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 remaining in this Act. 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 section 1 of the companies Act 2013 came into force on 30th August 2013 . 98 different sections of the companies Act came into force on 12th 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 sections of the Act notified. A total of another 183 sections came into force from 1 April 2014.
Background to the Act
The Act was introduced with the objective of meeting the changed national, international and economic environment and to accelerate the expansion and growth of the economy in India. The Act is armed with 470 sections and was passed to overhaul the previous companies law, the Companies Act, 1956 (Old Act) which had 658 sections.
The Act is a culmination of much deliberation and debate, its provisions having been introduced first in the form of the Companies Bill, 2009, to which amendments were recommended by a Parliamentary Standing Committee, followed by the Companies Bill, 2011. Despite this, the Act has seen more than 150 amendments in the 7 years after its enactment. This does not include clarifications, circulars and orders issued by the executive, which have been a source of constant interpretation and modifications of the law.
Amendments to the Act
(a) Company Incorporation
(b) Commencement of business declaration
(c) Private company exemptions
(d) Related party transactions
(e) Auditors' obligations
(f) Significant beneficial owners
(g) Disqualification of directors
(h) Corporate social responsibility
(i) Voluntary liquidation
Minimum Members for Private Company –
The new act has increased the limit of the number of members from 50 to 200.
Immediate Changes in Stationery –
The letterhead, bills or invoices, quotations, emails, publications & notifications, letters or other official communications, should bear the full name of contact person, address of company’s registered office, Corporate Identity Number ( CIN No. which is a 21 digit number allotted by Government), Telephone number, fax number, Email id, contact website (if any).
Conclusion
What emerges from this discussion is that the Act appears to fall short of providing a stable platform for enabling ease of doing business. The numerous amendments have meant that various provisions have been recast through interpretation and clarifications. This is a far from ideal situation and makes it difficult for businesses and investors to keep pace with reforms.
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