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Govt-Appointed Panel Might Aim To Have Better Regulatory Framework For Unlisted Cos

Concerns over the fundraising and corporate governance practices of some start-ups and other unlisted firms sparked the current development

Govt-Appointed Panel Might Aim To Have Better Regulatory Framework For Unlisted Cos

Start-Up Team

POSTED ON October 17, 2023 6:00 PM

A government-appointed panel is likely to look at the possibility of putting in place a more rigorous regulatory framework for unlisted companies, according to a senior official. 

While there is a strict regulatory framework, including disclosure requirements, for listed companies, the norms are not that stringent now in the case of unlisted companies. 

Against this backdrop, the Corporate Affairs Ministry has plans to introduce stricter norms with respect to unlisted companies, including large startups. 

The Company Law Committee (CLC) is likely to discuss the possibility of having more rigorous regulations for unlisted companies, especially large ones and big startups, the official in the know said. Various regulatory aspects, including those related to corporate governance, are expected to be looked at by the panel, the official added. 

At the same time, efforts will be made to ensure that there is not too much of a regulatory burden and promote the ease of doing business. In recent times, there have been concerns about corporate governance practices and funding issues at certain start-ups and other unlisted entities. 

The corporate affairs ministry is implementing the Companies Act, 2013, under which more stricter rules might be introduced for unlisted companies. The CLC was set up by the corporate affairs ministry in September 2019. 

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