The Act was brought into force in stages. Section 1 of this act came into force on 30 August 2013. 98 different sections came into force on 12 September 2013 with a few changes.[1][2] A total of another 183 sections came into force from 1 April 2014.[3] The Ministry of Corporate Affairs thereafter published a notification exempting private companies from the ambit of various sections under the act.[4]
The Act increased the responsibilities of corporate executives in the information technology sector, increasing India's safeguards against organised cybercrime by allowing CEOs and CTOs to be prosecuted in cases of IT failure.
Before the Act, corporate social responsibility (CSR) requirements applied only to public sector companies.[7] Section 135 of the Companies Act introduced mandatory CSR contributions for large companies, making it the only mandatory CSR law in the world. All firms above a particular net worth, turnover, or net profit threshold are required to spend at least 2% of their annual profits of the preceding year on corporate social responsibility. The law requires that all such companies establish a CSR committee to oversee the spending.
Company Secretaries
Section 203 of the Companies Act 2013 deals with the appointment of a company secretary. For the first time, the Act defined company secretaries as a key managerial personnel of the company. The Act made it mandatory for every Indian listed company, and every other entity having more than rupees ten crore (100 million) paid up capital, to have a full-time company secretary.
Types of companies
In addition to private and public limited companies, the Act also provides for a One Person Company (OPC), Section 8 companies, and producer companies. One Person Companies (OPC)[8] are companies with a single member. Only individual Indian citizens can be shareholders in an OPC. At first, only resident Indians could be shareholders, but after an amendment to the Act in 2020, even non-resident Indians can be shareholders.[9]Section 8 companies are non-profit companies governed by section 8 of the Act. Producer Companies are formed for agricultural purposes. Only farmers can be members of a producer company members can be farmers. They are governed by Section 378A to Section 378ZT of the Companies Act, 2013.[8]
An annual general meeting is a meeting of the general membership of an organization.
A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore can exhibit aspects of both partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner's misconduct or negligence. This distinguishes an LLP from a traditional partnership under the UK Partnership Act 1890, in which each partner has joint liability. In an LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Depending on the jurisdiction, however, the limited liability may extend only to the negligence or misconduct of the other partners, and the partners may be personally liable for other liabilities of the firm or partners.
A private limited company is any type of business entity in "private" ownership used in many jurisdictions, in contrast to a publicly listed company, with some differences from country to country. Examples include the LLC in the United States, private company limited by shares in the United Kingdom, GmbH in Germany and Austria, Besloten vennootschap in The Netherlands, société à responsabilité limitée in France, and sociedad de responsabilidad limitada in the Spanish-speaking world. The benefit of having a private limited company is that there is limited liability.
Institute of Chartered Accountants of India (ICAI) is India's largest professional accounting body under the administrative control of Ministry of Corporate Affairs, Government of India. It was established on 1 July 1949 as a statutory body under the Chartered Accountants Act, 1949 enacted by the Parliament for promotion, development and regulation of the profession of Chartered Accountancy in India.
The Ministry of Corporate Affairs is an Indian government ministry primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008, and the Insolvency and Bankruptcy Code, 2016.
General Insurance Corporation of India Limited,, is an Indian public sector reinsurance company, headquarters in Mumbai, India. It was incorporated on 22 November 1972 under Companies Act, 1956. It was the sole nationalised reinsurance company in the Indian insurance market until the insurance market was open to foreign reinsurance players by late 2016 including companies from Germany, Switzerland and France. GIC Re's shares are listed on BSE Limited and National Stock Exchange of India Ltd.
The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act, 2013, The Limited Liability Partnership Act, 2008, The Company Secretaries Act, 1980 and The Chartered Accountants Act, 1949. These officers are from Indian Corporate Law Service cadre. 'ICLS' is an organised Group A service recruitment of which is done by UPSC through Civil Service Examination since 2009 along with other services like IRS, IAS & IPS etc. There are currently 25 Registrars of Companies (ROC) operating from offices in all major states of India. Some states, such as Maharashtra and Tamil Nadu, have two ROCs each. Also in some places unified ROC offices manned by senior Group A ICLS officers are located in capital cities like Jammu and Srinagar. Section 609 of the Companies Act, 1956 tasks the ROCs with the primary duty of registering companies and LLPs floated in the respective states and the union territories under their administration.
Indian Accounting Standard (abbreviated as Ind_AS) is the accounting standard adopted by companies in India and issued under the supervision of Accounting Standards Board (ASB) which was constituted as a body in the year 1977. ASB is a committee under Institute of Chartered Accountants of India (ICAI) which consists of representatives from government department, academicians, other professional bodies viz. ICAI, representatives from ASSOCHAM, CII, FICCI, etc. ICAI is an independent body formed under an act of parliament.
The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India. Unlike the general partnerships in India, LLP is a body corporate and legal entity separate from its partners, have Perpetual succession and any change in the partners of an LLP shall not affect the existence, rights or liabilities of the LLP.
The Indian Corporate Law Service (Hindi: भारतीय कॉरपोरेट विधि सेवा), abbreviated as ICLS, is one of the Central Civil Services and it functions under the Ministry of Corporate Affairs, Government of India. The service is entrusted with the responsibility of the implementation of Companies Act,1956, Companies Act, 2013 and The Limited liability Partnership Act, 2008.
Preeti Malhotra has been the Chairman of the Smart Bharat Group, a diversified conglomerate, with interests in reality, hospitality, entertainment, preventive healthcare, finance and also venturing into new age projects. This is a part of Smart Group which has its footprint across India, China, ASEAN, Middle-East, USA, UK and Africa. Preeti also serves as a director on the board of several group of companies.
India's National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) were released by the Ministry of Corporate Affairs (MCA) in July 2011 by Mr. Murli Deora, the former Honourable Minister for Corporate Affairs. The national framework on Business Responsibility is essentially a set of nine principles that offer businesses an Indian understanding and approach to inculcating responsible business conduct.
The Serious Fraud Investigation Office (SFIO) is a statutory agency in India tasked with investigating corporate fraud. It operates under the Ministry of Corporate Affairs, Government of India, with the mandate of detecting and prosecuting or recommending prosecution for white-collar crimes. The SFIO is a multi-disciplinary organization, comprising experts in various fields such as accountancy, forensic auditing, banking, law, information technology, investigation, company law, capital market, taxation, among other domains.
The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that adjudicates issues relating to Indian companies. The tribunal was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India and is based on the recommendation of the V. Balakrishna Eradi committee on law relating to the insolvency and the winding up of companies.
Indian company law regulates corporations formed under Section 2(20) of the Indian Companies Act of 2013, superseding the Companies Act of 1956.
The Indian Institute of Corporate Affairs (IICA) is a central civil service training institute under the jurisdiction of Ministry of Corporate Affairs, Government of India for the central civil servants of the Indian Corporate Law Service cadre.
Tribunals in India are quasi judicial bodies for settling various administrative and tax-related disputes, including Central Administrative Tribunal (CAT), Income Tax Appellate Tribunal (ITAT), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), National Green Tribunal (NGT), Competition Appellate Tribunal (COMPAT) and Securities Appellate Tribunal (SAT), among others.
The Real Estate Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 61 of 92 sections notified. The remaining provisions came into force on 1 May 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.
The Insolvency and Bankruptcy Code, 2016 (IBC) is an Indian law which creates a consolidated framework that governs insolvency and bankruptcy proceedings for companies, partnership firms, and individuals.
The National Company Law Appellate Tribunal (NCLAT) is a tribunal which was formed by the Central Government of India under Section 410 of the Companies Act, 2013. The NCLAT was formed as a body with an appellate jurisdiction at the same time when NCLT was established as a major reform as per powers granted to the Ministry of Corporate Affairs in India,
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