Professional Documents
Culture Documents
Summary of The COA
Summary of The COA
1. Council of Architecture.
The Act establishes the Council, a body corporate, with specific
criteria for its composition. The Council consists of elected and
nominated members representing various institutions, bodies,
and government entities related to the field of architecture.
6. Recognition of Qualifications.
It outlines the process for recognizing architectural qualifications
in India and from foreign countries, including the criteria and
mechanisms for amendments to the Schedule of recognized
qualifications.
8. Disabilities.
Specifies conditions that disqualify an individual from being
eligible for Council membership, including being an undischarged
insolvent or having a conviction for an offence resulting in
imprisonment of two or more years, barring eligibility for an
additional five years post-release.
9. Meetings of Council.
Mandates the Council to convene at least biannually, stipulating
rules for conducting meetings, quorum requirements, and the
process for decision-making in case of tied votes.
1. Economic Growth: India experienced a substantial surge in its economy, necessitating a legal framework that
could accommodate and facilitate the country's economic expansion.
2. Stakeholder Expectations: Changing stakeholder dynamics and expectations demanded an updated legal
structure to align with modern business practices.
3. Increased Corporate Entities: The rapid growth in the number of companies—surging from around 30,000 in
1956 to approximately 11,00,000 in 2013—highlighted the requirement for a more comprehensive regulatory
framework.
The key objective of the Companies Act, 2013 was to facilitate the Indian corporate sector's
adoption of best global practices. This was aimed at fostering an environment conducive to
investment and growth, allowing for healthy competition in the global market.
1. Legislative Modifications: The Companies Act, 2013 introduced substantial changes in company law. It consisted
of 29 chapters, 470 sections, and 7 schedules, in contrast to the previous Companies Act of 1956 which comprised
658 sections and 14 schedules.
2. Incorporation of New Concepts: The Act introduced a plethora of new definitions and concepts, including
significant roles and responsibilities, definitions for specific company types, and governance parameters. For
instance, it brought in the concept of One Person Company, introduced the need for at least one woman director,
laid down restrictions on the layers of subsidiaries, and mandated e-governance practices.
3. Corporate Governance and Social Responsibility: The Act emphasized the importance of corporate governance
and social responsibility. It introduced the concept of independent directors, guidelines for bonus share issuance,
provisions for re-opening accounts in specific cases, and mandated the appointment of an internal auditor for
certain categories of companies.
4. Financial Reporting and Auditing: The Act also aimed at enhancing financial reporting standards and
introduced the National Financial Reporting Authority (NFRA) to oversee and enforce compliance with these
standards.
5. Share Capital and Debentures: Regulations were tightened regarding share capital, issuance of shares at a
discount, and guidelines for buybacks.
6. Deposits, Charges, and Management: The Act provided stringent guidelines for deposits, their acceptance, and
registration of charges. It also delineated provisions concerning management, board responsibilities, and
reporting requirements.
7. Dividend Declaration and Accounts: It outlined rules for dividend declaration, allowed transfer of profits to
reserves, and imposed strict norms on the maintenance of accounts and filing of returns.
Title of the Act: This law is known as the Companies Act, 2013.
Important Definitions: The Act provides vital definitions such as "associate company," "control," "director,"
"financial statement," "Financial Year," "Free Reserves," "key managerial personnel," "net worth," "officer," "officer
in default," and "relative."
Introduction of One Person Company (OPC): This concept allows the creation of an OPC that functions like a
private limited company and enjoys specific privileges.
Exemptions for OPCs: Certain obligations, like including the cash flow statement in financial statements, are
exempt for OPCs.
Annual General Meeting (AGM) Requirement: The necessity of holding an AGM is waived.
Memorandum and Articles of Association: Stipulations regarding what can be included in these documents are
specified.
Name Reservation and Incorrect Information: Penalties for incorrect information in the name reservation
process are detailed.
Electronic Filing of Documents: Specific professionals are mandated to sign documents when registering a
company.
Securities Issuance by Different Company Types: Guidelines for public, private, and specific companies in
issuing securities are outlined.
Civil Liability and Fraudulent Practices: Detailed consequences for fraudulent actions related to the prospectus
issuance.
Dealing with Misleading Information in Prospectus: Legal action against individuals affected by deceptive
statements in the prospectus is elaborated.
Global Depository Receipt Issuance: Procedures for companies to issue Global Depository Receipts are
provided.
Issuance of Duplicate Share Certificates: Consequences and penalties for fraudulent issuance of share
certificates are outlined.
Voting Rights for Preference Shareholders: Conditions under which preference shareholders can vote on
resolutions are specified.
Restrictions on Use of Securities Premium: Guidelines on how specific companies can use their securities
premium are detailed.
V. Acceptance of Deposits by Companies (Sections 73-76)
Deposit Regulations: Stipulations related to accepting deposits and their regulations, excluding Non-Banking
Financial Companies (NBFCs), are outlined.
Mandatory Registration of Charges: All types of charges created by a company must be registered with the
Registrar of Companies.
Annual Return Particulars: Additional particulars to be included in the annual return are detailed.
Shareholder Reporting Obligations: Detailed reporting obligations for listed companies and specifics about
Annual General Meetings are provided.
Dividend Declaration and Transfer to Reserves: Guidelines regarding dividend declaration and the transfer of
profits to reserves are outlined.
Financial Statements and Reporting: Details on financial statements, books of accounts, and changes in filing
requirements are described.
Corporate Social Responsibility (CSR): Guidelines on CSR policy and its implementation are detailed.
Appointment of Internal Auditor: Specific companies are mandated to appoint an internal auditor for
bookkeeping and auditing.
Companies need to appoint an auditor at their first annual general meeting, with a term extending up to the sixth
annual meeting.
Mandatory rotation of auditors (individual or firm) in intervals of five or ten years for listed companies and certain
specified classes.
Existing companies at the time of this law's commencement are given three years to comply with the rotation rule.
Members of a company can resolve to rotate the auditing partner or involve multiple auditors.
The Audit Committee must be considered when appointing or filling vacancies for auditors.
Individual auditors serve for five years, ratified yearly; confusion exists between "ratification" and "reappointment."
Mandatory retirement of auditors after five or ten years for individuals and firms, respectively.
No auditor or audit firm with common partners can continue an audit consecutively for more than five years.
These provisions apply to listed companies and other classes as specified.
Restrictions on auditors holding more than twenty appointments or LLPs as auditors unless represented by
Chartered Accountants.
Provisions for multidisciplinary partnerships and mandatory fraud reporting by auditors.
Compliance with auditing standards and restrictions on providing specific services directly or indirectly to the
company or its affiliates.
Sanctions against auditors failing to comply, including liability for misleading information.
Requirement for at least four board meetings annually, no specific mandate for quarterly meetings.
Authorization for directors to join meetings via prescribed electronic means.
Notice requirements for board meetings, counting participation through electronic means for quorum.
Compulsory formation of an Audit Committee for listed companies and specific requirements for its composition.
Provision for a vigil mechanism in listed companies or as prescribed for certain classes of companies.
Mandate for a Nomination and Remuneration Committee and a Stakeholders Relationship Committee.
Limits on political contributions by companies.
Mandatory disclosure of interests by directors and restrictions on voting for interested directors in private
companies.
Relaxation on the requirement of Central Government permission for loans to directors and investments through
inter-corporate entities.