Companies Act 2013

The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The 2013 Act is divided into 29 chapters containing 470 sections as against 658 Sections in the Companies Act, 1956 and has 7 schedules. However, currently there are only 438 (470-39+7) sections remains in this Act.[1] The Act has replaced The Companies Act, 1956 (in a partial manner) after receiving the assent of the President of India on 29 August 2013. The Act came into force on 12 September 2013 with few changes like earlier private companies maximum number of members were 50 and now it will be 200. A new term of "one-person company" is included in this act that will be a private company and with only 98 provisions of the Act notified.[2][3] A total of another 184 sections came into force from 1 April 2014.[4]

Companies Act 2013
Parliament of India
Territorial extentIndia
Enacted byParliament of India
Assented to30 August 2014
Signed29 August 2013
Commenced12 September 2013 (98 sections)
1 April 2014 (184 sections)
Legislative history
BillThe Companies Bill, 2012
Bill citationBill No. 121-C of 2011
Repeals
The Companies Act 1956
Amended by
The Companies (Amendment) Bill, 2020
Status: Amended

The Ministry of Corporate Affairs thereafter published a notification for exempting private companies from the ambit of various sections under the Companies Act.[5]

The 2013 legislation has stipulations for increased responsibilities of corporate executives in the IT sector, increasing India's safeguards against organised cyber crime by allowing CEO's and CTO's to be prosecuted in cases of IT failure.

Minister of Corporate Affairs, Nirmala Sitharaman introduced The Companies (Amendment) Bill, 2020. It was passed by the parliament in 2020.

History

Indian Companies Act 1956 was an Act of the Parliament of India, enacted in 1956, which enabled companies to be formed by registration, sets out the responsibilities of companies, their executive director and secretaries and also provides for the procedures for its winding.[6]

Mandatory CSR contributions

Section 135 of the Companies Act introduces mandatory Corporate social responsibility (CSR) contributions for large companies, making it the only mandatory CSR law in the world. According to the bill, all firms with net worth above 5 billion rupees or ₹5 billion (approx. $75 million), turnover over 10 billion rupees or ₹10 billion (approx. $150 million), or net profit over 50 million rupees or ₹50 million (approx. $750,000) are required to spend at least 2% of their annual profits of the preceding year. The law requires that all businesses affected establish a CSR committee to oversee the spending. Prior to this law's passage, CSR laws applied to public sector companies only.[7]

Company secretary

Section 203 of the Companies Act 2013 deals with the appointment of a company secretary. The act was the first time in the history of Indian company law has defined company secretary as a Key managerial personnel of the Company.

Indian company law make it mandatory for every Indian listed, and every other entity having more than rupees ten crore (100 million) paid up capital, to have a whole time company secretary.

Major changes in Companies Act 2013
  • Companies (1st amendment) Act 2015
  • Companies (2nd amendment) Act 2017
  • Companies ( 3rd amendment) Act 2019
  • Companies (4th amendment) Bill 2020

Authorities established

See also

Notes
  1. Prasad, Suresh. "Complete list of Sections of Companies Act, 2013". AUBSP. Archived from the original on 29 January 2020. Retrieved 14 May 2020.
  2. "Commencement Notification Of Companies Act 2013" (PDF). Ministry of Corporate Affairs, India. Archived (PDF) from the original on 11 January 2014. Retrieved 11 January 2014.
  3. Varma, Sindhu. "India: New Companies Act, 2013 – The Cat Is Finally Out". Mondaq. Archived from the original on 28 March 2014. Retrieved 27 March 2014.
  4. "MCA notifies 183 sections of Companies Act 2013". Business Standards. 26 March 2014. Archived from the original on 27 March 2014. Retrieved 27 March 2014.
  5. http://www.companiesact.in/Companies-Act-2013/News-Details/545/%20MCA%20lays%20draft%20notification%20us%20462%20for%20Private%20Companies%20in%20Parliament. Archived from the original on 13 February 2015. Retrieved 13 February 2015. Missing or empty |title= (help)
  6. "Business Portal of India : Starting a Business : Regulatory Requirements : Companies Act". National Portal of India. Government of India. Archived from the original on 20 June 2008. Retrieved 17 March 2016.
  7. "A brief history of Indian CSR". 3 July 2015.
  8. https://web.archive.org/web/20180321063535/https://nclt.gov.in/content/organisation. Archived from the original on 21 March 2018. Retrieved 7 March 2019. Missing or empty |title= (help)
  9. "Cabinet To Notify Audit Regulator NFRA, Approves Draft Rules", Bloomberg Quint, 1 March 2018, archived from the original on 2 March 2018
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