Sikkim Companies Act 1961 annulled by Companies Bill 2012

December 27, 2012 by iSikkim

Amidst the FDI and reservation in promotions hungama, a bill which brings down curtains one more existing old law of Sikkim was passed along with five other bills without much fuss by the Lok Sabha during its fiery winter session. The month long winter session of the Parliament concluded on December 20.
Two days before the Parliament was adjourned sine die, the Lower House approved the Companies Bill 2012 aiming to replace the archaic Indian Companies Act of 1956. The bill also repeals the Registration of Companies(Sikkim) Act 1961. The Companies Act, 1965 and the Registration of Companies (Sikkim) Act 1961 shall stand repealed, the bill
states. The bill still needs to be approved by the Rajya House where it will be placed for discussion and approval in the next session.
If the Companies Bill 2012 is passed by the Rajya Sabha and becomes an Act upon Presidential assent, companies operating or aiming to work here would no longer have to follow the existing Registration of Companies (Sikkim) Act 1961 as it stands repealed. Till now, companies here had to undertake registration with Law department paying a fee as per the Registration of Companies (Sikkim) Act 1961. Even those companies, outside of Sikkim and already registered under the existing Companies Act 1965, had to register with the Sikkim government if they want to operate here.
An entire floor of the State Law department is devoted on the task of registering companies here. The Registration of Companies (Sikkim) Act 1961 was also protective of local interests. As per the amendment enacted in 2008, no companies would be registered in Sikkim unless it has at least 50 percent local people having Sikkim Subject Certificate or Certificate of Identification in its board of directors.
As per the Companies Bill, companies already registered under the Sikkim Act would continue to be valid. Before our readers assume that the Companies Bill 2012 is all about rescinding the old law of Sikkim, the legislation has been hailed as a great achievement of the Ministry of Corporate Affairs of this year. On its enactment, the new bill will allow the country to have a modern legislation for growth and regulation of corporate sector in India, the Ministry said.
Various reforms proposed in the bill and together with omission of existing unwanted and obsolete compliance requirements, the companies in the country will be able to comply with the requirements of the proposed Companies Act in a better and more effective manner, the Ministry said in its year end review. New concepts of One Person company, Corporate Social Responsibility (CSR), dormant companies, having woman director and e-governance have been introduced in the bill.
However, it has been difficult to extract response on the bill in Sikkim whose existing law has been directly affected by the Central legislation. Those in corporate sector and are aware about the proposed enactment believes that the Companies Bill 2012 would be positive for Sikkim.