Companies Act: Rules for 11 chapters notified
The new Act, which replaces the Companies Act of 1956, comes into force from 1 April
New Delhi: The ministry of corporate affairs (MCA) notified rules for 11 chapters of the new Companies Act of 2013.
These include rules for specifications and definitions, incorporation of companies, prospectus and allotment of securities, shares and debentures, registration of charges, management and administration, declaration and payment of dividend, accounts, appointment and qualification of directors, board meetings and powers, and corporate social responsibility.
The new Act, which replaces the Companies Act of 1956, comes into force from 1 April.
The notification of rules comes soon after the corporate affairs ministry on Wednesday notified 183 sections of the new Act, in addition to the 100 sections that had been notified in September 2013.
Parliament approved the long-awaited overhaul of legislation governing Indian companies on 9 August. The new law is aimed at easing the process of doing business in the country and improving corporate governance by making firms more accountable.
“This is an exciting development that makes the reformative new company law indeed a reality. However, considering the immediate effective date of 1 April 2014, timelines to ensure compliance is expected to be of concern for the corporates," said Yogesh Sharma, partner, assurance at Grant Thornton India LLP in an emailed statement.
“What will now be interesting to see is how soon the other related rules are notified and become effective, and whether they provide any additional transition time," he added.
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