The ministry of corporate affairs is hopeful of enacting the Companies Bill, 2009, within

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the current financial year. The ministry’s optimism comes in the wake of the parliamentary standing committee on finance having submitted its report on the bill last week.

“We were determined on tabling the parliamentary committee report on the Companies Bill 2009 within the monsoon session of Parliament and we have done it. Now we will table the revised bill by the winter session and by the end of this financial year you will see the bill becoming law,” secretary of ministry of corporate affairs R Bandyopadhyay told reporters on the sidelines of a CII conference on challenges of the dynamic business environment and need for corporate governance and credible disclosures.

"We are considering the committee's report with an open mind and making legislative vetting wherever necessary,” said Bandhyopadhyay. Bandyopadhyay said Indian companies should voluntarily come forward to implement international financial reporting standards (IFRS). He said the government is keen to implement IFRS and is not under pressure from any quarter to implement IFRS rules, but is doing this in the interest of Indian companies to be at par with other developed countries while competing with the world.

He also said the government is keen to adopt XBRL, the new reporting tool for financial reporting, however the cost aspects are being considered before a final decision can be taken, since the Government would not like to burden companies with a heavy cost burden.

The bill provides for the basic principles for all aspects of internal governance of corporate entities, artic­ulation of shareholders demo­c­ra­cy with protection of the rights of minority stakeholders, substitution of government control over internal corporate processes. It also says that shares with differential voting rights should be done away with and valuation of non-cash considerations for allotment of shares to be through independent valuers.

It also provides for facilitating joint ventures and limiting the number of partners in entities such as partnership firms, banking companies to a maximum 100 with no ceiling as to professions regulated by Special Acts. To check the menace of vanishing companies, under the proposed law, every director would be given a unique direct identification number that would make their identification and tracking easier. The bill will also make it mandatory for listed companies to have 33 per cent independent directors and provide for formation of a one person company (OPC), while empowering the government to have a simpler compliance regime for small companies.

The bill also introduces for the first time in India the concept of class action suits, which would empower investors to sue a company for oppression and mismanagement and claim damages.