The Hindu Business Line : Sleek version of Cos Act on cards

A SLIMMER version of the company law is on the cards, which is expected to be more in tune with current times. The Department of Company Affairs (DCA) is working on a concept paper that may lead to a trim and slender version of the Companies Act.

Currently, the Companies Act, 1956 has more than 700 sections that corporates have to comply with.

"Our endeavour would be to make the Companies Act a slim legislation. The larger action could be done through the rules that are framed for the Act. We are working towards a concept paper for this purpose," the DCA Secretary, Mr M.M.K. Sardana, told a national conference on "Legal Compliance for Sustainable Business Growth", organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

He said that the concept paper would not only incorporate the essential features of the existing Companies Act, 1956, but also the salient features of the controversial Companies (Amendment) Bill, 2003 (which was withdrawn from Rajya Sabha) and the recommendations of the second report of the Naresh Chandra Committee.

Mr Sardana declined to give a timeframe by when the concept paper would be ready for public comments. He also said that the views of all stakeholders would be obtained before the concept paper is finalised.

When asked whether the concept paper would look at framing of a new legislation (like the 1997 Bill) or only bring about amendments to the existing Act, Mr Sardana told newspersons, "it is too early to make comments on how the process would take shape" and that one would have to wait for a draft law. "Our effort would be to first come up with a concept paper and then proceed from there," he said.