Seeking a comprehensive review of the new Companies Act, industry body CII today said that an "unclear and cumbersome" law would make things worse for the corporates.
"The government needs to trust industry. One or two incidence of corporate malfeasance should not lead to mistrust of the entire spectrum of corporate India and should not make normal business activities difficult," CII President Ajay Shriram said in a statement.
"While the country is looking to improve its image after a series of setbacks like retrospective changes to tax laws, poor economic conditions, etc, an unclear and cumbersome Companies Act would make things worse," he added.
Many concepts are being introduced in the legislation for the first time and practices with respect to these need to be allowed to evolve over time, he said.
CII has made a detailed representation to the government on the subject and has sought adequate legroom for companies to comply with the norms on corporate social responsibility as well as clarity with regard to appointment of independent directors, among others.
Shriram observed that the "rush to notify the Act has introduced disruptive features making it harder for corporates to ensure compliance".
"In absence of any unambiguous clarifications from the Ministry of Corporate Affairs, companies are resorting to different interpretations of the provisions," he said.
The Companies Act, 2013, whose many provisions have come into force from April 1, provides for wide ranging changes in the way corporates are governed in the country.