A quick view on some of important notified Sections

As all we are aware that recently MCA has notified 98 sections and all these notified sections are became applicable from 12/09/2013. Many of the sections of Companies Act, 2013 which have been notified on 12/09/2013 have provisions similar to that of Companies Act, 1956.

But here are comparison of some important Sections of Companies Act, 2013 in which new provisions have been inserted.

(1) DEFINITIONS

Companies Act 2013 - Definitions under Section 2

(There are 94 definitions in the new Act and out of which all definitions except 12 definitions have been notified.)

In a few definitions, a particular portion has not been notified.

Companies Act 1956 - Definitions under Section 2

CHANGES - The definition of Private Company is different from the earlier Act.

REMARKS -The Ministry on 13th September 2013 has clarified that all incorporation documents being filed on or after 12.09.2013 must contain the new definition only.

(2) STATEMENT TO BE ANNEXED TO NOTICE

Companies Act 2013 - Section 102 - Statement to be annexed to notice

Companies Act 1956 - Section 173 - Statement to be annexed to notice

CHANGES -

1. In the new Act, Disclosure of interest made mandatory for directors/ manager and every key managerial personnel and relatives of directors, manager and key managerial personnel. Earlier, interest of not only directors/ manager has to be disclosed.

2. In the Companies Act, 1956, with regard to any special business concerning another company, disclosure of shareholding interest of director/manager in that other company had to be disclosed if such share holding was more than 20%.

Now the percentage has been changed to 2% and also the same has been made applicable to all promoters, directors, manager and key managerial personnel.

3. Companies Act, 2013 specifies the consequences of non-disclosure or insufficient disclosure. It said that if any benefit accrues to any director, manager, promoter or key managerial personnel or their relatives because of non-disclosure or insufficient disclosure, then the concerned person will be deemed to be holding the amount of benefit in trust for the company.

4. New Act also contains the penalty clause which provides for a penalty of Rs. 50,000/- or 5 times the amount of benefit, whichever is more. Earlier no specific penalty was provided.

5. As per new Act, applicability of this Section is for all companies except to a One Person Company.

Earlier, as per Section 170 of Companies Act, 1956, the provisions of section 173 will apply to private companies only if the Articles do not provide anything otherwise.

“Key managerial personnel”, in relation to a company, means—

(i) the Chief Executive Officer or the managing director or the manager;

(ii) the company secretary;

(iii) the whole-time director;

(iv) the Chief Financial Officer; and

(v) such other officer as may be prescribed;

REMARKS - MCA has clarified that the provisions of this section will apply to all notices issued on or after 12th September, 2013.

(3) QUORUM FOR MEETINGS

Companies Act 2013 - Section 103 – Quorum for meetings.

Companies Act 1956 - Section 174 - Quorum for general meetings.

CHANGES - Quorum requirement for PUBLIC COMPANIES:

- No. of members as on date of Meeting -1000 or less