President signs new companies bill into law

The Companies Bill, 2013 has received President's assent, making it into law replacing the Companies Act, 1956 that regulated the country's corporates.

Pranab Mukherjee signed the Companies Bill 2013 into law on 29 August, a government official said.    

The new legislation provides for sweeping changes in the way companies operate and are regulated in the country and the ministry of corporate affairs is in the process of making the rules for the new legislation.

It has provisions provides for empowering investors against any frauds committed by promoters and seeks to bring in greater transparency in corporate governance matters,

It also encourages companies to have women directors and requires companies to spend on social welfare activities.

Besides, it also provides about three dozen new definitions, including for terms such as frauds, promoters, turnover, small companies, associate companies and employee stock options.

The draft rules, expected to be ready in two weeks, would be put out on the ministry's website. After this, stakeholders and general public, among others, would have up to 60 days to provide their comments.    

Corporate affairs minister Sachin Pilot had earlier said the government plans to adopt a transparent and interactive process to finalise a detailed set of rules to be adopted under the new companies bill.