Keeping in view the developments taking place nationally as well as internationally and with a view to modernize the structure for corporate regulation in India and represent a major reform statement by the Government to promote the development of the Indian corporate sector through enlightened regulation, a decision was taken to revise the existing Companies Act, 1956 comprehensively.

Accordingly, the Companies Bill, 2009 was introduced in the Lok Sabha on 3rd August, 2009 and was referred to Hon'ble Parliamentary Standing Committee on Finance for examination and report. The Hon'ble Committee consulted various Experts and stakeholders on the provisions of the Bill and received a large number of suggestions. The Committee also heard the Ministry of Corporate Affairs on a number of occasions.

After examination of such suggestions and consultation with various stakeholders, the Committee submitted its report to the Parliament on 31s'August, 2010.

Subsequent to the submission of the Report by Parliamentary Committee, some of the Industry Chambers and Experts have drawn attention towards some of the issues like:-

• Norms (Numbers/Attributes /Tenure/ Liability/ Remuneration) relating to Independent Directors
• Rotation of auditor/audit firms
• Corporate Social Responsibility
• Restrictions on Layers of Subsidiaries
• Issue of Equity Shares with Differential Voting Rights
• Number of maximum directorships
• Managerial remuneration limits
Various recommendations made by Hon'ble Committee in its report and the views of the Stakeholders thereof are under examination in the Ministry. The revised Bill is proposed to be introduced in the Parliament in the ensuing Budget Session. The intention is to move forward and bring the long pending legislative reform on the comprehensive revision of the Companies Act, 1956. This interaction will give useful inputs to take a decision on various matters relating to the Companies Bill.

Corporate law reform: proposed overhaul to modernize governance including independent director norms and auditor rotation. Comprehensive revision of company law is proposed to modernize corporate regulation and promote development of the corporate sector through a new Companies Bill. Key reform areas under consideration include Independent Director norms (composition, tenure, liability and remuneration), auditor rotation, a formal Corporate Social Responsibility framework, restrictions on subsidiary layers, differential voting rights for equity, limits on directorships, and managerial remuneration ceilings.