Govt willing to address difficulties in Cos Act implementation

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With stakeholders seeking changes in the new Companies Act, government today indicated its willingness to review the rules to address the difficulties in implementing them.

Government officials and stakeholders, including the representatives of industry associations, held discussions on various issues related to the new Companies Act, whose many provisions came into force from April 1.

A host of issues including those related to independent directors, financial reporting & auditing, related party transactions and Corporate Social Responsibility (CSR) were discussed.

Among others, industry representatives sought changes in rules pertaining to related party transactions and independent directors.

Industry groups - CII, Ficci, Assocham and PHDCCI - emphasised upon the need to ensure progression and development of business, and avoid unintended negative outcomes.

"The law fortunately delegates considerable power to the government to make rules, through which many of the issues highlighted by the industry can be addressed," Corporate Affairs Secretary Naved Masood was quoted as saying in the statement issued by CII.

On the basis of suggestions received, Masood said the ministry would identify major areas of correction and review the rules, wherever required, in order to facilitate smooth implementation of the new law.

Besides, he also clarified that the legislation itself is open to amendments where the difficulties are serious enough to warrant such a course of action, according to the CII statement.

The views were expressed during an interactive session, organised by the the National Foundation for Corporate Governance (NFCG), here.

Meanwhile PHD Chamber of Commerce and Industry (PHDCCI) suggested that implementation of the Companies Act 2013 should be deferred at least for one year to enable industry to fully understand and comprehend its provisions, sections and clauses in details.

CII President Ajay Shriram, Ficci President Sidharth Birla, Assocham President Rana Kapoor and PHDCCI President Sharad Jaipuria, among others, participated in the meeting. Besides, officials of Corporate Affairs Ministry, the Reserve Bank and other ministries were present.

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