Key Features of the Companies Act, 2013
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Types of Companies
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Private Limited Company
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Public Limited Company
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One Person Company (OPC) – A new concept allowing single ownership
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Section 8 Company – Non-profit organizations
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Corporate Governance & Compliance
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Mandatory Board Committees: Companies must have an Audit Committee, Nomination & Remuneration Committee, and Corporate Social Responsibility (CSR) Committee.
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Independent Directors: Public companies above a certain threshold must appoint independent directors.
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Rotation of Auditors: To prevent long-term auditor relationships, audit firms must be rotated every 5–10 years.
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Corporate Social Responsibility (CSR)
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Companies with a net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more must spend at least 2% of their average net profits on CSR activities.
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Ease of Doing Business
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Simplified incorporation with online registration via the MCA portal.
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Introduction of a Director Identification Number (DIN) and Unique Identification Number (UIN).
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Fraud Prevention & Penalties
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Serious Fraud Investigation Office (SFIO) strengthened to detect and investigate fraud.
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Strict penalties for mismanagement, insider trading, and false financial reporting.
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Mergers & Acquisitions
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Simplified process for mergers, especially for small companies and startups.
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Fast-track mergers without requiring the approval of the National Company Law Tribunal (NCLT) in certain cases.
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Investor Protection
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Establishment of the National Financial Reporting Authority (NFRA) for audit oversight.
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Class Action Suits introduced, allowing shareholders to take legal action against fraudulent management.
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Recent Amendments
The Act has been amended multiple times to enhance ease of business and compliance. Some key amendments include:
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Decriminalization of minor offenses.
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Relaxation of penalties for startups and small companies.
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Online dispute resolution mechanisms introduced.
