Regulations that govern companies to get a ‘Make-over’

Author: Anurag Bhullar

‘The Companies Act 1956’ is likely to get replaced by ‘The Companies Bill, 2008’ if the bill gets approved in the Parliament. The bill was presented in Lok Sabha today by Prem Chand Gupta, Minister of Corporate Affairs. The new set of guidelines is more apt at in providing a modern environment to operate in.

The bill however stands minimal chances of getting cleared in the current session. Possibly, it will be taken to a standing committee, which would study it and suggest changes, it thinks are necessary. The whole task of incorporating the recommendations and its final presentation before Parliament can take a long period, of up to two years.
	Such a revisit to the 1956 Act was needed because of increase in both the number of companies in the country and complexity of the various sectors. In 1956, the companies in India stood at 30,000 but now the number has swelled to 7,00,000. This called for a systematic set of changes in the previous guidelines, to make the domestic Industrial sector more growth intensive. Some of the amendments desired are related to speeding the process of incorporation and assigning a unique identification number for every company’s director, DIN.