Companies Act

The Companies Act 2013 is an Act of the Parliament of India. It is applicable for Indian Companies registered as Private Companies or Limited Companies. Nidhi Company. Finance Company etc.

Your business is a distinct legal entity. It is able to take loans, hold assets, etc. In accordance with the Companies Act, your Company was created for legal purposes only. Contact for any clarification on the Companies Act 2013.

Company Act List

Companies Act 2013 & Applicability

The Companies Act 2013, has come into force with effect from 30th Aug 2013.it controls the Companies operating in India. The main purpose of this Act is, to regulate the companies for better governance, and better facilitation of business with the spirit of the law.

Since commodities typically pass through several stages before being sold to a consumer, from a manufacturer to a wholesaler to a retailer, GST is multi-stage. Each level involves a value addition, so GST is charged there as well.

GST is a destination-based tax, which implies that the state where the goods or services are consumed is responsible for collecting the tax. For

The Companies Act 2013 applies to

Business registered under this Act or previous Act (Companies Act 1956). Insurance companies and Banking companies

The Act also provides for the maintenance of financial records and the preparation and auditing of financial statements. It sets out the process for mergers, acquisitions, and amalgamations of companies, and provides for the dissolution of a company in certain circumstances, such as if the company is not carrying on any business or if it is unable to pay its debts.

Overall, the Companies Act, 2013 is applicable to all companies registered in India and regulates the incorporation, functioning, and dissolution of these companies. It plays a crucial role in ensuring that companies are governed and managed in a transparent and accountable manner.

Is the Corporate law is the same Companies Act?

Companies Act is a legal framework that sets out the rules and regulations for companies to follow, and non-compliance can lead to legal and financial consequences

The Companies Act has been specifically framed to manage the Companies registered under this Act, it has limited to those specified companies as per the applicable list given above.

The Corporate law is wide in terms of coverage, it applies SEBI, FEMA, SARFESI, SCRA Indian Contract, GST etc.

Overall, corporate law encompasses the various laws and regulations that govern the formation, operation, and dissolution of corporations, and the Companies Act is a key legislation in this regard in India.

Is the Business law is the same as Companies Law?

The Company law is interchangeably used as a Business law, however, Company Law mainly focuses on the Companies Registered under the Companies Act, 2013. The Business Law covers other regulators also like Contract Act, Labor Act, Stock Exchange Etc.

Even though business terms use Company law as business law, but Business law has a wide definition then Company law.

 

The Key points under the Companies Act, 2013

Directors’ Role in Company Law

As the Company is a Separate person, it can execute its roles through Directors of the Company appointed by the Shareholders.

  1. Directors must act as per mentioned in the AOA of the company.
  2. Must act to promote the objects of the company for the benefit of Shareholders as a whole
  3. Must act to protect the interest of the Company, its employees, community as a whole

 

Importance of Meetings in Company Law

Board of Directors and Shareholders meetings are important aspect to make decisions and declare the Dividend, appointments, approval of the accounts and review the progress made by the Business etc.

Any business decision shall be made through the Board meetings which shall be held as per the specified quorum in the meeting with full support as per applicable Companies Act.

As per companies Act, the Companies Must have 4 Board meeting and 1 AGM every-year, however few exceptions given for small companies and OPC.

 

Powers of Directors as per Company Law

The Directors of the company derived the power from Shareholders to execute the day-today business affairs.

The directors may be shareholders vice versa, all the acts done in good faith by directors are not liable for there personal property.

Below are the main powers of the Directors:
  1. Call for meeting to decide on the agenda’s
  2. Open a bank a/c
  3. Borrow money
  4. Investments on the business
  5. Approve of the financials and accounts
  6. Appointment of employees and agents
  7. Issue of other shares/ securities
  8. Approve bonus to staff

 

Importance of Shares in Company Law

Shares are a vital part of the business, it’s the capital required to run the business. The shareholders are the real owners of the business, they contribute the monies through subscription of the shares of the company.

The shares are easily transferable subject to rules of the Companies Act. The companies easily raise capital by way of issuing new shares to its existing members or through private placement route.

 

The shares are mainly classified as Ordinary shares, Preference shares, Redemble shares, and non-voting shares.

Applicablity of Key Managerial Personnel

As per the Companies Act, 2013, the Key Managerial personnel is the one who has control over the affairs of the company, namely: directors of the Company, Company Secretary, Manager, Cfo, and any authorized by the Company. allthese persons are called Key managerial personnel of the company.

As per Act, the Key Managerial personnel are called officer in Default, that means,  that means any issues or defaults happens in the company, then the so called Key Managerial personnel held responsible to answer those and resolve it.

Role of Chartered Accountant under Companies Act

The CA plays the vital role in Company, he gives advise on the proper management of books of accounts, Internal Audit, Statutory audits, certification of the records, advice on Internal controls etc.

He involves in the preparation of the tax planning, budgeting, year-end books closer etc.

 

Role of Company Secretary under Companies Act

The company secretary is a Key managerial person of the Company. he is the compliance person who advise the Board of directors regarding legal and financial risks of the company and ensures that the company complies with statutory regulations as applicable.

The CS plays important role in deciding the business module, structure of the business, borrowings, management of the business, filings etc,

 

New Companies Must do

The new private company must be aware of the below compliance on time.

  1. within 30day – open a bank a/c, conduct Board meeting, the appointment of auditor etc,
  2. within in 60 days – the deposit of share money, allotment of shares
  3. within in 180 days – filing commencement of business certificate
  4. Maintenance of compliance books as per given above
  5. periodicity compliance – as per explained in the above chart

Takeaway: The Companies Act compliance is the process of making sure your company follows the laws, regulations, standards, and ethical practices that apply to your organization. The benefit of doing compliance is that it decreases your risk of fines, penalties, work stoppages, and shutdown of your business.

There is a famous saying “If you think compliance is expensive, try non-compliance”

 

If you need any assistance, kindly reach us to support, feel free to reach us, we are a one-stop solution for all the Companies Act, compliance, to build strong business support.

How Companies Act 2013 Helpes Business

Among the many changes made by the 2013 Companies Act, one has to mention the introduction of the One Person Company. This was intended to encourage more companies to incorporate.

The other major change that the Act introduced is a requirement for a company to spend on corporate social responsibility. This is intended to increase accountability on the part of companies.

The Companies Act provides a legal framework for businesses to operate within, promoting transparency and accountability, and protecting against legal and financial consequences.

Company Secretaries and Companies Act Compliance

The role of a Company Secretary is essential in ensuring compliance with the Companies Act. They are responsible for advising the Board of Directors on their legal obligations and ensuring that the company complies with all relevant laws and regulations. This includes maintaining accurate and up-to-date records of the company’s activities, preparing and filing annual returns, and ensuring that the company is in compliance with all corporate governance requirements.

Company Secretary also acts as a point of contact between the company and regulatory bodies, such as the Registrar of Companies and the Securities and Exchange Board of India (SEBI), and ensures that the company is in compliance with all relevant laws and regulations, including the listing agreement and securities laws.

Additionally, company secretary also plays an important role in conducting Board Meetings, and maintaining the minutes of the meeting, and ensuring that the company’s internal policies are in compliance with the Companies Act, including the appointment of directors, share allotment, and other critical matters.

In summary, the role of a Company Secretary is critical in ensuring compliance with the Companies Act and other relevant laws and regulations. They provide valuable guidance to the Board of Directors and ensure that the company is operating in a legal and compliant manner.

A Company Secretary can effectively manage the Companies Act by staying informed, developing a compliance plan, and maintaining accurate records. Utilizing technology and seeking professional help when needed can also aid in compliance management.

Get in Touch with CS

Role of the Company Secretary, as a Practicing Company Secretary (PCS) is a professional who is registered with the Institute of Company Secretaries of India (ICSI) and holds a valid certificate of practice. A PCS is qualified to provide professional services in the field of company law and corporate governance to companies and other organizations.

 

The role of a PCS in relation to the Companies Act, 2013 is to assist companies in complying with the various provisions of the Act and other relevant laws and regulations. Some of the specific responsibilities of a PCS in relation to the Companies Act are:

 

Incorporation of a company:

A PCS can assist the company in the process of incorporating a company, including drafting the memorandum of association and articles of association and filing the necessary documents with the Ministry of Corporate Affairs.

 

Governance and management:

A PCS can advise the company on the duties and responsibilities of directors, the powers and duties of the board of directors, and the role of shareholders in the decision-making process of a company as per the Companies Act.

 

Maintenance of financial records:

A PCS can assist the company in maintaining proper financial records and in preparing and auditing financial statements in accordance with the prescribed accounting standards.

 

Mergers and acquisitions:

A PCS can advise the company on the process for mergers, acquisitions, and amalgamations of companies as per the Companies Act.

 

Dissolution of a company:

A PCS can assist the company in the process of dissolving a company as per the provisions of the Companies Act.

 

In addition to these responsibilities, a PCS may also be involved in other tasks such as drafting legal documents, representing the company in legal proceedings, and advising the company on compliance with other laws and regulations.

 

Overall, a PCS plays a crucial role in assisting companies in complying with the provisions of the Companies Act and other relevant laws and regulations, and in providing professional advice on legal and regulatory matters.

Need Help To Your Business?

Contact us to get a free consultation.