Lok Sabha approves Companies Bill, 2011
Lok Sabha cleared Companies Bill, 2011.
As per the new legislation:
- It will be compulsory for companies with Rs. 5 crore or more profits in last three years to spend 2% of their average net profit towards Corporate Social Responsibility.
- In case companies not comply with this, they would have to give explanation. If the companies are not able to do the same, they have to disclose reasons in their books. Otherwise, they would face action, including penalty.
- Special courts to be established for speedy trials regarding investments.
- Remuneration of a director of a company should not be more than 5 % of the net profit.
- The number of companies an auditor can serve would be limited to 20
- Annual ratification of appointment of auditors for five years
- A new clause related to offence of falsely inducing banks for obtaining credit.
- Companies which are winding up will have to make payment of two years’ salary to employees.