CA

MAJOR CHANGES in COMPANIES ACT -2013
Section	Details	Brief Provision
Section 2(41)	Definitions	Financial Year of any Company can end only on March 31 and only exception is for companies, which are holding / subsidiary of a foreign entity requiring consolidation outside India, can have a different financial year with the approval of Tribunal.
Section 2(68)	Definitions	Maximum number of members in a Private Company increased from 50 to 200.
Section 2(85)	Definitions	Concept of small companies with various relaxations in terms of reporting requirement, board meetings and procedure for mergers/ amalgamations have been introduced.  Small Companies have been defined to mean a Company, other than a public Company (a) having paid-up share capital not exceed fifty lakh rupees or such amount, not exceeding rupees five crores, as may be prescribed; (b) Having turnover not exceeding rupees two crores or such amount, not exceeding rupees twenty crores, as may be prescribed, as per its last profit and loss account.
Section29	Public offer of securities to be in dematerialised form.	Any company, other than a public company may convert its securities into dematerialised form or issue its securities in physical form in accordance with the provisions of this Act or in dematerialised form in accordance with the provisions of the Depositories Act, 1996 and the regulations made thereunder.
Section 43	Issue of differential equity shares	Issue of equity shares with differential rights would have to be in accordance with such rules as may be prescribed. This has been made applicable to even private companies now.
Section 62	Preferential issue of shares	Pricing of a Preferential Issue of shares by a company to be determined by a registered valuer. Conditions may be prescribed in rules for preferential issue by companies.
Section 62	Further issue of Capital  –	Provisions relating to further issue of capital applicable to all companies. Accordingly, any shares have to be offered to all shareholders on pro-rata basis (except in case of preferential issue through special resolution dealt in next point).
Section 101	Notice of meetings	Notices for Board and General Meetings sent by electronic mode are recognised in the statute.
Section 120	Maintenance and inspection of documents in electronic form	Any document required to kept by a company or allowed to be inspected or copies given can be maintained in electronic mode
Section 123	Decleration of Dividend	Declaration of interim dividend can be out of surplus profits or out of current years profits. However, in case the Company has incurred loss up to preceding quarter during the year, the interim dividend cannot be declared out at a rate higher than the average dividend declared by the Company during immediately preceding 3 financial years.
Section 129	Consolidation of financial statements	Consolidation of financial statements mandatory in case a Company has one or more subsidiaries
Section 129	Financial Statements	Cash flow statement and statement showing changes in equity if any of the company also forms part of the financial statements. In case the Company has a subsidiary company, the consolidated financial statements of all subsidiaries and the company shall be prepared and laid before the AGM
Section 131	Voluntary revision of financial statements or Board’s report.	Voluntary revision of financial statements or Board’s report.
Section 135	Concept of Corporate Social Responsibility	CSR introduced  ;Board shall ensure to spend 2% of average profits of last 3 years on CSR. Applicable to Companies having net-worth of Rs. 500 cr or more or Turnover of Rs. 1,000 cr or more or net profit of Rs. 5 cr or more. Company also required to constitute CSR committee.
Section 139	Appointment of auditors	The Auditor will be appointed for a period of 5 years, with a requirement to ratify such appointment at each annual general meeting
Section 149(1)	Company to have Board of Directors.	A maximum limit of 15 directors is imposed for the Board unless approved by a special resolution in AGM.
Section 149(3)	Company to have Board of Directors.	Every company shall have at least 1 director who has stayed in India for a total period of not less than 182 days in the previous calendar year.
Section 174	Quorum for meetings of Board	Participation of directors through video conferencing or by other audio visual means is recognized for the purpose of quorum.
Section 185	Loan to directors	No Company shall directly or indirectly make any loan including book debt or give any guarantee or provide any security to its directors or to any persons in whom the director is interested. However, this provision shall not be applicable to managing director / whole time director subject to conditions, etc.
Sec 186	Inter-Corporate loans / investment	Rate of interest on inter corporate loans will be the prevailing rate of interest on dated Government Securities. Further, exemption to Private companies from restrictions /conditions contained under section 372A of the exiting Companies Act, 1956 is now done away with. Hence, private companies shall be required to be bound by the above restrictions (i.e., private companies may not be able to grant interest free loans).
Section 232	Merger of listed Company with unlisted Company	Under existing provisions of the Act merger of listed company with listed company entails listing of the unlisted company. However under the new provisions the unlisted company has the option to continue as an unlisted company subject to payment of cash to existing shareholders of listed transferor company in accordance with determined valuation.
Section 233	Merger and amalgamation of certain companies	Concept of fast track merger without the requirement of a Court Process introduced to facilitate merger between 2 or more Small Companies or between holding Company and its wholly owned subsidiary.
Section 234	Merger of Indian Company with Foreign Company  –	Indian Company can be merged with Foreign Company or vice versa with prior approval of RBI
Chapter XI	Directors	(a)  One of the directors of the company shall be a person who has stayed in  India  for 182 days or more; (b) Maximum no. of directors in a company increased from 12 to 15 which can be increased further by special resolution; (c) Maximum no. of directorship increased from 15 to 20 (with maximum 10 public companies)
Chapter XXVII	National Company Law Tribunal and National Company Law Appellate Tribunal –	Constitution of a National Company Law Tribunal and National Company Law Appellate Tribunal consisiting of combination of technical and judicial members