Highlights of New Companies Bill, 2011, The New Companies Bill, 2011 is likely to be introduced in the Parliament in Winter Session.
1. Mandatory rotation of Independent Directors in every 10 years
2. Periodic rotation of Auditors after every 4 years
3. Profit-making companies above a certain threshold will have to spend at least 2% of the average profits in the preceding three years on CSR activities. This provision is not mandatory
4. Exit option must for minority shareholders in case of company gets new promoters
5. Definition of an “associate” company fixed at 20% of voting rights
6. Shareholders are now empowered with tools of class action suit like in US
7. Creditors are empowered to order restructuring if net worth of the borrower company falls
8. Shareholders’ approval must for Inter-corporate loans
9. It proposes to tighten laws for raising money from the public
10. The Bill aims to give more powers to the Serious Frauds Investigation Office (SFIO)
11. It seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence
12. New corporate responsibility (CSR) framework, greater shareholder democracy and stricter corporate governance norms
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