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Major Changes in Companies Old Section as in 1956 ACT Act

New Section in 2013 ACT

1. One Person Company

Not in existence

Section 2 (62) Section 2 (68)

2. Increase in number of Section 2(35) & 3 members in private company (50 to 200) 3. Companies to follow Section 2(17) ; no such uniform financial year adoption of financial year was from April to march; there with exception to be made only by approval of NCLT 4. Detailed prospectus Section 55,56,58 & 60 as well with certain disclosure. as Schedule II where requirements regarding disclosure was stated 5. Special resolution Section 61; ordinary required for making resolution was required to variation to contracts make such changes

Section 2(41)

Section 26; it omits Schedule II

Section 27

6. Definition and detailed Section 67; exclusion from provision on Private scope of public issue referred Placement as private placement

Section 42

7. Acceptance of public Not in existence deposit by certain companies

Section 76

8. Dormant Company; for Not in existence future projects or holding an asset or intellectual property 9. In case of change in Not in existence stake of promoters and shareholders, return need to be filled to

Section 455

Section 93

ROC 10. Application of Postal Section 192 A; earlier used to Ballot be applied in case of only listed public companies 11. The National Advisory Committee on Section 210 A; it was earlier Accounting Standards mere an advisory body renamed as The National Financial Reporting Authority with quasi-judicial functions 12. Mandatory Section 210 and 211; no such consolidated financial provision statement in case of company having one or more subsidiaries Section 110; applied to all companies.

Section 132

Section 129

13. Re-opening of Not in existence accounts on courts or tribunals order

Section 130

14. Appointment of an Not in existence individual or firm as auditor on first Annual General Meeting continuing upto 6th Annual General Meeting but subject to ratification at every such meeting 15. Appointment of one Not in existence woman director (a) at least one of the directors should be the person stayed at least 182 days or more in previous calendar year.

Section 139

Section 149

16. One-third

of

total Not in existence

Section 149

directors should be independent in every listed public company

17. No arrangement shall be sanctioned by the tribunal unless a certificate has not been filled by the auditor with the tribunal stating that accounting treatment, if any proposed in the scheme is in conformity with accounting standards.

Section 394; earlier such certificate was to be filled by registrar of company to the concerned court. (a) Where transferee company is not Indian company, then in such case amalgamation scheme cannot be sanctioned

Section 232; merger and acquisitions. Now merger with foreign companies is a possibility.

18. Simplified procedure Not in existence for merger between certain companies 19. Cross-Border Mergers Section 394;Only possible in case of transferee company being Indian

Section 233

Section 234

20. Corporate Responsibility

Social Not in existence

Section 135; mandatory policy and spend certain amount; atleast 2% of average net profit made during 3 immediately preceding financial year.

21. Strength of NCLAT 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32.

Section 10FR;

33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44.

MAJOR CHANGES IN COMPANIES ACT 2013

9. Postal ballot will now apply to both listed and unlisted companies; as earlier only applied to only listed ones.

10. One of major changes are regarding rules governing declaration of dividend where one of change states that in case of failure to repay deposits then company cannot declare dividends on its equity shares. Other changes are dividend only from free reserves, past losses not required to be set off etc. 11. Re-opening of account books and financial statement would be recasted in case of order by competent court/tribunal. 12. Financial statements include balance sheet, profit and loss account and cash flow statements. 13. Every company at its first Annual General Meeting need to appoint an individual or firm as an auditor. After getting an appointment the auditor will hold his post till 6th Annual General Meeting. The appointment of auditor would be ratified at every Annual General Meeting.(5 years tenure subject to ratification). 14. An auditor shall not provide certain other services directly or indirectly to its holding or subsidiary company. Services here include accounting, advisory services etc. 15. Partners of an audit firm and would be jointly and severally responsible for liability whether civil or criminal if its proved that partners or partner of firm had acted in a fraudulent manner then they would be punished for fraud as in section 447 of the act.

16. Now, the companies have to appoint at least one woman director and at least one of director should have stayed for 182 days or more in previous year. 17. An individual can hold directorship of 20 companies of which not more than 10 can be public companies. 18. Companies with more than 1,000 shareholders, debenture holders and deposit holder at any time during financial year shall constitute the Shareholders Relationship Committee with nonexecutive director as a chairperson and other members decided by board. 19. No central government approval required in case of giving loan to a director. 20.