Companies Act 2013: While forming a company, there are several questions which a promoter have in his mind: How to establish a company? How the company get regulated? What is the wind-up process for the company? Well, all these questions are answered by the Companies Act 2013.
The Government of India formed Companies Act 2013 on Indian company law which regulates:
- Establishment of a company,
- Duties & responsibilities of a company,
- Directors’ role,
- Dismissal of a company
Historically, the act came into full force in 1956, but
several amendments amended according to the requirements under Provisions of
the Companies Act 2013. The Indian Parliament recently passed The Companies
(Amendment) Bill in the year 2020.
Provisions of the Companies Act 2013
It allows relevant provisions to ensure timely compliance by
the companies.
Resolution for borrowing more than paid-up capital: Section
180 of the Act regulates non-borrowing of above paid-up capital. In
case of any requirement, it has to be approved by a special resolution.
The same applies to a private company.
Associate Company: Section 2 (6) does not allow the associate
company as a stakeholder of more than 20% of the total share capital in the
host company. Section 2 (76) asks for disclosure or approval if the business
is, to begin with, the associate company.
Private Company: Section 2 (68) allows to have a
maximum of 200 persons and not to accept deposits from the general public. However,
subsection 76 permits the public company to raise funds from the general public.
Experts: According to Section 2 (38), an expert is a person who has the authority to issue a certificate, for example, Company Secretary. Furthermore, the company is liable to pay for damages if any stakeholder claims it from the expert under the act.
The above mentioned are the most important provisions of the Companies Act 2013 under the Companies Act 2013 applied on 12th September 2013.
