companies_bill_2013

8/13/2019 companies_bill_2013

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COMPANIES BILL 2013An Insight on the changes

Presented By:

S. DhanapalPractising Company Secretary

Senior Partner,

S Dhanapal & Associates

A Firm of Practising Company Secretaries


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Part * 1


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O,I-IN O' COMPANIES AC IO,I-IN O' COMPANIES AC I

he ear#iest "iece o( #egis#ation in India

re#ating to co$"anies /as the Act o( 1.

he net ca$e co$"anies Act %144.

A(ter this the co$"anies Act 12 /asenacted and it /as re"#aced )y IndianCo$"anies Act%1513.

'o##o/ing the reco$$endations


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A$end$ents to the Co$"anies A

The Companies Act,1956, has beenamended as many as The major amendment24 times since 1956.

to the Companies Act,1956, was made byenacting theCompaniesAmendment Act, 1988.

Theamendby tAmen


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Objectives of the ActObjectives of the Act

o he#" the attain$ent o( the +#ti$ate ends o( the soc"o#icy o( the -o6ern$ent.

o he#" the de6e#o"$ent o( Co$"anies in India on hea#tcor"orate sector constit+tes a 6ery i$"ortant seg$ent o

a((airs o( a co$"any in the "+)#ic interest and as "e"rescri)ed )y #a/ so that the interest o( a## the sta8e"rotected (ro$ +nscr+"+#o+s $anage$ent.

o "rotect the interests o( #arge n+$)er o( share ho#derse"aration o( o/nershi" (ro$ $anage$ent in a co$"an


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200

Companies Bill, 2008 was introduced on 23rd October 2008 in the Existing Companies Act, 1956

2005

Companies Bill 2009 was reintroduced on 3rd August 2009 in theExisting Companies Act, 1956 with modifications and the same wa

further process

2010

Report of Standing Committee on finance on companies bill,2009 Lok Sabha on 31st August 2010

2011 Companies Bill 2011 introduced in Lok Sabha on 14th Decemb

2012

Companies Bill 2012 passed by Lok Sabha on 18th December 2


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KEY CHANGES PROPOSED IN

Part * 2


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90 C#a+ses

4

Sections

25 Cha"ters Sched+#es

1

Sched+#es


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!E'INIIONS

Accounting Standards Associate Company Auditing Standards

Authorised Capital Books of Accounts Called up capital Charge Chartered Accountant

#oreign Company #ree $eser!es %lo&al 'epository $eceipts

Inde"endent !irector Indian 'epository $eceipt Interested 'irector Issued Capital ;ey Manageria# Personne#

Su&sc S)eat +urno

,nlim -oting .hole

NE< !E'INIIONS IN,O!=CE! IN SECION 2>

Chief #inancial "fficer Company /imited By

%uarantee

Company /imited &y Shares Company /i*uidator Contri&utory

Control Cost Accountant

"fficial /i*uidator One Person Co$"any "rdinary or Special $esolution Postal Ballot Promoter Pu&lic #inancial Institution

$egister of Companies ,e#ated Party


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!E'INIIONS

'istrict Court

Industrial Company Industrial ,ndertaking

Information memorandum

!E'INIIONS


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SOMESOME

CONCEPTSCONCEPTS


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!e(inition

"ne PersonCompany meansa company )hich

Incor"oration

.ill &e formed asa pri!ate company

(ame of nominee

(o

(o4

ONE PE,SON COMPAN

person as amem&er

) o ) cont nuein e!ent of deathto &e specified5

.ords "nePerson Company

to &e mentioned&elo) name

n'i

Enrem

Su 4


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ONE PE,SON COMPAN

!irector

Mini$+$ onedirector re7+ired

Acco+nts

'inancia# State$ents$ay not inc#+de cash

(#o/ state$ent

Sig

'c

S+)scri)er to MOAdee$ed to )e (irst

director ti## director isd+#y a""ointed.

Acco+nts to )e (i#ed/ithin 10 days o( '@

Boards re"ort to


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Board 4eeting Pro!isions f


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Contracts &y a "PCIn case a "ne Person Company enters into any cothe ordinary course of &usiness6 )ith its sole m

also a director6 then such contract must 7

either &e in )riting6 or

entere in t e 4emoran um6 or recorded in the minutes of the meeting heltime after entering of the contract

and the particulars of the said contract must &company )ith the $egistrar )ithin 18 days of th


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SMALL COMPAN@

!e(inition

99small company:: means a company6 other than a "+)#ic co$"any6

up share capital of )hich does not eceed fifty lakh rupamount as may &e prescri&ed )hich shall not &e more than fi

or


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SALIEN 'EA=,ES O' A SMALL CO

"nly a pri!ate company can &e classified as a sma

olding company6 su&sidiary company6 charita&lecompany go!erned &y any Special Act cannot &esmall company5

or a sma company6 e t er t e pa up cap eceed $upees fifty lakhs or the turno!er as per of profit loss should not eceed rupees t)o cror

+he status of a company as Small Company mayear to year5 +hus the &enefits )hich are a!aiparticular year may stand )ithdra)n in the


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SMALL COMPAN@

Acco+n

tshe (inancia#

state$ent%/ith res"ect tos$a## co$"any$a not a

#,et+

rnhe ann+a#

ret+rn sha## )esigned )y theco$"anysecretar or

MeetingAt

&otocoea

inc#+de thecash (#o/state$ent

Ann

/here there isno co$"anysecretary% )ythe director o(

the co$"any.

Boar

caan&et)

noni


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!O,MAN COMPAN

Sa#ient'eat+res

o( a

!or$antCo$"any

Co$"any (or$ed and registered +nder this act

'or a (+t+re "roect or to ho#d an asset or inte##ect+a# "ro

has no signi(icant acco+nting transaction

Inacti6eCo$"any

has not $ade any signi(icant acco+nting transaction d+rin(inancia# years% O,

has not (i#ed (inancia# state$ents and ann+a# ret+rns d+ri(inancia# years

signi(icant acco+nting transactionD $eans any transaction aF "ay$ent o( (ees )y a co$"any to the ,egistrarG


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!or$ant Co$"any

A dormant

company shallhave suchminimumnumber of

directors, file

Financial

statement, withrespect todormant

company, maynot include the

At least one

meeting of theBoard of

Directors to beconducted ineach half of a

and pay suchannual fee as

may beprescribed to the

Registrar toretain its

dormant statusin the register

statement.

and the gapbetween the twomeetings is notless than ninety

days.


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Associate Company

!e(inition * associate company6 in relation to anomeans a company in )hich that other company hinfluence6 &ut )hich is not a su&sidiary company o

ha!ing such influence and includes a oint !enture compExplanation.For the purposes of this clause, signifmeanscontrol of at least t)enty per cent of total sha&usiness decisions under an agreement5

I$"act at other "#aces >Included in definition of related party

Annual $eturn of a company to carry particulacompanies also5

Consolidated financial statements to include accouncompanies


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Ne/ ,e7+ire$ents at ti$e o( incor"ora

A((ida6it to )e (i#ed )y (irst directors and s+)scrha6e not )een con6icted o( any o((ence% )reach

co$"any etc. and that a## in(or$ation (+rnis

Proo( o( identity to )e (+rnished (or a## directors an

!irectors interest in other co$"aniesH)ody co( i h d


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Other re#ated ne/ "ro6isions7

S+)scri"tion $oney to )e )ro+ght in /ithin

incor"oration

AOA $ay contain entrench$ent "ro6ision.

Notice o( change in sit+ation o( registerea#teration o( artic#es to )e (i#ed /ith ,OC /

instead o( 30 days as "ro6ided in the eisting A


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S?A,ES AN! S?A,E CAPI

Iss+e o( Shares at a disco+ntSection 5 "er$its iss+e o( shares at disco+nt

s+)ect to Centra# -o6ern$ent A""ro6a#Iss+e o( shares at discece"t in case o( s/e

Co$"anies Act% 154 Co$"anies B

Iss+e o( "re(erence shares (or $ore than 2Section 0 "rohi)its iss+e o( irredee$a)#e"re(erence shares and "re(erence shares

redee$a)#e a(ter 20 years.

Iss+e o( "re(erence seceeding 20 years

in(rastr+ct+re


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S?A,ES AN! S?A,E CAPI

Conso#idation and di6ision o( shares

Co$"any "er$itted to conso#idated or s+)di6ide its shares ) assin reso#+tion in

Conso#idation and di6ischanges in the 6otin


Increase in "ena#ty a$o+nt > 'ra+d+#ent iss+e oCerti(icate

genera# $eeting

s are o ers s a re7+

ri)+na# to )e


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S?A,E CE,I'ICAES

o S+)scri)ersNo s"eci(ic ti$e #i$it "rescri)ed.

Share Certi(icates to )e$onths o( inco


On A##ot$ent o( Shares


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'+rther Iss+e o( ShareBasis o(

Co$"arisonEisting Co$"anies Act%

154Co$"anie

A""#ica)i#ity Applica&le only to pu&liccompanies5

Applica&le only for allotment

made after 2 years of

formation or one year from

date of first allotment made

after incorporation5

Applica&le to

Applica&le to allot

after incorporat

o /ho$

shares can )e

o((ered

+o eisting e*uity share

holders in proportion to their

eisting holding

+o others &y passing a special

resolution

o eisting e7+it

proportion to the

o e$"#oyees und

su&ect to special r

company and

conditions as m

o any "ersons6 if

special resolution


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!I:I!EN!

Basis o(co$"arison

Basis o(co$"arison

Co$"anies Act154

Co$"anies Act154

Co$"aniCo$"ani

The Board ofdirectors may

declare interimdividend and the

amount of dividend

The Board o

declare intduring any fiof the surpluand out of prwhich such in

Interi$!i6idend

dividend shall bedeposited in aseparate bank

account.The amount of

dividend includinginterim dividend sod it d h ll b

sought to be d

co has incucurrent FY u

the quarteprecedindeclaratidividend,

dividend shalat a rate h


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!I:I!EN!

=n"aid !i6idend Acco+nt

Same requiremenco. shall, within


Unclaimed dividend to betransferred to separate bank

account after 30 days of

declaration.

Dividend Accounstatement containtheir last knownthe unpaid divideneach person and

website of the coand also on any


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!I:I!EN!


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!I:I!EN!

BASIS O' COMPA,ISON

=ti#iation o( IEP'

COMPANIES AC% 154 The fund shall be utilized for promotion of investor awareness an

interest of the investors in accordance with such rules as may be p

COMPANIES BILL 2013

the refund in respect of unclaimed dividends, matured deposits, mthe application money due for refund and interest thereon shall be

promotion of investors education, awareness and protection;

distribution of any disgorged amount among eligible and identifshares or debentures, shareholders, debenture-holders or depsuffered losses due to wrong actions by any person, in accordanmade by the Court which had ordered disgorgement;


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!I:I!EN!

MPA,IS

ON

Pena#tyPro6ision >'ai#+re to

distri)+tedi6idend/ithin 30days

AC.%154

E!ery 'irector)ho is kno)inglyparty to the

default 7 Simpleimprisonment upto 3 years D (ineo( ,s. 1000H* fore!ery day during B

ILL201

3

BA

SISO'CO

CO

MPANIES

)hich the default

continues5

Company 7 to paysimple interest 1F p5a5 duringthe period for)hich defaultcontinues CO

MPANIES


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WOMEN

DIRECTOR

S"eci(ic c#ass orco$"any to ha

one


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Residet Di!ecto!

E6ery co$"anyshall ha!e

at least one director )ho

has stayed in India for a

total period of not #ess

than one h+ndred and

eighty*t/o days in the


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INDEPENDENT DIRECTOR

E!ery listed pu&lic company shall ha!e at lea

of the total num&er of directors as

directors5

Central %o!ernment may prescri&e thenum&er of independent directors in case of

classes of pu&lic companies5

ny rac on con a ne n suc one> r num

rounded off as one5


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GualificationsH'is*ualifications for independeprescri&ed in depth )hich are e!en more str

that of listing agreement5

Independent 'irector to gi!e decla

independence e!ery year5


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+o &e appointed for a period of 8 years Can &e reappointed for another period of

passing special resolution and disclosure

report5

After 2 consecuti!e terms of fi!e years6 3 ye

off period to &e o&ser!ed5


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!e(inition o( re#ati6e


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Other Changes "ertaining to !

Basis (or

co$"arison

Pro6ision contained in eisting

Co$"anies Act% 154

Pro6ision

Co$"an

Mai$+$ N+$)er

o( !irectors

12

More than 1 can

s"eciaMai$+$ n+$)er

o( !irectorshi"

1

Ec#+des "ri6ate co$"anies% +n#i$ited

co$"anies% a#ternate directorshi" and

directorshi" in non*"ro(it associations

O+t o( /hich not $

co

Inc#+des A#tern

No s"eci(ic e

Co$"osition o(

Board

Mini$+$ 2 directors in case o( "ri6ate and 3 in

case o( "+)#ic co$"anies. Mai$+$ 12 !irectors.

Certain c#ass o( co$

/o$

E6ery co$"any to ha

has stayed (or at#

"re6io+s

Listed Co$"anie

inde"en

:acancy o( o((ice (ornot attending )oard

he o((ice o( a director sha## )eco$e 6acant i(he a)sents hi$se#( (ro$ three consec+ti6e

he o((ice o( a direc


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Basis (or

co$"arison

Pro6ision contained in eisting

Co$"anies Act% 154

Pro6isio

Co$"an

,esignation o(

!irector

(o specific pro!isions contained

ecept that any change in directors

to &e filed )ith $"C )ithin 30 days5

'irector to sen

letter and d

resignation to $

of r

!isc#os+res in

Boards re"ort

Section 21 contains disclosure

re*uirements of Board:s report5

Additional 'is

the &ill6 name

$eturn6 (um&

CS$ initiati!es

of loans6 guara

!irectors Section 21


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A person )ho has failed to &e appointed in a general meeting cannot &e appo

additional director at a &oard meeting5

Alternate 'irector 7 Person can act

original director for a period of three mIndia5

4em&ers of a company may6 &y speciaspecify any lesser num&er of companie


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;E@ MANA-E,IAL PE,SONNEL

Kco$"any secretaryD or KsecretaryD means

secretary as defined in clause


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,E*OPENIN- O' ACCO=N

CO=,S O, ,IB=NALS O, A Co$"any sha## reo"en its )oo8s o( acco+nts and

(inancia# state$ents% on an a""#ication $ade

-o6ern$ent% the Inco$e*ta a+thorities% theEchange Board% any other stat+tory reg+#atory )oor any "erson concerned to the Co+rt o( co$"etenthe ri)+na# and an order is $ade )y a co+rt

+risdiction or the ri)+na# (or the )e#o/ stated rea

he re#e6ant ear#ier acco+nts /ere "re"ared in$annerG or

he a((airs o( the co$"any /ere $is$anaged d+ri


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:OL=NA,@ ,E:ISION O' 'INANCIAL SAEMEN

,EPO,

I( it a""ears to the directors o( the Co$"any that the (ino( the Co$"any or the re"orts o( the Board do not

"ro6isions o( section 125 or section 139% the co$"aa""#ication to the ri)+na#.

he order co"y "assed )y the ri)+na# sha## )e (i#ed /ith

S+ch re6ised (inancia# state$ent or re"ort sha## not )e

$ore than once in a (inancia# year.


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Secretaria# A+dit

Secretarial Audit mandated for all listed companieother class of companies.

To be given by a company secretary in practice.

Audit Report to be annexed to Boards report.

This is in addition to Corporate Governance Reportagreement.

It shall be the duty of the company to give all asfacilities to the company secretary in practice for


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Secretaria# A+dit

Board to respond to qualifications contained in Secre

means of explanation in Boards report.

Powers and duties of statutory auditors as specified

secretarial audit.

Contents, manner of preparation, frequency of repoprescribed.


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CORPORATE SOCIAL RESPONSIBILITY

Board to ensure that at least 2% of the average net profits ospent by the company on CSR activities every financial year.

Else reasons for non compliance to be specified in the Boar

Amount of ex enditure incurred on cor orate social res onsto be disclosed by way of footnote to Statement of Profit & L

Schedule VII to the bill contains list of Activities which maycompanies in their Corporate Social Responsibility Policies.

Boards report to contain the details about the policy


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O:E,:IE

companies_bill_2013

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