First of all, we need to understand the term company. The company is a group of different people who get together from different regions, different identities, for work together for their benefits is called the company. All the companies previously work under the act of 1956 and after the changes, adaptation, different revolutions now all companies are governed by the act of 2013. The act 2013 come by some force, the registered companies from the act of 1956 are still in act 2013 are taken into account. In this article, we overlook the shortcomings of the previous article and how the new act of 2013 fulfilled all kinds of legislation. We also note the changes in their definitions, features, directors, etc.
The word company is derived from two Latin words. One has come means work together, and the word pains mean to earn bread. A company is simply a group of people who come together and also invert their money to the common person for work. When the act 2013 develop all the companies are registered under this act 0f 2013. Let’s see the difference between these two acts of companies.
Difference between the companies act 1956 and companies act 2013:
There is a distinction between these two acts of companies some are given below.
Interest: The first difference between these two acts is in the previous act the charge is not properly defined. But in the act of 2013 charge is defined properly. It is an interest that is created on a property or agreement of a company for permission of undertaking as both for security. This charge cannot be included in the previous act of 1956 but it is included in the act of 2013.
In act 1956, it is stated that registered companies are those public companies that have their securities in any notable stock exchange. However, in the act of 2013, it is stated that registered companies are those companies that have their securities registered on the stock exchange. The present act of 2013 not only includes public companies but also includes private and all types of companies.
The company 1956 defines that default officer in sec2(31) while the present act defines this under sec 2(60). It is stated that the trend has Been increased and scope merchants, and convey agents are also included.
If the company has a managing director the work of the director knows the default about the participation in the board meeting, it will also include the CFO in this type of category.
The concept of the individual or one-person company is ambiguous to the previous company act of 1959. While in the present act of 2013 it stated that the company which is ren by an only one person is called an individual company or one-person company.
The previous article includes the provisions of establishment and the article of the provisions can be altered when all the important requirements are fulfilled. While in the present act of 2013 the register has to be noticed for the establishment and the model for articles for companies provided by the government.
The final year of the company financial is decided by the companies which is the end date of the financial year under the act of 1956. The company has the right to this decision. While in the company act of 2013 the end date of every financial year is decided and it is fixed that is 31st March of every year.
The financial statement in the previous act was listed in schedule VI. While the financial statement in the company act of 2013 is listed under the schedule of III.
The number of participants:
In the previous act of 1956, the number of partners for banking business is 10 while in other business is 20. But in the company act of 2013, the number of business partners is a maximum of 100.
A number of shareholders:
under the previous company act 1956, the maximum shareholder was 50 eliminating the present and previous employees. While in the present company 2013 the maximum shareholder is 200 without the present and past workers.
The issue of discount share is under the previous act 1956 was granted. While it is prohibited by the present act of 2013. Discount shares are providing to the employees under sec 54 ESOPs.
Interest in advance:
In the previous act 1956, the interest on call in advance is provided was 6% in the non-appearance of any clause in the articles. While in the present act of 2013 the interest in advance is provided was 10%.
Interest on liabilities:
in the previous act of 1956, the interest provided to the liabilities was 5% in case only when the non-appearance of any clause in the article. While under the company act of 2013, (present act) was 10% interest provided to the liabilities.
Limits of subscription:
In the previous act of 1956, the only concerns were the shares in the market. However, in the present company act of 2013, it is the limits of subscription have been developed so the securities issues have not appeared.
Maximum shareholder in private companies:
The maximum shareholder for the private companies under the act of 1956 was 50 without including past and present employees. While in the act of company 2013 it includes 200 shareholders for the private companies.
one person company:
the company which has one person includes is called a one-person company.
One person company is present in the present act of 2013. While it does not exist under the company act of 1956.
Premium security reserve:
Under the act of 1956, the security premium reserve was provided under section 77A. while in the company act of 1956 this section is present in 52(2).
Structure of both acts:
The structure act of 2013 includes 29 chapters which are divided into 470 sections and 7 schedules. While in the company act of 1956 it includes 658 sections that are opposed to part III. The new laws were made under the reference of legislation in terms of rules more vigorously than the 1956 act. This includes an integral part of new companies in India that are new laws governing companies.
The company act 2013 is adopted and more versatile than the company act of 1956. It introduced the new legislation in the Indian companies. It is a very important concept in that India involvement such as corporate social responsibility, one-person company, dormant company, these factors are not included in the company act of 1956. This is for ensuring good governance.
in this article, we see a clear difference between the company act of 1956 and the company act of 2013. The present act pf companies keep look on the process and work of administration of companies and keep look on their activities as well as for efficient working.