New Delhi: It’s been in the making for two years now, but Indian corporates will have to wait for another year for a new company law that seeks to keep the government from interfering in the everyday affairs of companies.
The new law, based on the recommendations made by the J.J. Irani Committee in 2005, is going through inter-ministerial discussions before it is placed in Parliament.
“My target was to introduce the bill in the monsoon session of Parliament. But as it will replace an old law which has been amended 25 times, we would be able to place in Parliament only in the winter session,” corporate affairs minister Prem Chand Gupta said on the sidelines of a seminar organised by the Institute of Trade and Industrial Development.
“By the middle of next year, you will have a new company law,” he said.
Gupta said the number of provisions in the new Act would be one-third of the 786 provisions in the existing law.
The new law would be easy to understand and will do away with the government’s role in the everyday affairs of the companies, he said. “Government would only step in when there is default or defiance,” Gupta added.
He said the new law would move from the system of approvals to self-regulation.
The Minister said that Limited Partnership Bill, which was introduced in Parliament in December, is likely to be passed in the winter session. At present, the Parliamentary Committee is examining it.
When passed, the Bill would allow partnerships where the liability of partners would be limited to their responsibility in the organisation. It would also allow partnerships with unlimited members.