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Topics: Privately held company, Public company, Types of companies Pages: 5 (1066 words) Published: September 23, 2014
On 18th December, 2012 the Lok Sabha passed the much expected Companies Bill, 2012 to replace the existing Companies Act, 1956, one of the most important legislation governin g all companies in India for the past 56 years. The Bill has 470 clauses as against 658 Sections in the existing Companies Act, 1956.

Comparison of Companies Act, 1956 and Companies Bill, 2012

Basis of Comparison

Companies act ,1956

Companies Bill,2012

Maximum number of 50 (Fifty)
members for private
company

200 (Two Hundred)

Minimum Number of Public Company - 7
members
Private Company - 2

No change for private and
public companies.
New concept of one person
company introduced which can
have a single member

Object Clause of
MOA

Object clause consists of
Main Objects, Incidental or
Ancillary Objects and Other
Objects.

MOA to contain the objects for
which the company is proposed
to be incorporated and any
matter considered necessary in
furtherance thereof.

Issue of Preference
Shares for more than
20 years

Prohibited

Permitted, only for
infrastructure projects

Maximum time for 18
months
from 9 Months from closure of
holding first AGM
incorporation or 9 months accounts
from
closure
of
accounts, whichever is earlier
Mode of Notice for Written Notice mandatory
holding AGM
Statutory Meeting

In writing or in electronic
form.

For
Public
company No provision
mandatory to hold after 1
month but before 6 months
from the date of entitlement
to commence business.

Basis of Comparison

Companies act ,1956

Maximum Number of 12
Directors

Companies Bill,2012
15
More than 15 can also be
appointed by passing special
resolution at EGM

Certification
of By Manager or Secretary, if Chairman alone can sign if so Financial Statements
any, and by not less than 2 authorized by the Board.
directors one of whom shall
be the MD where there is
one.
Cross Border Mergers

No Specific Provisions

Merger of Indian Companies
with
foreign
companies
permitted and rules to be
notified
by
Central
Government

Maximum Tenure of No Specific Provisions
Auditors

For listed companies and other
prescribed
companies:
- individual auditors to be
rotated
after
5
years
- audit firm after every 10
years

Service of Documents By post under a certificate By registered post, speed post by company or an posting or by registered post
or courier.
officer
Issue of Shares at
Discount

Permitted
subject
to Prohibited except in case of
compliance with conditions
sweat equity shares

Time and day for During business hours, on a During business hours i.e holding AGM
day that is not a public between 9 A.M. and 6 P.M. on
holiday
any day that is not a National
Holiday
Consent for shorter By all members entitled to By not less than 95% of the notice for holding vote at the meeting
members entitled to vote at the
AGM
meeting
Financial Year and Financial year not to exceed
Extension.
fifteen months. Financial
year can end on date other
than
31st
March.
Financial Year can be
extended up to 18 months by
ROC.

Financial year to end on 31st
March every year for all
companies.
No
explicit
provision regarding extension
of financial year is given.

Basis of Comparison
Registered Office of
New Company

Companies act ,1956

Details of the Registered Company shall have registered
office to be filed in e-Form office within 15 days.
18
at
the
time
of Verification of registered
incorporation.
office to be furnished within
thirty
days
of
its
incorporation.

Notice of Change in Within 30
Registered Office of change.
Existing Company to
ROC
Restrictions
Commencement
Business

Companies Bill,2012

days

of

the Within 15 days of the change.

on Provision is applicable only Applicable to all companies
of to Public Companies
having share capital viz.,
Public Company, Private
Company and One Person
Company.

Alteration...
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