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With the Cabinet clearing the modified Companies Bill, activity has gathered pace in the Ministry of Corporate Affairs (MCA). The ministry has appointed an advisory group to verify and oversee the rule-making process of the new Companies Act.
“An expert group comprising seven to eight people has been formed. This group will verify the various rules under the Act and give suggestions,” said an official familiar with the development.
Representatives of professional bodies such as the Institute of Company Secretaries of India (ICSI) and Institute of Chartered Accountants of India (ICAI), top securities lawyers and other company law experts are part of this group. The rule-making process is significant, as they will determine the manner in which the law is implemented, say experts. The Companies Bill, 2011, aimed to give a modern legislation for growth and regulation of corporate sector was approved by the Union cabinet earlier this month with certain modifications. The Bill which is expected to be tabled in the Parliament during the Winter session, redefines the role of auditor, makes companies answerable towards corporate social responsibility. It also contains new provisions governing inter-corporate loans and responsibility of directors and private placements.
The Bill, which will become law after Parliament approval, provides the broader policy direction on these issues. The rules will determine the course through which these objectives are achieved. After verification by experts, the draft rules are also expected to be put up on the MCA website for public comments.