The Companies Bill, which will replace the nearly 50-year-old Companies Act, was passed by Rajya Sabha by voice vote.
Lok Sabha had given its assent in December last year.
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Wrapping up the debate, Corporate Affairs Minister Sachin Pilot termed the passage of the legislation a "historic feat".
"The passage of the Bill will give impetus to the growth momentum," Pilot said, wrapping up the debate, adding, "The focus of the bill is to enhance transparency and ensure fewer regulations, self reporting and disclosure...It will outline the positivity in the economy".
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The new law requires companies that meet certain set of criteria, to spend at least two per cent of their average profits in the last three years towards Corporate Social Responsibility (CSR) activities.
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Pilot said the government accepted about 96 per cent of the suggestions of the Standing Committee and will seek views of stakeholders before finalising rules for the legislation, which is compliant with "latest technologies".
The new law also makes its mandatory for companies that one-third of their board comprises independent directors to ensure transparency. Also, at least one of the board members should be a woman.
It will also encourage companies to undertake social welfare voluntarily instead of imposing the same.
The legislation has provisions for "faster winding up" of firms and has also defined the word 'fraud', Pilot said.
The Companies Bill also provides for setting up of special courts for speedy trial and stronger steps for transparent corporate governance practices and curb corporate misdoings.
In case entities are unable to comply with the CSR rules, they would be needed to give explanations. Otherwise, they would face action, including penalty.
The amended legislation also limits the number of companies an auditor can serve to 20 besides bringing more clarity on criminal liability of auditors.
Hishey Lachungpa (SDF) contended that the provisions of the Bill are detrimental to the interest of Sikkim, as the new law is in conflict with constitutional provisions. Pilot assured him that he would speak to the Sikkim Chief Minister before notification of the Bill and the concerns would be taken into account.
Earlier, participating in the debate, Mani Shankar Aiyar (Cong) urged all members to extend full support to the Bill and asked Pilot to guard against bogus business entities.
Supporting the Bill, V P Singh Badnore (BJP) said a proper check needs to be there to ensure that unscrupulous people do not take advantage of the One-Person company provision.
S P Singh Baghel (BSP) also supported the Bill.
D Raja (CPI) stressed the need to regulate and discipline the corporate sector as it has grown to such a extent that it has started influencing government policy.
"To face the corporate sector, it is a big challenge. I do not know whether his (the Corporate Affairs Minister's) party allows him to take this challenge," he said and sought to know from the government if the new legislation is sufficient to control the corporate sector.
Seeking some changes in the bill, he suggested that nominee directors of financial institutions should be considered as independent directors as they are not appointed by promoters. Besides, there should be a provision for workers nominee in the bill.
Supporting the provision for mandatory CSR spending of two per cent, Raja sought to know if such activities and funds would be monitored.
The CPI member also asked the government to regulate non -banking financial institutions.
P Rajeeve (CPI-M) said the function of economy should not be confined to a few rich, 10 per cent of whom at present own 53 per cent of the country's asset.
He said there is no provision to protect the interest of SCs/STs in private sector.
Vivek Gupta (TC) said the new bill does not talk about promoting entrepreneurs and asked the government to take note of the repeated use of words "as may be prescribed" in the bill.
He sought more clarity on National Financial Reporting Authority (NFRA) even as he praised the government for provisions to protect sick units.
Ashok S Ganguly (Nom) said government should not create obstacles for growth of the industry in the name of regulating "handful wrong-doers".
N K Singh (JD-U) said there was conflict of interest in the bill and added that a subordinate legislation was necessary as the bill has "excessive delegated powers".
Rabinarayan Mohapatra (BJD) also participated in the debate.