The government on Wednesday notified more than 180 sections of the new Companies Act, as it moves to make the legislation operational from next month.
The Companies Act, 2013 replaces the nearly six decade old law that governs corporates in the country and also provides for strong measures to ensure good corporate governance as well as to protect the interest of investors.
Apart from various sections, the Corporate Affairs Ministry on Wednesday also notified six schedules of the new law.
With this all the seven schedules of the Companies Act, 2013 have been notified.
The detailed rules for various sections are expected to be put out in the coming days.
The voluminous legislation is spread across 29 chapters, seven schedules and 470 sections.
With the latest notification, main requirements of the new company law related to incorporation, management, board functioning accounts and audit, would be operational from April 1.
“The Companies Act 2013 is finally a reality and has been substantially operationalised with the notification of 183 sections earlier today, in addition to the 100 sections notified earlier,” Sai Venkateshwaran, Head of Accounting Advisory Services, KPMG in India said.
On March 20, the ministry had received Election Commission’s approval for notifying rules related to various sections of the new Companies Act.
With the Election Commission of India announcing the schedule for the Lok Sabha polls, the Model Code of Conduct came into force from March 5. Consequently, the ministry sought the Commission’s nod for notifying the rules.
In late February, the ministry notified rules for CSR (Corporate Social Responsibility) spending. Under the legislation, certain class of companies have to shell out at least 2 per cent of their 3-year annual average net profit towards social welfare activities.
Mr. Venkateshwaran noted that today’s notification has come practically in the last week of the year, giving corporates very little time to understand the ramifications of the detail in the final rules.
“... one does hope the rules contain some additional transitional provisions that would provide companies some reasonable time to comply with the new requirements,” he added.
Notifications related to National Financial Reporting Authority (NFRA), Investor and Education Protection Fund, sick companies, special courts and National Company Law Tribunal (NCLT), among others, would be coming later.
The Companies Bill 2013 had received approval from the Parliament in August.