The Indian government plans to regulate all foreign companies and businesses who have operations in the country through online and electronic means. This move applies to all companies established in foreign countries but have online operations in the country but are not registered here. This will be implemented under the Companies Bill 2012 which has been approved by the Lok Sabha but is yet to get a nod from the Rajya Sabha of the Parliament.
The government has taken this initiative all thanks to scores of businesses and enterprises conducting various forms of online activities and are not registered with the government departments. The move will also help the country legally regulate the various operations of foreign online companies who are not required to register officially with the Registrar.
“The Companies Bill, 2012, Clause 2(42) defining ‘foreign company’ has widened the scope of foreign companies to include companies operating through electronic mode,” Corporate Affairs Minister Sachin Pilot today said in a written statement to the Lok Sabha.
“Further, the provision in respect of inspection, inquiry and investigation proposed in clause 206 to 229 of the proposed Bill shall also be applicable to foreign companies,” the minister added. He also stated later on, “453 foreign companies were registered in the country in the last two financial years. While 231 firms were registered in 2011-12 period, the number stood at 222 during 2010-11 fiscal.” The Companies Bill 2012 has previously also take other strides in bringing together the corporate world with effective governance.
I would tout this move as a good one as it will directly lead to the protect the interests of the consumers, general public and investors of India. This will further strengthen the investors’ confidence. After all, that is what the Corporate Affairs ministry stands for.
I might add that the government has been taking footsteps towards embracing technology with efficient governance methods. Recently, IT Minister Kapil Sibal had said that India is working towards framing a clear and definite cyber security policy, which I think is welcome given the nature of this Digital Age. To speed up fraud detection, the Reserve Bank Of India had performed a few policy reforms regarding online money transfer.
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