been done away with. Further, many procedural aspects have been de-linked from the substantive law. Read More...