The Companies Act, 2013 which replaces the Companies Act, 1956 incorporates various provisions aimed at strengthening of corporate governance in companies in India. These provisions include, inter-alia, enhanced responsibilities for the Board and its committees like the Audit Committee and Nomination and Remuneration Committee, enhanced disclosures to stakeholders, appointment of Independent Directors, stricter norms for ensuring independence and accountability of auditors and greater level of investor protection.

 The Indian Accounting Standards (Ind AS) have also been notified in February 2015, and are expected to contribute to improved corporate governance. The number of activities under Corporate Social Responsibility has also been expanded. Further, Companies Act, 2013 has been amended to do away with mandatory requirement of minimum paid up capital for companies, common seal for companies and the requirement of filing declaration of commencement of business with a view to facilitate doing business using company as a vehicle. Incorporation process for a company has been simplified through the introduction of an integrated e-form INC-29, amongst other steps.

 This information was given by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today.

Corporate governance reforms enhance board and committee duties, auditor independence, and simplify company formation procedures. Reforms strengthen corporate governance by increasing Board and committee responsibilities, enhancing stakeholder disclosures, securing auditor independence and appointment of Independent Directors. Indian Accounting Standards have been notified to improve reporting, CSR activities have been expanded, and amendments simplify company formation by removing minimum paid-up capital, common seal and commencement declarations and introducing an integrated incorporation e form.