New Corporate Law in India

The companies Bill passed by the Indian parliament in 2012 has in fact replaced the old corporate laws which were more than a century old. In fact the bill was targeted to make considerable improvements in the spheres like the corporate governance, much more protective measures for the investors, fight against fraudulent practices, and moreover, simplifying the processes for both creation and closing of the business.

The corporate lawyers are of the opinion that the new corporate legislation has increased professionalism and added sophistication to business dealings.Morever it has given a clear definition to many of the aspects concerning the corporate governance. This bill has given a new status to corporate social responsibility in relation to the size of the companies in the sense that companies of a certain sixe are required to make a percentage of their average net profits towards corporate social responsibility programmers.

The new law highlights the fact that there should be a higher level of accountability from the part of the shareholders in company boardrooms.  With the implementation of the new corporate law, the directors will also become accountable for the decisions of the board. This provision has definitely made an active role in the company rather than acting as a rubber stamp in the affairs of the corporate companies.

The other highlights of the new corporate law:

·  With this new corporate law, now the corporate companies can have a maximum of 15 directors. Out of the 15 one must be a woman.

·  He law highlights the fact that the listed companies should have a minimum of three directors.

·  The law also underlines the fact that the company finances should be audited regularly with the frequent replacement of the auditors.

·  And moreover, the company CFO will be held accountable for the contents being given in the financial statements.