The Companies Act 2013. Learn the new rules of the game.

 

From left to right: Mr. Kota Srinivasa Rao, Vice Chairman, ANMI, Mr. Pavan Kumar, Company Secretary, Mr. Paresh Shah, Director, PCS Securities LTD, Mr. Raghu Babu, R&A Associates at Business Standard Smart Business in Hyderabad on 26th September 2014, in association with Association of National Exchanges Members of India.

The Companies Act of 2013, which has been enacted recently, has far reaching impact on the corporates, according to speakers at a Smart Business event on "New Companies Act as applicable to Capital Market", conducted by Business Standard and Association of National Exchanges Members of India (ANMI).

Paresh Shah, whole time Director of PCS Securities Limited and representative of ANMI, welcomed the gathering and introduced the speakers to the audience.

Explaining the provisions of the legislation in detail, Pawan Kumar, a Company Secretary, said that the Act has 470 sections that regulate the corporate functioning in the country.

He said that as per the Act, company giving loans to its directors was prohibited and a company's board should hold at least four meetings in a year with a maximum gap between one meeting and another not exceeding 120 days.

Similarly, the Act makes it mandatory for any company which has a paid up capital of Rs. 100 crore and above, or a turnover of Rs. 300 crore and above, to have a woman director on board.

G Raghu Babu, a partner of R & A Associates, lamented that the new legislation has both, private and public limited companies, at par, and emphasised the need for their segregation.

Stating that there were several family-run private limited companies, he wondered why there is a need to give a 7 days notice (to directors regarding a board meeting) for a company that is run together by a married couple.

He said that doing business as per the provisions of the new Act has become a bit complicated and urged the Union Government to look at how to make it more easily applicable.

"The biggest beneficiaries of the legislation are minority shareholders", he said, pointing out that, of late, shareholders activism was on the rise.