Wednesday, May 23, 2018
CII Wants to change the Section New Companies Act.
We all know that the companies wanted a relaxation in the condition in which they have to disclose the details of the political party to whom they provide funding, as required by the company law. This condition is raised to the government also but unfortunately it is rejected by them.
The corporate affairs ministry cannot amend the law passed by parliament, as the ministry is under the process of finalizing the rules that will govern the new Companies Act.
Confederation of Indian Industry (CII) wants to change the Section 182 (3) of the new companies act, as it says that the companies should disclose the names of the political parties in their profit and loss account, to whom they are providing funding. They have written letters regarding the same to the government, to change the act, but the government rejected the condition.
As per the earlier act, companies have to disclose the name of the person, instead of the name of a political party. It was believed that there is a contradiction between the rules governing the funding of political parties directly and through trusts. According to the CII as per the act of 1956, that govern electoral trust don’t require disclosure of the names of the political party.
According to the industry, there's a misalignment between the two sets of rules, thus this clause should be clarified by the rules of the new act.
As per the ministry, the concerns of industry are valid in terms of a misalignment between the company’s law and the rules on disclosure of political funding through trusts. According to the Ministry of finance, it should clarify in their scheme that the changes must be made to align it with the new Companies Act,"
Now the government wants the companies provide the name of the political party and instead of the name of the person, to whom they are funding.
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