Vivek Rajan. V
Companies Act, 2013- Journey so far
The Ministry of Corporate Affairs [MCA] by notification dated 12th September 2013 had appointed 12th of September 2013 as the date on which certain provision of the Companies Act, 2013 shall come into force. Further, the MCA followed it up with notification dated 27th February 2014, notifying Section 135 of the Companies Act, 2013 and Schedule VII, to be effective from 01st April 2014; the section 135 and schedule deals with Corporate Social Responsibility.
Companies Act, 2013 – Going Forward
The MCA has by notification dated 26th March 2014 has appointed the 1st of April 2014 , as the date on which certain provisions and all remaining schedules ( totally seven in number , Schedule VII notified earlier and the rest of the six by virtue of this notification) of the Companies Act, 2013 shall come into force.
In this context, I have prepared two tables, one for the definitions that have not been notified, in Part A of Table I and other for the definitions that will come into force ( by virtue of this notification) from 1st April 2014, in Part B of Table I ( all the other definitions not covered in these two tables have been notified and are in force from 12th September 2013) and another for all the sections that will be coming into force vide this notification of MCA from 1st of April 2014, in Table II. I have also prepared a part that describes the schedules of the Companies Act, 2013 that will also come into force from 1st April 2014.
Table – I – Definitions not notified and definitions coming into force from 1st April 2014
All the definitions have come into force vide notifications issued in September 2013 and this notification( those covered by this notification comes into force from 01st April 2014 and is given as Part –B to Table I), except for the following stated in Part A of Table I given as under
Part A – Table I – Definitions not notified
| Section of Companies Act, 2013 | Definitions not yet notified |
| 2(23) | Company Liquidator |
| 2(29)(iv) | 2(29)(iv) defines Court . In that (iv) deals about Special Court |
| 2(67)(ix) | Under “Previous Company Law” – the Registration of Companies (Sikkim) Act, 1961 |
| 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” |
Part – B of Table I- Definitions coming into force from 01st April 2014
| Section of Companies Act, 2013 | Definitions effective from 1st April 2014 |
| 2(2) | Accounting Standard |
| 2(7) | Auditing Standard |
| 2(13) | Books of Accounts |
| 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(83) | Serious Fraud Investigation Office |
| 2(85) | Small Company |
| 2(87) Explanation (d) | “ Layer” in relation to a holding company means its subsidiary or subsidiaries |
Table II – Sections coming into force
The following sections shall come into force from 1st April 2014 in addition to those that have been notified earlier.
| Section of Companies Act, 2013 | Chapter of Companies Act, 2013 | Caption of the Section |
| 3 |
Chapter II – Incorporation of Company and Matters incidental thereto |
Formation of company |
| 4 | Memorandum of Association | |
| 5 | Articles of Association | |
| 6 | Act to override memorandum and articles etc | |
| 7 except sub-section (7) # | Incorporation of company | |
| 8 except sub-section (9) # | Formation of companies with charitable objects etc | |
| 9 | Effect of registration | |
| 10 | Effect of memorandum and articles | |
| 11 | Commencement of business etc | |
| 12 | Registered office of company | |
| 13 | Alteration of memorandum | |
| 14 except second proviso to sub-section (1) and sub-section (2) # | Alteration of articles | |
| 15 | Alteration of memorandum and articles to be noted in every copy | |
| 16 | Rectification of name of company | |
| 17 | Copies of memorandum, articles etc to be given to members | |
| 18 | Conversion of companies already registered | |
| 20 | Service of documents | |
| Clause (b) of sub-section (1) and (2) of section 23 # |
Chapter III -Prospectus and allotment of securities
|
Public offer and private placement |
| Sub-section (3) of section 25 # | Document containing offer of securities for sale to be deemed prospectus | |
| 26 | Matters to be stated in prospectus | |
| 27 | Variation in terms of contract or objects in prospectus | |
| 28 | Offer of sale of shares by certain members of company | |
| Sub-section (3)of section 33 # | Issue of application forms for securities | |
| Clause (e ) of sub-section (1) of section 35 # | Civil liability for mis-statements in prospectus | |
| 39 (4) | Allotment of securities by company | |
| 40 (6) | Securities to be dealt with in stock exchanges | |
| 41 | Global depository receipt | |
| 42 | Offer or invitation for subscription of securities on private placement | |
| 43 |
Chapter IV – Share Capital and Debentures |
Kinds of share capital |
| 46 | Certificate of shares | |
| 47 | Voting rights | |
| 52 | Application of premiums received on issue of shares | |
| 53 | Prohibition on issue of shares at discount | |
| 54 | Issue of sweat equity shares | |
| 55 except sub –section (3) # | Issue and redemption of preference shares | |
| 56 | Transfer and transmission of securities | |
| 61 except proviso to clause (b) of sub-section (1) # | Power of limited company to alter its share capital | |
| 62 except sub-sections (4) to (6) # | Further issue of share capital | |
| 63 | Issue of bonus shares | |
| 64 | Notice to be given to Registrar for alteration of share capital | |
| 67 | Restrictions on purchase by company or giving of loans by it for purchase of shares | |
| 68 | Power of company to purchase its own securities | |
| 70 (2) | Prohibition for buy- back in certain circumstances | |
| 71 except sub-sections (9) to (11) # | Debentures | |
| 72 | Power to nominate | |
| 73 |
Chapter V – Acceptance of deposits by companies |
Prohibition on acceptance of deposits from public |
| 74(1) | Repayment of deposits etc accepted before commencement of this Act | |
| 76 | Acceptance of deposits from public by certain companies | |
| 77 |
Chapter VI -Registration of charges |
Duty to register charges |
| 78 | Application for registration of charge | |
| 79 | Section 77 to apply in certain matters | |
| 80 | Date of notice of charge | |
| 81 | Register of charges to be kept by Registrar | |
| 82 | Company to report satisfaction of charge | |
| 83 | Power of Registrar to make entries of satisfaction and release in absence of intimation from company | |
| 84 | Intimation of appointment of receiver or manager | |
| 85 | Company’s register of charges | |
| 87 | Rectification by Central Government in register of charges | |
| 88 |
Chapter VII – Management and Administration |
Register of members |
| 89 | Declaration in respect of beneficial interest in any share | |
| 90 | Investigation of beneficial ownership of shares in certain cases | |
| 92 | Annual Return | |
| 93 | Return to be filed with Registrar in case promoter’s stake changes | |
| 94 | Place of keeping and inspection of registers, returns etc | |
| 95 | Registers etc to be evidence | |
| 96 | Annual general meeting | |
| 100(6) | Calling of extraordinary general meeting | |
| 101 | Notice of meeting | |
| 3rd and 4th proviso to sub-section (1) and (7) of section 105 # | Proxies | |
| 108 | Voting through electronic means | |
| 109 | Demand for poll | |
| 110 | Postal ballot | |
| 113 (1) (b) | Representations of corporations at meeting of companies and creditors | |
| 115 | Resolutions requiring special notice | |
| 117 | Resolutions and agreements to be filed | |
| 118 | Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot | |
| 119 except sub-section (4) # | Inspection of minute- books of general meeting | |
| 120 | Maintenance and inspection of documents in electronic form | |
| 121 | Report on annual general meeting | |
| 122 | Applicability of this chapter to One Person Company | |
| 123 | Chapter VIII – Declaration and Payment of Dividend | Declaration of dividend |
| 126 | Right to dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares. | |
| 128 |
Chapter IX – Accounts of Companies |
Books of accounts etc to be kept by company |
| 129 | Financial statement | |
| 134 | Financial statement, Board’s report etc | |
| 136 | Right of member to copies of audited financial statement | |
| 137 | Copy of financial statement to be filed with Registrar | |
| 138 | Internal audit | |
| 139 |
Chapter X – Audit and Auditors |
Appointment of auditors |
| 140 except second proviso to sub-section (4) &(5) # | Removal, resignation of auditor and giving of special notice | |
| 141 | Eligibility, qualifications and disqualifications of auditors | |
| 142 | Remuneration of auditors | |
| 143 | Powers and duties of auditors and auditing standards | |
| 144 | Auditor not to render certain services | |
| 145 | Auditor to sign audit reports , etc | |
| 146 | Auditors to attend general meeting | |
| 147 | Punishment for contravention | |
| 148 | Central Government to specify audit of items of cost in respect of certain companies | |
| 149 |
Chapter XI – Appointment and Qualifications of Directors |
Company to have Board of Directors |
| 150 | Manner of selection of independent directors and maintenance of databank of independent directors | |
| 151 | Appointment of director elected by small shareholders | |
| 152 | Appointment of directors | |
| 153 | Application for allotment of Director Identification Number | |
| 154 | Allotment of Director Identification Number | |
| 155 | Prohibition to obtain more than one Director Identification Number | |
| 156 | Director to intimate Director Identification Number | |
| 157 | Company to inform Director Identification Number to Registrar | |
| 158 | Obligation to indicate Director Identification Number | |
| 159 | Punishment for contravention | |
| 160 | Right of persons other than retiring directors to stand for directorship | |
| 161 (2) | Appointment of additional director, alternate director and nominee director | |
| 164 | Disqualifications for appointment of director | |
| 165 | Number of directorships | |
| 166 | Duties of directors | |
| 167 | Vacation of office of director | |
| 168 | Resignation of director | |
| 169 except sub-section (4) | Removal of directors | |
| 170 | Register of directors and key managerial personnel and their shareholding | |
| 171 | Members right to inspect | |
| 172 | Punishment | |
| 173 |
Chapter XII – Meetings of Board and its Powers |
Meetings of Board |
| 174 | Quorum for meetings of Board | |
| 175 | Passing of resolution by circulation | |
| 177 | Audit Committee | |
| 178 | Nomination and Remuneration Committee and Stakeholders Relationship Committee | |
| 179 | Powers of Board | |
| 184 | Disclosure of interest by director | |
| 186 | Loan and investment by company | |
| 187 | Investments of company to be held in its own name | |
| 188 | Related party transactions | |
| 189 | Register of contracts or arrangements in which directors are interested | |
| 190 | Contract of employment with managing or whole-time director | |
| 191 | Payment to director for loss of office etc in connection with transfer of undertaking , property or shares | |
| 193 | Contract by One Person Company | |
| 196 |
Chapter XIII – Appointment and Remuneration of Managerial Personnel |
Appointment of managing director, whole-time director or manager |
| 197 | Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits | |
| 198 | Calculation of profits | |
| 199 | Recovery of remuneration in certain cases | |
| 200 | Central Government or company to fix limit with regard to remuneration | |
| 201 | Forms of, and procedure in relation to, certain applications | |
| 203 | Appointment of key managerial personnel | |
| 204 | Secretarial audit for bigger companies | |
| 205 | Functions of company secretary | |
| 206 |
Chapter XIV – Inspection, Inquiry and Investigation |
Power to call for information, inspect books and conduct inquiries |
| 207 | Conduct of inspection and inquiry | |
| 208 | Report on inspection made | |
| 209 | Search and seizure | |
| 210 | Investigation into affairs of affairs of company | |
| 211 | Establishment of Serious Fraud Investigation Office | |
| 212 [ except references of sub-section (10) of section 66, sub-section (5) of section 140, section 213, sub-section (1) of section 251 and sub-section (3) of section 339 made in sub-section (6) and also sub-sections (8) to (10) # | Investigation into affairs of Company by Serious Fraud Investigation Office | |
| 214 | Security for payment of costs and expenses of investigation | |
| 215 | Firm, body corporate or association not to be appointed as inspector | |
| 216 except sub-section (2) # | Investigation of ownership of company | |
| 217 | Procedure, powers etc of inspectors | |
| 219 | Power of inspector to conduct investigation into affairs of related companies , etc | |
| 220 | Seizure of documents by inspector | |
| 223 | Inspector’s report | |
| 224 except sub-section (2) and (5) # | Actions to be taken in pursuance of inspector’s report | |
| 225 | Expenses of investigation | |
| 228 | Investigation etc of foreign companies | |
| 229 | Penalty for furnishing false statement , mutilation , destruction of documents | |
| 366 |
Chapter XXI –Part I- Companies Authorised to Register under this Act and Part – II – Winding up of unregistered companies |
Companies capable of being registered |
| 367 | Certificate of registration of existing companies | |
| 368 | Vesting of property on registration | |
| 369 | Saving of existing liabilities | |
| 370 except the proviso # | Continuation of pending legal proceedings | |
| 371 | Effect of registration under this Part | |
| 374 | Obligations of companies registering under this Part | |
| 380 |
Chapter XXII – Companies Incorporated Outside India |
Documents , etc to be delivered to Registrar by foreign companies |
| 381 | Accounts of foreign company | |
| 384 | Debentures, annual return, registration of charges, books of account and their inspection | |
| 385 | Fee for registration of documents | |
| Clause (a) of section 386 # | Interpretation | |
| 387 | Dating of prospectus and particulars to be contained therein | |
| 388 | Provision’s as to expert’s consent and allotment | |
| 389 | Registration of prospectus | |
| 390 | Offer of Indian Depository Receipts | |
| 391(1) | Application of section 34 to 36 and Chapter XX | |
| 392 | Punishment for contravention | |
| 393 | Company’s failure to comply with provisions of this Chapter not to affect validity of contracts, etc | |
| 395 |
Chapter XXIII – Government Companies |
Annual reports where one or more State Governments are members of companies |
| 396 |
Chapter XXIV – Registration Offices and Fees |
Registration offices |
| 397 | Admissibility of certain documents as evidence | |
| 398 | Provisions relating to filing of applications, documents, inspection , etc in electronic form | |
| 399 except reference of word Tribunal in sub-section(2) # | Inspection, production and evidence of documents kept by Registrar | |
| 400 | Electronic form to be exclusive, alternative or in addition to physical form | |
| 401 | Provision of value added services through electronic form | |
| 402 | Application of provisions of Information Technology Act, 2000 | |
| 403 | Fee for filing etc | |
| 404 | Fees , etc to be credited into public account | |
| 406 |
Chapter XXVI – Nidhis |
Power to modify Act in its application to Nidhis |
| 442 |
Chapter XXVIII – Special Courts |
Mediation and Conciliation Panel |
| 454 |
Chapter XXIX – Miscellaneous |
Adjudication of penalties |
| 455 | Dormant company | |
| 464 | Prohibition of association or partnership of persons exceeding certain number |
# Please refer the respective sections for the exceptions, applicability etc as the case may be, as in the above table the only the caption of the section is given.
Notified Schedules
The following table has the notified schedules. All the schedules shall come into force from 1st April 2014
| Schedule I | Memorandum of Association and Articles of Association and connected matters |
| Schedule II | Useful lives to compute depreciation |
| Schedule III | General Instructions for preparation Balance Sheet and Statement of Profit and Loss of a Company |
| Schedule IV | Code for Independent Directors |
| Schedule V | Part I – Conditions to be fulfilled for the appointment of a managing or whole – time director or a manager without the approval of the Central GovernmentPart II – RemunerationPart III – Provisions applicable to Parts I and II of this SchedulePart IV – Power of Central Government to exempt any class of companies from any requirements of this schedule |
| Schedule VI | Defining the scope of infrastructural projects/ infrastructural facilities |
| Schedule VII@ | Corporate Social Responsibility |
@ This was notified by notification issued in February 2014
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.
In my opinion, the words ” As may be prescribed” in Schedule II ( which in turn refers to Sec 123) means all the companies who are eligible to declare dividend. This is b’cos the law makers wanted to ensure uniformity with respect to companies as regards declaration of dividend .
Pl do let me know in case of different opinion
V.Vivek Rajan
Dear Readers
Thank you .
Your comments motivates me
Vivek Rajan.V
gainfull
In schedule II, part A- para 3 is as below:
(i) In case of such class of companies, as may be prescribed and whose financial statements comply with the accounting standards prescribed for such class of companies under section 133 the useful life of an asset shall not normally be different from the useful life and the residual value shall not be different from that as indicated in Part C, provided that if such a company uses a useful life or residual value which is different from the useful life or residual value indicated therein, it shall disclose the justification for the same.
With reference to above, what is the meaning of “as may be prescribed”
it’s very useful. Keep it up.
Your article is good. Keep writing
Useful info…