The Ministry of Corporate Affairs (MCA) has notified
a list of provisions of the Companies Act, 2013 that came into force with
effect from 12 September 2013.
a list of provisions of the Companies Act, 2013 that came into force with
effect from 12 September 2013.
A cursory review of the list of sections does not indicate
any coherent pattern regarding which aspects of the new legislation are being
brought into force, and the sections are peppered across various chapters. The
only seeming common thread is that most of them do not require rules to be
promulgated by the Central Government in order to make them operational. This
approach of piecemeal effectiveness is bound to cause significant practical
problems given there is no clarity regarding the legislative/regulatory rationale
for why these sections have been brought into force first.
any coherent pattern regarding which aspects of the new legislation are being
brought into force, and the sections are peppered across various chapters. The
only seeming common thread is that most of them do not require rules to be
promulgated by the Central Government in order to make them operational. This
approach of piecemeal effectiveness is bound to cause significant practical
problems given there is no clarity regarding the legislative/regulatory rationale
for why these sections have been brought into force first.
The social media is abuzz with another curious question
posed by some lawyers. Section 465 of the new legislation, which repeals the
Companies Act, 1956, has not been notified. Hence, there could be a question as
to whether the new provisions notified will operate in addition to the
provisions of the 1956 Act. It is not clear as to what would happen in case of
a conflict.
posed by some lawyers. Section 465 of the new legislation, which repeals the
Companies Act, 1956, has not been notified. Hence, there could be a question as
to whether the new provisions notified will operate in addition to the
provisions of the 1956 Act. It is not clear as to what would happen in case of
a conflict.
Hopefully,
such a hairsplitting exercise will not be required, and that these issues are
confined to a fairy short transitional phase. They may get addressed once the other
provisions of the Act become effect. Practical difficulties would get exacerbated,
however, if there were to be an inordinate delay in giving effect to the other
provisions.