Rajya Sabha, on Thursday, ratified The Companies Bill, 2012, as passed by the Lok Sabha about eight months ago. As and when consented to by President Pranab Mukherjee, the new legislation will replace the 57-year-old Companies Act, 1956.

Piloting the Bill, Corporate Affairs Minister Sachin Pilot said the new regime would seek to usher in more transparency and governance in the corporate bodies besides creating the necessary environment for growth in the present global structure.

In 1956, there were just about a few thousand companies in the country. The number had now grown to more than a million now, he pointed out. The government was in favour of a fewer regulation and self-regulation by the business houses, he added.

The objective was also to help small one-person companies to access facilities and credit, besides ensuring one minimum woman director in certain prescribed class of companies. The effort would also be to encourage these companies to give employment to all sections of society.

The Bill, as ratified by Parliament, prescribes an expenditure of 2 per cent of profits on CSR (corporate social responsibility) activities in their respective areas of operation. These would have to be outcome and timeline-driven with details posted on websites.

It provides for formation of welfare trusts which could buy shares of the company and be part of the decision-making process, Mr. Pilot clarified in response to questions that there was no provision for giving representation to employees on the board of directors.

Once enacted, the law will also provide for faster liquidation, mergers and acquisitions.

He promised to consult all stakeholders while framing the rules.