Millennium Post
Business

Govt notifies 98 sections of new Companies Act

Moving ahead with implementation of the new Companies Act, the government on Thursday notified 98 sections of the new law, which is spread across as many as 470 sections and would be enforced in phases.The new Companies Act, which has replaced a nearly six- decade old legislation, seeks to revamp the entire gamut of the way corporates function and are regulated in India.

A large part of the new Act would come into force after taking into account public comments on the detailed draft rules for various provisions of the new law.

The government on Thursday notified those provisions which do not require further subsidiary rules, while other provisions would be notified in phases.
‘Accordingly, a notification for commencement of 98 sections of the new Act has been issued by the Ministry on Thursday, that is 12 September, 2013’ the Corporate Affairs Ministry said in a statement.

The entire Companies Act comprises of 470 sections and 29 chapters spread across nearly 300 pages, while detailed draft rules for 16 chapters have already been put in public domain for consultation process. The draft rules for the remaining chapters would be put up for public comments shortly. The entire set of law is expected to come into force by the end of the current fiscal.

‘The provisions of the new Act which require statutory/ regulatory consultation or functioning of new bodies or prescription of relevant rules/forms will be brought in force after the preparatory action is completed.

‘In the first instance it has been decided to notify those provisions of the Act which do not require such preparations,’ the ministry said.
The process to implement the new law follows passage of the Companies Bill, 2013 by Parliament in its recently concluded monsoon session, followed by Presidential assent.

‘The ministry has initiated the process to implement the new Act in consultation with concerned regulatory authorities, Ministry of Law and Justice and other stakeholders,’ the ministry said.

‘The first set of draft rules has also been placed on the Ministry’s website on 9 September, 2013. The relevant forms under such rules and remaining draft rules/forms are also being released for public comments shortly,’ it added.
The Companies Act, 2013 sections that have come into force with effect from Thursday include those related to difference between public offer and private placement, powers of Sebi to regulate issue and transfer of securities, mandatory public offer of securities in demat form, as also civil and criminal liability for mis-statements in prospectus.

The norms detailing punishment for fraudulently inducing persons to invest money, the calling of extraordinary general meeting of shareholders, shareholder voting, ordinary and special resolutions and punishment for failure to distribute dividend have also been notified.
Other such sections include those related to definitions of Apellate Tribunal, article of association, associate company, bank company, board of directors, body corporates and book of accounts.

Besides, new definitions of CEO, CFO, company, company secretary, control, cost accountant, debentures, derivatives, director, dividend, ESOPs, experts, financial statements, financial institutions, global depository receipts, government company and holding company, have also been notified.
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