The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The 2013 Act is divided into 29 chapters containing 470 sections as against 658 Sections in the Companies Act, 1956 and has 7 schedules. However, currently there are only 438 sections remains in this Act. The Act has replaced The Companies Act, 1956 after receiving the assent of the President of India on 29 August 2013. The Act came into force on 12 September 2013 with few changes like earlier private companies maximum number of members were 50 and now it will be 200. A new term of "one-person company" is included in this act that will be a private company and with only 98 provisions of the Act notified. A total of another 184 sections came into force from 1 April 2014. The Ministry of Corporate Affairs thereafter published a notification for exempting private companies from the ambit of various sections under the Companies Act. The 2013 legislation has stipulations for increased responsibilities of corporate executives in the IT sector, increasing India's safeguards against organized cyber crime by allowing CEO's and CTO's to be prosecuted in cases of IT failure.
History
Indian Companies Act 1956 was an Act of the Parliament of India, enacted in 1956, which enabled companies to be formed by registration, sets out the responsibilities of companies, their directors and secretaries and also provides for the procedures for its winding.
Mandatory CSR contributions
Section 135 of the Companies Act introduces mandatory Corporate Social Responsibility contributions for large companies, making it the only mandatory CSR law in the world. According to the bill, all firms with net worth above 5 billion rupees or ₹500 crores , turnover over 10 billion rupees or ₹1000 crores, or net profit over 50 million rupees or ₹5 crores are required to spend at least 2% of their annual profits of the preceding year. The law requires that all businesses affected establish a CSR committee to oversee the spending. Prior to this law's passage, CSR laws applied to public sector companies only.
Section 203 of the Companies Act 2013 deals with the appointment of a Company Secretary. The act very first time in the history of Indian company law has defined Company Secretary as a Key managerial personnel of the Company. Indian company law make it mandatory for every Indian listed, and every other entity having more than rupees ten crore paid up capital, to have a whole time Company Secretary.
National Company Law Tribunal is established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India & is based on the recommendation of the Justice Eradi committee on law relating to insolvency and winding up of companies.
