COMPANIES LAW GETS A COMPREHENSIVE MAKEOVER

Here are the Salient features of the New Bill:

1. The Bill has 470 clauses & the entire Bill has been divided into 29 Chapters.
2. The Bill prescribes 33 new definitions. Some of them are Associate Company, Small Company, Turnover, Chief Executive Officer, Chief Financial Year, Global Depository Receipt, Fraud and wrongful gain, etc.
3. The number of Members of Private Companies increased from 50 to 200.
4. Incorporation of One Person Company is permitted. It will be a Private Limited Company.
5. Prescribed class or classes of Companies are required to appoint at least One Woman Director.
6. More Statutory Powers to the Government's Investigative arm Serious Fraud Investigation Office (SFIO) to tackle Corporate Fraud.
7. The limit of maximum number of Companies in which an Auditor can serve is 20 and they are to be Appointed for 5 Years which shall be subject to ratification by Members at every Annual General Meeting.
8. Every Company with Net worth of Rs. 500 crore or more, or Turnover of Rs. 1,000 crore or more     or a Net Profit of Rs. 5 crore or more during any Financial Year to constitute a CSR Committee of     the Board consisting of Three or More Directors, of which at least one Director shall be an                 Independent Director. Companies are required to spend at least two percent (2%) of their Net Profit on Corporate Social Responsibility.
9. The Bill has provisions that allow Shareholder Class Action Law Suits, better disclosure requirements in Financial Statements, disclosure of Interest of Directors, etc.
10. The Bill provided for constitution of NCLT and NCLAT.
11. Mergers and Amalgamations have been now simplified - improved transparency, became more easier and clearer.
12. The New Law mandates payment of two years' salary to employees in Companies that wind up operations.

Now the Bill goes for Presidential Assent.