New Delhi, Aug 9 (IANS): Terming the new Companies Bill as modern and growth-oriented, the Institute of Company Secretaries of India (ICSI) Friday welcomed the passage of the new legislation a day after it was accorded parliamentary approval.
The new Companies Bill, which seeks to enhance compliance and transparency, makes corporate social responsibility mandatory and protects the interest of employees and small investors.
The Rajya Sabha passed it Thursday while the Lok Sabha did so Dec 18 last year.
According to President-Council, ICSI, S.N. Ananthasubramanian, the new law provides for improved corporate governance, enhanced transparency besides increased accountability of company managements and auditors.
He added it is designed to balance the stakeholders' interests, viz promoters, shareholders and public at large.
"The new companies law will accelerate the transformation of company secretaries into corporate governance professionals. The company secretary is expected to become the chief governance officer," the institute said in a statement.
"Further, it envisages a much larger role for company secretaries in areas of secretarial audit, restructuring, liquidation, valuation and much more."
The provisions of the bill are meant to prevent a Satyam Computer Services Limited-like fraud, the biggest in India's corporate history running into $1.5 billion detected in 2009. The bill will now go to President Pranab Mukherjee for his consent. The new legislation will come into effect with notification by the corporate affairs ministry after the presidential assent.
The new law will replace the nearly six-decade-old Companies Act of 1956.
Leading industry bodies such as the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) have also welcomed it.
"This legislation is indeed a milestone in the history of company law and will revolutionise the administration and management of businesses in the times to come," said FICCI President Naina Lal Kidwai.
Kidwai said the bill had introduced several changes and concepts which would simplify regulations and bring greater clarity and transparency in managing businesses. "The global environment calls for economic laws and regulations that are effective and efficient, have a reasonable compliance cost and keep Indian businesses competitive."
"Now that the law is ready, it is time to focus and work on the practical aspects of complying with its provisions," said CII Director General Chandrajit Banerjee.
He added the new Companies Bill is commensurate with "global standards vis-à-vis disclosure requirements, increased democratic rights for shareholders, self-regulation and accountability.