27 March 2014 | Volume 5 Issue 4
MCA notifies 183 new sections of the Companies Act, 2013 

The Ministry of Corporate Affairs (MCA) has notified 183 sections and six schedules of the Companies Act, 2013 (the Act) on 26 March 2014. The MCA has also notified certain subsections of 13 sections that had been notified earlier. All of these sections, subsections and schedules will come into force from 1 April 2014.

98 sections of the Act were notified on 12 September 2013 and came into force on the same date. Further, section 135 and schedule VII notified on 27 February 2014 will come into effect on 1 April 2014.
 
The new law relating to Companies is divided into 29 chapters. It contains 470 sections and seven schedules, and is being notified by the MCA in parts. 


The following chapters have been fully notified:
  • Prospectus and Allotment of Securities
  • Registration of Charges
  • Meetings of Boards
  • Appointment and Remuneration of Managerial Personnel
  • Companies to Furnish Information or Statistics
  • Nidhis
The following chapters have been substantially notified (except for a few provisions):
  • Incorporation of Company and incidental matters (except provisions referring to the Tribunal)
  • Share Capital and Debentures
  • Acceptance of Deposits by Companies
  • Management and Administration (except provisions referring to the Tribunal)
  • Declaration and Payment of Dividend
  • Accounts of Companies (except provisions relating to re-opening of accounts)
  • Audit and Auditors (except provisions referring to the Tribunal)
  • Appointment and Qualification of Directors (except provisions referring to the Tribunal)
  • Companies incorporated outside India (except provisions relating to winding up)
  • Registration Offices and Fees
The MCA is yet to notify the provisions relating to Compromises, Arrangements and Amalgamations, Prevention of Oppression and Mismanagement, Registered Valuers, Removal of Names of Companies from the Register Of Companies, Revival and Rehabilitation of Sick Companies and Winding Up.
 
Further, the MCA has communicated that rules pertaining to the notified sections will be notified shortly.
 
With this notification announced on 26 March 2014, the rules yet to be notified, and the provisions becoming effective from 1 April 2014, Indian businesses will not have much time to understand the intent of the rules. Regardless, it is perceived that Indian corporate entities will take compliance with the new provisions seriously.

The ministry intends to mandate the use of Indian accounting standards along with International Financial Reporting Standards (IFRS) for a specified class of companies. The notification can definitely be seen as a step in this direction.
 
As a result of domestic and international economic events, an improved version of a legislation that was introduced in 1956 and saw several amendments thereafter, is now almost set to be implemented. The law intends to bring significant shifts across a number of areas and the effects are perceived to be far-reaching.
 
For a copy of the notification, please click here.

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