Cabinet nods tabling companies bill in Parliament

New Delhi: The Indian cabinet on Friday approved the introduction of the Companies Bill 2008 in the coming session of Parliament, to replace the existing Companies Act, 1956.

"The new bill revolutionises company partnership structures. It will change the nature of corporate governance, and make companies competitive globally," Science and Technology Minister Kapil Sibal said after the cabinet meeting.

The new bill seeks to do away with the minimum paid-up capital requirement to set up a company, as currently needed in accordance with the existing rules, reports IANS.

Sibal said it also advocated allowing individuals to set up a company, and lawyers and chartered accountants to have companies with unlimited partners.

He said the bill would be tabled for consideration and approval in the coming session of parliament, scheduled to begin October 17.

"There will be no restrictions on subsidiaries in the case of companies being set up as per the norms of the new bill," Sibal said, adding the new Act would promote e-Governance and electronic voting by shareholders.

The bill also seeks the tightening of norms for share sales by the firms to owners, and having special courts to deal with the company related disputes.

Additionally, it says, the board of a company should have as many as 33 per cent independent directors