Corporate India will have to brace up for a comprehensively new company law regime from April 1 with the Corporate Affairs Ministry notifying most of the provisions under this new legislation enacted last year.On Wednesday, the Ministry notified 183 sections of this law including those concerning auditor rotation, one-person company and mandatory secretarial audit.This is in addition to the nearly 98 sections that were notified in the first phase. With the latest move, the company law will be substantially operalitionalised from April 1.The rules for the provisions are expected in the next few days.
The areas which are yet to be notified are compromise and arrangement, oppression and mismanagement, winding up, sick companies, special courts, national company law tribunal, national financial reporting authority and investor education and protection fund.With the latest changes, the responsibilities of Boards, committees and those of directors, including independent directors has significantly been enhanced, said Sai Venkateshwaran, Partner and Head, Accounting Advisory Services, KPMG in India.
Auditors’ reporting responsibilities have also been significantly enhanced together with more stringent penalties and independence requirements, he added.Companies will have to ensure compliance from April 1 as there is no specific transition period for most of the provisions, said Lalit Kumar, Partner, J Sagar Associates, a law firm.The exception will only be for the transition period provided in the company law itself (for example one year in the case of Board composition), he pointed out.Dolphy D’ Souza, senior partner, S.R.Batliboi & Co, said it’s absolutely clear that corporate boards will now have to gear up for the new regime from April 1.
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