New concepts introduced through the updated Companies Act, 2013!
The Companies Act 2013 replaced the old Companies Act 1956 from 12th September 2013. This new act is shorter than the previous one with only 470 sections as against 658 sections form the older one. There are many new things introduced through this new act which have been illustrated below. We hope it will help everyone benefit from the new policy introduced by the Government of India.
One Person Company – Also known as an OPC, is a normal Private Limited Company, but has only 1 member, which is also its shareholder. It is just like any other normal Private Limited Company, and hence avails all the benefits like perpetual succession, limited liability and separate legal identity to name a few. The costs required to form an OPC are much lower as compared to a normal Private Limited Company, but has limitations on its paid-up capital and turnover. Once its turnover crosses Rs. 2 Crore, it has to convert to a normal private limited company with minimum of 2 directors.
Woman Director – It is mandatory to have at least one woman director in a company with Rs. 100 Crore paid-up capital or more, or for companies exceeding turnover of Rs. 300 Crore.
Corporate Social Responsibility – A committee shall be appointed from the Board of at least three directors consisting one independent director for looking after the company’s corporate social responsibility.
Maximum number of members – A private limited company can now have a maximum of 200 members as against the previous 50 members.
Dormant Company – A company can apply for being a dormant company and be classified as one. It still has to adhere to the minimum compliance requirements and report its financial statements to the registrar once in a year. Also, companies failing to file the statutory compliance for two consecutive years can be shifted from an active company to a dormant company status by the Registrar.
These are few of the major new things introduced under the Companies Act 2013 in India to facilitate the start-up culture here!