Impact of Companies Act, 2013 on the Foreign Companies having a Place of Business in India
The much awaited Companies Act, 2013 (“New Act”) has finally been notified to replace most of the provisions of the Companies Act, 1956 (“Old Act”). The economic scenario globally has undergone major transformation and structural changes and promulgation of the New Act is a step towards globalization and is a successful attempt to meet the changing environment and liberalization. The New Act is progressive and futuristic as it duly envisages the technological and legal developments. The New Act aims to:
- revise and modify the Companies Act, 1956 in consonance with the changes in the national and international economy.
- bring about compactness by deleting the provisions that had become redundant over time and by regrouping the scattered provisions relating to specific subjects;
- re-write various provisions of the Old Act to enable easy interpretation;
- delink the procedural aspects from the substantive law and provide greater flexibility in rule making to enable adaptation to the changing economic and technical environment; and,
- inculcate the culture of corporate governance in the Indian corporate world.
With these objectives the New Act seeks to bring various changes for the businesses, promoters, stakeholders, creditors, directors, the law enforcers and the society at large. Different sections of the corporate world will be affected in their own way with the New Act. This Note highlights the impact of the New Act on foreign companies having a place of business in India.
This article is originally posted on our monthly newsletter “Indo Japan Trade and Investment Bulletin-March 2014” and the following points have been discussed thoroughly: