Stiffer penalties, including enhanced fines and imprisonment, as a deterrent against violations by corporates and provisions ensuring greater transparency and accountability will form part of the comprehensive Companies Law Amendment Bill that is proposed to be tabled in Parliament in the winter session.
The new Companies Bill, which has taken liberally from the recommendations of the J. J. Irani Committee, will also virtually slash by half the original Act of 1956, which has about 781 Sections, to make the law easy to understand and comply with.
In the new law, the quantum of punishment for violations by corporates will be commensurate with the offences like cheating of shareholders, misinformation, siphoning off of funds and defaults, many of which have criminal intent, Company Affairs Minister, Prem Chand Gupta, told newspersons.
The offences will be categorised and provisions would be incorporated for launching criminal prosecution against offenders.
Details on the nature of the offences and the punishment were being worked out in consultation with various ministries, he said.
We hope to introduce the new companies bill in the winter session of Parliament, Gupta said.