Indian Companies Act 2013: A Comprehensive Guide

Indian Companies Act 2013 is a comprehensive Indian law governing the incorporation, regulation, and winding up of companies. It was introduced to replace the Companies Act 1956 and came into force on April 1, 2014.It consists of 29 chapters, 470 sections, and 7 schedules.

Here’s a brief overview of the key sections and schedules of the Indian Companies Act 2013:

Sections:

• Preliminary (Sections 1-2): This section covers the basic provisions of the Act, such as its title, extent, commencement, and application.
• Incorporation of Company and Matters Incidental Thereto (Sections 3-22): This section deals with the process of incorporating a company in India, as well as other related matters such as the memorandum and articles of association, share capital, and directors.
• Prospectus and Allotment of Securities (Sections 23-42): This section deals with the issue and allotment of securities by companies, including the prospectus and other disclosure requirements.
• Share Capital and Debentures (Sections 43-72): This section covers the various types of shares and debentures that companies can issue, as well as the related rights and obligations.
• Acceptance of Deposits by Companies (Sections 73-76): This section deals with the acceptance of deposits by companies from the public, and the related restrictions and safeguards.
• Registration of Charges (Sections 77-87): This section deals with the registration of charges created by companies over their assets.
• Management and Administration (Sections 88-122): This section covers the management and administration of companies, including the powers and duties of directors, the board of directors, and general meetings.
• Declaration and Payment of Dividends (Sections 123-127): This section deals with the declaration and payment of dividends by companies.
• Accounts of Companies (Sections 128-138): This section covers the accounting and reporting requirements for companies.
• Audit and Auditors (Sections 139-148): This section deals with the appointment, qualifications, and duties of auditors of companies.
• Appointment and Qualifications of Directors (Sections 149-172): This section covers the appointment and qualifications of directors of companies.
  Meetings of the Board and its Powers (Sections 173-195): This section deals with the meetings of the Board of Directors and their powers.
• Appointment and Remuneration of Managerial Personnel (Sections 196-205): This section deals with the appointment and remuneration of managerial personnel such as managing directors, whole-time directors, and managers.
• Inspection, Inquiry, and Investigation (Sections 206-229): This section deals with the powers of the Central Government and other authorities to inspect, inquire into, and investigate the affairs of companies.
• Compromises, Arrangements, and Amalgamations (Sections 230-240): This section deals with the procedures for companies to enter into compromises, arrangements, and amalgamations.
• Prevention of Oppression and Mismanagement (Sections 241-246): This section provides for the protection of minority shareholders and other stakeholders from oppression and mismanagement by the majority shareholders and directors.
• Registered Valuers (Sections 247): This section deals with the registration and regulation of registered valuers.
• Removal of Names of Companies from the Register of Companies (Sections 248-252): This section deals with the procedure for removing the names of companies from the Register of Companies.
• Winding Up (Sections 253-365): This section deals with the winding up of companies, including the various types of winding up and the procedures involved.
• Producer Companies (Sections 366-378): This section deals with the formation and operation of producer companies.
• Companies Incorporated Outside India (Sections 379-393): This section deals with the registration and operation of foreign companies in India.
• Government Companies (Sections 394-395): This section deals with the annual Reports relating to Government companies.
• Registration offices and offices (Section 396-404): This portion deals with the provisions related to registration offices and fees. Section 396 of CA 2013 provides for registration offices.
• Companies to furnish statistics(Section 405): This section requires to furnish such information or statistics with regard to companies or their constitution or working.
• Nidhis (Sections 406): This section deals with the formation and operation of nidhis, which are a type of mutual benefit society.
• National Company Law Tribunal and Appellate Tribunal (Sections 407-434): This section deals with the establishment and jurisdiction of the National Company Law Tribunal and the National Company Law Appellate Tribunal.
• Establishment of Special Courts (Sections 435-446): This section deals with the designation of many Special Courts as may be necessary for the purpose of providing speedy trial of offences under this Act or by notification.
  Miscellaneous (Sections 447-470)

The Companies Act 2013 contains seven schedules, each of which deals with a specific aspect of corporate law. The schedules are:

Schedule I: Tables A, B, C, D, and E (Memorandum and Articles of Association)

This schedule contains the model Memorandum and Articles of Association (M&A) for various types of companies. The M&A are the two most important documents in a company’s constitution, and they outline the company’s objects, powers, and internal governance structure.

Schedule II: Useful Lives to Compute Depreciation

This schedule provides a list of useful lives for various types of assets, which can be used by companies to compute depreciation. Depreciation is a non-cash expense that is charged to the profit and loss account to account for the wear and tear of assets over time.

Schedule III: General Instructions for Preparation of Balance Sheet and Statement of Profit and Loss of a Company

This schedule provides general instructions for the preparation of the balance sheet and statement of profit and loss, which are the two main financial statements of a company. The balance sheet shows the company’s assets and liabilities on a specific date, while the statement of profit and loss shows the company’s income and expenses over a period of time.

Schedule IV: Code for Independent Directors

This schedule provides a code of conduct for independent directors, who are directors who are not connected to the company’s management or promoters. Independent directors are responsible for overseeing the company’s management and ensuring that the company is run in a fair and transparent manner.

Schedule V: Conditions to be Fulfilled for the Appointment of a Managing or Whole-time Director or a Manager

This schedule sets out the conditions that must be met for the appointment of a managing or whole-time director or a manager. Managing directors and whole-time directors are responsible for the day-to-day management of the company, while managers are responsible for the management of a particular department or function within the company.

Schedule VI: Provisions Applicable to the Company and its Officers in Case of Contravention of Section 73

This schedule sets out the provisions that will apply to a company and its officers if they contravene section 73 of the Companies Act 2013. Section 73 deals with the restrictions on the allotment of securities.

Schedule VII: Activities that may be Included by Companies in their Corporate Social Responsibility Policies

This schedule lists the activities that companies may include in their corporate social responsibility (CSR) policies. CSR is a voluntary initiative by companies to contribute to the social and economic development of the communities in which they operate.

The seven schedules of the Indian Companies Act 2013 play an important role in the regulation of companies in India. The schedules cover a wide range of topics, from the incorporation of companies to the appointment of directors to CSR.