IMMEDIATE EFFECTS OF PROVISION IN COMPANIES ACT, 2013

PROVISION RELATED TO COMPANY’S STATIONERY INCLUDING LETTER HEAD

As per companies Act 2013, companies are required to get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, bill heads, letter papers and in all its notices and other official publications from 01/04/2014.

PROVISION RELATED TO DIRECTOR’S

As per companies Act, 2013 a person is allowed to hold directorship in 20 companies only, out of which not more than 10 could be public companies including private ltd companies. if the person is the director in more than the above mentioned limit then he has to resign from the other companies in the excess of above limit within one year from the commencement of the act.

Further director’s of the company has to mention their name & DIN (Director Identification Number) with their signature i.e. all the documents containing the signature of director, director’s name & DIN shall also be mentioned along with their Signature.

PROVISIONS RELATED TO ALLOTMENT OF SHARES

Companies are time bound to allot the shares within a period of sixty (60) days from the date of receiving application. If they fail to allot the shares within prescribed duration then the entire amount should be repaid by companies within 15 days to the respective applicants.

Non repayment within prescribed duration would be considered as default & from the 76th day, the whole application money held by company will be treated as deposit.

Further, application money received by the company for allotment of shares cannot be utilized for any other purpose & a separate bank account shall be maintained for receiving the application money from the applicant & all the transaction related to allotment shall be done through that account only.

In the light of above mentioned provisions, our views are that all the companies shall repay the application money held as on 31/03/2014 before 30th May 2014.

PROVISIONS RELATED TO LOAN FROM SHAREHOLDERS

All the companies who had taken Deposit shall file the return to ROC with 3 months from the commencement of this Act & repay the loan to its shareholders within one year from the date of commencement of this act. In respect to the above provision amount taken by the company from its shareholder will also cover in the definition of deposit

PROVISION RELATED TO DIRECTORSHIP OF THE COMPANY

From the date of commencement of this Act, Every Company is required to have minimum one resident director. Here resident means “director who stayed in India for 182 days or more in previous calendar year”

For existing companies, company should fulfill the requirement of the resident director within one year from the date of notification.

Changes in Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014, Impact on Private companies

The Companies Act, 2013 (Private Company)

The Companies Act, 1956	The Companies Act, 2013
Maximum no of members restricted to 50.	Maximum no of members restricted to 200.
Private Companies are not mandated to appoint MD/WTD/manager except Whole Time company Secretary in case company having a paid up capital of Rs. 5Crore or more.	All Companies having Paid up capital of Rs.5Crore or more are required to appoint following whole Time KMP: MD/CEO/WTD/Manager Company Secretary and CFO
No Requirements to have director resident in India.	All companies including Private Companies must have at least one director who stayed in India for a period of 182dayas or more during the previous calendar year.
No requirement to file ‘Consent to act as a director’ with registrar of Companies	A person appointed as a director shall not act as a director until his/her consent to hold the office as a director has been filed with the registrar of companies within 30days of his appointment.
Private companies were exempted while calculating maximum number of limit in which a person can act as a director.	Now a person can act as a director in Max.20 companies out of which not more than 10 should be public Companies.
Applicable only to listed companies and companies having turnover in excess of Rs.50Crore or borrowing in excess of Rs.10Crore.	Every Company, except One Person Company and small Company, are required to prepare Cash flow Statement.
As per Section 224(1B), private companies are not included while calculating ceiling limit.	Maximum 20 Companies(inclusive of private companies)
No requirement	All companies who fulfill the eligibility requirement, required to constitute a committee of at least 3 directors out of them 1 must be an independent director and required to spend at least 2% of the average net profit on CSR activities.

 Companies (Acceptance of Deposits) Rules, 2014

Acceptance of Deposit by companies from its directors, members and its relative.

Companies (Acceptance of Deposits) Rules, 1975	Companies (Acceptance of Deposits) Rules, 2014
any amount received by a private company from a person who, at the time of  the  receipt  of  the  amount,  was a  director,  relative  of  director  or member:	any amount received from a person who, at the time of the receipt of the amount, was a director of the company:
Provided that the director or member, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given  out  of  funds  acquired  by  him by  borrowing  or  accepting  from others;	Provided that the director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is   not being given out of funds acquired by him by borrowing or accepting loans or deposits from others;
Earlier Not Required	As per companies Act2013, if the private companies have any loan received from any person other than director, then they have to file a statement in Form DPT-4 up to 30th June 2014 with the ROC.
any  amount  received  by  a  company  from  any other company;	any  amount  received  by  a  company  from  any other company;
any amount received by way of subscriptions to any shares, stock, bonds or debentures such bonds or debentures as are covered by sub-clause (x) pending the allotment of the said shares, stock, bonds or debentures and any amount received by way of calls in advance on shares, in accordance with the Articles of Association of the Company so long as such amount is not repayable to the members under the Articles of Association of the Company ;	any amount received  and  held  pursuant to an offer made in accordance with the provisions of the Act towards subscription to any securities, including share application money or advance towards allotment of securities pending allotment, so long as such amount is appropriated only against the amount due on allotment of the securities applied for;
	Explanation.- For the purposes of this sub-clause, it is hereby clarified that -
	(a)  Without  prejudice  to  any  other  liability  or action, if the securities for which application money or advance for such securities was received cannot be  allotted  within  sixty  days  from  the  date  of receipt of the application money or advance for such securities and such application money or advance is not refunded to the subscribers within
	Fifteen days from the date of completion of sixty days, such amount shall be treated as a deposit under these rules.
	(b) Any adjustment of the amount for any other purpose shall not be treated as refund.