Economic Risk Factor Update: April 2024 [SlideShare]
Accounting and Auditing issue in New Companies Act 2013
1.
2. New companies bill was approved by lok
sabha on 18th,december, 2012 and was
approved by rajya sabha on 8thaugust 2013.
Bill has 29 chapters, 470 clause ,as against
658 sections in the existing companies
act,1956 and 7 schedules.
4. There is a Uniform financial year for all the
companies i.e. April to March.
now, Private companies now have 200
members.
the Provisions for re-opening or re-casting of
the books of accounts of a company
provided.
All securities are rule by bill only.
Now, the companies prospectus is now more
elaborated.
5. There is no provision for issue of shares on
discount (except issue of sweet equity
shares).
New defination to Nidhi company was
ordered.
Companies can accept deposits only from its
members after seeking approved of its
shareholders at a general meeting.
6. Postal Ballot to be applicable on all
Companies, whether listed or not.
Financial Statements shall include Balance
Sheet, Profit & Loss Account and Cash Flow
Statements.
Strict advice to authority to use accounting
standards .
Central govt. is not allow to enter into party
transactions.
7. New Bill forbids insider to buying and selling
of securities of the company.
Now, Companies have maximum of 15
directors.
A director of company can participate in a
board meeting through video conferencing or
other audio visual(AV) modes.
8. Loans can be given to a Director without seeking
approval of the Central Government.
The Bill specify the functions of a company
secretary.
Object Clause of MOA not need to be divided
into Main, Ancillary and Other Objects Clause.
Any document required to be filed under this
Bill, filed within specific time and have to be filed
within a period of 270 days on payment of
additional fees.
9. First annual general meeting(AGM) of a
company shall be held within nine months
from the ending of first financial year .
New concept of one person company
introduced.
All the authority advise to use Auditing
Standards and Accounting Standards.
10. At least one director should be a person who
has stayed in India for a period, not less than
182 days in the last calendar year.
At least one-third number of directors of a
listed public company should be independent
directors.
All the Companies accept deposits only from
its members after seeking approval of its
shareholders at AGM.
11. Every company is required at its first annual
general meeting (AGM) to appoint an
individual or a firm as an auditor.
The NationalAdvisory Committee(NAC) of
Accounting Standards renamed asThe
National Financial Reporting
Authority(NFRA).
No central government approval required for
entering into any party transactions.
12.
13. BASES COMPANIES ACT
,1956
NEW COMPANIES
ACT,2013
DIRECTORS Includes any person
occupying the post of
directors.
Directors are appointed
by board of company.
FINANCIAL
STATEMENTS
1.Balance sheet made at
the end of financial year
2.P/L a/c or in case of
NPO, an income &
expenditure a/c for
financial year are made.
1.Balance sheet made at
the end of financial year
2.A statements changes
in equity
3.And cash flow
statements also made
14. FREE RESERVES It means that all
reserves are created out
of profits and share
premiums a/c but it
does not include
reserves make out of
revaluation of assets.
1.Share premium a/c
does not form a part
2. Cr. Balance in
statements of P/L a/c is
not free reserves now.
NETWORTH It means the sum of all
paid-up capital and free
reserves after subtract
all expenses.
Its says that only paid-
up capital, share
premium and reserves
are make out of profits
will handle as net worth
15. SMALL COMPANIES Not defined 1.Paid up share capital
of company should not
exceed 50 lakhs rupees
2.And the turnover as
per last P/L a/c does not
exceed 2 crore rupees.
DORMANT
COMPANY
Not defined a dormant company is a
company in which there
is no significant a/c
statements during
accounting period
16. PRIVATE COMPANY maximum numbers of
members does not
exceed 50
maximum numbers of
members does not
exceed 200
ONE PERSON
COMPANY
Not defined Most exclusive rights to
OPC’s are as follows:-
1.Financial statements
not include cash flow
statements.
2.No requirements of
holding an annual
general meeting(AGM)
3.There are minimum
numbers of directors.
17. ISSUEOF BONUS
SHARES
Not defined Private companies are
not allow to issue bonus
shares.
INCREASE
ACCOUNTATBILITY
OF AUDITORS
Penalties were provided
for violation of section
227(dealing with powers
and duties of auditors)
and section 229
(dealing with signature
of audit report).with
small penalties of fine
up to Rs. 10000
Penalties significantly
enhanced-fine not less
than 25000 but
extendable to Rs. 5
lakhs. and
Imprisonment up to one
year and fine in case
there is an intention to
deceive the company
shareholders
18. MEMORANDUMOF
ASSOCIATION(MOA)
MOA should have
Clauses such as Name,
state, main objects,
other objects,
subscription clause.
Now ,MOA not have
other objects, and all
the things remains the
same.
E-GOVERNANCE Not defined Now, Maintenance of
documents by
companies in electronic
form
19. WOMEN DIRECTOR Not exist As per new bill every
company should have 1
women director.
ISSUEOF
DEBENTURESWITH
CONVERSION
OPTION
No such requirement
existed
Needs special resolution
of members for the
issue of debentures with
conversion option
wholly or partly.
20. MAXIMUM NUMBER
OF DIRECTOR
There should be max.
12 and beyond 12
required before Central
Govt.
Approval.
provides for max 15 and
beyond 15 by passing a
special resolution
MAINTAINENCEOF
BOOKS OF
ACCOUNTS
Books are keep for the
period of 8 years
Where investigation is
ordered then they may
direct the books for
longer period of time.
21. The best thing about the new
Companies bill is that it is simple, with
great limpid of AIM and FUNCTION. It
replaces the old law with over 700
dispute clauses with something shorter
and sweeter.470 clauses and all of it in
309 pages. Not bad for something that
will govern all listed and unlisted
companies in the country. Even so, a
new law does not itself become a great
law, as success depends on
implementation and execution.