Companies Act, 2013

 NAME-ARVIND S

COLLEGE-SCHOOL OF EXCELLENCE IN LAW, CHENNAI

UNIVERSITY-THE TAMILNADU DR. AMBEDKAR LAW UNIVERSITY

DATE-30 TH JULY 2022

The Companies Bill, 2012 finally became the Companies Act, 2013. It received the assent of

the President on August 29, 2013 and was notified in the Gazette of India on 30.08.2013.

Companies Act, 2013 has undergone amendments four times so far. Companies

(Amendment) Act, 2015 and Companies (Amendment) Act, 2017 aimed at enhancing

efficiency and promoting ease of doing business. The Act was also amended by The

Insolvency and Bankruptcy Code, 2016 and Finance Act, 2017. The Insolvency and

Bankruptcy Code, 2016 led to omission of various sections i.e. section 253 to section 269,

section 289, section 304 to section 323 and section 325. The Finance Act, 2017 amended

section 182 with regard to prohibitions and restrictions regarding political contributions. So

far Ministry has come out with several circulars, notifications, Orders and various

amendment rules to facilitate better and smooth implementation of the Act.

The Companies Act 2013 introduced new concepts supporting enhanced disclosure,

accountability, better board governance, and better facilitation of business and so on. It

includes associate company, one Person Company, small company, dormant company,

independent director, women director, resident director, special court, secretarial standards,

secretarial audit, class action, registered valuers, rotation of auditors, vigil mechanism,

corporate social responsibility, E-voting etc.

Applicability of Companies Act, 2013

According to section 1 of the Companies Act, 2013, the Act extends to whole of India and the

provisions of the Act shall apply to the following:-

1. Companies incorporated under this Act or under any previous company law;

2. Insurance companies, except in so far as the said provisions are inconsistent with the

provisions of the Insurance Act, 1938 (4 of 1938) or the Insurance Regulatory and

Development Authority Act, 1999;

3. Banking companies, except in so far as the said provisions are inconsistent with the

provisions of the Banking Regulation Act, 1949;

4. companies engaged in the generation or supply of electricity, except in so far as the

said provisions are inconsistent with the provisions of the Electricity Act, 2003;

5. any other company governed by any special Act for the time being in force, except in

so far as the said provisions are inconsistent with the provisions of such special Act;

and

6. such body corporate, incorporated by any Act for the time being in force, as the

Central Government may, by notification, specify in this behalf, subject to such

exceptions, modifications or adaptation, as may be specified in the notification.

Companies Act, 2013 is not applicable to unincorporated companies. An

unincorporated company, association or partnership consisting of large number of

persons has been declared illegal.

By virtue of section 464 of the Companies Act, 2013, no association or partnership consisting

of more than such number of persons as may be prescribed shall be formed for the purpose of

carrying on any business that has for its object the acquisition of gain by the association or

partnership or by the individual members thereof, unless it is registered as a company under

this Act or is formed under any other law for the time being in force. Rule 10 of Companies

(Miscellaneous) Rules, 2014 prescribes 50 persons in this regard. The maximum number of

persons which may be prescribed under this section shall not exceed 100.

Section 464 of the Act does not apply to the case of a Hindu undivided family carrying on

any business whatever may be the number of its members. However, this section is also not

applicable to an association or partnership, if it is formed by professionals who are governed

by special Acts.

THANK YOU