1. Companies Act, 2013 By Dr P V S Jagan Mohan Rao
M Com, LL B, FCS, FCMA, Ph D,
MCJ, M A (Astrology) & MA (Sanskrit)
Past President – The Institute of Company
Secretaries of India – New Delhi
Former Council Member – The Institute of Cost
Accountants of India
Member PAIB Committee of IFAC (International
Federation of Accountants)
President – SAFA (South Asian Federation of Accountants)

2. Companies Act, 2013
Lok sabha –
Rajya Sabha –

3. Companies Act, 2013 29 Chapters 470 Sections 7 Schedules
Substantial part of the Bill will be in the form of rules – will be prescribed
The Government of India has power to notify different provisions of the Act at different parts of time
The bill has 33 new definitions

4. Companies Act, 2013 Chapters
Chapter I
Preliminary
Short Title, Commencement and Application
Definitions
Chapter II
Incorporation of Companies and Matters Incidental Thereto
Chapter III
Prospectus and Allotment of Securities
Part I – Public Offer
Part II – Private Placement

5. Chapter IV Chapter V Chapter VI Chapter VII
Share Capital and Debentures
Chapter V
Acceptance of Deposits by Companies
Chapter VI
Registration of Charges
Chapter VII
Management and Administration

6. Chapter VIII Chapter IX Chapter X Chapter XI
Declaration and payment of Dividend
Chapter IX
Accounts of Companies
Chapter X
Audit and Auditors
Chapter XI
Appointment and Qualifications of Directors

7. Chapter XII Chapter XIII Chapter XIV Chapter XV Chapter XVI
Meetings of Board and its Powers
Chapter XIII
Appointment and Remuneration of Managerial Personnel
Chapter XIV
Inspection, Inquiry and Investigation
Chapter XV
Compromise, Arrangements and Amalgamations
Chapter XVI
Prevention of Office and Mismanagement

8. Chapter XVII Chapter XVII Chapter XIX Registered Valuers
Removal of Names of Companies from the Register of Companies
Chapter XIX
Revival and Rehabilitation of Sick Companies

9. Chapter XX Chapter XXI Winding Up
Winding Up by the Tribunal
Voluntary Winding Up
Provisions applicable to every mode of Winding Up
Official Liquidators
Chapter XXI
Companies Authorised to register under this Act

10. Chapter XXII Chapter XXIII Chapter XXIV
Companies Incorporated outside India
Chapter XXIII
Annual Report of Government Companies
Chapter XXIV
Registration Offices and Fees

11. Chapter XXV Chapter XXVI
Companies to Furnish Information and Statistics
Chapter XXVI
Nidhis

12. Chapter XXVII Chapter XXVIII Chapter XXIX
National Company Law Tribunal and Appellate Tribunal
Chapter XXVIII
Special Courts
Chapter XXIX
Miscellaneous

13. Schedules Schedule I Schedule II Schedule III Schedule IV
Memorandum and Articles of Association
Schedule II
Useful Lives to Compute Depreciation
Schedule III
General Instructions for preparation of Balance Sheet and Statement of Profit and Loss of Company
Schedule IV
Code for Independent Directors

14. Schedules Schedule V Schedule VI Schedule VII
Conditions to be fulfilled for the appointment of a Managing or Whole-Time Director or Manager without approval of Central Government
Schedule VI
Infrastructure Projects
Schedule VII
Activities -- CSR

15. New chapters Registered Valuers Government companies
Companies to furnish information or statistics
Nidhi companies
NCLT - NCLAT
Special courts

16. new definitions Accounting standards Auditing standards
Associate company
CEO, CFO
Control
Employee stock option
Financial statements
GDR

17. IDR
Independent director
Interested director
Key managerial personnel
Promoter
One person company
Small company

18. Definition of private company
200 members
Associate company
Dormant company
expert

19. Small companies – with lesser control

20. Public offers
Private placements

21. egovernance Maintenance and inspection of documents in electronic form
Option to keep books in electronic form
To be placed on company’s website
Board meetings – video conferencing

22. Minimum directors
Maximum directors
Resident director
Women director

23. Independent Directors
Independent director - Section 149 (6)
Listed companies one third - independent directors
At least two Independent Directors
- Public Companies – Paid up Capital of Rs. 10 Crore or more
- Public Companies – Turnover of Crore or more
- The Public companies which have in aggregate outstanding loans, debentures and deposits, exceeding fifty Crore

24. Woman Director Woman Director – Every listed company
Paid up capital – 100 crores
Turnover crores
Vacancy to be filled in 3 months / next board meeting which ever is later

25. Independent director – for five years
For two terms of five years
Gap of three years after the two terms
Retirement by rotation Section 152 (6) and section 152 (7) – not applicable to Independent directors

26. DIRECTOR Appointment Qualifications Disqualifications – Section 164
Remuneration
Retirement by rotation
Resignation
Role
Code of conduct

27. Audit Committee Minimum three directors majority Independent
Majority including chairman with read and understand financial statements
Every listed company
Public Companies – Paid up Capital of Rs. 10 Crore or more
Public Companies – Turnover of 100 Crore or more
The Public companies which have in aggregate outstanding loans, debentures and deposits,
exceeding fifty Crore

28. Section 164 – disqualification of directors
Section 166 – duties of directors
Section 149 – directors
Schedule IV – Code for independent directors

29. Meetings
Attendance
Quorum
Independent Director

30. Director Identification Number
Application for allotment of Director Identification Number
Allotment of Director identification Number
Prohibition to obtain more than one Director identification Number
Director to intimate Director identification number
Company to inform director Identification Number to Registrar
Obligation to indicate Director identification Number

31. Code of Conduct - Independent Directors
I. Guidelines of professional conduct
II. Role and Functions
III. Duties
IV. Manner of Appointment
V. Re-appointment
VI. Resignation or removal
VII. Separate Meetings
VIII. Evaluation Mechanism

32. Duties of directors

33. CSR Net worth – 500 crore Turnover – 1000 crore Net Profit – 5 crore
Corporate social responsibility committee – 3 directors and atleast one independent directors
CSR policy
Schedule VII
2% - average net profits – 3 years

34. Company Secretary
Secretarial Audit
Secretarial Standards

35. Board
Composition
Meetings
Quorum
Minutes

36. Board Committees Audit Committee Section - 177
Nomination and Remuneration Committee Section – 178
Stakeholders Relationship Committee – Section - 178
Corporate Social Responsibility Committee Section

37. Auditors
Internal Audit
Cost Audit

38. National Financial Reporting Authority

39. Independent Directors
Role , Responsibility and Accountability

40. Section - 2 (47) – definition of Independent Director
With reference to Section (5)
Section 149 (6)

41. A director other than a managing director, whole time director and independent director

42. He must be a person of integrity
Has relevant expertise and experience
Not related to promoter directors the company, holding, subsidiary or associate.
No pecuniary relationship
Possesses such other qualifications as may be prescribed

43. Declaration as to compliance of criteria for being a an Independent director. Independent director shall give a declaration in the first board meeting he attends and in the first board meeting every year and whenever there is a requirement.
Every listed company shall have atleast one third of the total number of directors as independent director
If an independent director resigns – the vacancy shall be filled in 180 days - When it leads to less than the required number

44. Alternate director to an independent director shall comply with the criteria for an independent director

45. Nomination and Remuneration Committee for listed and such other companies..
Shall have three or more non executive directors
Shall have one-half independent directors
Chairman shall be independent director

46. Audit Committee Minimum 3 directors Majority independent directors
Members should be able to read and understand financial statements

47. Statement of declaration given by the independent directors shall form part of the annual reports placed at AGMs

48. Meetings of Independent Directors
Independent directors shall hold at least one separate meeting every year
Other directors and members of management are not to attend these meetings
Independent directors must attend these meetings
Review of the performance of non independent directors and the board as a whole is carried on these meetings.

49. Review of the performance of the chairperson
Quality quantity and timeliness of the information being provided to the directors and the board is reviewed

50. Independent directors are liable only when acts are occurred
with his knowledge
Attributable through board processes
With his consent and connivance
When he has not acted diligently

51. Training for independent directors

52. Remuneration of independent directors
Resignation of independent directors

53. Schedule IV Uphold the ethical standards of integrity and probity
Act objectively and constructively
Act in the bona fide manner in the interests of the company
Devote sufficient time
Not to allow anything which may vitiate the independence
Not to use his position for personal benefits
Assist the company in implementing the best corporate governance practices

54. Role and functions
Help in bringing the independent judgment in board deliberations
Bring in objectivity in reviewing the performance
Satisfy and deal with the financial information and statements as to their integrity.
Safeguard the investors
Balance the conflicting interests of stakeholders
Determine the appropriate levels of remuneration

55. Duties Update their skills, knowledge and familiarity
Seek needed information
Follow the professional advice
Attend the meetings
Insist on appropriate recording of minutes
Keep informed about the company and external environment
Not to unfairly obstruct the functioning

56. Ensure proper deliberations take place regarding related party transactions.
Appropriate vigil mechanism
Participate actively in ensuring the company’s code of conduct
Not to disclose confidential information

57. Auditor not to render certain services
Accounting and book keeping services
Internal audit
Design and implementation of any financial information system
Actuarial services
Investment advisory services
Rendering of outsourcing financial services
Management services
Any other services as may be prescribed

58. Chapter IX – Accounts of Companies
Section Books of Accounts
Section – 129 Financial Statements
Section ‐ 130 Re – Opening of accounts on Court’s or Tribunal’s Orders
Section ‐ 131 Voluntary Revision of Financial Statements or Board’s Report

59. Section - 132 Constitution of NFRA
Section Financial Statements, Board Report, etc
Section ‐ 135 Corporate Social Responsibility
Section – 136 Right of member to copies of audited financial statements

60. Section – 137 Copy of financial statement to be filed with the registrar
Section ‐ 138 Internal Audit
Schedule II Useful lives to Compute Depreciation
Schedule III General Instructions for Preparation of Balance Sheet and Profit and Loss Account

61. Audit and Auditors Sec 139 – Appointment of Auditors
Sec- 140 – Removal , resignation of auditor and giving of special notice
Sec – 141 – Eligibility, qualifications and disqualifications of auditors
Sec – 142 – Remuneration of Auditors
Sec – 143 – powers and duties of auditors and auditing standards

62. Sec – 144 – Auditor not to render certain services
Sec – 145 – Auditor to sign audit reports, etc
Sec – 146 – Auditors to attend general meeting
Sec – Punishment for contravention

63. Sec – 148 – Central Government to specify audit of items of cost in respect of certain companies

64. Thank You