NEW DELHI: The much-awaited Companies Bill, which seeks to replace the more than five-decades old regulations that govern corporates in the country, is likely to be tabled in the Rajya Sabha this week.
The Companies Bill 2012, which envisages a slew of changes to rules governing the functioning as well as social responsibilities of corporates, is awaiting Rajya Sabha nod.
In the wake of repeated adjournments, the bill is yet to be taken up by the Upper House even though it was cleared by the Lok Sabha in December, 2012.
A government official said the Companies Bill is likely to be introduced in the Rajya Sabha this week.
Experts opined that the proposed legislation is expected to be cleared without much hurdles in the Upper House, especially since most of the parties are on board.
Once in place, the new legislation would replace the Companies Act, 1956.
Spending towards Corporate Social Responsibility (CSR) activities, more responsibility on independent directors and setting up of National Financial Reporting Authority (NFRA), are among the major features of the proposed legislation.
With the new legislation, India would possibly become the first country to have Corporate Social Responsibility (CSR) spending through a statutory provision.
As per the proposal, companies have to shell out two percent of their three-year average profit towards CSR activities and in case they are unable to spend the money, they have to provide explanations.
Already, a committee is working on making rules related to implementation of the new bill.
“Severity of law is not deterrent, it is surety which is deterrent,” Corporate Affairs Minister Sachin Pilot had said in the Lok Sabha during the debate before passing the Companies Bill in December last year.