Ministry of Corporate Affairs (MCA) and Companies Act 2013

The Ministry of Corporate Affairs (MCA) is primarily concerned with administration of the principal legislation governing Companies in India, i.e. the Companies Act 2013 (the Act) and the Companies Act 1956.

The Act consolidates and amends the law relating to Companies, and for that purpose has substantially replaced its predecessor, the Companies Act 1956 (some provisions may still be in force at the relevant date until amendment/replacement via notification). Through the relevant provisions of the Act, new concepts, investigative and adjudicatory bodies have also been introduced, some of them are —

  • One Person Companies (OPC)
  • Corporate Social Responsibility (CSR)
  • Appointment of Women Directors
  • Class Action
  • Dormant Company
  • Serious Fraud Investigation Office (SFIO)
  • National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT)

 

Focus and Specialisation

Private Limited Company

The Ministry of Corporate Affairs (MCA) has recently introduced ‘Simplified Proforma for Incorporating Company Electronically’ (SPICe) to simplify and speed up the Company incorporation/registration (subject to some exceptions and conditions) process through an online application eForm INC – 32, in addition to the Memorandum of Association (eForm INC – 33) and Article of Association (eForm INC – 34).

> Register/Incorporate a ‘Private Limited Company’


Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) is a hybrid form of ‘Partnership’ entity which incorporates the ‘limited liability’ benefit of a Company along with reduced compliance obligations, relatively less complex structure and flexibility of a ‘Partnership’ (subject to the Indian Partnership Act 1932) entity in general.

> Register/Incorporate a LLP


Other Business/Professional Entities

  • One Person Company (OPC)
  • Wholly Owned Subsidiary (WOS)
  • Joint Venture Company
  • Small Company/MSME
  • Public Company (Listed/Unlisted)
  • Private (Business/Commercial) Trust
  • Registered Society/Co-operative Society
  • Non-Banking Financial Company (NBFC)

 

Get Professional Help – Register/Incorporate a Company, LLP etc.

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The Memorandum of Association (Memorandum or MoA) is the constitutional or founding document for every Company, and mandatory for registration/incorporation of Companies under the Companies Act 2013 (the Act). The Article of Association (Articles or AoA) also mandatory, contain the regulations for the management of the said Companies.

Together, these documents are the principal source* of rights, duties, limitations, obligations and liabilities for the Company, concerned Stakeholders (eg. Shareholders, Directors, Management, investors etc.) and various third parties dealing with the said Companies.

> Read more about ‘Memorandum and Articles of Association’

 

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The principal legislation for Companies in India, i.e. Companies Act 2013 (the Act), allows the incorporation of various types of Companies. This includes Companies ‘limited by Guarantee’ and those ‘limited by Shares’ (Limited Company), wherein the latter, the liability of the Members is limited by the concerned Company’s Memorandum (of Association or MoA) to the amount (if any) unpaid on the Shares respectively held by them.

> Read more about ‘Share Capital’

 

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The Companies Act 2013 (the Act) i.e. the principal legislation for Companies in India, requires every Company registered/incorporated in India to have a Board of Directors (the Board), consisting of individuals as Directors appointed to the Board. Subject to the provisions of the Act including ‘duties’ prescribed therein, a Director of a Company has to act in accordance with the Articles of Association (the Articles) of the concerned Company.

> Read more about ‘Directors, Board of Ditectors and Key Managerial Personnel’

 

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Dividend’ is not defined meaningfully by the Companies Act 2013 (the Act), other than to state that it includes an ‘Interim Dividend’. In general parlance, (Final) Dividend is the distribution of a Company’s earnings/profits to its Shareholders, as decided and announced by the concerned Company’s Board of Directors and ratified by the Shareholders at the Annual General Meeting (AGM) or other such Member meeting in the manner prescribed by the Act and Rules thereunder.

> Read more about ‘Dividend’

 

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The Companies Act 2013 (the Act) allows (subject to prescribed rules and other applicable legislation) Private and Public Companies to raise additional funds or borrow money for its business and commercial purposes from the public and/or Company Members (alternatively to loans, credit and borrowings from banks, other such financial institutions, Companies etc, which do not classify as a ‘deposit’). Two such sources of funds (briefly discussed below) include the issue of ‘Debentures’ and acceptance of ‘Deposits’ by such Companies.

> Read more about ‘Debentures, Deposits and Borrowings’

 

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The recently notified sections of Chapter XV under the Companies Act 2013 (the Act) provides for ‘corporate reconstruction or restructuring’ by Companies under the broad provisions of ‘Compromises, Arrangements and Amalgamations’ .

The main concepts of ‘Merger’, ‘Amalgamation’ and ‘Demerger’ have not specifically defined by the Act, but specific provisions have been legislated under the said Chapter to effect the same. Some other corporate restructuring strategies and methodologies include ‘Reverse Mergers’, ‘Disinvestment’, ‘Takeovers’, Incorporated Joint Ventures (JV) etc.

> Read more about ‘Compromises, Arrangements and Amalgamations’

 

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An incorporated or registered Company can be closed, terminated, liquidated, wound-up or dissolved in a number of ways (some discussed below), in differing circumstances, voluntarily by the Company or legally enforced upon it by the National Company Law Tribunal (NCLT), Company creditors, Government authorities or other empowered third persons.

> Read more about ‘Company Closure’

 

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The Companies Act 2013 (the Act) via section 455 enables a Company formed and registered for a future project or to hold an asset or intellectual property and having no significant accounting transaction, or an ‘Inactive Company’, to make an application to the Registrar of Companies (ROC) for obtaining the status of a ‘Dormant Company’.

> Read more about ‘Dormant Company’

 

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Chapter XVI of the Companies Act 2013 (the Act) through an application to the National Company Law Tribunal (NCLT) under section 241 provides an extremely potent legal right and avenue for relief to the Members to prevent, rectify or stop the conduct of affairs of Companies in a manner that isprejudicial or oppressiveto Member(s) interests, that of the public or of the concerned Company; or where such prejudice is likely to be caused by such conduct, brought about by a material change in the management or control of the said Company.

> Read more about ‘Oppression and Mismanagement’ and ‘Class Action

 

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The Companies Act 2013 (the Act) imposes penalties on Companies registered under the Act and/or Officers of such Companies in default for non-compliance or default under the relevant provisions of the Act. Penalties so imposed require the payment of monetary sums by the person/Company in default in accordance with the relevant Rules and may differ in quantum, payment schedule etc. depending on the particular penalty imposed as prescribed under the said relevant provision(s) of the Act infringed.

> Read more about ‘Penalty and RD Appeal’

 

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In addition to the Act, the MCA also administers the following important legislations —

 

MinusTax Professionals and e-Help

MinusTax network of independent professionals* specialise in Taxation, Company Law and Revenue matters, undertake ethical, transparent and professional practices. MinusTax Professional’s specialised services as provided under the Companies Act 2013 and the Companies Act 1956, and the other above mentioned laws also administered by the Ministry of Corporate Affairs (MCA) have also been briefly mentioned below.


> e-Request for Professional Help

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