The document provides an overview of the key aspects of the Companies Bill 2012 in India. It discusses the new concepts being introduced like one person companies, class action suits, and registered valuers. It also summarizes the major changes proposed around corporate governance, disclosures and accountability, enforcement of laws, investor protection, and restructuring provisions. The bill aims to bring more flexibility, adoption of international practices, and effective protection for different stakeholders while ensuring healthy growth of companies in India.

1. Overview OF
Companies Bill 2012- An Introduction
23rd Feb 2013
New Delhi
2/23/2013

2. "The illiterate of the 21st century will not be those
who cannot read and write, but those who
cannot learn, unlearn, and relearn."
Alvin Toffler – Eminent Writer of USA
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3. The Era of Opportunities
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4. The Companies Bill, 2012
HIGHLIGHTS
29 Chapters, 470 Sections & 7 Schedules
Substantial Part of the Bill in form of rules which are to
be prescribed separately
33 New Definitions
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5. A Paradigm Shift For the Corporate
The Companies Act, 1956
The Companies Bill, 2012
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6. Re-enacting the Companies Act, 1956
THE OBJECTIVE
Bringing Flexibility
& Adoption of Effective protection
Internationally for different
Accepted Practices sections of Society
Self Regulation
Healthy Growth of
with more
India Inc.
disclosures
Stringent
Efficient
Punishment for
enforcement of law
violation
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7. The Companies Bill, 2012
MAJOR CHANGES PROPOSED
Corporate
New Concepts Corporate Liberalization
Governance
Governance
Disclosures & Enforcement of Investor
Accountability Law Protection
Restructuring
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8. Highlights
New Concepts
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9. The Companies Bill, 2012
NEW CONCEPTS
Introduction of One Person Company
One Woman Director on Board of Specific Class
Class Action suits by members against prejudicial acts of the
Company Management
Specification of term “Associate Company”
Introduction of Registered Valuer
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10. The Companies Bill, 2012
NEW CONCEPTS
Fast Track Merger for Holding & Subsidiary Companies, Cross
Border Merger
Introduction of Dormant Company
Use of electronic mode: E-voting, E-participation of experts, Board
Meeting through video conferencing
Maintenance of documents, records, registers, books of accounts,
etc. in e-form
Summary procedure for winding-up of Companies
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11. Major changes towards
Corporate Governance
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12. The Companies Bill, 2012
ENHANCED CORPORATE GOVERNANCE
At least 1/3rd of the directors of the board of listed company
should be Independent Directors
Independent directors can serve 2 consecutive terms of 5
years each on the Board of a Company. Liability of
Independent Directors made limited
Mandatory Internal & Secretarial Audit for prescribed
Companies
Compulsory rotation of Individual Auditors every 5 years & of
Audit firms every 10 years, cap of 20 Companies for audit by a
firm
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13. The Companies Bill, 2012
ENHANCED CORPORATE GOVERNANCE
Quorum of General Meeting of a Public Company to
depend upon the number of its members
Instead of Conducting EGM, Private Companies have the
option of Postal Ballot for business conduction
Restriction on Insider Trading & Forward Dealing by
Directors & Key Managerial Personnel
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14. The Companies Bill, 2012
IMPROVED CORPORATE
ENHANCED CORPORATE GOVERNANCE
GOVERNANCE
Consolidated financial statements of all subsidiaries to be laid
before AGM along with financials, subsidiaries to include
Associate companies & Joint Ventures
Provision to spend at least 2% of Average Net Profit on CSR
by Companies meeting a specific criteria
The Scope of Officer in default has been widened to include
Share Transfer Agents, Registrars Merchant Bankers
For uniformity & better compatibility, Financial year of the
Companies can be from April to March only
exceptions: Foreign Holding/ Subsidiary subject to tribunal’s approval)
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15. The Companies Bill, 2012
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16. The Companies Bill, 2012
SOME LIBERAL PROVISIONS
Bifurcation of the Objects No approval from Central
clause into main, ancillary & Govt. for related party
other objects has been transaction/loan to Director
done away with. Only - (Section 295, 297
objects to be stated in MOA approval has been done
away with)
For paying monthly salary
to Non-Executive director Rationalization of
(Some Limits) – (Section process of removing
309(4) approval has been the name of Company
done away with) by ROC
For holding the place of
profit by the Director to in Enabling provisions
Company or its Subsidiary – for issue of GDRs
(Section 314 approval has
been done away with)
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17. Major changes towards
Disclosures & Accountability
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18. The Companies Bill, 2012
DISCLOSURES & ACCOUNTABILITY
The bill defines the term Private Placement:
PRIVATE PLACEMENT OFFER
CONDITIONS
PUBLIC OFFER
 Offer to section of public Comply with provisions of Bill,
other than QIBs Securities Contract Regulation
Act, 1956 and SEBI Act, 1992
 Not more than 50 number
of people or such higher
number as may be
prescribed YES NO
 In compliance of
prescribed terms &
conditions Conditions
fulfilled?
 Made through Private
Placement offer letter and
not Prospectus
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19. The Companies Bill, 2012
DISCLOSURES & ACCOUNTABILITY
Exit opportunity to
Enhanced Disclosures in the dissenting shareholders if
Prospectus , source of the Company intends to vary
promoters contribution is the objects as specified in
also required to be disclosed the Prospectus
Company Investment Disclosure of interest of
through more than 2 layers every director now
of Investment Companies mandatory & not
not allowed (exemptions discretionary
available)
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20. The Companies Bill, 2012
DISCLOSURES & ACCOUNTABILITY
Duties of Directors towards Disclosure of the Risk
the Company now Management Policy in the
prescribed Board Report
Scope of officer in default
widened to include directors
Streamlined procedure &
aware of the default by way of
disclosure with regard to their participation in the board
Related Party Transactions - meeting or receipt of minutes
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21. The Companies Bill, 2012
DISCLOSURES & ACCOUNTABILITY
Immunity to Independent & Non-
Executive Directors not being
Promoters or KMPs (Liability only if the act
occurred with their knowledge attributable
through Board Process)
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22. Major changes towards
Compliances & Enforcements
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23. The Companies Bill, 2012
ENFORCEMENT OF LAW
Establishment of National Company Law
Tribunal
Establishment of Special Courts, Mediation &
Conciliation panel for speedy trial of offences
under the Act
Concept of fraud is introduced, Stringent
Punishments in case of fraud & coverage of
more activities under fraud
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24. The Companies Bill, 2012
COMPLIANCES & ENFORCEMENTS
Imprisonment & twice the prescribed penalty
in case of repeated defaults committed within
a span of 3 years
Offences punishable with fine or
imprisonment or both to be compounded only
by Special Courts
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25. The Companies Bill, 2012
ENFORCEMENT OF LAW
Serious Fraud Investigation Office (SFIO)- A
separate agency for investigation of Company
related frauds
• Centralized Agency for investigating the affairs of the Company
• The power of other authorities for investigation shall be stopped once the
case has been authorized to SFIO
• Power to Arrest
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26. Major changes towards
Investor Protection
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27. The Companies Bill, 2012
INVESTOR PROTECTION
Class Action suit empowering minority shareholders
Provision for purchase of minor shareholding in case of
acquisition
Mandatory Exit Opportunity to the dissenting shareholders in
case of Change of Objects or terms of Contract in Prospectus
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28. The Companies Bill, 2012
INVESTOR PROTECTION
Shares in respect of which unpaid/unclaimed dividend has been
transferred to IEPF shall also be transferred to IEPF
Person claiming Share/amount in the Unpaid Dividend Account
that got transferred to IEPF may apply to the authority for the
money claimed/Shares
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29. Highlights
Restructuring
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30. The Companies Bill, 2012
RESTRUCTURING
Process of
revival & Provision for
rehabilitation of Cross Merger
Sick Amalgamations
Companies
overhauled
Easy merger Abolition of the
of Holding & concept of
Subsidiary treasury shares
Companies -
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31. The Elevated Horizon
The Elevated Horizon
For For For
For Investor
Entrepreneurs Regulator Professional
16.01.2010

32. The Elevated Horizon
For Entrepreneurs
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33. The Elevated Horizon
FOR ENTREPRENEURS
Self Regulatory Regime One Person Company
Simplified merger of Small
Special Provisions for Small
Companies & Holding/
Companies
Subsidiary Companies
Recognition of Partnership
Liberalization of Related
or Association of up to 100
Party Transactions
Members
Time Bound rehabilitation of
Sick Companies
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34. The Elevated Horizon
For Regulators
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35. The Elevated Horizon
FOR REGULATORS
Towards the NATION
 More avenues for global representation owing to the
streamlined procedures
 Flexibility in functioning due to framework of rules
 Increased time value due to Self Regulatory regime
with dictum of “
 Exhaustive database creation for Nation Building
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36. The Elevated Horizon
FOR REGULATORS
Towards the ENTREPRENEURS
 Growth orientation & Liberalized outlook
 Automated systems & self governance regime
 Increased Quasi Judicial Authorities for faster action
 More health checks for corporates and more shelf life
through rehabilitation & restructuring modes
 Facilitation of inorganic growth through relaxed
provisions
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37. The Elevated Horizon
FOR REGULATORS
Towards the INVESTORS
 Systematic Dispute Management System
 Ability to peruse Class Action Suits
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38. The Elevated Horizon
For Investors
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39. The Elevated Horizon
FOR INVESTORS
 Better participation in decision making due to e-voting
regime
 Increased Investor Awareness by availability of more
information on line on public portals
 Responsive Investor Protection
 Better dissemination of information from India Inc.
 Ability to file Class Action Suit
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40. The Elevated Horizon
For Professionals
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41. The Elevated Horizon
For Professionals
Slates are being re-written, you should be the torch bearer to
guide the corporates, professionals and investor community
New law brings new interpretations and issues leading to
increased need for opinions and advisory
Increased compliance & stringent penalties will stimulate the
role of Company Secretary
Increased shareholders rights and activism will lead to greater
focus on company-investor relationship
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42. The Elevated Horizon
For Professionals
New law brings everyone at par, presents golden
opportunity for young professionals
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43. Companies Bill 2012
“Belief in self & not in legal
“OPPORTUNITIES AHEAD FOR
support”
COMPANY SECRETARY ”
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44. Opportunities ahead
“
Current Role
Future Ahead
• Certification
• Compliance Certificate • Secretarial Audit
• Minutes of the Meetings • Corporate Compliance
• Maintenance of Management
Statutory Documents • Entire Company Law
• Annual Filling • Strategic Advisory
• Routine Procedural • Vigilance Officer
Works
2/23/2013

45. A stitch in time saves nine
“ secret of & not in in life
“TheBelief in selfsuccesslegal is
for a man support”
to be ready for his
opportunity when it comes
-Benjamin Disraeli
Ex – British Prime Minister
Thanks
Pavan Kumar Vijay
2/23/2013