COMPANIES ACT 1956

VS

COMPANIES ACT 2013

Contents

THE COMPANIES ACT, 20133

An overview of Companies Act 20133

Comparative study on some of the provisions of Companies Act 1956 and Companies Act 20134

I. Significant changes in Definitions and new inclusions4

II. Incorporation8

III. Directors10

IV. Share capital12

V. Acceptance of deposits by Companies14

VI. Investments14

VII. Books of Accounts and Financial Year15

VIII. Reports16

IX. Prospectus, Raising of funds & Allotment16

X. Utilising Securities Premium Account17

XI. Annual returns and related issues17

XII. Notices, Meetings, Quorums, Voting, Resolutions, Minutes19

XIII. Internal Audit21

XIV. Cost Audit21

XV. Statutory compliance21

XVI. Transfer to reserves22

XVII. Dividends22

XVIII. Auditors22

XIX. Nomination & Remuneration committee25

XX. Prohibitions & Restrictions25

XXI. Company Secretary25

XXII. Investigations26

XXIII. Corporate Restructuring26

XXIV. Class action Suits27

XXV. Valuations27

XXVI. Winding up27

XXVII. Other legal provisions28

XXVIII. National Financial reporting Authority28

XXIX. Schedules Companies Act 201330

References:31

THE COMPANIES ACT, 2013

(Passed in both houses of Parliament on 8th August 2013)

We all know that the 57 year old Companies act, 1956 has now got replaced with the new Companies Act, 2013. This write up has bee n made with an effort to compare some of the major clause / issues in the new Companies Act, 2013 and the Companies Act 1956.

2013

2012

2011

2010

2009

2008

History of Companies Bill 2012

Enactedas Companies Act 2013,with President assent on 29thAugustt 2013 Billpassed inRajya Sabhaon 8thAugust 2013

Companies Bill passed in Lok Sabhaon 18thDecember 2012

Introduced in Lok Sabha on 14thDecember 2011

Bill referred to standing committee for review , report tabled in Lo k Sabha on 31st August 2010

2008Bill modified and reintroduced on 3rdAugust 2009

Companies bill 2008 introduced in Lok sabha on 23rd October 20008 for the first time, to replace52yearold Coompanies Act ,1956Butit lapsed due to dissolution of parliament.

An overview of Companies Act 2013

470 CLAUSES

VII SCHEDULES

29 CHAPTERS

COMPANIES ACT 2013

Comparative study on some of the provisions of Companies Act 1956 and Companies Act 2013

CaptionCompanies Act 1956Companies Act ,2013

I. Significant changes in Definitions and new inclusions

New

Clauses

A) Associate company

B) Control

C) Director

In relation to another company, means a

company in which that other company

has a significant influence, but which is

not a subsidiary company of the

company having such influence and

includes a joint venture company.

Explanation.For the purposes of this

clause, significantinfluence means

control of at least twenty per cent of

total share capital, or of business

decisions under an agreement

For the purposes of this Act,acontrol, shall include the right to

company shall, subject totheappoint majority of the directors or to

provisions of sub- section (3),control the management or policy

be deemed to be asubsidiarydecisions exercisable by a person or

of another if, butonly if,persons acting individually or in

concert, directly or indirectly, including

a) thatother controlsby virtue of their shareholding or

thecomposition ofmanagement rightsor shareholders

its Boardof directors;agreements or voting agreements or in

b)orany other manner

that other-

i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of

such company; ii)where the first-

mentioned company is any other company, holds more than half in nominal value of its equity share capital; or]

c) The first- mentioned company is a subsidiary of any company which is that other's subsidiary.

includes any personMeans a director appointed to the Board

occupying the position ofof a company.

2(6)

2 (27)

2(34)

Provided that, in relation to an insurance company, "financial year" shall mean the calendar year referred to in subsection (1) of section 11 of the Insurance Act, 1938 (4 of 1938)"free reserves" means all reserves created out of theprofits and share premiumaccount but does not includereserves created out ofrevaluation of assets, writeback of depreciationprovisions andamalgamation

D) Financial Statement

E. Financial Year

director, by whatever name

called

i. a balance sheet as at theIn relation to a company includes:

end of the financial year,i.a balance sheet as at the end of

the financial year,

ii. a profit and loss account,ii.a profit and loss account, or in

or in the case ofthe case of accompany carrying

accompany carryingonon any activity not for profit, an

any activity not for profit,incomeandexpenditure

anincomeandaccount for the financial year;

expenditure accountforiii.cash flow statement for the

the financial yearfinancial year,

iv.a statement of changes in

equity; and

v.any explanatory note attached

to or forming part of any

documentreferred to in sub-

clause (i) to sub-clause (iv);

providedthatthefinancial

statementwith respect to One Person

Company,small company and dormant

company may not include the cash flow

statement

Issue: Cash Flow Statement becomes

mandatory.

InrelationtoThe Financial can mandatorily end on

anybodycorporate,the31st March

periodinrespect of which

any profit and loss account ofException-

the body corporatelaida) Entities which are holding

before it in annual generalcompanies or subsidiary

meeting is made up, whethercompanies of foreign companies

that period is a year or notrequiring consolidation outside

India with the approval of

Tribunal.

b) Existing companies to align

within 2 years

2(40)

2(41)

F. Free reservesShare premium account does2(43)

not form part.

Credit balance in Statement of

Profit & Loss is not free reserve

G. KeyManagementNo provision existthe Chief Executive Officer or2(51)

Personnelthemanaging director or the

manager;

the company secretary;

H. Net Worth

I. Officer

J. Officer in default

K. relative

L. Related party transactions

the Chief Financial Officer if the

Board of Directors appointshim;

and

such other officer as may be

prescribed

Means the sum total of the it says that only paid upcapital,

paid-upcapitalandshare premium and

freereservesafterdeductingreservescreated out of profit will

the provisions or expenses asbetreated asnet worth.

may be prescribed. Credit balance in Statement of

Explanation.-ForProfit & Loss has been left out.

thepurposesofthis clause,

"freereserves"meansall

reserves created out of the

profitsandsharepremium

account but does not include

reservescreatedoutof

revaluationofassets,write

back

ofdepreciationprovisions and

amalgamation

includesanydirector,to include CEO/ CFO or any other

manager or secretary or anyofficer as may be prescribed

personin accordancewith

whosedirectionsor

instructionstheBoardof

directors or any one or more

of the directors is or are

accustomed to act

In relation to any provisionScope broadened

referred to in section 5, has Directors aware of the default

the meaning specified in thatCFO

section ; KMPs if knowingly commits

default

A person shall be deemed towith reference to any person, means

be a relative of another, if,anyone who is a related to another, if

and only if, they are members of a Hindu

a)they are members ofUndivided Family;

a Hindu undivided family ; they are husband and wife; or

or one person is related to the

b)theyarehusbandother in such manner as may be

and wife ;prescribed

c)the one is related to

the other in the manner

indicated in Schedule IA

Section 297 covered only saleAlso covers

and purchaseofgoods,leasing of property

renderingofservices,appointment of agent for the

underwritingthesubs-sale or purchase,

cription of any shares orrelated partys appointment to

debentures.any office or place of profit in

Where paid up share capitalthe company, its subsidiary or

of the company exceeds Rs. 1associate company.

crore, prior approval of thePrior CG approval done away it and

Central Govt. required. Notonly Members approval required by

applicabletocontractsway of a special resolution.

2(57)

2(59)

2(60)

2(77)

188

M. Small Company

N. SickIndustrial Companies

O. Dormant Company

P. Nidhi Companies

Q. PublicCompany

between two public companies

No provision exists.

Treatment meted out under

SICA,1985 coverage limited only to Industrial companies. SICA determines sickness based on negative net worth criteria

Not defined

Section 620A-Necessary for

Central Govt. to notify a company as a Nidhi for it to qualify as such

Considers aprivate companywhich is asubsidiary of apubliccompanyas a publiccompany.

Applicable to contracts between two public companies as well

means a company, other than a public company,- paid up share capital of which does not exceedfifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crores rupees; or

turnover of which as per its last profit and loss account does notexceedTwo crore rupees or such higheramount as may be prescribed whichshall not be more than twenty crorerupees

Provided that nothing in this clause shall apply to :

a. a holding company or a subsidiary company;

b. a company registered under section 8;

c. a company or body corporate governed by any special act.

subjected to a lesser stringent regulatory framework

Treatment meted out under chapter XIX of the Bill:

Covers revival and rehabilitation of all companies irrespective of the industry they are in.

Sickness of company to be determined on the basis of whether co is able to pay its debts or not.

Clause 455 defines inactive company as a company which: Has not been carrying on any business or operation or has not made any significant accounting transaction during the last two financial years, or

Has not filed financial statements and annual returns during the last two financial years No such notification required.

Nidhi defined in this clause.

Further enhanced to provide that a private subsidiaryof a public company deemed to be a public companyeven though the subsidiary continues to be a privatecompany in the articles

2(85)

455

406

R.PrivateCompanyRestricts themaximumTo restrict the maximum number of

numberof members to 50members to 200

S.OnepersonNo provision exists.Concept of One Person Company has3

Companybeen introduced and the OPC can be

formed as private limited company

Privileges Provided

to OPCs

The financial statement may not

include the cash flow statement

[Proviso to Clause 2(40)]

The annual return to be signed

by the company secretary, or

where there is no company

secretary, by the director of the

company.

No requirement of holding an

AGM [Clause 96(1)]

Inapplicability of the provisions

of Section 98 and Sections 100 to

111 (both inclusive) [Clause

122(1)]

Minimum number of directors:1

[Clause 149(1)]

Board Meetings- Minimum 1

ineach half of a calendar year

andthe Gapbetween the

twomeetings shall not be less

than90 days. Notapplicable

wherethere is only one

Director.Clause 173 (5)

Quorum for Board Meetings

notapplicable where there is

only 1director in OPC. (Clause

174)

AI. Incorporation

IncorporationofCertificate of IncorporationtoAction can be taken even after7

companybeconclusive evidenceincorporation, if incorporation is on the

basis of false or incorrect incorporation.

Thus the certificate is not treated as

conclusive evidence

CompaniesthatcanPublic Limited , private LimitedList includesOne person company as a3

be formedcompanies,Section25private company

companies,Government

companies

ReservationofnewProcedural aspects not covered.On payment of prescribed fees to ROC4(4), 4(5)

name-proceduraland by an application the new name/

aspectschange of name can be reserved.

MemorandumofMoA should have Clauses suchMoA not to have other objects, other4(1)

Associationas Name, state, main objects,things remains the same

other objects,subscription

clause

Formats of AoA Table B Company limited Table F- company limited by shares

by shares TableG-companylimitedby

Table C Company limitedguarantee and having share capital

by guarantee and not having TableH-Companylimitedby

share capitalguarantee and not having share capital

Table D- company limited Table I Unlimited company having

by guaranteeandhavingshare capital

share capital Table J- Unlimitedcompanynot

Table E- Unlimited companyhaving share capital

FormationofSection25Company.DidSpecifically provides for all thesewords.

companieswithnotspecificallyprovideforCould be as a OPC or anAssociation of

charitable objectssports,education,research,Persons(AOP).Actionbesides

socialwelfareandrevocation can be directionfor winding

environmentprotection.Couldup of the Company oramalgamation

be only by wayof a public orwith another companyregisteredwith

private company.same objects.

Max. action that can be takenby

CentralGovernment(CG)Providesforadditional grounds

wasrevocationoflicense andforrevocationlikeaffairs

thattoo only for violation ofbeingconductedfraudulentlyor

anyterms of the license.prejudicialto public interest.

CommencementofApplicableonlytoApplicable to both Public and Private

BusinessPublicCompanies.IfnotROC is empowered to remove the name

complied,no powers to the ROCof the company from the register of

toinitiateactionforthecompanies if declaration is not filed

removalof the name of thewithin 180days from the date of

CompanyfromtheRegisterincorporation of the company and ROC

ofCompanieshas reasonable cause to believe that the

company is not carrying on any

business.

EntrenchmentNo such provisions existed.Articles may provide for more stringent

provision in articlesor restrictive procedure than passing of

special resolution for altering the certain

provisions of AoA ( a provision can be

altered only if agreed by all the

members of the company in writing)

Name change duringNo such provision existed.Every company should have its former

the last two yearsname printed or affixed outside its

office, in its letter head, etc during last

two years

It is not necessary to have a registered

office at the time of incorporation, but it

shall have at all times a registered office

from the 15th day of incorporation

New restrictionsonObjectsclauseIt cannot alter its clause unless it passes

alterationof objectsalterationrequiredonlya special resolution and the details as

clausewherespecialresolutionofmembersmay be prescribed , of the notice, shall

companyhasanyandfiling of Form 23 withbe published in two newspapers and

unutilisedproceedstheROC.shall also be placed on the companys

from public issuewebsite of the company;

Dissenting shareholder shall be given

exit opportunity in accordance with

SEBI regulations.

Change of promotersNo such provision existed.Company has to file a return with the

ROC in case of changes in promoters or

top ten shareholders of the company

within 15 days of such change

8

11

5

12

13

93

Applicability ofNot applicable

certain provisions to

OPC-clause

Power to call meetings of members,

calling for EOGM, notice of meeting, statement to be annexed to notice,

quorum for meetings, chairman for meetings,

98100101

102103

104

proxies,

restriction on voting rights,

voting by show of hands,

voting through electronic means,

demand for poll,

postal ballot,

circulation of members resolution

Contract by OPCNo OPC concept existedWhere OPC limited by shares or by

guarantee enters into a contract with its

sole member, who is also a Director; the

company should preferably enter into a

written contract.

If not the above, the OPC will have to

record the contract in the board minutes

book and file a return with the ROC

within 15 days of the date of approval

by the BOD, with prescribed fees.

Conversion of LLPsNot permitted under the presentProvides for conversion of LLPs into

intoregimecompanies

Companies

Companies Service of documents on foreign

incorporated outsidecompany now can be served

Indiathrough any electronic mode.

The foreign officesarealso

required to comply with the

provisions ofwinding up.

E-governanceNo such provisionMaintenance and allowing inspection of

documents by companies in electronic

form

Vigil MechanismNo provision exists.177(9)-Every listed company or such

class orclasses of companies, as may

beprescribed,shall establish a

vigilmechanism for directors and

employeesto report genuine concerns

insuchmanner as may be prescribed.

177(10)- The vigil mechanism undersub-

section (9) shall provide foradequate

safeguardsagainstvictimisation of

persons who use suchmechanism and

make provision for directaccess to the

chairperson of theAudit Committee in

appropriate orexceptional cases.

III.Directors

Women DirectorNo such provision existedIn prescribed class or classes of

companies there should be 1 women

director

Resident DirectorsNo such provision existedEvery company shall have at least one

Director who has stayed in India for a

total period of not less than 182 days in

the previous calendar year.

Panel of IDs to be maintained by a

body/institutenotifiedbythe

CGfacilitatingappointmentof

Independent Directors.

105106107108

109110

111

193

371

383

391

120

177(10)

149(1)

149(1)

150

Independent directors

Maximum number of

Directors

Right of the person other than retiring directors to stand for directorship

Alternate Director

Duties of Director

Resignation of directors

Loan to Directors

Listed companies may have one director151

by small share holder

No such provision existed Tenureof suchdirectors-not149

exceedingtwo consecutive term of 5

years

Can be reappointed after a gap of 3

years, however he should not be

associated with the company directly

or indirectly in this gap

Not liable to retire by rotation

Excludedfor thepurposeof

computing 1/3rd of the retiring

directors

Section 259providedforprovides for max 15 and beyond 15149(1)

max. 12 and beyond 12by passing a special resolution

required prior Central Govt.

Approval

Section 257 provides thatClause 160 has increased this amount160

such a person has toto Rs. 100,000 which is refundable

deposit Rs. 500 whichwhen he is appointed or even when

would be refunded in casehe gets more than 25% of the total

he is appointed as Directorvalid votes cast either on show of

hands or on poll on such resolution

Section 313-Absence for 3Clause 161-has been modified to161

months from the state whereinclude India, instead of the state

the BoardMeetingsarewhere the board meetings are

ordinarilyheld, istheordinarily held, to be the criteria

criteria

Not specifically providedProvides for the following duties:166

To act in accordance with

cosAoA;

Act in good faith;

Exercise his duties with due

care and diligence.

A director shall not involve in

any conflicting interest with the

company

Achieve or attempt to achieve

any undue advantage;

Assign his office.

No such provisionProvision for director to resign by168

specifically existedtendering his resignation letter: which

the Board has to note and place before

the members in the next general

meeting.

Date of resignation will be date

mentioned in the letter or the date of

receipt of the resignation by the

company, whichever is later.

Director who has resigned shall be liable

even after his resignation for offences

which occurred during his tenure

sec 295-not applicable toCG approval done away with and185

private companies and priorapplicable to private companies as well.

Remuneration of managerial personnel in case of no profits or inadequate profits.

Appointment of Whole

Time Director

Number of directorship

Increase in subscribed capital

Issue of bonus shares

Buy back of shares

approval of the CG required

Governed by Schedule XIIITo be governed by schedule V. IDs not

to get stock option but may get payment

of fees and profit linked commission

subject to limits. CG may prescribe

amount of fees under the rules

Section 269-every publicEvery company belonging to such

company having capital ofclassor description of companies as may

more than Rs 5 cr.-to have abe prescribed shall have MD or CEO or

Managing director/ WTD/Manager and in their absence, a WTD

Managerand a Company Secretary.

Individual not to be the Chairman of the

Co. as well as the MD or CEO of the Co.

at the same time (AoA can provide for

this);

Every whole time KMP to be appointed

by a resolution at BOD meeting;

A WTKMP not to hold office in more

than one company at the same time.

Any vacancy in the office of any KMP to

be filled up by the BOD within 6 m.

Provisions relating to separation of

office of Chairman and Managing

Director (MD) modified to allow, in

certain cases, a class of companies

having multiple business and separate

divisional MDs to appoint same person

as chairman as well as MD

20, out of which not more than 10 can be

a public companies and includes

alternate directorship also

IV.Share capital

Apart from existing shareholders, if the company having share capital atanytime, proposes to increase its subscribedcapital by the issue of furthershares, such shares may also be offered toemployees by way of ESOPsubject to approval of shareholders by way of special resolution. (Clause62)No such provisions existed. Private limited companies are notHowever rules framed for permitted to issue bonus shares. public unlisted company.[77B.PROHIBITIONFORA company can make a buy back even if

BUY-BACK IN CERTAINit had at any time defaulted

CIRCUMSTANCES

1.Nocompanyshallin repayment of deposit or

directlyorindirectlyinterest thereon, redemption of

purchase its own shares ordebentures or preference shares

other specified securities or payment of dividend to any

a)throughanyshareholder

subsidiarycompanyRepayment of term loan or

includingitsowninterest thereon

subsidiary companies ; or

b)throughanyProvided that default must have been

203

165

62

63 and

23

66(6)

investmentcompanyorremedied and a period of 3 years must

groupofinvestmenthave elapsed after such default ceased to

companies ; orsubsist.

c)if a default, by the

company, in repayment of

deposit or interest payable

thereon,redemptionof

debenturesorpreference

sharesorpaymentof

dividendtoany

shareholderorrepayment

of any term loan or interest

payablethereontoany

financialinstitutionor

bank is, subsisting.

2.No companyshall

directlyorindirectly

purchase its ownshares or

other specified securities in

case,suchcompanyhas

notcompliedwiththe

provisions of sections 159,

207and 211.]

ExitoptionofNo provisionShareholders have exit option if the27

shareholdermoney raised has not been utilised

PermissiblemodeofCompaniescouldPrivate companies can issue securities23, 62,63

issuance of securitiesissuesecuritiesbywayofonly through private placements after

publicissue,privatecomplying with Part II of Chapter II .

placement,rightsissuesorThus Private companies cannot rights

bonus issueshares or bonus shares.

VotingrightsonSection 87-No difference between cumulative or47

preference sharesDifferentcriterianon cumulative, voting rights arise if

forcumulativeandnon-dividends payable are in arrears for a

cumulativepreferencesharesperiod of two years or more.

fortrigger ofvotingrights.

Prohibitionof issueofSection79-IssueofsharesatIssue of shares at discount is void and54

shares at discountdiscountpermissiblesubjectnot permissible except for Sweat equity

to conditionsandCentralshares

Government approval

PreferencesharesSection 80-Only infrastructure companies can issue55

beyond 20 yearsIssueofirredeemablepreference shares beyond 20 years

preferencesharessubject to annual redemption of such

orredeemablebeyond20yrspercentage of preference shares as may

is prohibitedbeprescribedon annual basisatthe

option of such preferential shareholders

RedemptionofNo such provisionCompanymayredeem55 (3)

unredeemedpreferenceunredeemedpreferencesharesby

sharesbyissueofissuing further redeemablepreference

further sharesshares equal to the amount due, along

with the dividend thereon , with the

consent of 75% of shareholders (in

value) and approval from tribunal on a

petition made.

Such issue or redemption shall

not be deemed to be an increase or as

thecase maybereduction ofshare

capital of the company.

AlterationofshareSection94(1)permittedCan be made only after making

capital by consolidationthesame iftherewasaapplication and obtaining approval from

or divisionofshareprovisionforthe sameintheTribunal

capital intoshares ofAoAtreatingitasa

larger amountmerealterationnotinvolvingApproval is required for consolidation

anyreductionintheshareand division of share capital only if the

capital.votingpercentageofshareholders

changesconsequentonsuch

NoapprovaloftheCourtorconsolidation

anyother authorityrequired.

Issue of bonus sharesNoprovisionintheact.Private companies are excluded in this

HoweverRulesframedclause for issue of bonus shares, but

forpublic unlistedCompanyapparently clause 23 does not permit

private companies to issue bonus shares

No reduction of capitalNo such provision existed.No reduction of capital shall be made by

if deposits not repaida company if the company is in arrears

in the repayment of any deposits

accepted by it or the interest payable

thereonirrespectiveofthedeposits

being accepted before or after the

commencement of this act

Issue of debentures withNo suchrequirementexisted.Needs special resolution of members for

conversionoptionandthe issue of debentures with conversion

other provisionsoption wholly or partly

Private placementsQualified Institutional Buyers shall not

be covered under the provisionsrelated

to Private Placement

AppointmentofSection 117B-Is compulsory for public issue of

Debenture trusteeNosuch ceiling of500 existed.debenture through prospectus to more

AppointmentofDebenturethan 500 persons

trusteecompulsory

forcompany

issuingprospectusoraletter

ofoffertothepublic

forsubscriptionofits

debentures

V. Acceptance of deposits by Companies

Acceptance of DepositsPrivatecompaniesareNBFCs are not covered by theprovisions

by Companiesprohibitedfrominviting orrelatingtoacceptanceofdepositsand

acceptingdepositsfromthey will be governedunder rules issued

personsotherthanitsby Reserve Bank ofIndia.(Clause 73)

members,directors ortheir

relativesCompanymayacceptdeposit

frompersons other than its members

havingnet worth and turnover of

certainamountasprescribed subject

tocomplyingwithnecessary

conditionsandafterconsultation with

RBI.

(Clause 76)

VI.Investments

Investment restrictionNo such provision existed inProvides that investments not to be

section372Aofthemade through more than 2 layers of

Companiesact 1956, whichinvestment companies.

dealt withintercorporate

loans and investments.The rateofinterestonintercorporate

61 (b)

63 and

23

66

71

71

73

76

186

loans will be the prevailing rate of

interest on dated Government Securities

VII.Books of Accounts and Financial Year

Financial YearInrelationtoFinancial year can only be from April-2 (41)

anybodycorporate,theMarch , existing companies has to align

period inrespectofwhichwithin 2 years of the commencement of

any profit and loss account ofthe act

thebodycorporatelaid

before it in annual general

meeting is made up, whether

that period is a year or not

Provided that, in relation to

aninsurancecompany,

"financialyear"shallmean

the calendar year referred to

in subsection (1) of section 11

of the Insurance Act, 1938 (4

of 1938)

Maintenance of books ofNot permittedProvides for electronic maintenance128(1)

account in electronicof the same

mode

Preservation period ofSection 209- books andwhere investigation is ordered, CG128(5)

books of accountvouchers for 8 yrs periodmay direct books to be preserved for

longer period

CorporatesocialDid not exist.Mandatory for companies:135

responsibility Having NetWorthofRs.500

crore or more;or

Turnover of Rs.1000 crore or

more or

A net profit of Rs.5 crore or

more during the any financial

year

Every financial year atleast 2% of the

average net profits of last 3 years to be

spent on CSR activities, otherwise

reason for not spending to be given in

Board's Report.

Re-opening of accountsNo such provision existedIf an order is passed by the court or130

in certain casestribunal to the effect the relevant earlier

accounts were prepared in fraudulent

manner, re-opening of accounts can be

done.

Voluntary revision ofNo such provision existedIf the Board feels that the financials131

financial statement oror the Report do not comply with the

board report withapplicable provisions of clause 129 or

tribunals consent134, they may revise the aforesaid in

respect of any of the three preceding

financialyearsafterobtaining

approval of the Tribunal.. Cannot be

revised for more than once in one

financialyear.CGmaymake

separate rules for this.

ConsolidationofSection212providedCompulsoryconsolidationofaccounts129

accountsforattachmentofaccountsof holding and subsidiaries including its

ofsubsidiariesalongwithassociates and joint ventures

theholdingcompany

accounts. No provisionfor

consolidation

VIII.Reports

Secretarial audit reportSection 383A provided onlyEvery listed company and other

for secretarialauditbyprescribed companies shall annex with

companies having paidupits Boards Report, a Secretarial Audit

capital between Rs. 10 lakhReport. Directors shall explain in full in

to Rs. 5crores. Did nottheir DR,qualification/observation/

specificallyprovideforremarks in the secretarial audit report

attachment of such report to

the Directors report

IX.Prospectus, Raising of funds & Allotment

Raising capitalthroughNo such provision existedOnly public companies can issue

Public- offersecurities by making public offer and

that too by complying Part I of chapter

III

Misleading statement inNo suchprovisionexistedAny group of persons or AOP affected

Prospectusby this misleading prospectus , may take

action against the guilty persons

PunishmentforSection 68-Any person who,No change, but in addition to which it

fraudulently inducing aeitherbyknowinglyorincludespunishmentforfalsely

person to invest moneyrecklesslymakinganyinducing a person to enter into any

statement,promiseoragreement with bank or financial

forecastwhichisfalse,institution, with a view to obtaining

deceptive ormisleading,orcredit facilities.

byanydishonest

concealmentofmaterial

facts, induces or attempts to

induce another person to

enter into, or to offer to enter

into

any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting shares or debentures ; or

any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of shares or debentures, or by reference to fluctuations in the value of shares or debentures ;

shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to one lakh rupees, or with both.

Allotment of securitiesSection 69-Minimum subscription extended to all

204

28

37

36

39

andminimumMinimumsubscriptionapplicsecurities

subscriptionableonly toshares.

IssueofGlobalNo such provision existed.Company may after passing a special41

Depositoryreceiptsresolution in its general meeting ,issue

(GDR)GDRs subject to conditions

X. Utilising Securities Premium Account

Utilisation of securitiesSection78-SPAcanPrescribed class of companies whose52(3)

Premium account (SPA)beutilizedforwritingfinancialstatementscomplywith

offpreliminaryexpensesorAccountingstandardsprescribedfor

forprovidingpremiumsuch class cannot utilize forSec

payableonredemptionofPremium Account for writing off

preferencesharesorpreliminary expenses and premium on

debenturesredemption of preference shares or

debentures

XI.Annual returns and related issues

Annual return(AR)Detailsto befurnishedinFollowingadditionaldetailstobe92

Annual returnmentioned

Detailsofprincipalbusiness

its registered office,activities, particulars of holding

theregisterofitsandsubsidiaryandassociate

members,companies

theregisterofitsPromoters,directors,key

debenture holders,managementpersonnel along

its shares and debentures,with changes since last year

its indebtedness, Meetings of members or class

itsmembersandthereof, board and its various

debentureholders,pastcommitteesalong withthe

and present, andattendance details

itsdirectors, managingRemunerationof directorsand

directorsmanagersandKeymanagement

secretaries,pastandpersonnel(KMP)

presentPenaltiesandpunishments

imposed on the company, its

directors, or officers and appeals

madeagainstpenaltiesor

punishments

Matters related to certification

ofcompliances,disclosures as

may be prescribed

Details of shares held on behalf

ofFIIs

Such other matters as may be

prescribed

Certification of AnnualThe copyoftheannualIn case of an OPCand small company,92

return (AR)returnfiledwiththeAR to be signed by a Company secretary

Registrar undersection159(CS), where there is no CS, by a

or 160, as the case may be,practising company secretary

shall be signed both by a

director and by the managerFor listed companies, having turnover

or secretary of the company,and paid up capital as may be

or where there is no managerprescribed- By a Director and CS, where

or secretary, by two directorsthere is no CS then by PCS.

of the company, one of

whom shall be the managingIn addition to this the PCS shall also

director where there is one.certify that the AR discloses the facts

correctly and adequately and that

companyhascomplied withallthe

provisions of the act.

Other Companies by a director and a

CS, where there is no CS then by a PCS

Time limit for filing AREvery company shall, withinWhere AGM is held then within 30 days

sixty days from the day onfrom the date of AGM

which each of the annualWhere AGM is not held within 30 days

general meetings referred toof the due date of the AGM along with

in section 166 is held, preparereasons for not holding the AGM

and file with the Registrar a

returncontainingthe

particularsspecified in Part I

of Schedule V, as they stood

on that day,

Consequencesfor1. If acompanyfailstoFiled between

default in filing ARcomplywithany ofthe30 days 300 days : additional fees as

provisionscontainedinperclause 403

section 159,160or161.

The company,andeveryFails to file beyond the above date:

officerofthe

companywhoisinthe company shall be punishable with

default,shallfine not less than Rs.50000 but which

bepunishablewithfinemay extend upto Rs.500000 and

whichmayextendto

[five hundred]rupees forevery officer of the company who is in

every day during whichdefault shall be punishable not less than

the default continues.Rs.50000 but which may extend upto

2. For the purposes of thisRs.500000 or with both

section and sections 159,

160and161,the

expressions "officer"and

"director"shallinclude

any person in accordance

with whose directions or

instructions the Board of

directors of the company

isaccustomed to act

Additional disclosuresSection 217 Disclosures in Number of meetings of Board;

in the Board Reportthe boards reportStatementofdeclarationby

independent directors;

Companyspolicy ondirector

appointment /remuneration;

Explanationonevery qualification

made by PCS in his report;

Particularsofloans,guarantee,

investment;

Related party contracts;

Implementation of risk management

policy;

Policy developed on Corporate Social

Responsibility;

Statement of formal evaluation of the

performance of the board and its

committees in case of listed and

public companies, as may be

prescribed

92(3)

134

Directors responsibility217(2AA) ;Provides for additional disclosures:

statementDisclosures required on fourIn case of a listed company:

fronts:a) Directors have laid down internal

Applicableaccountingfinancial controls and they have been

standards followed;complied with;

True and fair view of theb) Directors have devised proper

financials;systems to ensure compliance with

Detecting and preventingthe provisions of this Act, rules, and

fraud;that such systems were adequate and

Accountsona goingoperating effectively.

concern basis

Report on AGMNo provision existedprovides that every listed company shall

required to be submittedprepare a report on each AGM and file a

by listedcopy of the same with the ROC within

company30 days from the AGM

XII.Notices, Meetings, Quorums, Voting, Resolutions, Minutes

No. of meetingsInthecaseofeveryAtleast 4 meeting should be held each

company, a meeting of itsyear.

Board of directors shall be

held at least once in everyThere is no requirement ofholding the

three months andat least fourmeeting every quarter; the only

such meetings shall be heldrequirement is that not morethan 120

in every yeardays shall elapse between two

consecutive meetings.

Holding of First AGMCompany may holdTo do away with 18 months timeline in

itsfirstannualgeneralcase of the 1st AGM

meeting within a period of

notmorethaneighteen

months from the date of its

incorporation;andifsuch

generalmeetingisheld

within that period, it shall

not be necessary for the

company to hold any annual

general meeting in the year

of its incorporation or in the

following year

thattheRegistrar

may,forany special reason,

extendthetimewithin

whichanyannual

generalmeeting(notbeing

thefirstannualgeneral

meeting) shall be held, by a

periodnotexceedingthree

months

Timing of AGM166(2)-Every annualgeneralDuring the business hours between 9.00

meeting shall be called for ato 6.00 defined

time during business hours,

on a day that is not a

publicholiday,andshall be

held either at the registered

office of the company or at

some other place within the

city, town orvillage in which

the registered office of the

company is situate.

134(5)

121

173 (1)

96

AGM cannotbe calledAGM can be called on a dayCan be called on a public holiday but

on which daysthat is not a publicholiday,cannot be called on national holidays.

and shall be held either at theNational holidays means and includes a

registeredofficeoftheday declared as such by the central govt.

company or at some other

place within the city, town

orvillagein whichthe

registeredofficeofthe

company is situate

Explanatorystatement173(2)-Where any items ofDefines material facts to be set out in the

in respect ofmaterialbusiness to be transacted atexplanatorystatement,namely, the

factsthe meeting are deemed to benature of theconcern or interest,

specialasaforesaid,therefinancial or otherwise, if any, in respect

shall be annexed to the noticeof each item of every director and

of the meeting a statementmanager, every other KMP and relatives

setting out all material factsof all the above and such other

concerning each such item ofinformation and facts that may enable

business,includinginmembers to understand the meaning,

particular the nature of thescope and implications of the items of

concern or interest, if any,business and to take decision thereon

therein,ofeverydirector,

and the manager, if any.

QuorumSection 174-Quorum was 5If Members on the date of meeting is

memberspersonallypresent5000- 30 members personally

present

Voting throughNo such provisions existedCentral government may provide for

electronic meansclass companies which can provide for

voting through electronic means

Resolutions requiringSection 190-nocriteria forSuch a notice can be given by such

Special noticevotingpower or sharesnumber of members holding not less

than 1% of the total voting power or

holding shares on which an aggregate

sum of not less than Rs.100000 has been

paid up

Gap between two boardSection 285 provided for oneProvides that the gap between any two

Meetingsmeeting to be held in everyboard meetings should not exceed 120

calendarquarter.Soonedays.

board meeting could be heldFor OPC: If OPC has more than one

in the first month of thedirector, then at least one meeting in

quarter and the next could beeach half of the calendar year and gap

held in the last month of theshould not be less than 90 days between

next quarter, thereby a gapsuch meetings.

of almost 6 monthsIf OPC has only ONE director, no need

to hold any board meetings.

102

103

108

115

173(1)

Directors participationNosuchprovisionSpecifically provides for directors173(2)

byaudio-visual meansspecifically existed.attending the meetings even by way of174(1)

or videoconferencingCompanies used to resort tovideoconferencing/audio-visual

suchmechanismforconferencing.

administrativeconvenienceSuch director to be counted for the

howeverthedirectorpurpose of quorum. Central Govt. may

participatingthroughnotify such matters which shall not be

audio/videoconferencingdealt with in a meeting through video

could not be counted forconferencing or other audio-visual

quorum.means

NoticeforSection 286 merely providedProvides for 7 days notice for BM.(can

boardmeetings(BM)for notice of BMs to be givenbe electronic also) Shorter consent

to directors in writing butpossible if at least one independent

did not specify the length ofdirector is present at such meeting

such notice

173(3)

Withdrawal ofResolution by circulation

Tampering with minutes

Compulsory Internal

Audit (IA)

Cost Audit

Statutory recognition to

SecretarialStandards(SS)

Section289providedforClause 175 provides that if a demand is

passing of board resolutionsmade by not less than 1/3rd of Board of

bycirculationwithnoDirectors (BOD) that resolution under

provision of withdrawalcirculation be decided at a BM the

chairman shall circulation and have the

question decided at a BM

No such provisions exist.Any person found guilty of tampering

any minutes of the proceeding of any

meeting shall be punishable with

imprisonment which may extend upto

two years and with fine which shall not

be less than Rs.25000 but which may

extend to Rs.100000

XIII.Internal Audit

No such provision existed.Prescribed companies to have an

Internal Auditor to conduct IA, who

can be a CA or ICWA or such other

professional as may be decided by

the Board.

CG may prescribe rules for conduct

and report of IA

XIV.Cost Audit

Where in the opinion of theInstead of company pertaining to

CentralGovernment itisanyclass ofcompanies engaged

necessary so to do in relationinproduction,processing,

toanycompanyrequiredmanufacturing or mining activities, the

underclause (d) of sub-centralgovernment can only direct cost

section (1) of section 209 toaudit tobe conducted in such class

include in its books ofofcompanies engaged in the production

accounttheparticularsof suchgoods or providing suchservices

referredtotherein,the, which have the prescribed networth

Central Government may, byorturnover and who hasbeen directed to

order, direct that an audit ofinclude the particulars relating to the

cost accounts of the companyutilization of materialor labour or to

shallbeconductedinother items of cost as may be prescribed

suchmannerasmaybein their books ofaccount .

specified in the order by an

auditor who shall be a costNoapprovalisrequiredof

accountantwithinthecentralgovernment for the appointment

meaning of the Cost andof costauditor to conduct the cost audit.

Works Accountants Act, 1959

(23 of 1959)

XV.Statutorycompliance

SS were recommendatory.It provides that every company shall

follow SS

with respect to General and Board

Meetings and

approved by the Central government

175

118

138

118

In case of loss, interim dividend rate not to exceed average dividends declared during preceding three financial yearsAlong with the unclaimed dividend, the shares on which dividend is unclaimed, also to be transferred to the IEPFNo dividend shall be paid by a company from its reserves other than freereservesClaim of an investor over a dividend not claimed for more than a period of 7 years not to be extinguished and shall be entitled to refund in accordance with the rulesXVI. Transfer to reserves

Transfer of specified %Section 205Company to use its wisdom to

of profits not exceedingCompany could not transferdecide % of profits to be transferred

10% tomore than 10% profits exceptto reserves.

Reservesin accordance with the rules.Its no longer mandatory for

companies to transfer its profits to

Reserves.

XVII.Dividends

Restriction on interimNo such restriction existed.BOD to declare interim dividend out

Dividend introducedof the surplus in the P&L a/c as well

as the profits for the financial year in

which the interim dividend is sought

to be declared.

Transfer of shares toOnly unclaimed dividend to

Investor Education &be transferred to IEPF

Protection Fund (IEPF)

Dividends

123

123(3)

124

123

Claim from IEPF after 7 yrs

Rotation of Statutory

Auditors

No claim lied against theFund or the Company in respect of individual amounts which were unclaimed or unpaid for a period of seven years.

XVIII. Auditors

No such provision existed. Listed and other prescribed companies not to appoint or re-appoint

an individual auditor for more than one term of five years and

an audit firm for more than two terms of five consecutive years.

Members of a company may resolve to rotate the auditpartner every year to resolve to conduct audit by morethan one auditor.

Provisions relating to voluntary rotation of auditingpartner (in case of an audit firm) modified to providethat members may rotate the partner at such intervalas may be resolved by members instead of every yearproposed in the clause earlier.

The limit in respect of maximum

139(2)

number of companies inwhich a

person may be appointed as auditor

is twenty companies.

Re-appointment ofBoard recommended the re-After the expiry of term mentioned

statutory auditorsappointmentofretiringin previous point, there has to be a

auditorsandretiringgap of 5 yrs for reappointment after

auditors could be re-every cessation.

appointed at the AGM.Further in case of an Audit firm, no

other firm which has a common

partner to the other audit firm can be

appointedasStatutoryAuditors.

Members can approve rotation of

audit partners and also appointment

of joint auditors

5 years tenure forSec 224-Auditorscould beAudit firm or an individual139(1)

auditorsappointed to hold office onlyincluding an LLP to be appointed for

upto the date of the next5 yrs. i.e. to hold office upto the date

AGMandcouldbeof the sixth AGM.

reappointed thereat.Appointment of auditors for five

years shall be subject to ratification

by members at every Annual General

Meeting.

AutomaticSection 224(3)-existing auditors continue to be the139(10)

reappointment ofprovided that if no Auditorauditors of the company in such a

existing Auditors, whenwas appointed/reappointedscenario

not appointed/at the AGM, the Central

reappointed at the AGMGovernment could fill up the

vacancy

Time bound filling up ofSection 224(6) -Casual vacancy to be filled up by the139(8)

Casual vacancy in theCasual vacancy to be filledBoard within 30 days. If due to

office of Auditorsup by the Board. If due toresignation, then by the Company in

resignation,thenbytheits meeting within 3 months from the

members in their meeting.date of recommendation of the Board

and such auditor to hold office only

upto the date of the next AGM

FormationNo such provision Existed EveryListedCompanyand such139(1)

&Recommendationsofother company as may be prescribed

Audit CommitteeforshallformAuditCommittee

appointment of auditorscomprised of minimum 3 directors

with majority of the Independent

Directors and majority of members of

committee shall be person with

ability to read and understand

financial statement.

All the appointment of statutory

auditors including in case of casual

vacancy shall be made after

considering the recommendations of

the Audit Committee, where there is

one.

Auditors duties whenNo such provision orRetiring auditor to file a statement140(2)/(

they resignrequirement existedwith the ROC as well as the3)

Company, within 30 days of

resignation,indicating reasons and

other facts that may be relevant with

regard to his resignation

Tribunal may direct company to change its Auditors

Duties of auditor/secretarial auditor/cost auditor to report fraud to the CGLimited LiabilityPartnership (LLP) can act as an Auditor

Auditor not to render certain services

Auditors attendance at AGM proposed to be made obligatory

Increased accountability of auditors

Section 224(7) provided for removal of

auditors before the expiry of their term, only with the prior approval of the Central Government

No such provision existed

Section 226(3)

LLP was not to be treated as a Body Corporate for the limited purpose of this section and hence could beappointed as an Auditor.

No suchprovisionexisted

Section 231-

Provides for all notices of and other communication relating to general meeting of a company to be forwarded to the Auditor. The Auditor was thus entitled to but not obliged to attend any general meeting

Penalties were provided forviolation of section 227(dealing with powers andduties of auditors)

Provides that the Tribunal may, by140(5)

order, direct the company to change

its auditors on being satisfied that the

auditors has acted in a fraudulent

manner or abetted or colluded in any

fraud

Auditors/CWA/CStoinformthe143(12)-

fraud to the CG within prescribed(14)

time and manner and the same shall

not be construed as breach of duty

Where a firm including an LLP is141

appointed as an auditor of a

company, only the partners who are

Chartered accountantsshallbe

authorized to act and sign on behalf

of the firm.

Multidisciplinarypartnershipis141(1)

allowed

auditor not to render directly or144

indirectly the following services to

the company, its holding

company or its subsidiaries, or

associate company:

Accounting and book keeping service; Internal audit; Design and implementation of any financialinformation system; Actuarial services; Investmentadvisory services; Investment banking services;

Rendering of outsourced financial services; Management services; and

Any other kind ofconsultancy services.

Provisions relating torestrictions on non-audit services modified to providethat such restrictions shall not apply to associate companies and further to provide for transitionalperiod for complying with such provisions.

provides that auditor shall, unless 146 otherwise exempted by the Company, attend any general meeting, either by himself or through

his Authorized representative who is qualified to be an auditor

Penalties significantly enhanced-fine147

not less than 25000 but extendable to

Rs. 5 lakhs.

Imprisonment upto one year and fine

andsection 229 (dealing withsignature of audit report).Meagre penalties of fineupto Rs. 10000

in case there is an intention to deceive the company, its shareholders or creditors.

Provisions relating to extent of criminal liability of auditors particularly in case of partners of an audit firm reviewed to bring clarity.

Further, to ensure that the liability in respect of damages paid by auditor, as per the order of the Court, (in case of conviction under Clause 147) is promptly used for payment to affected parties including tax authorities,

Central Government has been empowered to specify any statutory body/authority for such purpose

Nomination &RemunerationCommittee andStakeholders

Relationship Committee

Limit on political contribution by a nongovernment company

New restrictions on non-cash transactions by directors

Prohibition on forward dealings in securities of company by a Key Managerial Personnel (KMP)

Prohibition on Insider

Trading of Securities

Functions of Company

Secretary

XIX. Nomination & Remuneration committee

A mention of RemunerationProvides for mandatory constitution of

committee was made only inNominationandRemuneration

the Schedule XIIICommitteeandStakeholders

RelationshipCommitteefor prescribed

companies.

AX. Prohibitions & Restrictions

Section 293A upto 5 % ofLimit enhanced to 7.5% from 5%.

the average net profits forPolitical party defined as political party

preceding threefinancialregistered under section 29A of the

years on authority of a BoardRepresentation of the People Act, 1951

Resolution.

No such provision existedA company shall NOT, subsidiary or

associate, enter into specified non cash

transactions with its director or a

director of its holding company or

person connected with him unless

approved by the company in its general

meeting. Such transactions to be treated

voidable

No such provision existedProhibits a Director of a Company or a

KMP to buy a right to call for delivery at

a specified price and within a specified

time, of a specified number of relevant

shares or debentures, right to make

delivery at a specified price and within a

specified time, of a specified number of

relevant shares or debentures

No such provision existedMakes insider trading by a Director or a

KMP,acriminaloffence.

Communication in the ordinary course

of business, profession or employment

will not be treated as Insider Trading

XXI.Company Secretary

No such provision existedto report to the BOD, compliance with

the Act, rules made there under; To

ensure that the company complies with

178

182

192 A

194

195

205

Serious Fraud

Investigating Office (SFIO)

Investigation report

Penal provisions for misconduct

Freezing of assets of company on inquiry and investigation

Certification fromAuditor

Simplified procedure for compromise between small companies or between Holding/subsidiary companies.

Cross Border Mergers

the applicable SS; To discharge such

other duties, as may be prescribed.

XXII.Investigations

No such provision existedstatutory status to SFIO211

No such provision exists.Investigation report filed by SFIO with212

the court for framing of chargesshall be

treated as a Report filed by a Police

Officer. SFIO shall have the power to

arrest.

In the process of the Investigation,229

Inquiry or inspection if any person:

destroy, mutilates or falsifies or

concealsortamperor

unauthorized removes or is a

party to that or any document

relating to the property, assets

or affairs of the Company or

body corporate or

makes or is a party to the

making of any false entry in the

documentconcerningthe

company or body corporate or

providesany false information

which he knows to be false

Then he shall be liable to punishment

for imprisonment for a term from 6

months to10 years and shall also be

liable to fine which shall not be less than

theamount involved in fraud but which

may extent upto 3 times of the amount

of fraud.

No such provision existedClause 221 provides for freezing of221

assets of company on enquiry and

investigation

XXIII. CorporateRestructuring

No compromise or arrangement shall be230

sanctioned by the Tribunal unlessa

certificate by the companys auditor has

been filed with the Tribunal tothe effect

that the accounting treatment, if any,

proposed in the scheme ofcompromise

or arrangement is in conformity with the

accounting standardsprescribedunder

Clause 133.

No such provision existedClause233providessimplified233

procedure for compromise

No such provision existedProvides for cross border mergers where234

a foreign company may with prior

approval of RBI, merge or amalgamate

in to a co. registered under this Act or

vice-versa.

Squeeze out provisions

Relief for past concluded acts of oppression

Payment of consideration to the shareholders of the merged company in cash, or in Depository Receipts or partly by cash and Depository receiptsNo such provision existedSqueeze out provision means provisions

which confer the acquirer with a

statutory right to squeeze out the

minority,i.e.acquireminority

shareholders on the same terms when

the acquirers shareholding crosses a

certain high percentage of the voting

capital of the target company

This was not possible underClause 241 uses the phraseology-affairs

section 397 of the Companiesof the company have been or are being

Act, 1956, as the sameconducted/. Thus relief for past acts is

provided only for the currentpossible

affairs of the company

XXIV. Class action Suits

236

241

Class action by member/s, depositor/s or any class of them

Powers of registrar

Approval

No such provision existed

Provided for. Provisions relating to extent of criminal liability of auditors particularly in case of partners of an audit firm reviewed to bring clarity. Further, to ensure that the liability in respect of damages paid by auditor, as per the order of the Court, (in case of conviction under Clause 147) is promptly used for payment to affected parties including tax authorities, Central Government has been empowered to specify any statutory body/authority for such purpose

Registrar has the power to remove the name of a company from its recordunder certain circumstancesIn case of a company regulated under a

Special Act, approval of theregulatory body constituted or established under that Act shall also be obtained.

245

248(5)

248(2)

Registered valuers

XXV.Valuations

No such provision existedWherever valuation is to be done of any

property, stocks, shares, debentures,

securities or goodwill or net worth of a

company or of its assets, such valuation

shall be done by a person who is a

registered valuer under this chapter and

appointed by the Audit Committee or in

its absence by the BOD

247

XXVI. Winding up

Power of Registrar toSection 560 provided for theSection 560 provided for the ROC to suo

remove name of aROC to suomoto strike offmoto strike off the company as a defunct

company from Registerthe company as a defunctcompany if it has reasonable cause to

company if it has reasonablebelieve that a company is not carrying

cause to believe that aon its business or in operation.

company is not carrying on

its business or in operation.

Bar on company makingNo such provision existedProvides for situations ( in the previous

247

248(2)

application to the ROC for removal of its name from register

Fraudulent application by company for removal of name

3 months) where such an applications cannot be made:

Name change/registered office change;

Disposal for value of property;

Engagement in any other activity; Made an application to the Tribunal forcompromise/arrangement; Is being wound up

No such provision existedProvidesfor managementbeing

responsible, jointly and severally, in

such a scenario to any person/s who

incurred loss or damage and shall also

be liable to penal action. ROC may

recommendprosecution ofpersons

responsible for filing of application for

removal of name, fraudulently.

248(2)

Modes of winding up

Limits for determining inability to pay debts

By court, under supervision of court and voluntary winding up Voluntary could be members or creditors

Section 434-Any creditor indebted for more than Rs. 500/-

By the Tribunal and Voluntary.No such classification exists. Additional grounds for winding up by Tribunal provided.

Limit raised to Rs. 100,000/-

270-365

Special Courts.

Punishment for fraud

XXVII. Other legal provisions

No such provision existedThe Bill aims at setting up of special

courts to try offences under the Bill

Fraud not defined.Fraud has been defined and penalty

Punishment for fraud notprovided

quantified or provided

435-446

447

Penalty for obtaining name by providing wrong or incorrect information

Power to remove difficulties

No recourse provided.

If company is not incorporated reserved name shall be cancelled after imposing a penalty not exceeding Rs.100,000/-;

if the company is incorporated the ROC may give direction to change of name within 3 months by passing ordinary resolution or make an application for winding up of the company

Provisions in respect of removal of difficulty modified to provide that the power to remove difficulties may be exercised by the Central Government upto five years (after enactment of the legislation) instead of earlier upto three years. This is considered necessary to avoid serious hardship and dislocation since many provisions of the Bill involve transition from pre-existing arrangementsto new systems.

4(4), 4(5)

NACAAS - Constitution

XXVIII.National Financial reporting Authority

Section-210A. Constitution ofThe name of NACAAS has been

NationalAdvisorychanged to National Financial Reporting

Committee onAccountingAuthority (NFRA) and authority is to

standards.adviseonmattersrelatedto

auditingstandard inadditionto

The CentralGovernmentaccounting standards

132

may, by notification in the

Official Gazette, constitute anThe CG may prescribe the standards of

AdvisoryCommitteetobeaccounting or any addendumthereto, as

calledthe National Advisoryrecommended by the ICAI in

CommitteeonAccountingconsultation with and afterexamination

Standards(hereafterinthisof the recommendations made by the

section referred to as theNFRA

"AdvisoryCommittee")toPowers:

advisetheCentral

Governmentonthemonitorandenforcethe

formulation and laying downcompliance with accounting and

ofaccountingpoliciesauditing standards

andaccounting standards foroversee the quality of service of

adoptionbycompaniesorthe professions associated with

class of companies under thisensuring compliance with such

Act.standards

havethepowerto investigate

into the matters of professional

or othermisconduct committed

by any member or firm of

charteredaccountantsand

impose penalties of not less than

Rs. 1 lakhs in caseof individuals

and Rs. 10 Lakhs in case of firms

and debar members/firms for a

period of 6 months to 10 years.

Other related issuesThe Advisory CommitteeNFRA had jurisdictions over CAs, cost

shallgiveitsaccountants, companysecretariesand

recommendationstotheany other profession as may be

CentralGovernmentonprescribed.

suchmattersof

accounting policiesandNow, this Clause has been amended,

standards and auditing asNFRA to have jurisdiction over

may be referred to it foronlyCAs. i.e., Professional misconduct

advice from time to time.ofcharteredaccountantsalso

Themembersofthecomesunder NFRA.

AdvisoryCommittee

shall hold office for suchWhereNFRAinitiatesan

termsasmaybeinvestigation, no other institute or

determinedbythebody shallinitiate or continue any

CentralGovernmentatproceedings in such matters of

thetimeoftheirmisconduct

appointmentandany

vacancyinthePenalty increased

membershipinthe

Committee shall be filledChairperson and members in Full

bytheCentralTime Employment with NFRA shall

Government in the samenot beassociated with any audit firm

manneras thememberincludingrelated consultancyfirms

whosevacancyoccurredduringthe course of their appointment

was filled.and 2 years after ceasing to hold

Thenon-officialsuchappointment.

members of the Advisory

CommitteeshallbeThe Directors report for every

entitledtosuch fees,company except for One Person

travelling,conveyanceCompany,shall provide various types

andotherallowancesasof additional information like number

Schedule I

Schedule II

Schedule III

Schedule IV

Schedule V

Schedule VI

Schedule VII

are admissibletotheofmeetings of the Board, Companys

officers of theCentralpolicy ondirectors appointment

Governmentoftheandremuneration;explanationsor

highest rank.]commentsbytheBoardon

everyqualification,reservationor

adverse remark or disclaimer made by

theCompanySecretaryinhis

secretarial audit report, particulars of

loans,guarantees or investmentsetc.

(Clause 134)

XXIX. Schedules Companies Act 2013

Sections 4 and 5

Useful Lives to Compute Depreciation

General Instructions for Preparation of Balance Sheet andStatement of Profit and

Loss of a Company

Code for Independent Directors

Conditions to be fulfilled for the Appointment of a Managing orWhole Time

Director or a Manager without the approval of theCentral Government

Section 55 and 186 related to Infrastructure Projects

Corporate Social Responsibility