Ministry Of Company Affairs Is Now Ministry Of Corporate Affairs
The ‘Ministry of Company Affairs’ has been renamed as the ‘Ministry of Corporate Affairs’
The focus of the Ministry’s working is no longer limited to the administration of companies but has increasingly acquired an all-inclusive role of addressing a wide sweep of functions - Corporate Governance reforms and the emerging legal framework. With the introduction of the ‘Limited Liability Partnership Bill’ proposing a new corporate structure, the amendments in the Acts governing the three professional institutions viz. the Institute of Chartered Accountants of India, the Institute of Costs & Works Accountants of India, and the Institute of Company Secretaries of India, notification of Accounting Standards, the initiatives being taken towards operationalisation of the ‘Competition Commission of India’, etc., the Ministry has, during the period of last two years, re-oriented itself to meet the expectations of a vibrant corporate sector in its march towards the global competitive environment.
The Ministry is engaged in a complete revamp of the legal framework for the corporate sector. A new form of body corporate is proposed to be enabled through the proposed legislation on Limited Liability Partnerships for which the Bill has already been introduced in the Parliament. It is expected that this new framework will provide a significant boost to the growth of professional and knowledge domain in the country in an organised form. Similarly, amendments to the Competition Act, 2002 are at advanced stages of processing to enable operationalisation of a full-fledged Competition Commission of India.
The Companies Act, 1956 is itself under a comprehensive revision.
The notification of Accounting Standards is another milestone to bring the Indian corporate financial reporting systems in line with the international practices. The new Accounting Standards are not only expected to strengthen the system of disclosures for the stakeholders but also bring about parity with the international standards in a significant manner. This has become important in view of the Indian corporate stretching their operations beyond the national boundaries.
Comprehensive restructuring of the legal framework apart, the Ministry is currently involved in restructuring its work processes both at the Head Office as well as in the field set up. The plan includes provision for a ‘new look’ physical infrastructure facilities with new office complexes planned to be constructed at certain places and the others being spruced up matching the corporate expectations.
Establishment of an Indian Institute of Corporate Affairs has been envisioned to provide a think-tank support to the ministry in partnership with the corporate sector in its efforts to translate its vision into a reality. The proposed institute is envisaged to perform multiple roles of knowledge management, think-tank, capacity building for the ministry’s staff and provision of value added services through a single registry in addition to implementation of financial literacy programmes to enhance the investor awareness.
The revised nomenclature is more representative of the new role of the Ministry, captured in the new vision: “To be a leader and partner in initiatives for corporate reforms, good governance and enlightened regulation, with a view to promote and facilitate effective corporate functioning and investor protection”.