Companies Act, 2013-25 Key Highlights

[hithakar chouta]

1. The concept of one person Company has been introduced.(Formed as a private limited company)
2. Private companies can have maximum 200 members.
3. It is clarified that the extra-ordinary general meeting shall be held at a place within India.
4. Now at least one director on the board of every company to be a person who has stayed in India for not less than 182 days in the previous calendar year.(Resident Director)
5. Directorship limits 20 companies including 10 public companies.
6. Now the Act prohibits grant of any loans, giving of guarantee or providing of any security to the directors or any other person in whom the director is interested.
7. A company, unless otherwise prescribed, cannot make investment through more than two layers of investment companies.
8. No approval of the central government required for entering into any related party transactions.
9. Greater restrictions have been placed on inter corporate loan/deposits.
10. No need to conduct a Board meeting in a calendar quarter. However, gap between the two Board meetings cannot exceed 120 days and four Board meeting should be held in a calendar year.
11. Stringent provisions have been made for allotment of shares. Key points are:

• Allotment should be made within 60 days of receipt of application money.
• Allotment should be made through private placement basis.
• The minimum investments shall not be less than ₹ 20000.

12. Even a director who has resigned need to intimate the ROC about his resignation.
13. Annual return format has been changed drastically. Companies to furnish a host of financial as well as non financial details.
14. Companies need to maintain the registers in the new format prescribed by the Ministry.
15. Registers can be kept in soft copies.
16. Adherence to Secretarial Standards on Board and General meeting has been made mandatory.
17. Private companies with a turnover of ₹ 200 crores or more OR borrowings of more than ₹ 100 crores need to appoint an internal Auditor.
18. Retirement of auditors of Private companies with borrowings of ₹ 50 crores or more is mandatory.
19. Companies with a public borrowings of ₹ 50 crores or more need to have a vigil mechanism for the Directors and employees.
20. Private companies with a net profit of ₹ 5 crores or more need to contribute 2% of the net profit to the CSR Activities.
21. Unlike the old Companies Act, 1956 the present Companies Act, 2013 has made non compliance stricter by providing for imprisonment in many of the non compliances.
22.  Auditors are compulsorily required to attend the AGM.
23.  Valuation of shares is mandatory, if issued at a premium.
24. Appointment of Company Secretary is not mandatory for private company.