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Dear Modiji

We are Laalla, the Small & Medium Enterprises who have not borrowed any money from banks nor have we raised any money from public issue. We are those companies who have a small shed in an industrial suburb and are helping your dream “make in India” come true. We are the Laallas or the SMEs.

We are Bhola, the Multi National companies who are here to do business and do not have debts or public shareholding. We were thrown out of India on account of the swadeshi movement, in 1991 after liberalization the country opened the doors for us more Foreign Investment was required since the Forex was depleting. We are quietly and innocently doing business with just two shareholders and are 100% wholly owned subsidiary of a foreign company. We are generating employment and improving the economy of this country. We are the Bholas or the Innocent MNCs.

We are Saalla, the family owned business in India and we do business as husband & wife or two brothers or brother-in-laws or as father and son – all this in a combo pack. There are no external borrowings and it is all in the family. We are quietly doing business for the last few generations and have always been supportive of any government. We are the Saallas or the family business.

We are no. 1, but why no. 142

India ranks number 1 for implementing a mandatory CSR, number 4 for a box ticking corporate governance, number 2 in a whistleblowing business and 142 in ease of doing business, the bad rating in on account of corrupt governance. The country fails the Governance test but it has passed the fortune test only on account of the biggest asset, which is the 1.2 billion population in the country.

Companies Act 2013 – the fear factor

Why this kolaveri to introduce this draconian legislation in this country in a tearing hurry, it is hampering our growth and there is too much of fear while doing business. Why is this law looking at all corporate businessmen as fraudsters out to loot the country? This legislation seems to be drafted with a vengeance as in the past the government has failed to identify scamster before any scam and has failed to form regulations that could stop any scandal in this country and in fact every remedy was becoming law for the regulators. This new Companies Act now requires every entrepreneur along with the auditors of the Company to identify a fraud before it happens – is it fair.

Oxymoron Legislation

Companies Act is one of those many legislations in this country that is not clear, concise and it is framed based on the principle of mistrust. This Act has become a big stumbling block while doing business. You write a slogan a month ease of doing business in India is a nice slogan but it is of no use to entrepreneurs. In fact with stringent provision in the Act business community is planning to ease away existing business and switch over to traditional forms of doing business, which is the sole proprietor and partnership. Nirbhaya for Laalla, Bholla & Saalla Companies

The other slogan Swatcha Bharat may be good enough to build toilets in the country and to clean the streets, where is any legislation to clean the scams, the regulators seem to have opted the punch line “scam may come, scam may go but the system in this country will go on forever”. There are no signs of cleaning this country’s corporate governance ratings and everyone fears to do business in the country. The feeling of businessman is the same as that of women during the Nirbhaya movement. This Companies Act has created the feeling of Bhaya or fear – Oxymoron legislation, as we are yet to figure out whether there is nirbhaya or bhaya.

No Bail for non-compliance

As business organisation we pay tax, provide employment, cater to the inclusive growth and in spite of that why do you want to penalise us for certain administrative and procedural mistakes. What is the use of bringing amendments that will not be of any use to us, it does not take into account the interest of the Laalla, Bholla and Saalla companies. Can you to look into some of these issues that are in our interest and there may be more:

i) Defer the Corporate Social Responsibility issue as there is no regulation to regulate the inflow of funds and spends.

ii) Amend section 117(2) for non-filing of form MGT 14 it will do a lot of good to small business like ours.

iii) Amend the provisions of section 185(2) & section 186(13) for taking and giving loans how can a regulator impose a penalty, which is imprisonment first - explanation later.

iv) Amend section 134(5)(f) and make it applicable to only listed entities, all the responsibility are cast on a director to comply with all applicable laws

v) Amend section 196(4) & 197(3) for closely held private company where is the requirement of monitoring appointment and remuneration of directors;

vi) Provide relief for holding General meetings; amend section 136 and section 101 to 105

vii) Provide relief for private companies

Comply or Perish

Professionals say that Companies Act is tactfully framed to ensure that it explodes in 2015. This Act has enough landmines that can explode and the stakeholders can perish, which you need to look into immediately and amend the Act failing which the Laallas. Bhollas and Saallas will anyways perish but this will mark a dent on this Government. The new slogan that has missed your attention for 2015 applicable to us who are running corporate is Comply or Perish, even a developed country like UK has a slogan that reads Comply or Explain. 

Please amend the Companies Act immediately and spare the Laallas, Bhollas and Saallas of this country. The least you can do is to bring out an amnesty scheme that can pardon the unwitting mistakes that was committed by us from April 1, 2014 to March 31, 2015 while trying to comply with the provisions of this Act.

Affectionately yours laallas, bhollas & saallas

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Category Corporate Law, Other Articles by - Sundharesan Jayamoorthi 



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