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.

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0 responses to “Companies Act, 2013- Sections & schedules effective from 01.04.2014”

  1. Vivek Rajan.V says:

    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

  2. Vivek Rajan.V says:

    Dear Readers

    Thank you .

    Your comments motivates me

    Vivek Rajan.V

  3. PRAKASH says:

    gainfull

  4. Nirma Shah says:

    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”

  5. Nirma Shah says:

    it’s very useful. Keep it up.

  6. Manisha says:

    Your article is good. Keep writing

  7. Eswaran says:

    Useful info…

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