Indian Companies Act was an Act of the Parliament which was enacted in 1956. It was enabled the companies to be formed by registration, sets out the responsibilities of companies, their executive director and secretaries. It provides for the procedures for its winding.
Later in 2013, the Government of India has amended the Indian Companies Act 1956 and added a new Act called as Indian Companies Act 2013. The Companies Act, 1956 has been replaced in a partial manner by the Indian Companies Act 2013. The President of India gave his assent to the bill on 29 August 2013. Subsequently, it became the act and finally it into force on 12 September 2013.
Why is the Indian Companies Act, 2013 in news?
Recently, the Parliament of India has passed the Companies (Amendment) Bill, 2020, on 19 September 2020 to further amend the Companies Act and decriminalise various compoundable offences as well as promote ease of doing business in the country.
The Companies (Amendment) Bill, 2020 was passed by a voice vote from Rajya Sabha and also got approval from the Lok Sabha.
The Companies (Amendment) Bill, 2020 looks for to decriminalise several penal provisions, permit the direct overseas listing of Indian corporate and to introduce a new chapter related to producer organisations in the legislation.
Reduction in penalties for certain offences as well as in timeline for rights issues, relaxation in corporate social responsibility (CSR) compliance requirements and creation of separate benches at the National Company Law Appellate Tribunal (NCLAT) are among the proposed changes too.
Features of the Companies Act of 2013
1. It regulates incorporation of a company, responsibilities of a company, directors, and dissolution of a company.
2. It is divided into 29 chapters which containing 470 sections as against 658 Sections in the former Companies Act, 1956 and has 7 schedules. However, there are only 438 (470-39+7) sections remains in this Act currently.
3. It provides a maximum of 200 members, earlier the private companies the maximum number of members were 50.
4. A new term of ‘one-person company’ is included in this act.
5. It notified 98 provisions of the Act, and has a total of another 184 sections.
Major changes in Companies Act 2013
The Act has been so far amended four times, first in 2015 and till this year 2020.
1. Companies (1st amendment) Act 2015
2. Companies (2nd amendment) Act 2017
3. Companies ( 3rd amendment) Act 2019
4. Companies (4th amendment) Bill 2020