Chairman, Expert Committee on Company Law, Dr. J.J. Irani, presents his report - Press Note
Government
had undertaken an exercise to comprehensively revise the Companies Act, 1956 to
enable a simplified compact law to replace the existing Act, that would address
the changes taking place in the national and global economic scenario, enable
adoption of internationally best practices as well as provide adequate
flexibility for timely evolution of new arrangements to meet the requirements
of the corporate sector in India. It has been the intention of the Government
that this exercise is consultative in nature and takes into consideration the
needs and views of various stakeholders.
Accordingly,
on August 4, 2004 the Ministry of Company Affairs had published a Concept Paper
on Company Law on its website to enable a broad-based examination of various
Company Law issues requiring revision. A large number of comments and
suggestions were received on the Concept Paper. Later, on December 2, 2004, the
Government constituted an Expert Committee on Company Law under the
Chairmanship of Dr. J.J. Irani to make recommendations on :
a.
Issues
arising from the revision of the Companies Act, 1956.
- Responses received from various
stakeholders on the Concept Paper.
- Bringing about compactness by
reducing the size of the Act and removing redundant provisions;
- Enabling easy and unambiguous
interpretation by recasting the provisions of the law;
- Providing greater flexibility
in rule making to enable timely response to ever-evolving business models;
- Protecting the interests of stakeholders
and investors, including small investors.
- Any other issue related, or incidental,
to the above.
The
Expert Committee comprises of experts drawn from trade and industry
associations, professional bodies and institutes, chambers of commerce, leading
senior advocates and auditors. Representatives of Government Departments,
regulatory bodies and other organisations were included as Special Invitees.
The Committee deliberated on various issues on Company Law requiring a review
on the basis of comments and suggestions received in response to the Concept
Paper, opinions expressed by experts, professional bodies etc. The Committee
held as many as 17 full sessions over a period of six months and after
intensive study of issues undertaken by the members individually and in groups,
submitted its report on May 31, 2005.
The
Report comprising of thirteen chapters divided into seven parts addresses a
range of issues including a perspective on the scope of Company Law, the issues
concerned with classification and registration of companies, measures to make
the governance in companies more accountable and transparent, measures to be
taken in respect of proper disclosure of related party transactions and
minority interests, a comprehensive view on the range of issues necessary for
enabling protection of small investors, changes desirable in the regime
governing access to capital, maintenance of accounts and conduct of audit of
companies, ways and means of making the process of mergers and acquisitions
more efficient, effective investigation and prosecution for company offences
with proper focus on officers in default and providing a model, balanced and
efficient regime for addressing corporate insolvency.
The
recommendations of the Committee are expected to provide a valuable input in
the preparation of new Company Law. The Report of the Expert Committee will be
available for viewing on the website of the Ministry of Company Affairs at http://www.dca.nic.in.
Ministry of Company Affairs, Government of India
New Delhi, Jyaistha 10, 1927/ May 31, 2005
SMK/sk
(Release ID :9543)