Government notifies 10 more chapters of new Companies Act

The government Friday notified 10 more chapters of the new Companies Act, primarily related to appointment of directors and powers of board.

Major part of the new legislation is now operational. The ministry of corporate affairs notified 183 new sections Wednesday, in addition to 100 sections notified earlier. The total of notified chapters now stand at 293.

The new chapters notified Friday primarily relate to incorporation, management and administration, directors and board functioning, prospectus and allotment of securities, shares and debentures, accounts, declaration of dividends, registration of charges, in addition to the CSR Rules released earlier this month.

"It is time for corporates to gear themselves to comply with the new law," said Sai Venkateshwaran, partner and head of accounting advisory services at KPMG in India.

He pointed out that the ministry has made several changes to the final rules especially in the area of rationalising the limits for compliance with various sections.

"It is heartening to note that the ministry of corporate affairs has taken into account several of the recommendations made by the corporate sector in finalising these rules, keeping in mind the practical difficulties that would have been faced by the corporate sector in implementing some of the changes," Venkateshwaran said.

With this notification, the key requirements of the new legislation relating to incorporation, management, board functioning accounts and audit, will now be operational with effect from April 1, 2014.

"One of the biggest challenges for India Inc. at this stage will indeed be compliance with the new law," said Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry (FICCI).

"This is definitely a positive step in the overall implementation of the Companies Act, 2013 and we compliment the ministry of corporate affairs for the extensive consultative process adopted by them while finalising these rules," Birla said.