Comments
Private companies -- in which public interest is non-existent -- should not be subjected to mandatory auditor rotation, requirement of a woman director on the Board or be covered under class action suits.
A submission to this effect has been made by the Confederation of Indian Industry (CII) in a letter to the Corporate Affairs Ministry.
The apex industry chamber has listed out nearly 20 provisions of the new company law from which "non-public interest private companies" should be exempted.
The exemption should be available for all private companies that are neither subsidiaries of listed companies nor have substantial public borrowings, the chamber has said.
CII considers these nearly 20 provisions as cumbersome for compliance resulting in hardships for such private companies.
The 20 provisions from which exemptions have been sought include postal ballot, annual returns, filing of profit & loss accounts with the registrar of companies, register of directors and key managerial personnel.
FEELING THE HEAT
Private companies are feeling the heat of the new company law provisions as no distinction has been made on the basis of class of companies as regards mandatory procedural compliances such as shareholders’ approvals, filing of forms and disclosures.
Being private has brought on an added set of compliance requirements and costs for such companies, say legal experts.
This is because the new company law looks to subject private companies to greater control and regulations.
While information released by listed and other public interest entities would serve interest of some of the stakeholders, detailed information with respect to private companies (non-public interest) would not be of any use, the CII has said.
This would only cause procedural delays for private companies due to time consuming approvals, or result in unnecessary information being released in public domain, Chandrajit Banerjee, Director General said in the CII letter to the Corporate Affairs Ministry.
srivats.kr@thehindu.co.in
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.