The document discusses key changes introduced by the Companies Act 2013 that create opportunities for consultants, including: 1) Introduction of concepts like one person company, corporate social responsibility, class action suits, secretarial audit, and key managerial personnel that increase compliance requirements. 2) Tighter regulations around related party transactions, independent directors, financial statements, and insider trading that require greater advisory services. 3) Stiffer penalties for non-compliance that are expected to lead to more litigation, creating roles for consultants in managing risks and disputes.

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Companies Act, 2013

2. BlueLotus Strategy Consulting ©
New Concepts introduced
Key Managerial Personnel (KMP)
Corporate Social Responsibility
Dormant Company
Fraud
Secretarial Audit
Subsidiary and Holding
Company
One Person Company
Small Company
Code of Independent Directors
Related Party
Secretarial Standards
Special Court and Conciliation Panel

3. Like Private Limited Entity
One director
One shareholder
Exempt from holding quarterly
board meeting
Exempt from holding General
Meetings
Cash Flow Statement is not
mandatory in financial
preparations
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This helps the promoters where they are
reluctant to introduce any other Director
or shareholder
Lesser no. of compliances
Beneficial to Sole Proprietors who want to
give shape as a Company to their
existing business
Introduction of One Person
Company

4. During the Audit if any
misconduct of management
against depositors or members
may be noted, the professional
can give advise to the
members or depositors in filing
class action suits.
Represent the case in front of
Tribunal
Key Managerial Personnel are
also covered
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A lawsuit that allows large number of
people with common interest in a matter
to sue or be sued as a group
Reduction in cost and time involved in
legal proceedings
Auditors, experts and Consultants will be
more cautious in their work and avoid
any manipulations
Increased scope for consultants due to
increased litigations
Introduction of Class Action Suits

5. Mandatory for certain class of
companies to form CSR
committee
Evolve new disclosure
requirements in board report-
professional will undertake
timely reporting of CSR activity
Board to specify reasons for
not spending the amount on
CSR- professional will aiding
board in making decision on
CSR expenditure
Need to disclose information
regarding CSR expenditure in
notes to accounts which leads
to increased scope and role
for statutory auditors
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Every company with net worth of Rs 500
crore or more, or turnover of Rs 1,000
crore or more or a net profit of Rs 5 crore
or more during any financial year to
constitute a CSR Committee of the Board
Helps to achieve sustainable
development of an organization
Corporate Social Responsibility
and Sustainability Reporting

6. Compulsory for certain class of
companies
Secretarial Audit report to be a
part of board’s report
All qualification remarks
required to be addressed by
the board in their board report
Huge Penalty from INR 1lac to
5 lacs on company
Every Practicing Company
Secretary is also liable for
penalty
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Every Listed Company or a class of
companies is required to hold secretarial
audit
Opportunity for Legal Consultants as the
same will be carried on by Practicing
Company Secretary
Secretarial Audit

7. Assist organization in
preparation of code of
conduct for prohibition of
insider trading
Creating Chinese wall to
protect the Unpublished Price
Sensitive Information
Reporting Opportunities for the
Statutory Auditor for violation
of Insider Trading
Internal Auditor can monitor
the transactions which leads to
Insider Trading
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Helpful in building effecting Environment
which is free from any chances of fraud
Human Resource people can assist the
management in defining the code of
conduct of employee to prohibit the
insider trading
Insider Trading

8. Defined under Section 2(13)
which includes both books and
papers (Sec 2(13)) and
financial Statements (Sec
2(40))
Consolidation of accounts for
companies having
subsidiaries, associate and joint
company
Maintenance of accounts in
electronic form is permitted
Maintenance of Accounts at
place other than Registered
Office by intimating Registrar
within seven days
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Green Initiative introduced
Opportunity to the Internal Auditor to
filter the information which should be
shown to the outsiders as accounts are
available in electronic form
Monitoring can be done by Statutory
Auditors on real time basis as accounts
are available in e form now
Financial Statements

9. Legal Interpretation- law
interpretation would open a
different area for company
secretary and other
consultants
Strategic Advisory- Practising
Company Secretary report is
obtained at the time of merger
or acquistions
Litigation Consultancy- due to
huge penalty number of suits
would be increased in an
organisation
Compliance Consultancy-
assist independent directors in
discharging their duties and
functions
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Being number of compliances are
applicable, professional like consultants
can propose a good governance audit
to the company
This audit help the organisation in
standarisation of process which lead to
better governance
Tremendous opportunities

10. Another area for advisory and
consultancy as provisions are
more stringent now
Transaction related to any kind
of property are covered
Related members can not vote
on any resolution
KMP and directors who are not
interested but are a party to
violation are also liable for
penal provisions
Huge Penalties for listed (Civil +
Criminal) and other than listed
companies (Civil)
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Any person or his relative who can
change the decision of board or Top
Management is deemed to related.
Definition/Category of Related Party has
now been prescribed under companies
Act
Any transaction involving these parties
deemed to be a Related Party
Transaction.
Related Party Transactions

11. To be undertaken by
Company Secretary before
appointing Independent
Director
Certain data bank shall be
maintained for the person
appointed as Independent
Director by Central
Government and Central
Government can outsource
this job to the outsiders
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A due diligence exercise shall take place
before appointing any Independent
Directors
Helps to ascertain the eligibility of
independent director
All the records of the company will be
regularised before appointing an
independent director
Due diligence Scope

12. Opportunities for HR and
related consultants though Job
Profile Revision of the existing
and newly appointed persons.
New opportunities for
consultants as they can assist
the KMP in discharging their
functions effectively to reduce
the chances of litigations
Define new KRA of the persons
covered under in the definition
of KMP’s
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KMP in relation to the company means:
the chief executive officer or the
managing director or the manager;
the company secretary;
the whole-time director;
the chief financial officer; and
such other officer as may be
prescribed
Key Managerial Personnel
(KMP)

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Risk Assessment can bring opportunities
for Internal Auditors and Consultants- one
can laid down the internal control
procedures and other can verify the
execution of the same
Secretarial Standards are mandatory-
Scope for secretarial practices
Other Opportunities
e-Compliance tool is really
become critical for every
organization as it offer the
timely Updation and
monitoring, reporting to top
management of compliances
on real time basis
Directors and KMP are exposed to
less risk by reviewing the
compliances on regular basis

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