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Comparision of Companies Act 2013 and 1956

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Companies Act 2013 Companies Act 1956 Description
399 610

Inspection, production and evidence of documents kept by the Registrar

  • NO MODIFICATION.
Section 148 Section 233 B

Certain Government to specify audit of items of cost in respect of certaincompanies

  • Penalty and punishment has been enhanced.
  • Central Government doesnot have power to appoint chartered accountant to conduct cost audit, if cost accountant were not available.
Section 33 Section 56(3)

Issue of application form for securities

  • Penalty has been increased.
  • A copy of the prospectus shall be made available till the closure of subscription list and offer.
Section 3 Section 12

Formation of Company

  • In Companies Act, 1956 minimum 2 persons were required to form a new company. In Companies Act, 2013 new concept of one person  company has been introduced.
  • E Governance proposed for various Company Processes.
Section 4 Section 13, 14, 20, 23

MEMORANDUM

  • The Memorandum as per the new act provides no bifurcation of Objects in three categories.
  • As per the new act, the name will be reserved for a period of 60 days after the application.
  • CG has prescribed a list of names which cannot be used as a part of company name without prior approval.

For getting a name reserved by furnishing in appropriate information, a person shall be liable for penalty which may extend upto Rs. 1,00,000.

Section 5 Section 26, 27, 28, 29 and 30

Article

  • The entrenchment provision has been introduced.
  • Format for adoption of articles is specified.
    Section 6 Section 9

    Act to override Memorandum

    • NO MODIFICATION
    Section 7 Section 15, 30, 33

    Incorporation of Company

    • New Act calls for more detailed disclosures and confirmations.
    • The subscribers to Memorandum and first Directors have to file affidavits, declaration for non conviction for any offence.
    • Penalty is increased.
    • Mandates to maintain the documents till dissolution.
    Section 8 Section 25

    Formation of Company with Charitable Objects

    • OPC can also beincorporated under the same.
    • Certain activities have been added with the ambit of objects
    • Previous approval of CG is required for alteration in Memorandumand Articles.
    • Transfer of Assets remaining after dissolution has beenintroduced.
    Section 9 Section 34

    Effect of Registration

    • NO MODIFICATION
    Section 10 Section 36

    Effect of Memorandum and Article

    • NO MODIFICATION
    Section 11 Section 149

    Commencement of Business

    • Unlike the old act, now all the Companies are required to obtain certificate for commencement of business.
    • In case of inability to file declaration by the Director within 180 days of incorporation, the Registrar can initiate action for removal of the name.
    Section 12 Section 17 A, 146, 147

    Registered Office of the Company

    • Time limit to have a Registered Office has been decreased from 30 days to 15 days.
    • Additional information to be included on the stationary of the Company.
    • Penalty has been increased
    Section 13 Section 16, 17, 18, 21

    Alteration of Memorandum

    • Timelines has been prescribed for alteration to Companies.Fresh COI will be issued in case ofshifting of Registered Office from One sate to another.
    Section 14 Section 31

    Alteration of Articles

    • Time limit to file an application has been revised from 30 days to 15 days.
    • For conversion of Public Company into Private Company with the approval of the Tribunal has been provided as against the CG (delegated to ROC) which was provided in the old act.
    Section 15 Section 40

    Alteration of Memorandum and Article to be noted in every Copy

    • Amount of penalty for default has been increased from Rs. 100 to Rs. 1000 per copy.
    Section 16 Section 22

    Rectification of the name of Company

    • New Sub-section has been added, according to which if a Company rectifies its name by way of order of CG, such notice along with copy shall be given to ROC within 15 days.
    • In case of resemblance with registered trade mark of any other Company an application for rectification is required to be made within 3 years of registration.
    • Rectification in the name due to similarity is required to berectified within 6 months as against 3 months in the previous Act.
    • Penalty for default has been increased.
    Section 17 Section 39

    Copies of Memorandum,Article to be given to Members

    • New Act provides a fee to be charged from members for the issuance of same.
    • Penalty has been increased
    Section 18 Section 32

    Conversion of Companies Already Registered

    • Unlike the old act, the new act provides for conversion of anyclass of Company into any other class.
    Section 19 Section 42

    Subsidiary Company not to hold shares in its Holding Company

    • No substantial change
    Section 20 Section 51, 52, 53

    Service of Document

    • Use of electronic media has been recognized.
    • Courier services are recognized as an acceptable mode.
    Section 21 Section 54

    Authentication of Documents, Proceeding and Contracts

    • Inclusion of all KMPs in the list of authorized signatories of the Company.
    Section 22 Section 47, 48

    Execution of Bill of Exchange

    • NO MODIFICATION.
    Section 23 No corresponding Section

    Public Offer and Private Placement

    • Inclusion of means by which Private and Public Limited Companies can issue Securities
    Section 24 Section 55 A
  • Power of Securities and Exchange Board to regulate issue and transfer of Securities
  • Section 25 Section 64

    Documents containing offer of securities for sale to be deemed prospectus

    • NO MODIFICATION.
    Section 26 Section 56Info.aspx?code=55">55, 56, 57, 58, 60, Schedule- II

    Matter to be stated in prospectus

    • There is no separate schedule providing for disclosure matters/information like the old act.
    • Unlike the old act, it is mandatory to disclose the name of CFO. It is mandatory for all the Companies to disclose the deadline for completion of project.
    • Mandatory to disclose the particulars relating to litigation or legal action pending against the Company. Additional declaration stating that there is no contravention against SCRA provisions. Time limit for refund can be according to company norms.
    • Source of promotions also need to be disclosed in the prospectus with manner of the same. More stringent penal provisions.
    Section 27 Section 61

    Variation in terms of Contracts or objects in prospectus

    • Exit offer to be provided to dissenting shareholders.
    • Except approval of shareholders in GM, the company cannot vary the object for which prospectus was issued.
    Section 28 No corresponding Section

    Offer of sale of shares by certain members of company

    • New Section gives powerto the members in consultation of BOD to offer their shares to the Public.
    Section 29 Section 68B

    Public Offer of Securities to be in de materialized form

    • Mandatory for companies making public offer and prescribed class of companies for issuance of certificate in de materialized form.
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