Companies Act 2013 – operational from 1st April 2014

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The Companies Act, 2013 ('the Act') is a landmark legislation with far-reaching consequences on all companies incorporated in India. The Ministry of Corporate Affairs (MCA) had already made 98 sections effective in September 2013. Further on 26 March 2014, the MCA has notified most of the remaining sections. These sections have been notified to come into effect from 1 April 2014.
With the notification of aforesaid sections, it can be assumed that relevant rules will also be notified shortly as most of them are dependent on rules.

Pending the formation of the National Company Law Tribunal (NCLT) the National Financial Reporting Authority (NFRA), and the framework for registration of valuers, those provisions that require these institutions have not yet been notified. The requirement to approach the NCLT intermingles with several sections of the Companies Act, notably the sections relating to mergers and restructuring and winding up of companies. It seems that until the NCLT and NFRA are formed the regulatory framework under the Companies Act 1956 would continue to apply. The provision relating to dissolution of the Company Law Board has not been notified.

Another point to note is that the sections relating to transfer of unclaimed dividend and corresponding shares to the Investor and Education Fund have also not yet been notified.

The new Companies Act provided an enabling framework to set up special courts. The provisions relating to these special courts have also not been notified.

Further, the new Companies Act requires, in several cases, valuation to be done by registered valuers. The provision relating to registered valuers has not been notified however, the individual sections that carry the requirement for valuation to be carried out by a registered valuer have been notified.

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Companies Act 2013 – operational from 1st April 2014

  1. 1. 1 Barboza, Melvin From: IN-FM Company Act Core Team Subject: Companies Act 2013 – operational from 1st April 2014 Attachments: CompaniesActNotification26March2014.pdf Importance: High Companies Act 2013 – operational from 1st April 2014   The Companies Act, 2013 ('the Act') is a landmark legislation with far-reaching consequences on all companies incorporated in India. The Ministry of Corporate Affairs (MCA) had already made 98 sections effective in September 2013. Further on 26 March 2014, the MCA has notified most of the remaining sections. These sections have been notified to come into effect from 1 April 2014. With the notification of aforesaid sections, it can be assumed that relevant rules will also be notified shortly as most of them are dependent on rules. Pending the formation of the National Company Law Tribunal (NCLT) the National Financial Reporting Authority (NFRA), and the framework for registration of valuers, those provisions that require these institutions have not yet been notified. The requirement to approach the NCLT intermingles with several sections of the Companies Act, notably the sections relating to mergers and restructuring and winding up of companies. It seems that until the NCLT and NFRA are formed the regulatory framework under the Companies Act 1956 would continue to apply. The provision relating to dissolution of the Company Law Board has not been notified. Another point to note is that the sections relating to transfer of unclaimed dividend and corresponding shares to the Investor and Education Fund have also not yet been notified. The new Companies Act provided an enabling framework to set up special courts. The provisions relating to these special courts have also not been notified. Further, the new Companies Act requires, in several cases, valuation to be done by registered valuers. The provision relating to registered valuers has not been notified however, the individual sections that carry the requirement for valuation to be carried out by a registered valuer have been notified.        “The new  Companies Act  has hit a  crescendo with  vast majority of  the sections now  being notified.   Pending creation  of the NCLT and  NFRA, the Central  Government has  kept provisions  relating to these  in abeyance.”   Sai Venkateshwaran Partner and Head, AAS KPMG in India Legal and Privacy KPMG, Lodha Excelus, Apollo Mills Compound, NM Joshi Marg, Mahalaxmi, Mumbai - 400 011 Phone: +91 22 3989 6000, Fax: +91 22 3090 2210 © 2014 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. This document is meant for e- communications only. The KPMG name, logo and “cutting through complexity“ are registered trademarks or trademarks of KPMG International.     

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