The Companies Bill, 2013 finally received Presidential assent on August 29, 2013. It has also been published in the Official Gazette, as the Companies Act, 2013 (the “Act”). Even so, this law has not yet come into force totally. All the substantive provisions have not yet been notified. This is clear from Section 1(3).
“This section shall come into force at once and the remaining provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of the Act shall be construed as a reference to the coming into force of that provision.”
The substantive provisions of the Act therefore, will be effective only once notified by the Central Government in the Official Gazette. No such notification has been made. Until then, we can assume that the Companies Act, 1956 continues in operation.
Given that the Act proposes sweeping changes in the way business is carried out, it is expected that the Act will be implemented in phases, giving companies enough room to comply with the new provisions.
The Corporate Affairs Ministry is also drafting new rules for implementing the Act. The draft rules will soon be published on the website of the Ministry of Company Affairs and all interested parties, including the general public would have the opportunity to provide comments and suggestions within a prescribed period.
While there is no schedule or timeline for the Act to come into force, companies should consider setting their house in order, to ensure they are in a position to be compliant with the new provisions.
(Deepa Mookerjee is part of the faculty on myLaw.net.)