Press Information Bureau

Government of India

Ministry of Corporate Affairs

08-December-2011 17:41 IST

The Companies Act, 1956, which is proposed to be repealed by the Companies Bill, 2011, provides for more stringent penal provisions for action against vanishing companies, prevention of frauds etc.

An expert group under the chairmanship of Dr. J. J. Irani was constituted on 02.12.2004 who submitted its report to the Central Government on 31.05.2005. The report seeks to rationalise the existing Companies Act, 1956 in the context of the present economic and business environment.

The Minister of State for Ministry of Corporate Affairs Shri R.P.N. Singh gave this information in a written reply in Lok Sabha today.

ST/bs

Corporate fraud prevention measures strengthened under proposed repeal and rationalisation of the Companies Act framework. Proposed repeal and replacement of the Companies Act, 1956 targets corporate fraud and vanishing companies by preserving and enhancing stringent penal provisions. An expert committee reviewed and recommended rationalisation of the statute to modernise enforcement, compliance obligations and corporate governance while maintaining strong sanctions for fraud and company disappearance.