Introduction to Indian Companies Act 2013

The Indian Companies Act 2013 is a landmark legislation that regulates the incorporation, management, and dissolution of companies in India. The Act replaced the previous Companies Act 1956, which was outdated and inadequate to deal with the complexities of the modern corporate world. The Act aims to promote good governance, transparency, accountability, and social responsibility among companies, while also protecting the interests of various stakeholders, such as shareholders, creditors, employees, consumers, and the public.

The Act consists of 29 chapters, 470 sections, and 7 schedules, covering various aspects of company law, such as:

- Incorporation and registration of companies

- Types and classes of companies

- Memorandum and articles of association

- Share capital and debentures

- Registration of charges

- Management and administration

- Meetings and resolutions

- Appointment and qualifications of directors

- Duties and liabilities of directors

- Board committees and corporate governance

- Audit and auditors

- Accounts and financial statements

- Dividend and reserves

- Inspection and investigation

- Compromises, arrangements, and amalgamations

- Prevention of oppression and mismanagement

- Winding up and liquidation

- Producer companies

- Companies incorporated outside India

- Government companies

- Nidhis (mutual benefit societies)

- Miscellaneous provisions

Some of the salient features of the Act are:

- Introduction of a new concept of "one person company" (OPC), which allows a single individual to form a company with limited liability.

- Simplification of the process of incorporation of companies, with online filing of documents and self-declaration by directors.

- Mandatory rotation of auditors and audit firms every five years for listed companies and certain other classes of companies.

- Enhanced role and responsibility of independent directors, with a code of conduct, eligibility criteria, tenure limit, and performance evaluation.

- Establishment of a National Company Law Tribunal (NCLT) and a National Company Law Appellate Tribunal (NCLAT) to replace the existing Company Law Board (CLB) and High Courts for adjudication of company law matters.

- Introduction of a new concept of "corporate social responsibility" (CSR), which requires certain companies to spend at least 2% of their average net profits in the preceding three years on social welfare activities.

- Strengthening of the provisions relating to frauds, insider trading, class action suits, and corporate governance.