Highlights of the Companies Bill 2012.

[CS Swati Dodhi]

Highlights of the  Companies Bill 2012.

• The new legislation, which would replace the nearly 50-year-old Companies Act of 1956 and would encourage the companies to undertake social welfare voluntarily instead of imposing the social responsibility.

• The proposed legislation would ensure setting up of special courts for speedy trial and stronger steps for transparent corporate governance practices and curb corporate misdoings.

• The new law would require companies that meet certain set of criteria, to spend at least two percent of their average profits in the last three years towards Corporate Social Responsibility (CSR) activities.

• In case, entities are unable to comply with the CSR rules, they would be needed to give explanations. Otherwise, they would face action, including penalty.

• The amended legislation also limits the number of companies an auditor can serve to 20 besides bringing more clarity on criminal liability of auditors.