COMPANY LAW

CHAPTER 1

History and Administration of

Company Law in India
HISTORY OF COMPANY LAW IN INDIA

For faster economic

development, we need The Companies Act, 2013
Britishers passed
change and passed Act received president’s
comprehensive Act to
(recommendation of assent on 29-8-13 and
meet Indian
Bhabha Committee) came into force w.e.f. 30th
requirements
“The Companies Act, Aug. 2013.
“The Indian Companies
1956” It Contains 470 sections, 29
Act, 1913”
658 sections and 15 Chapters and 7 Schedules
schedules
THE COMPANIES ACT,1956
A. It made significant landmark in the development of company law in India.
B. It empowers the Central Government
(i) to inspect the books of accounts,
(ii) direct special audit,
(iii) to order investigation into the affairs of a company and
(iv) to launch prosecution for violation of the Companies Act, 1956.
C. The main object of the Act is to provide protection to
(a) investors,
(b) creditors and
(c) public at large and at the same time leaving management free to uilize its
resources and energies for the optimum output.
THE COMPANIES ACT, 2013

FE 1. One Person Company 1. Simplified and rationalized

2. Key Managerial Personnel (KMP) O
AT BJ legislations
3. Independent Directors 2. Bring best global practices
U E
4. Removal of all restrictions on mana- 3. Prohibiting insider trading
R gerial remuneration C
E practices
5. Recognition of auditing standards TI 4. Promote corporate Social
S and Secretarial Standards V Responsibility
6. Centralised dispute-resolution E 5. Protection given to investors
7. Penalty-administration mechanism S 6. Electronic maintenance of
though Special Courts & NCLT records
8. Maintaining documents in electronic 7. Promote transparency
format
CHANGES IN COMPANIES ACT, 2013
1. One Person Company 9. Books of accounts may be 14. Atleast four meetings in
2. 30 new definitions kept in the electronic form every year, gap should
3. Uniform financial year (Apr 10. NACAS has been renamed not exceed 120 days
to Mar) as the National Financial 15. Appointment of MD/
4. Private companies max.200 Reporting Authority WTD/ Manager in
members (NFRA) Schedule V
5. SEBI to prescribe 11. Mandatory to have one- 16. Auditor’s certificate
class/classes of companies woman director in selected mandatory
to file Shelf Prospectus companies 17. Oppression or misma-
6. Buy back of shares 12. Listed company to have nagement filed before
provision liberalise atleast 1/3rd as the NCLT
7. NBFCs will be governed by independent Directors 18. Valuation of company’s
RBI rules 13. Max nos directors can assets by registered
8. 9 months for holding AGM be15 valuer
from the date of its 19. Dormant company
incorporation
SOME MORE POINTS

Class Action Suits

Class-action can field by investors in a court if they believe that company is
conducting in a manner detrimental to the interest of the company and its
shareholders.
NCLT & NCLAT
Constitute a Tribunal to be known as National Company Law Tribunal and an
Appellate Tribunal to known as National Company law Appellate Tribunal. [Section
408 and 410]
National Financial Reporting Authority (NFRA)
constitution a National Financial Reporting Authority to provide for matters relating
to accounting and auditing stander this Act. [Section 132]
Continue…

Administrative Authorities governing Companies in India

(1) ROC
(2) Regional Director
(3) National Financial Reporting Authority (NFRA)
(4) Serious Fraud Investigation Office (SFIO)
(5) National Company Law Tribunal
(6) National Company Law Appellate Tribunal
(7) Special Courts
………… End of Chapter