Press Information Bureau

Government of India

Ministry of Corporate Affairs

15-March-2012 16:52 IST

Vanishing Companies

The Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh today informed the Lok Sabha that the Companies Bill, 2011 provides for more detailed requirements in the form disclosures/declarations to be made by companies, and their promoters/first directors at the time of Incorporation. Detailed disclosure requirements on continuous basis have also been provided. Additionally, the Bill seeks enhancement of accountability through various clauses of the Bill viz appointment and accountability of Key Managerial Personnel, defining role of independent directors and enhanced penalties/fine/imprisonment etc.

Replying to a written question the Minister said the proposed Companies Bill, 2011 incorporating the above provision was introduced in the Lok Sabha on 14.12.2011 and has been referred to the Parliamentary Standing Committee on Finance. The Bill was introduced after widespread discussions with stakeholders and on the basis of the recommendations of the Expert Committee on Company Law, 2005 headed by Dr.Jamshed J.Irani.

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Corporate disclosure requirements strengthened; enhanced director accountability and penalties to deter vanishing companies under proposed Companies Bill. The proposed Companies Bill tightens Corporate Disclosure Requirements by mandating expanded declarations from companies and their promoters/first directors at incorporation and continuous disclosure thereafter, while increasing organizational responsibility through appointment and accountability of Key Managerial Personnel, defined roles for independent directors, and enhanced penalties to deter vanishing companies.