why we need company's act 2013 after having company's act 1956?
Answers
Answer:
Companies Act 1956 was separated into 13 parts having 658 sections, along with 15 schedules where as Companies Act 2013 has been divided into 29 chapters along with 470 sections and 7 schedules-✅
Explanation:
Indian company law is now regulated by the Companies act 2013 and it regulates the companies which are registered under the Companies act 2013.
Previously it was regulated by the Companies act 1956 and all the companies registered under the Companies act 1956 were taken into the account.
DISTINCTION –
Companies Act 1956 VS Companies Act 2013.
A.) Preliminary provisions
1.) This act was enacted in 1956 by Parliament of India on 1st April 1956 and Companies act 2013 was in year 2013 by Parliament of India on 1st April 2014.
2.) Companies Act 1956 was separated into 13 parts having 658 sections, along with 15 schedules where as Companies Act 2013 has been divided into 29 chapters along with 470 sections and 7 schedules.
3.) Companies Act 2013 consider some definitions which Companies act 1956 did not considered as of :
- Associate company
- Auditing standards
- CEO & CFO
- Independent director
- Small company
- Promoter
- Related party
- Global Depository receipt
- Key managerial.
4.) Some of the existing definition in the Companies Act 1956 has been modified in the Companies Act 2013 as follows :
- Earlier excluded, Corporation sole has now been covered in definition of body of corporate.
- The term “listed company” now includes all companies listed on stock exchange.
- Subsidiary of a public co. shall be deemed to be a public co. even if it is a private co. by its Article.
- The definition of Employee stock option now covers Directors, officers & employee of holding and subsidiary also.
- The scope of “officer in default” has been widened to include registrar and merchant bankers related to the issues.
- Only “April-March” to be considered as financial year (exception: Foreign holding/subsidiary subject to tribunal approval.)
B.) Incorporation and Matters incidental
1.) Changes towards Incorporation of entity :
- Companies Act 2013 introduced a new concept which was not there in Companies act 1956 that was “One person company”.
- No approval is now required for conversion of the Private company to one person company or vice versa.
- No approval is required for conversion of private company into public company.
2.) Provisions regarding matters of incidental corporation:
- MOA to carry the object only. Bifurcation of the object clause into main ancillary & and other object done away with.
- Even the private companies have to file the declarations for commencement of business.
- Subsidiary can hold shares in holding company as trustee, which was not allowed in Companies Act 1956.
- Penalizing Provisions
1.)