Recommendations of the Report of the Companies Law Committee
Q. Which of the following are the recommendations of the Report of the Companies Law Committee?
1) Managerial remuneration is not to be approved by shareholders
2) Restriction on layers of subsidiaries and investment companies to be removed.
3) Auditor to report on internal financial controls with regard to financial statements.- Published on 02 Feb 16a. 1 and 3
b. 2 and 3
c. 1 and 2
d. All of the above
ANSWER: 2 and 3
Some of the proposed changes are –- Managerial remuneration to be approved by shareholders.
- Restriction on layers of subsidiaries and investment companies to be removed.
- Auditor to report on internal financial controls with regard to financial statements.
- Modify definition of associate company and subsidiary company to ensure that ‘equity share capital’ is the basis for deciding holding-subsidiary relationship rather than “both equity and preference share capital”.
- Provisions relating to forward dealing and insider trading to be omitted from Companies Act. Listed companies are covered under SEBI Act/Regulations.
- No filing fees if financial statements and annual returns filed within prescribed time.
- Foreign companies having insignificant/incidental transactions through electronic mode to be exempted from registering and compliance regime under Companies Act, 2013.
