The Companies Act 2013 (No. 18 of 2013) is an
Act of the
Parliament of India
The Parliament of India (ISO 15919, ISO: ) is the supreme legislative body of the Government of India, Government of the Republic of India. It is a bicameralism, bicameral legislature composed of the Rajya Sabha (Council of States) and the Lok ...
which forms the primary source of
Indian company law. It received presidential assent on 29 August 2013, and largely superseded the
Companies Act 1956
The Companies Act 1956 was an Act of the Parliament of India, enacted in 1956, which enabled companies to be formed by registration, and set out the responsibilities of companies, their directors and secretaries. It was repealed and replace ...
.
The Act was brought into force in stages. Section 1 of this act came into force on 30 August 2013. 98 different sections came into force on 12 September 2013 with a few changes. A total of another 183 sections came into force from 1 April 2014. The
Ministry of Corporate Affairs
The Ministry of Corporate Affairs is an Indian government ministry primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008, and the Insolvency and Bankruptcy Code, 2 ...
thereafter published a notification exempting private companies from the ambit of various sections under the act.
The Act increased the responsibilities of corporate executives in the information technology sector, increasing India's safeguards against organised cybercrime by allowing CEOs and CTOs to be prosecuted in cases of IT failure.
The Act established the
National Company Law Tribunal
The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that adjudicates issues relating to Indian companies. The tribunal, established under the Companies Act 2013, was constituted on 1 June 2016 by the government of India a ...
(NCLT), which was constituted on 1 June 2016, based on the recommendation of the
Justice Eradi committee on the law relating to insolvency and winding up of companies. Further, the
National Financial Reporting Authority
National Financial Reporting Authority (NFRA) is the auditing and accounting supervision authority of India.
The authority oversees the auditing profession and the Indian Accounting Standards under the Companies Act 2013. It was formed in Oc ...
(NFRA) was established in March 2018 as an oversight body to investigate matters of professional misconduct by
Chartered accountants or CA firms.
Features
Corporate Social Responsibility
Before the Act,
corporate social responsibility (CSR) requirements applied only to public sector companies. Section 135 of the Companies Act introduced mandatory CSR contributions for large companies, making it the only mandatory CSR law in the world. All firms above a particular net worth, turnover, or net profit threshold are required to spend at least 2% of their annual profits of the preceding year on corporate social responsibility. The law requires that all such companies establish a CSR committee to oversee the spending.
Company Secretaries
Section 203 of the Companies Act 2013 deals with the appointment of a
company secretary
A Company secretary is a senior position in the corporate governance of organizations, playing a crucial role in ensuring adherence to statutory and regulatory requirements. This position is integral to the efficient functioning of corporations, ...
. For the first time, the Act defined company secretaries as a key managerial personnel of the company. The Act made it mandatory for every Indian listed company, and every other entity having more than rupees ten crore (100 million) paid up capital, to have a full-time company secretary.
Types of companies
In addition to private and public limited companies, the Act also provides for a One Person Company (OPC), Section 8 companies, and producer companies. One Person Companies (OPC)
are companies with a single member. Only individual Indian citizens can be shareholders in an OPC. At first, only resident Indians could be shareholders, but after an amendment to the Act in 2020, even non-resident Indians can be shareholders.
Section 8 companies are non-profit companies governed by section 8 of the Act. Producer Companies are formed for agricultural purposes. Only farmers can be members of a producer company members can be farmers. They are governed by Section 378A to Section 378ZT of the Companies Act, 2013.
See also
*
Indian company law
*
UK company law
British company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directive (European Union), Directives and court cases, the company is th ...
*
European company law
European company law is the part of European Union law which concerns the formation, operation and insolvency of companies (or corporations) in the European Union. The EU creates minimum standards for companies throughout the EU, and has its own c ...
*
US corporate law
United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governa ...
Notes
External links
{{toomanylinks, date=February 2025
Notified sections of Companies Act, 2013Act No. 1 of 1956Text of the Companies Act, 1956*http://www.mca.gov.in/Ministry/pdf/Companies_Cost_Records_and_Audit_%20amdt_Rules_2015.pdf
*
General Circular No. 08/2015 by K.M.S. Narayanan, Ministry Of Corporate Affairs.
* http://www.mca.gov.in/Ministry/pdf/Exemptions_to_private_companies_05062015.pdf
* http://www.mca.gov.in/Ministry/pdf/Exemptions_to_Section8_companies_05062015.pdf
Acts of the Parliament of India 2013
Indian company law