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 and has 7 schedules. However, currently there are only 438 (470-39+7) sections remains 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.
The Ministry of Corporate Affairs thereafter published a notification for exempting private companies from the ambit of various sections under the Companies Act.
The 2013 legislation has stipulations for increased responsibilities of corporate executives in the IT sector, increasing India’s safeguards against organised cybercrime 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.
Salient Features of the Companies Act 2013
- Women empowerment in the corporate sector
- Corporate Social Responsibility
- National Company Law Tribunal
- Fast Track Mergers
- Cross Border Mergers
- Increase in number of Shareholders:
- Limit on Maximum Partners
- One Person Company
- Indian Resident as Director
- Independent Directors
- Rehabilitation and Liquidation Process
- Electronic Mode
- More power for Shareholders
- Prohibits Auditors from performing Non-Audit Services
- Serving Notice of Board Meeting
- Duties of Director defined