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Vivek Rajan. V

The Ministry of Corporate Affairs by notification dated 12th September 2013 has appointed 12th of September 2013 as the date on which certain provision of the Companies Act, 2013 shall come into force.  In this context, I have prepared two tables, one for definitions that have not come into force, in Table I of this article and another for all the sections that have come into force, in  Table II of this article.

Table I – Definition not coming into force

All the definitions have come into force from 12th of September 2013, apart from the definitions stated in the following table

Section of Companies Act, 2013 Definition not coming into force from 12th September 2013
2(2) Accounting Standard
2(7) Auditing Standard
2(13) Books of Accounts
2(23) Company Liquidator
2(29)(iv) 2(29)(iv) defines Court  . In that (iv) deals about  Special Court
2(31) Deposit
2(41) Financial Year
2(42) Foreign Company
2(47) Independent Director
2(48) Indian Depository Receipt
2(62) One Person Company
2(67)(ix) Under “Previous Company Law” – the Registration of Companies (Sikkim) Act, 1961
2(83) Serious Fraud Investigation Office
2(85) Small Company
2(87) Proviso In relation to a subsidiary company, the proviso says that “such class or classes of holding companies as may be prescribed shall not  have layers of subsidiaries beyond such numbers as may be prescribed”
2(87) Explanation (d) “ Layer” in relation to a holding company means its subsidiary or subsidiaries

Clarification by Ministry of Corporate Affairs

One among the definitions notified is Private Company (Section 2(68) of Companies Act, 2013). This definition of Private Company is different from the definition given in Companies Act, 1956. Consequent to expression of difficulties by stakeholders and with a view to facilitate proper administration, the Ministry vide General Circular No.15/2013 dated 13.09.2013 has clarified that the Registrar of Companies may register those Memorandum and Articles of Association received till 11th of September 2013 as per the definition clause of the “Private Company” under the Companies Act, 1956 without referring to the definition of “Private Company” under Companies Act, 2013.

Table II – Sections coming into force

The following are the Sections of Companies Act, 2013 that have come into force from 12th of September 2013

Section of Companies Act, 2013 Chapter of Companies Act, 2013 Caption of the Section

Chapter II – Incorporation of Company and Matters incidental thereto

Subsidiary Company not to hold shares in its Holding Company
21 Authentication of Documents, proceedings & contracts
22 Execution of Bills of Exchange
23[except clause (b) of sub section (1) and sub-section (2)]

Chapter III – Prospectus and Allotment of Securities – Part I – Public Offer

Public Offer & Private Placement
24 Power of Securities and Exchange Board  to regulate  issue & transfer of securities etc
25 (except sub section (3) Document containing offer of securities for sale to be deemed prospectus
29 Public offer of securities to be in dematerialised form
30 Advertisement of Prospectus
31 Shelf Prospectus
32 Red herring prospectus
33(except sub-section(3)) Issue of application forms for securities
34 Criminal Liability for mis-statements in prospectus
35( except clause (e) of sub-section(1)) Civil Liability for mis-statements in prospectus
36 Punishment for fraudulently inducing persons to invest money
37 Action by affected persons
38 Punishment for personation for acquisition , etc of securities
39[except sub-section(4)] Allotment of securities by company
40[except sub-section (6)]. Securities to be dealt with in stock exchanges

Chapter IV -Share Capital and Debentures

Nature of shares or debentures
45 Numbering of Shares
49 Calls on shares of same class to be made on uniform basis
50 Company to accept unpaid share capital , although not called up
51 Payment of dividend in proportion to amount paid up
57 Punishment for personation of share holder
58 Refusal of registration and appeal against refusal
59 Rectification of register of members
60 Publication of authorized, subscribed and paid-up capital
65 Unlimited Company to provide for reserve share capital on conversion into limited company
69 Transfer of certain sums to capital redemption reserve account
70[except sub section (2)] Prohibition for buy-back in certain circumstances
86 Chapter VI – Registration of Charges Punishment for contravention

Chapter VII – Management and Administration

Power to close register of members or debenture holders or other security holders
100 [except sub section (6)] Calling of extraordinary general meeting
102- [Please refer  point 1 in sub note below] Statement to be annexed to notice
103 Quorum for meetings
104 Chairman of meetings
105[except 3rd &4th proviso of sub section (1)& (7) Proxies
106 Restriction on voting rights
107 Voting by show of hands
111 Circulation of member’s resolution
112 Representation of President and Governors in meetings
113[except clause (b) of sub-section(1)] Representation of corporations at meeting of  companies and of creditors
114 Ordinary and Special resolutions
116 Resolutions passed at adjourned meeting
127 Chapter  VIII – Declaration and payment of dividend Punishment for failure to distribute dividends
133 [Please refer  point 2 in sub note below] Chapter IX  – Accounts of Companies Central Government to prescribe accounting standards
161 [except sub-section (2)]

Chapter XI  – Appointment and Qualification of Directors

Appointment of additional director , alternate director and nominee director
162 Appointment of directors to be voted individually
163 Option to adopt principle of proportional representation for appointment of directors
176 Chapter XII – Meetings of Board and its powers Defects in appointment of directors not to invalidate actions taken
180 [Please refer  point 3 in sub note below] Restrictions on powers of board
181 Company to contribute to bonafide and charitable funds etc
182 Prohibitions and restrictions  regarding political contributions
183 Power of Board and other persons to make contributions to national defence fund, etc
185 Loan to directors
192 Restriction on non-cash transactions involving directors
194 Prohibition of forward dealings in securities  of company by director or key managerial personnel
195 Prohibition of insider trading of securities
202 Chapter XIII  – Appointment and Remuneration of Managerial personnel Compensation for loss of office of managing or whole time director or manager

Chapter XXII –Companies Incorporated outside India

Application of Act to foreign companies
382 Display of name , etc of foreign company
383 Service on foreign company
386[except clause (a)] Interpretation
394 Chapter XXIII- Government Companies Annual Reports on Government Companies
405 Chapter  XXV- Companies to furnish Information or Statistics Power of Central government to direct companies to furnish information or statistics

Chapter XXVII – National Company Law Tribunal and Appellate Tribunal

408 Constitution of National Company Law Tribunal
409 Qualification of President and Members of Tribunal
410 Constitution of Appellate Tribunal
411 Qualification of Chairperson and members of Appellate Tribunal
412 Selection of Members of Tribunal and Appellate Tribunal
413 Term of office of President , Chairperson and Other members
414 Salary, allowances and other terms and conditions of service of members

Chapter  XXVIII – Special Courts

Offences to be non- cognizable
443 Power of Central Government to  appoint company prosecutors
444 Appeal against acquittal
445 Compensation for accusation without reasonable cause
446 Application of fines

Chapter XXIX – Miscellaneous

Punishment for fraud
448 Punishment for false statements
449 Punishment for false evidence
450 Punishment where no specific penalty or punishment is provided
451 Punishment in case of repeated default
452 Punishment for wrongful  withholding of property
453 Punishment for improper use of “Limited “ or “Private Limited”
456 Protection of action taken in good faith
457 Non – disclosure of information in certain cases
458 Delegation by Central Government of its powers and functions
459 Powers of Central Government or Tribunal  to accord approval etc subject to conditions and to prescribe fees on applications
460 Condonation of delay in certain cases
461 Annual Report by Central Government
462 Power to exempt class or classes of companies from provisions of this Act
463 Power of Court to grant relief in certain cases
467 Power of Central Government to amend Schedules
468 Power of Central Government to make rules relating to winding up
469 Power of Central Government to make rules
470 Power to remove difficulties

 Sub Note –Clarification by Ministry of Corporate Affairs

Consequent to expression of difficulties by stakeholders and with a view to facilitate proper administration, the Ministry vide General Circular No.15/2013 dated 13.09.2013 has given clarifications as under

1. Section 102  of Companies Act, 2013

   The above section deals with statement to be annexed to notice for general meeting.  The Ministry has clarified that all companies which have issued notices of general meeting on or after 12.09.2013 , the statement to be annexed to the notice , shall comply with additional requirements as prescribed in Section 102 of Companies Act, 2013.

2. Section 133 of Companies Act, 2013

 The above section deals with Central Government’s power to prescribe accounting standards. The Ministry has clarified that till the Accounting or any addendum are prescribed by Central Government in consultation and recommendation of National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply.

3. Section 180 of Companies Act, 2013

 The above section deals with Restrictions on powers of board. This section requires passing of special resolution as against ordinary resolution as per provisions of Companies Act, 1956, in situations mentioned in the said sections. In this scenario, the Ministry has clarified that if notice for any general meeting was issued prior to 12.09.2013, then such resolution may be passed in accordance with the provisions of Companies Act, 1956.

Disclaimer: Every effort has been made to avoid errors or omissions in this article. In spite of this errors may creep in. The readers are requested by the writer, to bring to his notice any mistake or error for which act, the writer shall be ever grateful. The writer can be contacted at gsv.vivekrajan@gmail.com.

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  1. J.Kumar says:

    Dear Vivek,

    I appreciate your laudable service to professionals whether they are in the field of practice or not. This is really a knowledge sharing and clarifying the present position of new companies act to all the stakeholders. Pls keep do the good service continuously. J.Kumar – ACMA and ACS.

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