Companies Bill 2013 - Highlights

The new Companies Bill will replace the 60 year old regulations of Companies Act,1956 .The Companies Bill 2013 provides for modifying the rules and regulations that earlier governed the companies in the country. It mainly focuses on the social welfare and protection of the investors against the fraud committed. It mainly aims to bring transparency in the working of the company. As many new amendments has been made in the  Companies Bill 2013.  Some of the key highlights on the Companies Bill 2013 are:-

• The concept of “One Person Company” has been introduced for the first time.
• Compulsion of e-governance on all compulsory process.
• Mandatory transfer of 2% of average net profit of preceding three years for corporate social responsibility (CSR).
• It says about compulsory internal audit for different class of companies.
• The tenure of appointment of auditors at annual general meeting(AGM) of company has extended to five years , instead of annual appointment /retirement(other than government company)
• In case of listed companies 1/3^rd of total no of directors must be “independent directors”
• The Companies Bill 2013 considers manager or managing director or chief executive officer, whole time director, chief financial officer and company secretary as key “managerial personnel”.
• It prohibits insider trading of securities.
• The maximum no. of member for private company has increased to 200 from 50.
• National Advisory Committee on Accounting Standards (NACAS) has been renamed has National Financial Reporting Authority (NFRA).
• It also highlights on annual ratification of appointment of auditors.
• There is no ceiling on no. of members/partners as to associations or partnership formed by professionals by special acts.
• It highlights on the appointment of at least one women director in the company.
• The companies bill redefines’ the term “subsidiary”, “control” and associate “company”.
• Under the Companies Bill 2013   statutory   status will be conferred upon the Serious Fraud Investigation Office (SFIO).

Apurv Gourav