Thursday, September 19, 2013

Clarification on Effectiveness of the Companies Act, 2013

In a previous post concerning the notification bringing into effect several provisions of the Companies Act, 2013, it was discussed that the provision repealing the respective provisions of the Companies Act, 1956 was not brought into effect causing some confusion as to which law will apply to those matters. Based on requests for clarification seemingly made by several parties, the Ministry of Corporate Affairs (MCA) has now clarified through another notification dated September 18, 2013 that “the relevant provisions of the Companies Act, 1956, which correspond to provisions of 98 sections of the Companies Act, 2013 brought into force on 12.09.2013, cease to have effect from that date.” While this is intended to avoid overlap during the transitional period, it still leaves the task to companies and their advisors to identify the appropriate provisions of the 1956 Act that will cease to apply as they are not specified in the new notification.

1 comment:

sekhrishna said...

Also, defining and identifying the "Corresponding provisions" itself may be difficult and different views are possible in the exercise.
Further , unless the Section in the 2013 Act repealing the 1956 Act is actually notified , it is difficult to conclude that the provisions of the 1956 Act will cease to have effect automatically