VIA Taxation & Corporate Law Forum & The Institute of Company Secretaries of India (Nagpur Chapter)
jointly organized a programme on “What Company Directors should know about their responsibilities
under the New Companies Act 2013″
STRINGENT DISCLOSURE REQUIREMENTS IS IMPOSED BY NEW COMPANIES ACT-2013
Ashish Garg renowned Company Secretary and Central Council member of ICSI while speaking on “What Company Directors should know about their responsibilities under the Company Act 2013” Jointly organized jointly by VIA Taxation and Corporate Law forum and Institute of Company Secretaries of India, Nagpur Chapter begun his presentation with the background from Satyam to Kingfisher, which has resulted in the birth of the new Company Law. He said that the former company law of India 1956 was disgustingly deficient in many ways. The new CA-2013 can be seen offering a landmark piece of legislation which duly and explicitly clarifies, redefines and enlarges the ambit of duties and responsibilities of the directors.
He admitted that there are Problems in the new act but in the long run the Companies Act of 2013, would ensure better corporate governance and security, and would provide best possible growth and prosperity in the corporate world of India. Mentioning of DIN with the name of the directors have been made mandatory, he informed the audience and cautioned them to cancel the duplicate DIN if any have been issued errorneously. For the first time, specific sections discussing about the duties of the Director has been incorporated in the Companies Act, he revealed to the industrialist. Related party disclosure have been given high emphasis in the new act which may not suit the Indian industrialist, he opined. The new companies act has given more relevance to the disclosure requirements and more disclosure would result in more compliance cost and non compliance would entail penal consequences, he expressed. Penalty has become an integeral part of each & every provision of the new act and considering the heft consequences involved the cost of compliance is nothing when compared to cost of penalty involved, he said. There are instances when the board of director doesn’t accept the resignation of any director in the board meeting even then an individual director can escape his responsibility by filing his resignation form directly by virtue of specific provision in the Act, he replied in a question to the audience. He further highlighted the importance of timely filing of annual return and the role of independent directors in the company. The independent directors cannot even escape from the liability by making a plea of his ignorance or non presence in the meeting, he emphasized. Speaking on much talked about CSR fund, he clarified that mere donation of CSR fund is not sufficient but the end use of the fund is also the responsibility of the company in such cases. He further discussed the provision with regard to women director & requirement of disclosing interest in related party transaction and the penal consequences involved for non compliance thereof. He welcome the move to relax the conditions of loans acceptance from relatives in the case of private limited companies. However, he categorically criticized the restrictions imposed u/s 185 on giving loans or guarantee to other companies. It would be business restrictive provision and would be the biggest hurdle in the growth of corporate world, he expressed his concern. He asked the industries association to make a strong representation to the government against section 185 and to take a strong view as it is going to hamper the business growth. On the penalty front, he said the penalty in the range of 1 lacs to 2 crore or even more and prosecution ranging from 6 months to 10 years are there to ensure the better compliance by the corporate India.
Concluding his presentation he said, that the new Indian Companies Act of 2013 is is in line with the best prevailing practices across the globe. Categorization of directors as directors having pecuniary relationship with the company, and the independent directors, have been properly considered under this mature legislation for directors. He further expressed that CA-2013 sincerely seeks to make the corporate management and governance in India rather efficient, fully accountable, transparent, and maximally beneficial to all stakeholders and professionals.
Earlier, Anill Parakh, Vice President VIA, welcome the speaker with a floral bouquet. CA. Naresh Jakhotia- Convenor VIA Tax & corporate law forum conducted the proceeding whereas CS. Manish Rajvaidya gave the concluding remarks & formal vote of thanks.