183 Sections of Companies Act, 2013 notified
Taking the next step towards implementation of the new company law regime in India, the Ministry of Corporate Affairs (“MCA”) has now notified an additional 183 (One Hundred and Eighty Three) sections of the Companies Act, 2013 (“Act”), which are now in force with effect from April 1, 2014.
Such notified sections relate to:
- The definitions of ‘accounting standards’, ‘deposit’, ‘financial year’, ‘foreign company’, ‘independent director’ and ‘one person company’;
- The provisions on company formation including incorporation and the sections which deal with memorandum of association and articles of association of the company;
- The provisions dealing with non-profit companies;
- The provisions dealing with issuance, sale and purchase of securities including private placement of securities by public companies and issuance of securities by private companies along with provisions relating to offer for sale and further issue of capital;
- The provisions dealing with issue of debentures and acceptance of deposits;
- The provisions dealing with registration of charges;
- The provisions relating to beneficial ownership in shares;
- The entire chapter dealing with audit and auditors except for the provisions relating to appointment of a different auditor other than a retiring auditor;
- The entire chapter dealing with appointment and qualification of directors;
- The entire chapter dealing with meetings and power of the board of directors including provisions on board meetings, powers of the board, disclosure of interest by directors, inter-corporate loans and related party transactions; and
- The provisions dealing with appointment and remuneration of managerial personnel.
Further, the MCA has also released the final drafts of the following rules/regulations framed under the Act which will be notified separately.
- Companies (Specifications of Definition Details) Rules, 2014;
- The Companies (Incorporation) Rules, 2014;
- The Companies (Prospectus and Allotment of Securities) Rules, 2014;
- The Companies (Share Capital and Debenture) Rules, 2014;
- The Companies (Management and Administration) Rules, 2014; and
- The Companies (Meetings of Board and its Powers) Rules, 2014.
With the notification of these provisions, a substantial part of the Act (282 sections out of the total 470 sections) have now come into force. The sections left to be notified now include provisions on National Financial Reporting Authority (“NFRA”), Investor and Education Protection Fund, Sick Companies, Special Courts and National Company Law Tribunal among others.