What is the difference between the Companies Act 1956 and the Companies Act 2013?

By Ritesh|Updated : September 3rd, 2022

The Companies Act of 2013 had 7 schedules and 464 sections, whereas the Companies Act of 1956 had 15 schedules and 658 sections. One person cannot form a company according to the Companies Act of 1956, and one person can form a one-person company according to the Companies Act of 2013.

Companies Act, 2013

  • A single person can form a company.
  • The maximum number of persons allowed in a private company is 200
  • Articles may contain entrenchment provisions
  • Notice to ROC about a change of address to be given within 15 days of the change.
  • The tribunal's approval is required to convert a public company into a private company.
  • This Act recognizes the electronic mode of sending documents to the company.
  • Extract of annual return in prescribed format is to be given as part of Board’s report.
  • A person can be appointed as a proxy for a maximum of 50 members
  • A postal ballot applies to all companies
  • Past losses need not be set off before declaring the dividend
  • It is not compulsory to transfer profits to the reserves of the company
  • The company is permitted to keep a book of accounts in electronic mode
  • CSR spending of at least 2% of average net profits during the 3 preceding years is mandatory
  • Certain classes of companies compulsorily appoint a woman director
  • The maximum number of directors in public as well as private companies is 15

Companies Act, 1956

  • A single person cannot form a company
  • The maximum number of persons allowed in a private company is 50
  • No enabling provisions to contain entrenchments Articles
  • Notice to ROC about a change of address to be given within 30 days of the change
  • Approval of the central government is required for the conversion of the public into a private company
  • The electronic mode of sending documents to the company is not recognized
  • Extract of return is not required to be given as Board’s report
  • There is no such restriction in the 1956 Act
  • A postal ballot is not applicable under this Act
  • Past losses have to be set off before declaring the dividend
  • It is compulsory to transfer at least 10% of profits to the reserves of the company
  • The company need not keep a book of accounts in electronic mode
  • CSR spending is not compulsory
  • It is not compulsory to appoint a woman director
  • The maximum number of directors in a public company is 12.

Summary:

What is the difference between the Companies Act 1956 and the Companies Act 2013?

According to the Companies Act of 1956, one person cannot form a company, whereas, in the Companies Act of 2013, one person can form a company.

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