BUSINESS LAW

PRESENTED BY:
AYUSHI SINGH
(2022PBM5061)
 INTRODUCTION

 Company Act 1956 came into force with effect from 1st April, 1956.
• It contains 658 sections and XV schedules.
• The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates
incorporation of a company, responsibilities of a company, directors, dissolution of a company.
• The 2013 Act is divided into 29 chapters containing 470 sections and 7 schedules.
• The Act has replaced The Companies Act, 1956 (in a partial manner) after receiving the assent of the
President of India on 29 August 2013
•
Passed in Lok sabha Dec 18, 2012
• Passed in Rajya sabha - Aug 8, 2013
• Effective from-Sep 12, 2013
 MEANING AND FEATURES OF A COMPANY

Meaning:
• Section 2(20) of the Companies Act, 2013, defines the term ‘Company’ as follows: “A
company is an artificial person created by law having separate legal entity with perpetual
succession and a common seal”.
Features:
• Separate Legal Entity
• Perpetual Succession
• Limited Liability
• Artificial Legal Person
• Common Seal
• Transferability of shares.
 STRUCTURAL COMPARISONS:

COMPANIES ACT COMPANIES ACT

1956 2013

13 PARTS 29
CHAPTERS

658 470
SECTIONS SECTIONS

15 7
SCHEDULES SCHEDULES
 FEATURES OF COMPANY ACT 2013

Features:
• Digitalize the documentation
• Cross-border mergers are allowed
• Dormant Companies
• National Company Law Tribunal
• Faster and simpler merge and amalgamations
• One person Companies
• Women directors are mandatory for prescribed class
• Mandatory CSR
 NEW CONCEPTS INTRODUCED

One Persons Company:

• Section 2(62) of Companies Act defines a one-person company as a company that has only
one person as to its member.
Features
• Private company
• Single member
• Nominee
• No perpetual successions.
• Minimum one director (max 15director)
 NEW CONCEPTS INTRODUCED

Associate 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
Dormant Company (Sections-455):
• 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.
 NEW CONCEPTS INTRODUCED

Women Director
• Every listed company shall appoint at least one woman director
• Every other public company having paid up share capital of Rs. 100 crore 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.
Rotation of Auditors:
• 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.
Regulation of Corporate Social Responsibility (CSR):
• Mandates certain classes of companies to spend a specified percentage of their profits on corporate
social responsibility activities.
 NEW CONCEPTS INTRODUCED

Fraudulent Activities and Corporate Fraud:

• Introduces more stringent provisions to prevent corporate fraud and imposes stricter penalties
for fraudulent activities.
Audit and Accounting Standards:
• Introduces more robust provisions related to audit and accounting standards, including the
establishment of the National Financial Reporting Authority (NFRA) to oversee compliance.
M O N I T O R I N G A N D R E G U L AT O R Y A U T H O R I T I E S
 S F I O – S E R I O U S F R A U D I N V E S T I G AT I O N A U T H O R I T Y O F F I C E

• Investigation serious fraud of companies.

• Falls under the jurisdiction of the Ministry of Corporate Affairs
• It coordinates with the Income Tax Department and the central bureau of investigation.
 N C LT – N AT I O N A L C O M PA N Y L AW T R I B U N A L

• Established by central government through notification consisting of president and judicial

and technical members to discharge such powers.
• Any person aggrieved an order of the tribunal may prefer an appeal to the Appellate Tribunal.
• No appeal should lie to the Appellate Tribunal from an order made by the tribunal with the
consent of parties.
• Chapter 27 of the Act, Section 407-434.
 N F R A – N AT I O N A L F I N A N C I A L R E P O RT I N G A U T H O R I T Y

• Section 1332
• To advise on matters related to auditing standard in addition to accounting standards.
• Central Government prescribes the standards
• Monitor and enforce the compliance with accounting and auditing standards.
• Oversee the quality of service of the professions
• To investigate into the matters of professional or other misconduct committed by any member
or the firm of chartered accounts
Thank-you