Friday, August 16

Companies Act 2013 - Key Highlights

The Companies Bill has been passed by the Lok Sabha and Rajya Sabha as well. The bill is seeing light after decades of discussions and debates.

All credits to the Minister of Corporate Affairs for taking the bill through the lower house soon after assuming office.

Key highlights of the bill are:

Class Action suits introduced for the benefit of investors

One Person Company (OPC) introduced

Certain class of companies are required to spend at 2% of their average Net profits on Corporate Social Responsibility.

Severe punishment for fraud against investors

National Financial Regulatory Authority (NFRA) to be set up - this has curbed some rights and powers of Chartered Accountants with respect to setting up of Accounting and Auditing standards.

A CA can have maximum 20 companies as audit clients.

Every company to have a single financial year end - 31st-March. Certain exceptions apply.

A Private company can have 200 members (up from 50)

Concept of Dormant company introduced.

National Company Law Tribunal to be formed.

Non Banking Financial Companies (NBFCs) not covered by Acceptance of Deposit Rules. They will be guided by RBI.

Many definitions have been introduced for more clarity such as Private Placement, Key Management Personnel, Small Company, Independent Director among others.

Financial Statements to include Balance Sheet, Profit & Loss Account, Cash Flow Statement and Statement of Changes in Equity.

Refer link for more detailed highlights: View Detailed Highlights (An ICA Publication)

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