The Companies Act, 2013, is a cornerstone of corporate law in India. It governs various aspects of companies, their formation, functioning, and compliance. Understanding the applicability of this act is crucial for businesses, investors, and stakeholders. In this article, we delve into the provisions of the Companies Act, 2013, to understand its broad applicability and exceptions.
Chapter I: Preliminary
1. Short Title, Extent, Commencement, and Application
As per Section 1(4) of the Companies Act, 2013, the provisions of this Act shall apply to:
1. Companies incorporated under this Act or under any previous company law:
Explanation: The first question that arises here is, what is the meaning of a company?
As per Section 2(20), “Company” means a company incorporated under this Act or under any previous company law.
Then the second question arises, what is the meaning of the previous company law?
It is also defined under this Act in Section 2(67).
2. Insurance companies, subject to the provisions of the Insurance Act, 1938, or the Insurance Regulatory and Development Authority Act, 1999.
Explanation: This means that any inconsistency between the provisions of the Companies Act and the Insurance Act or IRDA Act implies that the Companies Act is not applicable. Therefore, the applicability of the Companies Act to insurance companies is limited because they are governed by a special act.
3. Banking companies, subject to the provisions of the Banking Regulation Act, 1949.
Explanation: This means that any inconsistency between the provisions of the Companies Act and the Banking Regulation Act, 1949, implies that the Companies Act is not applicable. Therefore, the applicability of the Companies Act to banking companies is limited because they are governed by a special act.
4. Companies engaged in the generation or supply of electricity, subject to the provisions of the Electricity Act.
Explanation: This means that any inconsistency between the provisions of the Companies Act and the Electricity Act implies that the Companies Act is not applicable. Therefore, the applicability of the Companies Act to companies engaged in the generation or supply of electricity is limited because they are governed by a special act.
5. Any other company governed by any special act for the time being in force, except insofar as the said provisions are inconsistent with the provisions of such special act.
Explanation: This point is provided here for upcoming special acts that come into effect after the enactment of the Companies Act 2013.
6. Such body corporate, incorporated by any act for the time being in force, as the Central Government may, by notification, specify in this behalf, subject to such exceptions, modifications, or adaptations as may be specified in the notification.
As of now, the Central Government has not notified any body corporate.
Body corporate is defined under Section 2(11).
Conclusion:
In conclusion, the Companies Act, 2013, casts a wide net of applicability, covering companies incorporated under its provisions or earlier company laws. The Companies Act, 2013, is applicable to:
I. Companies as defined under Section 2(20).
II. Insurance companies.
III. Banking companies.
IV. Companies engaged in the generation or supply of electricity.
V. Companies governed by any special act.
VI. Body corporate specified by the Central Government (as and when notified) subject to exceptions, modifications, or adaptations specified in the notification.
Additionally, it accommodates future special acts and offers the Central Government the flexibility to specify body corporates’ applicability. Understanding these provisions and exceptions is essential for entities operating under the ambit of the Companies Act, 2013, ensuring compliance and effective governance.
Author Bio
