India 2018

264 India 2018
Companies Act, 2013
The Companies Act, 2013, provides the corporate sector an opportunity for
self-regulation, while mandating greater transparency and enhanced disclosures
for improved compliance. The Companies Act, 2013 has 470 Sections. Of these,
39 Sections contained in Chapter XIX (Section 253 to 269) relating to revival
and rehabilitation of sick companies and part of Chapter XX (Section 289, 304,
323 & 325) relating to winding up have been repealed by the Insolvency and
Bankruptcy (IBC) Code, 2016. Of the remaining 431 Sections, 428 have been
notified. Remaining 3 Sections relating to (i) Constitution of National Financial
Reporting Authority (NFRA) (Section132), (ii) Registration of Valuers (Section
247), and (iii) Repeal and Transition (Section 465) are at various levels of
examination and would be notified in due course.
The Companies Act, 2013 seeks to bring corporate governance and
regulatory practices in India at par with global best practices. The corporate
sector has been given more flexibility in regulating its own affairs, subject to
full disclosure and accountability of its actions, while minimising Government
interference. The Act provides more opportunities for new entrepreneurs and
enables wide application of information technology in the conduct of affairs by
corporates. Key features of the Act are given here.
Key Features of the Companies Act, 2013
I. Business Friendly Corporate Regulations/Pro-Business Initiatives
‣ Provision of self-regulation with disclosures/transparency instead
of ‘Government approval based regime’.
‣ Automation of corporate records/meetings – statutory recognition
to (i) maintenance of documents by companies in electronic form,
(ii) ‘video-conferencing’ as a mode of conducting Board meetings
etc.
‣ Faster mergers and acquisitions including short form of mergers
and cross border mergers.
‣ Summary liquidation: For companies having net assets of ` 1
crore or less, Official Liquidators (OLs) are empowered with
adjudicatory powers.
‣ National Company Law Tribunal (NCLT) has been constituted
under Section 408 vide notification No. S.O.1932 (E) dated 1st June
1st, 2016.
‣ Concept of ‘dormant companies’ introduced (companies not
engaged in business for two consecutive years can be declared as
dormant).
‣ Concept of One Person Company (OPC) introduced.