Companies Act 2013- Major Highlights

The new Companies Act 2013 has received the assent of president, on 29th August, 2013 and 98 Section of the same has been made effective vide notification dated 12.09.2013. Major highlights of the Companies Act 2013 are presented below –

a) Private company can have a maximum of 200 members (earlier limit was upto 50). (Clause 2(68))

b) The maximum limit of directors in the Company has been increased to 15 with a power to add more directors upon passing of Special Resolution without taking CG approval as earlier required. One director can also form a company .

c) Resident Director – Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in previous calendar year. { clause149 (2) }

d) The Financial Year of any Company can be only from April-March. Existing companies has to align within 2 years of the commencement of the Act. (Clause 2 (41))

e) A person cannot become director in more than 20 companies out of this , he cannot be director of more than 10 public companies. (Clause 165)

f) New concept of One person companies has been introduced .One person can also form the company. One Person Company need not to hold any AGM (Annual General Meeting) for each year.

g) Concept of CSR introduced – For companies having networth of Rs. 500 crore or more or turnover of Rs. 1000 crore or more or net profit of Rs. 5 crore or more during any financial year. Above specified company need to spend at least 2% of average net profit of immediately preceding 3 financial years for every financial year .

H) Provisions for compulsory rotation of individual auditors in every five years and of audit firm every 10 years in the listed company & certain other class of companies, as may be prescribed.

i) The Books of accounts may be kept in electronic form . And Voting through electronic means at the Shareholders meeting introduced .

j) Internal audit – As per draft rules it is made compulsory for below mentioned class of company:-

1) Every listed company;

2) Every public company having paid up capital of Rs.10 crores;

3) Every other public company having outstanding loans or borrowing from banks or financial instiutions exceeding Rs.25 crores or accepted fixed deposit of Rs.25 crores or more at any point of time during last financial year.

(k) WOMEN DIRECTOR – EVERY LISTED COMPANY SHALL , AND EVERY OTHER COMPANY HAVING A PAID UP SHARE CAPITAL OF ₹ 100 CR. OR MORE ARE MANDATORILY REQUIRED TO APPOINT ATLEAST ONE WOMEN DIRECTOR