Page 34 - Banking Finance June 2017

ARTICLE

that can be made. Article 53 to 123, it explains about the the shareholders or prejudicial to the interest of the
shares, the share holders their rights, it explains about de- company as a whole.
bentures, share capital, their procedure and powers within Y Enforcement of the performance of their duties by those
the company. Article 146 to 251 it explains about the man- engaged in the management of public companies or of
agement and administration of the company and the provi- private companies which are subsidiaries of public com-
sions registered office and name. panies by providing sanctions in the case of breach and
subjecting the latter also to the more restrictive provi-
Article 252 to 323 elaborates on the provisions of duties,
sions of law applicable to public companies.
powers responsibility and liability of the directors in the
company which is a very integral part of the company when The transition from Companies Act, 1956 to Companies Act,
it is formed. Article 391 to 409 explains about the arbitra- 2013 has been an eventful one as several bills and commit-
tion, the prevention and obsession of the company Article tees have deliberated on the impact of global corporate law
425 to 560 it explains the procedure of winding up of a com- jurisprudence on Indian corporate houses. In terms of glo-
pany, the preventions the rights of shareholders, creditors, bal competitiveness, the new Companies Act has important
methods of liquidations, compensation provided and ways provisions that are unique to India. Some of the game-
of winding up the company. Article 591 and further on ex- changing provisions include mandatory women directors,
plains about setting up companies outside India and their corporate social responsibility (CSR), audit reporting require-
fees and registration procedure and all. ments and One Person Company.

Company objective and legal procedure The Companies Act 2013

based on the Act The Companies Act 2013 passed by the Parliament received
the assent of the President of India on 29th August 2013.
The basic objectives underlying the law are:
The Act consolidates and amends the law relating to com-
Y A minimum standard of good behavior and business
panies. The Companies Act 2013 was notified in the Official
honesty in company promotion and management.
Gazette on 30th August 2013. Some of the provisions of the
Y Due recognition of the legitimate interest of sharehold- Act have been implemented by a notification published on
ers and creditors and of the duty of managements not 12th September, 2013.
to prejudice to jeopardize those interests.
The provisions of Companies Act 1956 are still in force. Par-
Y Provision for greater and effective control over and
liament approved the long-awaited overhaul of legislation
voice in the management for shareholders.
governing Indian companies on 9 August 2013. The new law
Y A fair and true disclosure of the affairs of companies in is aimed at easing the process of doing business in India and
their annual published balance sheet and profit and loss improving corporate governance by making companies more
accounts. accountable. The 2013 Act also introduces new concepts
Y Proper standard of accounting and auditing. such as One Person Company, small company, dormant com-
pany and corporate social responsibility (CSR) etc.
Y Recognition of the rights of shareholders to receive
reasonable information and facilities for exercising an
intelligent judgment with reference to the manage-
ment.

Y A ceiling on the share of profits payable to manage-
ments as remuneration for services rendered.

Y A check on their transactions where there was a possi-
bility of conflict of duty and interest.

Y A provision for investigation into the affairs of any com-
pany managed in a manner oppressive to minority of

34 | 2017 | JUNE | BANKING FINANCE

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010