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.) ROC is empowered to strike off the name of a company incorporated with wrong of
incorrect information.
2.) Person deliberately furnishing false/incorrect information at the time of incorporation shall
be punishable for fraud under section 470 of Companies Act 2013.

C.) Prospectus and allotment of securities.

1.) Scope is widened to include all type of securities now than just shares.

2.) Specification for raising of funds by public company through:

- IPO /FPO
- Private placement
- Rights/Bonus shares.

3.) Now company after varying the terms of contract or objects mentioned in the prospectus
cannot use amount raised by it through prospectus for buying/trading/otherwise dealing in
equity shares of other company.

4.) Private placement offers have several conditions as:

- Offer to section of public other than QIBs
-Not more than 50 number of people
-In compliance of prescribed terms and conditions.
-Made through private placement offer letter not through prospectus.

5.) Public placement offer should comply with the provisions of Companies Act 2013, Securities
Contract Regulation Act 1956, SEBI Act 1992.

6.) Person responsible for fraudulently inducing others to invest money is now liable for
stringent punishment under the section 470 of the act which shall be non-compoundable.

7.) Any person affected by misleading statement, any inclusion/omission of a matter in the
prospectus can file suit/take an action:
-For civil liability for misstatement in prospectus
- For Punishment of Fraud.

8.) In Companies Act 1956, only public financial institution, public sector banks or scheduled
bank with main object of financing were allowed to issue there shelf prospectus but now
Companies Act 2013 provides that the government shall prescribe the types of companies that
can issue shelf prospectus.

- Penalizing Provision
1- Persons authorizing the issue of the prospectus having misleading information shall also be
criminally liable besides holding the civil liability.
2-Civil liability for misstatement in prospectus has been extended to experts also.

D.) Share capital and debentures.

1.) There has been various changes in regard with the share and securities in the Companies act
2013.