COMPANIES BILL TO ALLOW E-MEETING OF BOARDS

Indian companies will not have the trouble of getting their directors together at the specified venue for their board meetings once the Companies Bill 2008 is passed.The bill, which has been referred to the Standing Committee of the Parliament, allows company directors to participate in the board meeting through videoconferencing or any other electronic means.The new provision in the proposed company law will not only help directors who are located overseas or those travelling to participate in the meeting, but also companies to save in cost.“It will be an option to companies, who can take advantage of the technology available today,” said Mr Jitesh Khosla, Joint Secretary, Ministry of Corporate Affairs. The regulations regarding recording of minutes and security aspects of such meetings will have to be framed, he said. The bill will also encourage electronic communication between companies and shareholders. Shareholders will be also allowed to vote through electronic means — either through e-mail or through SMS — probably replacing the postal ballot. Addressing a seminar on the Companies Bill 2008, organised by the Bombay Chamber of Commerce and Industry, he said it ensures shareholder democracy and eliminates Government interventions. The bill when it becomes a law, will replace the Companies Act 1956. The bill prohibits companies from raising public deposits. On this, Mr Khosla said companies are prevented from accepting public deposits only under this law. The public deposits are regulated by the Reserve Bank of India, the banking and financial market regulator. Non-banking finance companies, regulated by RBI, can raise public deposits, he said.