The salient features of the new Companies law are:
-- Companies are required to spend at least two percent of their net profit on Corporate Social Responsibility.
-- To help in curbing a major source of corporate delinquency, introduces punishment for falsely inducing a person to enter into any agreement with bank or financial institution, with a view to obtaining credit facilities.
-- The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as 20.
-- Independent directors' shall be excluded for the purpose of computing 'one third of retiring directors'.
-- Appointment of auditors for 5 years shall be subject to ratification by members at every Annual General Meeting.
-- 'Whole-time director' has been included in the definition of the term 'key managerial personnel'.
-- The term 'private placement' has been defined to bring clarity.
-- Maximum number of directors in a private company increased from 12 to 15 which can be increased further by special resolution.
-- Financial Year of any company can end only on March 31 and only exception is for companies, which are holding / subsidiary of a foreign entity requiring consolidation outside India, can have a different financial year with the approval of Tribunal.