The “Companies Bill, 2008,” a potentially significant piece of legislation for Indian companies has reportedly cleared the Union Cabinet and is now headed to the Parliament for consideration. According to various reports, there are great expectations in India for the new bill, which one commentator said may be the most significant piece of corporate legislation in the past few decades.
According to an article in the Business Standard, the current company law in India contains many antiquated provisions left behind by the British, even after the UK has repeatedly replaced its company law.
Of particular note in the Business-Standard article, the bill reportedly permits a “group of Shareholders to be enabled to take legal action in case of any fraudulent action on the part of company and to take part in investor protection activities and ‘Class Action Suits.’” In addition, it recognizes insider trading by company directors and “KMPs” as a criminal offense.
