While in many respects India’s new Companies Act has come up trumps, doubts remain over its implementation.
Aparajit Bhattacharya and Harvinder Singh report
Companies operating in India can expect a greater focus on increased regulations and corporate accountability. Governance is at the heart of the Companies Act, 2013, which was notified in the Gazette of India on 30 August. The act appears to keep pace with the changes in the Indian economy and effectively frames dynamic, abstract concepts into concise and crisply worded legislation.
The act is an umbrella legislation, as it largely relies on subordinate rules for the implementation of its provisions and for day-to-day governance. The subordinate rules are being framed and are being made available; as yet there is no timeline for this. As a result, a complete picture of the impact of the new act would only be available when the Ministry of Corporate Affairs publishes the subordinate rules. In the meanwhile, two sets of draft rules that cover 24 chapters have been issued.
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Aparajit Bhattacharya is a partner at HSA Advocates in New Delhi where he heads its corporate M&A practice. Harvinder Singh is a partner at the firm. The authors would like to thank Sumedha Dutta, a senior associate, and Rohan Dang, an associate at the firm, for their contributions to this article.