Corporate Affairs Ministry open to receive suggestions on applicability of provisions of Companies Act: Sachin Pilot
Sachin Pilot, Minister for Corporate Affairs has stated that he is open to receiving suggestions from industry on defining the thresholds for applicability of various provisions of the Companies Act, 2013 such as rotation of auditors, requirement of independent directors, etc. He was interacting with members of the National Council of CII, the industry body.
Suggestions made to the Minister by the captains of the Indian industry for facilitative implementation of the new Companies Act, 2013 covered a wide range of subjects such as the requirement of independent directors for unlisted companies, audit rotation, definition of share capital, implementation of CSR provisions, related party transactions, exemptions for private companies, etc.
It was underscored that the ease of doing business
in India, which is at a precarious level, should not be negatively impacted because of implementation of the new company law.
Intricacies of the new Act such as applicability of related party transactions to CSR initiatives, contribution to corpus of Trusts, process of transfer of pending proceeding to NCLT from CLB, allowability of CSR spend as an expense item, loans and investment to private and subsidiary companies, etc were also discussed with the Minister and issues of concern to the corporates highlighted for Minister’s attention.
stated that the Act is forward-looking and that nothing in the Act would take effect retrospectively. He invited suggestions to rectify any such provision which may have retrospective effect.
It was also brought to the Minister’s notice that private companies- which are neither subsidiaries of listed companies nor have substantial borrowings from banks or financial institutions - should be exempted from certain provisions of the Act that seek to bring them at par with public interest entities.
CII would be submitting a detailed representation on these and other issues to the Ministry of Corporate Affairs.