The Companies Act 1956 is an Act of the Parliament of India, enacted in 1956, which enabled companies to be formed by registration, and set out the responsibilities of companies, their directors and secretaries. The Companies Act 1956 is administered by the Government of India through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) handles incorporation of new companies and the administration of running companies. Since its commencement, it has been amended many times, in which amendment of 1988, 1990, 1996, 2000 and 2011 are notable.
The Act has now been replaced by The Companies Act, 2013 after receiving the assent of the President of India on Thursday, 29 August 2013. The Companies Act, 2013 is divided into 29 chapters containing 470 Sections as against 658 Sections in the Companies Act, 1956. The Central Government has appointed Thursday, 12 September 2013 as the date on which some notified sections the Companies Act, 2013 shall come into force. The Ministry of Corporate Affairs has notified 183 sections of the new Companies Act, 2013, which comes into effect from April 1, 2014. With this, 283 of 470 sections of the Act have got notified in a phased manner.
The new law has been passed and is considered as trend changer in Indian Corporate law the new law has been rewritten extensively with several new provisions for investor protection, better corporate governance and corporate social responsibility etc. It defines a number of new terms that have come into vogue in recent times.
The bill provides for class action suit, which is key weapon for individual shareholders to take collective action against errant companies. Better disclosure requirements in financial statements and disclosure of interests of directors etc. It has also streamlined procedures relating to disclosure of transactions with parties related to directors, promoters etc.
It provides for new concepts such as a one person company. Cap on number of persons in a private company raised to 200. E-voting has been recognized. This new Act is one of the major achievement in Indian Parliamentary History in recent past.