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Outlines

Introduction of Companies Act, 2013 with up- to – date amendments

History of Companies Act, 2013 in India
Essentials of Companies Act, 2013

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 The word ‘company’ was derived from the
Latin words
Com=with or together : Panis =bread

A company can be defined as an "artificial

person", invisible, intangible, created under
law, with a discrete legal entity, perpetual
succession and a common seal.

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 Corporate Personality

Common Seal

Limited Liability

Perpetual Succession

Separate Property

Transferability of Shares

Capacity to Sue and Be Sued

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 The Indian company law begun with the
companies act 1850, modeled on British
companies act 1844
The Indian Companies act of 1913 was based on
the British Companies act of 1908
The Indian Companies act, 1956; April 1, 1956
The Indian Companies act, 2013

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 Passed in Lok sabha: December 18, 2012

Passed in Rajya Sabha: August 08, 2013

Total number of sections: 470

Total number of chapters: 29

Total number of schedules: 7

Effective from September 12, 2013

J.J Irani Committee

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 To promote the development of the economy

To encourage transparency and accountability

To promote high standards of corporate governance

To recognize new concepts and procedures to support

business while protecting interests of all the
stakeholders

To set up institutional structure in the form of various

authorities, bodies and panels (NCLT and NCLAT)

To enforce stricter action against fraud and gross non -

compliance with company law provisions

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 One Person Company is a hybrid of Sole-
Proprietor and Company form of business,
and has been provided with
concessional/relaxed requirements under the
Act.

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 Associate company in relation to another
company, means a company in which that
other company has a significant influence,
but which is not a subsidiary and joint
venture company

Significant influence means control of at least

twenty per cent of the total share capital, of
business decisions under an agreement

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 Where a company is formed and registered under the
new law for the future project of to hold an asset of
intellectual property.

Inactive company is one which has not been carrying

on any business operation, or has not made any
significant accounting transaction, or has not file
financial statements and annual returns during for the
last two financial years.

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 Every listed company shall appoint at least
one woman director
Every other public company having paid up
share capital of Rs. 100 crores or more or
turnover of Rs. 300 crore or more as on the
last date of latest audited financial
statements, shall also appoint at least one
woman director.

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 Mandatory rotation of auditors for the listed and
other specifies class of companies

Individual auditor to be rotate after a term of five

consecutive years

Audit firm to be rotate after two terms of five

consecutive years

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 Vigil (Whistle Blower) mechanism provides a
channel to the employees and directors to
report to the management concerns about
unethical behavior, actual or suspected fraud
or violation of the Codes of conduct or policy.

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 Secretarial Audit is a process to check
compliances made by the Company under
Corporate Law & other laws, rules,
regulations, procedures etc. It is a
mechanism to monitor compliance with the
requirements of stated laws and processes.

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 The Act simplified procedure for merger and
amalgamation of certain class of companies
such as holding and subsidiary and small
companies

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 Minimum Capital Requirement: Private or public
company can be incorporated without the need for minimum
paid up share capital

Common Seal: The requirement of having common seal

made optional

Declaration of Dividend: no company shall declare

dividend unless carried over past losses and depreciation in
previous year or years are set off against profit of the
company for the current year

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