Companies Bill 2012 passed by Rajya sabha, Rotation process for auditors to be implemented

Finally after much delay The Companies Bill, 2012 which overrides the existing Companies Law, 1956 has been passed in Rajya sabha after almost 7 Months from the date when it got consent of the Loksabha.

The bill is a much awaited one to bring changes to the old structures and rules for running companies and it also added tooth to the government by constituting Law tribunal and Appellate tribunals.

Here are the detailed Highlights of The Companies Bill, 2012:

• The most significant change proposed to be introduced is in the form of constitution of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT).

• The term for auditors has been fixed to five years and after the period the company must rotate the auditor.

• The new law also requires the companies to spend a minimum of 2% of their average profits in the last 3 years towards CSR activities.

All the existing pending issues related to companies will be transferred from Company Law Board (CLB), Board for Industrial and FInancial Reconstruction (BIFR), Appellate Authority for Industrial and Financial Reconstruction (AAIFR) to the National Company Law Tribunal (NCLT).