India’s first Companies Act 2013 notifications explained

Author: Ashley Lee | Published: 26 Sep 2013
  • India’s Companies Act is being implemented in phases, with 98 sections notified and implemented on September 12;
  • The law is intended to separate ownership from management, and encourage companies to regulate themselves. However penalties for non-compliance are quite harsh;
  • Some market participants are concerned that the immediate implementation of the Companies Act doesn’t give them enough time to adjust current practices, especially as the new law requires significant changes across many areas of corporate governance;
  • It places further restrictions on independent directors and their relationships with companies, and requires that related party transactions become subject to a shareholder vote.

On September 12, India’s Ministry of Corporate Affairs (MCA) issued a notification bringing into force 98 sections of 470 sections of the country’s Companies Act 2013. The...