Kamal Ega

The word ‘company’ was derived from the Latin words

Com=with or together : Panis =bread

A company can be defined as an "artificial person", invisible, intangible, created under law, with a discrete legal entity, perpetual succession and a common seal.

What is a company?

Corporate Personality

Common Seal

Limited Liability

Perpetual Succession

Separate Property

Transferability of Shares

Capacity to Sue and Be Sued

The most striking characteristics of a company are:

The Indian company law begun with the companies act 1850, modeled on British companies act 1844

The Indian Companies act of 1913 was based on the British Companies act of 1908

The Indian Companies act, 1956; April 1, 1956 The Indian Companies act, 2013

History of companies act in India

Passed in Lok sabha: December 18, 2012   Passed in Rajya Sabha: August 08, 2013   Total number of sections: 470   Total number of chapters: 29

Total number of schedules: 7

Effective from September 12, 2013

J.J Irani Committee

Highlights of the Companies Act, 2013

1956 v/s 2013

To promote the development of the economy   To encourage transparency and accountability   To promote high standards of corporate governance  To recognize new concepts and procedures to support

business while protecting interests of all the stakeholders  To set up institutional structure in the form of various

authorities, bodies and panels (NCLT and NCLAT)  To enforce stricter action against fraud and gross non -

compliance with company law provisions

Objectives of the Act 2013

The New Concepts Introduced

One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

One Person Company

Associate company in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary and joint venture company

Significant influence means control of at least twenty per cent of the total share capital, of business decisions under an agreement

Associate company

Where a company is formed and registered under the new law for the future project of to hold an asset of intellectual property.

  Inactive company is one which has not been carrying

on any business operation, or has not made any significant accounting transaction, or has not file financial statements and annual returns during for the last two financial years.

Dormant Company (Section-455)

Every listed company shall appoint at least one woman director

Every other public company having paid up share capital of Rs. 100 crores or more or turnover of Rs. 300 crore or more as on the last date of latest audited financial statements, shall also appoint at least one woman director.

Women Director

Mandatory rotation of auditors for the listed and other specifies class of companies

  Individual auditor to be rotate after a term of five

consecutive years  Audit firm to be rotate after two terms of five

consecutive years 

Rotation of Auditors

Vigil (Whistle Blower) mechanism provides a channel to the employees and directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy.

Vigil (Whistle Blower) mechanism

Secretarial Audit is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc. It is a mechanism to monitor compliance with the requirements of stated laws and processes.

Secretarial Audit

The Act simplified procedure for merger and amalgamation of certain class of companies such as holding and subsidiary and small companies

Fast Track Merger

Minimum Capital Requirement: Private or public company can be incorporated without the need for minimum paid up share capital

Common Seal: The requirement of having common seal made optional

Declaration of Dividend: no company shall declare dividend unless carried over past losses and depreciation in previous year or years are set off against profit of the company for the current year

The Companies (Amendment Act) 2015