The 2013 Act also
intends to improve corporate governance by requiring disclosure of nature of
concern or interest of every director, manager, any other key managerial
personnel and relatives of such a director, manager or any other key managerial
personnel and reduction in threshold of disclosure from 20% to 2%. The term
‘key managerial personnel’ has now been defined in the 2013 Act and means the
chief executive officer, managing director, manager, company secretary,
whole-time director, chief financial officer and any such other officer as may
2013 Act states that requirement of certification by a company secretary in
practice of annual return will be extended to companies having paid up capital
of five crore INR or more and turnover of 25 crore INR or more* (section 92(2)of 2013 Act and the 1956 Act requires certification only for listed companies).
information that needs to be included in the annual return has been increased.
The additional information required, includes particulars of holding,
subsidiary and associate companies, remuneration of directors and key
managerial personnel, penalty or punishment imposed on the company, its
directors or officers [section 92(1) of 2013 Act].
Place of keeping registers and returns
2013 Act allows registers of members, debenture-holders, any other security
holders or copies of return, to be kept at any other place in India in which
more than one-tenth of members reside [section 94(1) of 2013 Act]. The
flexibility in the 1956 Act is limited to a place within the city, town or
village in which the registered office is situated.
2013 Act states that the first annual general meeting should be held within
nine months from the date of closing of the first financial year of the company
[section 96(1) of 2013 Act], whereas the 1956 Act requires the first annual
general meeting to be held within 18 months from the date of incorporation.
the 1956 Act does not define business hours, which the 2013 Act now defines as
between 9 am and 6 pm. The 2013 Act states that annual general meeting cannot
be held on a national holiday whereas the annual general meeting cannot be held
on a public holiday as per the existing provisions of section 166(2) of the
1956 Act [section 96(2) of 2013 Act].
order to call an annual general meeting at shorter notice, the 2013 Act
requires consent of 95% of the members as against the current requirement in
the 1956 Act which requires consent of all the members [section 101(1) of 2013
2013 Act states that besides director and manager, the nature of concern or
interest of every director, manager, any other key managerial personnel and
relatives of such director, manager or any other key managerial personnel in
each item of special business will also need to be mentioned in the notice of
the meeting [section 102 (1) of 2013 Act]. Also, the threshold of disclosure of
share holding interest in the company to which the business relates of every
promoter, director, manager and key managerial personnel has been reduced from
20% to 2% [section 102 (2) of 2013 Act].
2013 Act states that in case of a public company, the quorum will depend on
number of members as on the date of meeting. The required quorum is as follows:
members if number of members is not more than one thousand
members if number of members is more than one thousand but up to five thousand
members if number of members is more than five thousand [section 103 (1) of
limit has been introduced on the number of members which a proxy can represent.
The 2013 Act has introduced a dual limit in terms of number of members, which
is prescribed as 50 members and also sets a limit in terms of number of shares
holding in the aggregate not more than 10 % of the total share capital of the
company carrying voting rights* [section 105 (1) of 2013 Act].
it is relevant to note that private companies cannot impose restrictions on
voting rights of members other than due to unpaid calls or sums or lien
[section 106 (1) of 2013 Act].
companies will be required to file with the ROC a report in the manner
prescribed in the rules on each annual general meeting including a confirmation
that the meeting was convened, held and conducted as per the provisions of the
2013 Act and the relevant rules [section 121 of 2013 Act].
companies will be required to file a return with the ROC with respect to the
change in the number of shares held by promoters and top ten shareholders
within 15 days of such a change[section 93 of 2013 Act]. This requirement again
demonstrates the effort made towards synchronizing the requirements under the
2013 Act and the requirements under SEBI. Additionally, on an annual basis,
companies are also currently required to make the disclosures with respect to
top shareholders under the Revised Schedule VI the 1956 Act.
2013 Act requires every company to observe secretarial standards specified by
the Institute of Company Secretaries of India with respect to general and board
meetings [section 118 (10) of 2013 Act], which were hitherto not given
cognisance under the 1956 Act. Additionally, it is also pertinent to note that
these standards do not have a mandatory status for the practicing company