The Indian cabinet has cleared the new company amendment bill on Friday. The amendments are made in the larger interest of companies and corporate sector. These amendments would provide good governance and protect the interests of investor. They companies can now enjoy electronic documents for fast delivery of their data. The proposed bill will be introduced in the parliament in the forthcoming session of the house next month. It takes four years to complete the discussion on the proposed amendments and review the six-decade-old Companies Act, 1956.
The new amendment allows up to 100 partners in partnership firms as compared to 20 now. It also relaxes the norms to elect director. A number of changes are proposed on the basis of recommendations of the Irani Committee. The committee submitted its report with its recommendations on May 31, 2005. The bill reduces the government role in the affaires of companies. The new law would increase the use of e-governance and internet technology in corporate affaires. The bill will also ease the norms for individual entrepreneurs to set up their own companies by allowing single person company.
The president, Institute of Chartered Accountants of India, Ved Jain said that the proposed amendments in the company act would help the companies to take fast decisions. Many other companies have also welcomed the proposed amendment bill.
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