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FAQs on Companies Act 1956 And 2013 - Business Laws for CA Foundation

1. What is the significance of the Companies Act 1956 and 2013 in CA Foundation?
Ans. The Companies Act 1956 and 2013 are important legislations that govern the functioning and operations of companies in India. Understanding these acts is crucial for students preparing for the CA Foundation exam as they cover various aspects of company law, including incorporation, management, accounting, and compliance.
2. What are the key differences between the Companies Act 1956 and 2013?
Ans. The Companies Act 1956 was the primary legislation governing companies in India until it was replaced by the Companies Act 2013. Some key differences between the two acts include: - The Companies Act 2013 introduced several new provisions, such as the concept of one-person companies, class action suits, and mandatory corporate social responsibility. - The Companies Act 2013 emphasizes greater transparency, accountability, and corporate governance compared to the Companies Act 1956. - The Companies Act 2013 introduced stricter penalties for non-compliance and enhanced provisions for investor protection.
3. What are the main provisions of the Companies Act 2013 relevant for the CA Foundation exam?
Ans. The Companies Act 2013 covers a wide range of provisions, but some of the key ones that are relevant for the CA Foundation exam include: - Incorporation and registration of companies - Memorandum and articles of association - Prospectus and allotment of securities - Board of directors and corporate governance - Audit and financial reporting - Annual general meeting and general meetings - Winding up and dissolution of companies
4. How does the Companies Act 2013 impact corporate governance practices in India?
Ans. The Companies Act 2013 has significantly strengthened corporate governance practices in India. It introduced several new provisions aimed at enhancing transparency, accountability, and investor protection. Some key provisions related to corporate governance include: - Appointment of independent directors - Mandatory rotation of auditors - Increased disclosure requirements - Audit committee and nomination and remuneration committee - Strengthened provisions for related party transactions
5. What are the implications of the Companies Act 2013 for small and medium-sized enterprises (SMEs)?
Ans. The Companies Act 2013 has both positive and negative implications for small and medium-sized enterprises (SMEs). While the act introduces several compliance requirements and stricter provisions, it also provides certain exemptions and benefits for smaller companies. Some important implications for SMEs include: - Relaxations in compliance requirements for smaller companies - Reduced penalties for non-compliance in certain cases - Easier fundraising through the concept of one-person companies - Enhanced provisions for corporate social responsibility, which can benefit SMEs involved in social and environmental initiatives.
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