This article was written by Ms. Neelam Singh, a 1st year BA LL.B student from Lloyd Law College

Companies Act 2013 Features

The significant features of the 2013  Act are given beneath:

• A private company can only have 200 shareholders (the previous limit was 50).
• The idea of a one-individual organization.
• Organization Regulation Investigative Court and Company Regulation Council
• CSR made compulsory

Salient Elements of the Companies Act 2013

• It has presented the idea of ‘Lethargic Organizations’. Companies that haven’t done business in two years are considered to be dormant.

• It presented the Public Organization Regulation Council. In India, it is a quasi-judicial body that decides company-related issues. It supplanted the Organization Regulation Board.
• Instead of relying on government approval, it allows for self-regulation in terms of disclosures and transparency.
• It is necessary to archive documents electronically.
• Official outlets have adjudicatory abilities for organizations having net resources of up to Rs.1 crore.
• The merger and amalgamation procedure has been streamlined and accelerated.
• This Act permits cross-border mergers (a foreign company combining with an Indian company and the reverse), but only with the approval of the Reserve Bank of India.
• The Idea of starting a business by yourself has been introduced. This is a brand-new kind of private company that may only have one shareholder and one director. A private company had to have at least two directors and two shareholders under the 1956 Act.
• Public companies are now required by law to have independent directors.
• Women directors are required for a specific group of businesses.
• At least one director in every business should have lived in India for at least 182 days in the previous year.
• The Demonstration accommodates entrenchment (apply extra-legitimate shields) of the articles of affiliation.
• Calling board meetings requires at least seven days’ notice under the Act.
• In this Demonstration, the obligations of a Chief has been characterized. The roles of “Key Managerial Personnel” and “Promoter” have also been defined.
• Audit firms and auditors ought to rotate for publicly traded businesses. The Demonstration likewise keeps evaluators from performing non-review administrations to the organization. An auditor faces significant criminal and civil penalties for noncompliance.
• In the event of a financial crisis, the entire process of reorganizing and liquidating businesses has been time-limited.
• Companies are required by the Act to establish CSR committees and policies. Concerning CSR, mandatory disclosures have been made for some businesses.
• One director ought to be appointed to listed businesses to also represent small shareholders.
• During the investigation, documents may be searched and taken without a warrant from a magistrate.
• Standards have been set aside severe for tolerating installments from the general population.
• The National Financial Reporting Authority (NFRA) has already been established. It participates in the foundation and implementation of bookkeeping and examining principles and oversight of crafted by evaluators. ( India is now eligible to join the International Forum of Independent Audit Regulators (IFIAR) as a result of NFRA’s announcement.)
• If a key manager or director reasonably expects to have access to price-sensitive information, the Act prohibits them from purchasing call and put options on the company’s shares.
• The Act gives shareholders more power by requiring shareholders’ approval for numerous significant transactions.