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Impact of Companies Act,2013 on a foreign WOS
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Impact of Companies Act,2013 on a foreign WOS

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A simplified presentation based on the 98 sections notified as on 12th Sep. 2013 and other relating provisions with a foreign Wholly Owned Subsidiary

A simplified presentation based on the 98 sections notified as on 12th Sep. 2013 and other relating provisions with a foreign Wholly Owned Subsidiary

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Impact of Companies Act,2013 on a foreign WOS Presentation Transcript

  • 1. Impact of the new Companies Act, 2013 In A fopreign WOS 1
  • 2. PART - I 98 Sections of the Companies Act,2013 Which came into force from 12th September,2013 2
  • 3. POSITIVE IMPACTS • Company can maintain minutes and registers in electronic form. • Employee stock options may also be granted to directors, officers and employees of holding or subsidiary of the Company. • Financial Statement should include Cash Flow Statement. 3
  • 4. • Key Managerial Personnel in relation to a company includes Company Secretary and Chief Financial Officer • Number of members has been increased from 50 to 200 in Private Companies. • Remuneration includes perquisites as defined under the Income-tax Act, 1961. • allows a subsidiary company to hold shares in its holding company: even if Holding or subsidiary is beneficiary of the same (Sec.19, of Companies Act, 2013). 4
  • 5. • when any special business is to be transacted in any general meeting, the explanatory statement thereof should specify the nature of concern or interest, financial or otherwise, if any, in respect of the following persons (sec.102) :Every Director and the Manager, if any Every other key managerial personnel; and Relatives of the persons mentioned above and any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon. 5
  • 6. • limits for political contribution by Company have been increased to 7.5% from 5 %. • Service of documents on foreign company can now also be served through any electronic mode (sec.383) 6
  • 7. NEGATIVE IMPACTS • The eligibility criteria under the Act, for making requisition for circulation of resolution have been increased to members holding 1/10th of the voting power instead of 1/20th .. • Alternate Director can only be appointed in case a Director leaves India for a period of not less than 3 months. 7
  • 8. • certain powers which under section 293 of the Companies Act, 1956 can be exercised by Board with the approval of general meeting only, are now applicable to Private Companies also. • No Company shall give any loan or provide any security or guarantee in connection with loan to a Director or any other person in whom he is interested (sec.185). 8
  • 9. • A Company shall not enter into any arrangement by which a Director of the Company or of its Holding Company or any person connected with him can acquire assets for the consideration other than cash from the Company & vice versa without the approval of Company in general meeting. (Sec.192) • Where the Director or connected person is a director of its holding company, then the resolution from Holding Company will also be required. • The notice for approval in general meeting under this section shall include particulars of the arrangement along with the value of asset duly calculated by Registered Valuer. 9
  • 10. • No Director of a Company or any of its key managerial personnel shall buy in the Company, or in its Holding, Subsidiary or Associate Company :– – A right to call for delivery at a specified price and within a specified time of a specified number relevant shares or a specified amount of relevant debentures. – A right to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures. – A right as he may elect, to call for delivery at a specified price and within a specified time, or to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures. 10
  • 11. PART – II Important provisions under Companies Act, 2013 for which, rules are yet to be notified 11
  • 12. • At least one Director should be a person who has stayed in India for a total period of not less than 182 days in the previous calendar year. (Sec.149). • Prescribed class or classes of companies are required to appoint at least one women director. • Auditor of a Company appointed for a period of 5 years, rotation of Auditors after 5 year and the appointment shall be ratified by the members during every annual general meeting. 12
  • 13. • At least 4 Board Meetings to be held in every year, and not more than 120 days to elapse between two consecutive meetings. • Annual Return certification by a Practicing Company Secretary. • Mandatory CSR (Corporate Social Responsibility) contribution of 2% of avg. net profits for the last 3 preceding financial years by the Companies having net profit Rs.5 crore or more/ net worth Rs.500 crore or more/ turn over Rs.1000 crore or more. 13
  • 14. 14