Companies Act – 2013



As per New Act

As per Old Act

1 Limit of members in private company 200 50
2 Definition of “Financial Year” 1st April – 31st March and Companies are required to change their Financial year within 2 years Not defined
3 One Person Company (OPC) One person private company can be made No provision
4 Rotation of independent directors Mandatory No provision
5 Cross Border Merger Allowed with prior  permission of RBI No provision
6 Revocation of license of companies under sec. 25 (Charitable companies) Revocation + Winding Up or Amalgamation Only Revocation
7 “Commencement of Business” Applicability Public + Private Company Only Public Company
8 Mode of issue of securities by private company Private Placement Only Private Placement + Right Issue/Bonus Shares
9 Misstatement in prospectus – Liability If proved that intentions were fraudulent then every person – Directors, Promoters etc. are personally liable without any limitation Compensation + Loss suffered only
10 Minimum subscription applicability To all securities Only to Shares
11 Disgorgement of gain – Provision In case of any gain accumulated by the person by making multiple shares applications in fictitious names No provision
12 Issue of Global Depository Receipts (GDR) Company after passing “Special Resolution” can issue GDR No provision
13 Preference share voting rights No difference between cumulative and non-cumulative preference share voting rights ( except when arrear dividend on cumulative preference shares are accumulated for a period of 2 years) Different voting rights of cumulative and non-cumulative preference shares
14 Security premium utilization (u/s 78) for writing off preliminary expenses and premium payable on redemption of preference shares Particular class of companies prohibited All companies are allowed
15 Discount on issue  of shares (u/s 79) Not allowed except for sweat equity shares Allowed
16 Issue of redeemable preference shares of beyond 20 years period Allowed for infrastructure companies subject to annual redemption of particular percentage at the option of preference shareholders Prohibited
17 Capital reduction when deposits and interest thereon are unpaid Not allowed No provision
18 Asset charge registration All charges require registration 9 types of charges required registration
19 Default in filing annual return After 300 days expiry – fine between Rs. 50,000 and Rs. 500,000 payable by company and officer who is in default punishable with imprisonment for 6 months or fine same as the fine stated above for the company May extend to Rs. 500 for every day of default
20 Holding of 1st Annual General Meeting (AGM) Within 9 months of F/Y end only Within 9 months of F/Y end or within 18 months of the date of incorporation
21 Business hours of calling AGM 9 AM – 6 PM Not defined
22 AGM on public holiday Allowed except on National holiday Prohibited
23 Voting through electronic means Allowed for particular class of companies No provision
24 Penalty for tampering with minutes Fine – Rs. 25,000 to Rs. 100,000
Imprisonment – up to 2 years
No provision
25 Transfer to “General Reserve” (GR) Not mandatory Mandatory
26 Transfer of shares on which dividend is unclaimed to “Investor Education and Protection Fund” (IEPF) Mandatory Not mandatory
27 Maintaining books of account in electronic mode Allowed Not allowed
28 Consolidation of accounts of holding company and subsidiary company Mandatory Not mandatory
29 Rotation of statutory auditors Individual Auditors – 5 years
Audit firm – 10 years
Cooling off period – 5 years
30 “Corporate Social Responsibility” (CSR)  obligation Companies with
Net Worth – 500 Crores, or
Turnover – 1000 Crores, or
Net Profit – 5 Crores
At least 2% profit to be spent on CSR where profit is calculated by taking average of the profits of the preceding 3 years
No provision
31 Report of fraud by auditors to “Central Government” (CG) Inform CG within prescribed time No provision
32 Auditors to attend AGM Obligatory unless otherwise exempted by the company Entitled to but not obligatory
33 Accountability of auditors Fine between Rs. 25,000 and Rs. 500,000
Imprisonment up to 1 year
Fine up to Rs. 100,000
34 Woman director for certain class of companies Required No provision
35 Maximum no. of directors 15 and beyond that after passing Special Resolution (SR) 12 and beyond that CG approval
36 Gap between 2 board meeting (BM) Generally – 120 days
OPC with 2 or more directors – 90 days
1 BM in every quarter means a gap of 6 months can be made
37 Insider Trading Criminal Offense No provision
38 Relief from past acts of oppression Relief available No relief
39 Sick Companies Act applicability and basis Applicability  – All companies
Basis – Ability to repay debts
Applicability – Only to industrial companies
Basis – Deficit Net Worth
40 Class Action Suits Shareholders/Depositors can sue company, directors, auditors, advisers and consultants Shareholders/Depositors can sue only company and directors
41 Memorandum Object Clause No classification required Objects were classified into Main object, Ancillary objects and incidental objects
42 Penalty for wrong info given to obtain company name Before Incorporation – Name cancellation with penalty up to Rs. 100,000 and After Incorporation – Directions are given to change name within 3 months or petition is made for winding up of the company No provision



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About Chiranjiv Kumar


  1. I read a lot of interesting articles here. Probably you
    spend a lot of time writing it

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