What is Companies Act 2013?
The act came into force on 12th september 2013 after few amendments into the previous company act 1956. This act introduced a new concept like one person company.The company act 2013 covers incorporation,dissolution and the running of companies in india.
Highlights of Indian companies Act 2013
1)Max number of shareholders permitted for a private limited company is increased from 50 to 200.
2)One Person Company.
3) Section 135 which deals with corporate social Responsibility.
4) Company Law Tribunal and Company Law Appellate Tribunal.
Salient features of the Companies Act 2013
1) Class action suits for Shareholders– A new concept of class action suits has been introduced in companies act 2013.A view of making shareholders and other stakeholders more knowledgeable and informed about their rights.
2) More Power to shareholders– Approval of shareholders is required on various significant transactions.
3) Empowerment of women in corporate sector-Appointment of atleast one women Director in the Board for certain class of companies.
4) Social Responsibility – It is necessary for companies to spend certain amount of money every year on actvities which reflects corporate social responsibility.
5) National Company Law Tribunal– National company law Appellate Tribunal has been introduced To replace company law board for industrial and financial reconstruction.This would relieve courts of their burden while simultaneously providing specialised justice.
6) Fast Track Mergers– Proposal of fast track and simplified procedure for merging and amalgamation of certain class of companies after approval of the Indian government.
7) Cross Border Merger– Companies act 2013 permits cross border merger of Foreign company with Indian Company and vice versa.
8) Increase in number of shareholders-Maximum number of shareholders increased from 50 to 200.
9) Maximum Partners limit-Maximum number of partners cannot exceed 100.This restrication is not applicable to association or partnership constituted of professionals like lawyers or charted accountants etc.
10) Electronic mode – Maintaining documents and account keeping books in electronic form and financial statement to be placed on company’s website.
11) Indian Resident as director -Every company should have atleast one director who has stayed in India for a total period of not less than 182 days.