Govt releases first set of draft rules for new Companies Act

Moving ahead with implementation ofthe new Companies Act, the government today released detaileddraft norms for various clauses of the new law that replaces a

nearly six decade-old legislation and overhauls the waycorporates function and are regulated in the country.

Releasing the first set of draft rules, covering 16 out oftotal 29 chapters of the Companies Act 2013, governmentinvited comments from the public and other stakeholders tillOctober 8 and said the second tranche of these rules would bereleased next week.

[caption id="attachment_1094927" align="alignleft" width="380"] Corporate Affairs Minister Sachin Pilot. AFP[/caption]

The first tranche covers rules governing new norms for theboard of directors, auditors, registration and incorporationof companies, revival of sick companies, financial accounts ofcorporates, foreign incorporated companies and NationalCompany Law Tribunal and Appellate Tribunal, among others.Besides, draft rules have been issued for chapters ondeclaration and payment of dividends, prevention of oppressionand mismanagement, nidhis and miscellaneous.

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The new legislation, that replaces the Companies Act,1956, was approved by Parliament last month.

Overhauling the rules governing companies in the country,the new Act, among others, requires corporates to spend onsocial welfare activities, empowers investors against anyfrauds committed by promoters and strives to bring in greatertransparency in corporate governance matters.

PTI