(Kumar, 2014 )

COMPANIES ACT, 2013: AN ANALYSIS OF KEY RULES

ISSN-2347-7571 , Published by: Sai Om Publications

The Companies Act 2013 became operational from 1st April 2014, replacing the 56
years old companies act. The research was conducted to have a insight about the key
rules, implications and provide information with respect to the Companies Act, 2013.
The Act states that:
1. Companies can have max fifteen directors until a special resolution is passed
2. One director should have stayed in India for at least 182 days
3. Certain of class companies must appoint at least one woman director
4. A person can be a director in only 20 companies out of which only 10 can be
public.
A new concept of Independent director has been introduced to safeguard
stakeholders decisions. The Act also makes audit committees mandatory for listed
companies and some other class of companies. Companies meeting requirements
should also have CSR Committee of Board. The Act also increases disclosures
requirements with respect to annual return, boards report and related party
transactions. Also many investor protection measures have been introduced to
safeguard the interest of investors. Also various penalties have been introduced on
companies for not fulfillment of their obligations.

The Act is forward looking and would ensure improved governance and more
transparency