KnowThe Difference Between CompaniesAct Of 1956And CompaniesAct Of 2013
Acompany is a collection of people who come together, create a unique legal organization, and work toward that goal. Indian companies were previously governed by the CompaniesAct of 1956; however, following a significant modification made in 2013, they are now governed by the CompaniesAct of 2013. It is important to remember that even though the 2013Act is now in effect, businesses registered under the previousAct are still considered.The CompaniesAct of 2013 comprises 7 schedules and 464 sections The old CompaniesAct of 1956 comprises 15 schedules and 658 sections.
In this article we’ll brief you the difference between the companies act 1956 and 2013 that’ll help you to understand the concept better.
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3. Women empowerment in the corporate sector:
4. Corporate Social Responsibility:
5 National Company LawTribunal:
6 FastTrack Mergers:
7. Cross Border Mergers: Conclusion
What is the difference between the CompaniesAct 1956 and 2013?
The fundamental difference between the CompaniesAct of 1956 and the CompaniesAct of 2013 is that while one may establish a company under the latest, one may not do so under the previous.
There are several points of difference, which include the following points.
1. Charge
Previously, theAct of 1965 did not define charge.According to theAct of 2013, a charge is an interest or lien registered against any corporation's assets, operations, or both Mortgages are included in this definition The interest and lien absent from the earlierAct are once more present.
2. Listed Company
TheAct of 2013 specifies in section 2 (52) that a listed company is one whose securities are listed on any recognized stock exchange, as opposed to theAct of 1956, which defined a listed public company as one that has any of its securities listed in any recognized stock exchange Therefore, the currentAct covers all companies, not just public ones.
3. Officer Who Is In Default
Section 2 of the presentAct and Section 2 of the priorAct contained descriptions of this (31). (60) It is important to note that the policy now covers merchant bankers and transfer agents
The Directors who are aware of the standard for attendance at board meetings or concerning the minutes will also be included with the CFO in this category, even if the company has a managing director or other senior managerial professional.
4. One-Person Company
This concept did not know the priorAct. However, section 2 (62) of the currentAct specifies that a business is referred to as a one-person company if it only has one member on the board of directors.
5.Articles OfAssociation
The existingAct contains provisions relating to entrenchment, and the provisions of theArticles may be altered or amended subject to the satisfaction of the applicable requirements According to the existingAct, corporations may obtain sample articles from the Central Government upon request.Along with that Notice of the Entrenchment must be given to the Registrar.The proper forms, Schedule 1's tables F, G, H, I, and J, should be used while constructing theArticles
6. FinancialYear
Companies were free to choose the completion of their fiscal year within the terms of theAct of 1956 However, according to the currentAct, a company's fiscal year ends on March 31
7. Financial Statement
The format of the financial statement under theAct of 1956 was specified in Schedule VI, whereas Schedule III of the currentAct specifies the same.
8. Number Of Partners
Following the previousAct, there might be a maximum of 10 partners in the banking industry and 20 partners overall The currentAct of 2013 sets a limit of 100
9. Maximum Shareholders
Apart from former and current workers, a Private Limited Company had 50 shareholders before the newAct.There are currently 200 shareholders (excluding past and present employees).
10. Issue Of ShareAt Discount
The currentAct forbids the issuance of shares at a discount, whereas the priorAct permitted it However, ESOPs are provided to the employees at a discount under section 54.
11. Interest On Calls InArrears
The interest rate that might be applied to a call in arrears under the previousAct in the absence of a provision in theArticles was 5% per year At the same time, the rate is 10% per year under the currentAct.
12. Interest On Calls InAdvance
In the absence of a clause in theArticles, the interest could only be paid at a rate of 6% per year under the formerAct, which is now 10% per year under the currentAct
13 Minimum Subscription
In terms of the existingAct, it only applied to the shares However, under the currentAct, securities won't be issued unless the required minimum subscription has been met.
Top 7 features of the CompaniesAct 1956
1. Independent Legal Entity
Anew company has a legal structure that is distinct and clear from the individuals that make up its core. It is a self-regulating, independent, and self-governing body. It has the right to distribute any form of property for which it is the owner in any manner it chooses Additionally, it has the authority to open a bank account, engage in business transactions, enter into shareholder agreements, and file lawsuits against itself or its shareholders.
2. IncorporatedAssociation
The CompaniesAct of 1956 mandates that all Indian corporations be registered. For the incorporation of a company, formal paperwork must be registered with the Registrar of the Companies.The Memorandum ofAssociation outlines the purposes for which a company is established
3. Limited Liability
Since a business has its own legal identity and cannot be claimed by its members, it cannot use the private assets of its shareholders to pay off its debts
4. Common Seal
An industry's common seal serves as the legal representation for any choices taken on its behalf that the firm is unable to make on its own. Directors are the company's artificially created personas; they serve as the organization's spokesmen
5. Perpetual Existence
Afirm is an artificial entity that is free from age-related limitations and other status-unaffecting variables like death, insolvency, retirement, etc Perpetual existence has an infinite lifespan Only laws have the power to terminate a company's existence.