Professional Documents
Culture Documents
Background
ACT 2013
13 Parts
29 Chapters
658 Sections
470 Sections
15 Schedules
7 Schedules
The Draft rules have been placed for comments from investors on
the Ministry of Corporate Affairs website.
Definitions:
Small Company
Incorporation
Charges to be registered
All charges on the companys property, assets or undertaking
require registration
No exemption from registration of pledges.
Earlier registration was required only for following:
Securing debenture issue
Immovable property
Book debts
Auditors
Listed companies & Prescribed class of companieso An individual as auditor- max 1 term of 5 consecutive years
o Audit firm as auditor- max 2 terms of 5 consecutive years
Accounts
ACT 1956
ACT 2013
mandatory
present
by:
by:
2 directors + CS
shall formulate and recommend CSR Policy which shall indicate the
activities to be undertaken as specified in schedule VII and shall also
recommend the amount of expenditure to be incurred on the CSR activities.
DIRECTORS
Key Highlights
Every company to have at least one director who has stayed in India for
at least 182 days in the previous calendar year
Now
Duties of Director
For the first time duties of directors have been laid down includes
independent directors
Must act in good faith, to exercise duties with care, skill and
judgment and shall act in the best interest of the company,
employees, community and environment. Contravention of this
provision entails fine under the Act.
Insider Trading
Directors/ KMP shall not enter into insider trading
Insider trading defined act of subscribing, buying, selling, dealing or
agreeing to subscribe to the securities of the company by any
director if he/ she has access to non-public sensitive information OR
an act of counseling about procuring or communicating non-public
price-sensitive information to any person
Price sensitive information any information which published could
materially affect the price of the securities of the company
Loose ends not defining non-public/ materially affect the price of
the securities
MEETINGS
AGM Notice
Where any business to be transacted affects any other company,
where the extent of shareholding every promoter, director,
manager, KMP is not less than two per cent of the paid up share
capital of that company shall be set out in the explanatory
statement to the notice.
Quorum five (public co), 15 (1000-5000), 30 (>5000) personally
present, two (private co)
Secretarial standards with regard to AGM to be followed
Exception:
The said section does not apply to:a. Loan to MD/WTD
As a part of contract of services extended to all its employees; or
Pursuant to scheme approved by members by special resolution
b. A Company which in the ordinary course of its business provides
loans or gives guarantees or securities for the due repayment of
any loan and in respect of such loans an interest is charged at a
rate not less than the bank rate declared by RBI
The full particulars of the loan given, investment made or guarantee given or
security provided and the purpose to be disclosed in the financial statement.
Investment Limits:
Not more than two layers of investment
companies
This shall not affect:
-A company can acquire any other company
incorporated in a country outside India, with
subsidiaries beyond 2 layers as per the laws of
such country.
- A subsidiary company having any investment
subsidiary to meet the requirement under law.
No Company shall enter into any contract or arrangement, except with the
consent of the Board, with a related party with respect to:
sale, purchase or supply of any goods or materials;
Selling or otherwise disposing of, or buying, property of any kind;
Leasing of property of any kind;
Availing or rendering of any services;
Appointment of any agent for purchase or sale of goods, materials, services or
property;
Such related partys appointment to any office or place of profit in the
company, its subsidiary company or associate company and
Underwriting the subscription of any securities or derivatives thereof,
Exemption - Transactions in the ordinary course of business except those not
entered into on arms length basis
Additional ground providing for winding-up:On an application made by the Registrar or any other person
authorized by CG by notification under this Act, the tribunal is
of the opinion that:
The affairs of the company have been conducted in a
fraudulent manner or
Company was formed for fraudulent and unlawful purpose or
The persons concerned in the formation or management of
its affairs have been guilty of fraud, misfeasance or
misconduct in connection therewith.
incorporation
Subscribers to the memorandum have not paid the subscription
Thank you
Small Company
Small company means a company other than a public company
i.paid-up share capital of which does not exceed Fifty Lakh or such higher
amount as may be prescribed not exceeding Five Crore;
or
i.turnover of which as per its last profit and loss account does not exceed
Two Crore or such higher amount as may be prescribed not exceeding
Twenty Crore.
Exemptions:
Holding company or subsidiary company
Company registered under section 8
Company or body corporate governed under Special Act
Private Company
Definition:
A company having minimum paid-up share capital of one lakh rupees or
such higher number as maybe prescribed and which by its articles;
Restricts the right to transfer its shares;
Except in case of One Person Company, limits the number of its
members to two hundred;
Prohibits any invitation to public to subscribe for any securities of the
company
Silent about acceptance of deposits
Commencement of Business
PARTICULARS
ACT 1956
ACT 2013
APPLICABILITY
Only to PUBLIC
companies
To all Companies
having SHARE
CAPITAL
If license is revoked
Company maybe wound up OR
Amalgamated with another Clause 8 company with similar objects
Impact: Pudhuaaru Kshetriya Gramin Financial Services