companies act 2013 india
Post on 02-Jan-2016
434 Views
Preview:
DESCRIPTION
TRANSCRIPT
Companies Act 2013
The Companies Act
Empowers the Central Government to regulate the formation, financing, functioning and winding up of companies
It empowers the Government to inspect the books of accounts f the company, direct special audits and other investigations into the affairs of the company if they are in any way violating the act
It is administered by the Central Government and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection etc.
Incorporation and the administration of running companies is done by the Registrar of Companies
Objectives of The Companies Act, 1956
Management of companies Control over companies Protection of consumer’s interest Enforcement of proper performance of
duties by management Investor’s protection Full disclosure of information
Companies Bill 2012
On 18th December, 2012, Lok Sabha passed this bill
It has 29 chapters, 7 schedules and 470 clauses as against 658 sections, 13 parts and 15 schedules in the existing Companies Act, 1956
The bill received the President’s assent on 29th August, 2013 and now is on its way to becoming an act
New introductions
Concept of One Person Company E- governance in all company processes Insider trading of securities is prohibited Punishment for fraud Nomination and remuneration committee
Independent Directors- one-third of board members
Corporate Social Responsibility- set aside a certain percentage of profits for CSR
Excessive Bureaucracy- Director Identification Number (DIN)
Women Directors- more number of women reaching higher levels of hierarchy
Class Action Suits- a large group of people can bring a claim to court in which a group of defendants are sued
Company Secretary- Elevates their role to management level
New Definitions Introduced
Associate Company- a company has significant influence over another company, controls 20% of share capital of other company or business decisions
Auditing Standard- standards of auditing for companies or class of companies
Global Depository Receipt- an instrument created by foreign depository and authorised by company making an issue of such depository receipt
Employee Stock Option- option given to directors, officers or employees of a company to purchase or subscribe for the shares of the company in the future
Financial year- a period ending on 31st March of every year in which respect financial statements are made
Turnover- aggregate value of realisation of amount made from the sale, supply or distribution of goods by a company in a financial year
One Person Company- a company which has only one person as the member
Key Managerial Personnel- it consists the following
-the chief executive officer or managing director or manager
- Company secretary
- Whole time director
- Chief Financial Officer
Comparison between the Former and New Act
Basis Companies Act, 1956
Companies Act, 2013
Maximum no. of members in private company
50 200
Minimum no. of members
Public- 7
Private- 2
No change but concept of 1 member company introduced
Maximum no. of directors
12 15, more by passing a resolution
Statutory meeting Public company- mandatory to hold after 1 month but before 6 months from date of entitlement of commencement
No provision
Cross boarder mergers No specific provisions Mergers of Indian and foreign companies permitted and rules to be notified by Central Government
Certification of financial statements
By manager or secretary, if any, and by not less than 2 directors, one of whom shall be an MD, if there is one
Chairman alone can sign if so authorised by the Board
Maximum time for holding first Annual General Meeting
18 months from incorporation or 9 months from closure of accounts, whichever is earlier
9 months from closure of accounts
Mode of notice for holding and Annual General Meeting
Written notice mandatory In writing or in electronic form
Object Clause of Memorandum of Association
Consists of main objects, incidental or ancillary objects and other objects
Contains the object for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof
Issue of preference shares for more than 20 years
Prohibited Permitted only for infrastructure projects
Maximum tenure of auditors No specific provisions For listed and other prescribed companies:
- individual auditors to be rotated after 5 years
- Audit firm after every 10 years
Financial Year and Extension Not to exceed 15 months but can be extended to 18 months by ROC, financial year can end on a date other than 31st March
Financial end on 31st March of every year for all companies and no other provisions for extension are given
First Board Meeting No specific provision Within 30 days from date of incorporation
Restrictions on commencement of business
Provisions applicable to only public companies
Applicable to all companies having share capital
Time gap between two board meetings
At least one meeting every quarter
Not more than 120 days of gap between 2 meetings
Quorum of General meeting of private and public companies
Private- 2
Public- 5
Private- 2
Public- 5 if total members is greater than 1000
-15 if total is greater than 1000 but less than 5000
- 30 if total is greater than 5000
top related