Executive Summary:  The Companies Act, 2013 has been highly anticipated and will bring sweeping changes to the extant company law regime. This article covers a general overview of some of the key changes brought about by the 2013 Act.  Topics covered include:

  • New and changed key concepts of control, a promoter, a subsidiary company, associate and related party.  Introduces a new form of corporate entity—a One Person Company.
  • Introduces the concept of fraud in relation to affairs of a company.
  • Creates a National Company Law Tribunal as well as a National Company Law Appellate Tribunal and vests it with the jurisdiction of High Courts and other judicial authorities.
  • Imposes certain restrictions and liabilities on companies, promoters and the management with regard to funds raised from the public.
  • Withdrawal of exemptions to private companies, holding and subsidiary companies from effecting inter-corporate transactions.
  • Excessive regulation of private companies similar to public companies.
  • Prohibits forward dealings and insider trading by directors and KMPs of unlisted companies.
  • Prohibits companies from making investments through more than 2 layers of investment companies i.e. companies whose principal business is acquisition of securities.
  • Significant changes in the corporate governance sphere, particularly in relation to provisions applicable to listed companies, directors’ duties and liabilities, independent directors, corporate social responsibility and board and shareholder meetings.
  • Changes to the auditors regime.
  • Empowered the central government to establish Special Courts for the speedy trial of offences.
  • Changes in the court restructuring process.

Full text of India’s New Company Law – Key Changes In The Regime