The comparison between companies act 1956 and act 2013 have many differences which are be listed in the below details.
The comparison between companies act 1956 and 2013 are listed below :
Power to call for information, inspect books and conduct inquiries
Act 1956
The act imparts power to SEBI to conduct inspection through its officers in respect of matters referred in section 55A. Every company and each person have fails they may be pay an amount upto Rs 5 thousand. If the offence is continuing they will be pay an amount of Rs.500 every day.
Act 2013
The central government may, as per the general or special order, authorize and statutory authority to carry out the inspection of books of accounts of a company or class of companies. Power of SEBI to conduct inspection of company’s documents is no more explicitly mentioned. If a company, director or the company officer in default of the condition of the section, they pay a fine amount which may increase to Rs 1 lakh and in case of a continuing failure, with an additional increase to Rs 500 for continuous failures.
Disqualification of directors
Act 1956
Where a director or any other officers of a company has been convicted of an offence by disobeying any direction provided by the registrar in the procedure of inspection he shall, be deemed to have vacated his office from the day of default and he shall be disqualified for holding such office in any company, for a term of five years from such date. The registration of a company may have certain rules to qualified a directors.
Every officer in a company who made default in complying under the section 209A, he shall be pay an amount of Rs.50 thousand and also with imprisonment for a term not exceeding 1 year.
Act 2013
If a director is convicted of an offence by disobeying any direction provided by the registrar or inspector in the procedure of inspection and inquiry under section 207, he shall be considered to have vacated his office from the day of default and he shall be disqualified from holding an office in any company.
If any director or officer of the company disobeys the direction provided by the direction provided by the registrar or the inspector under section 2007, the director or the officer may fails which may extend 1 year with a fine amount of Rs 25 thousand and it may increase to Rs 1 lakh.
Search & Seizure
Act 1956
No such provision in this act
The registrar can search and seize the books and documents of any bodies corporate or its managing personnel on such authorization by the magistrate of the first class.
Registrar such return to the company, the books and papers seized within 30 days after such seizure.
The registrar does not have power to call the books and papers again if required for further period.
Act 2013
The powers of the registrar/inspector to carry out search and seizure have been extended to books and papers relating to the key managerial personnel or auditor or company secretary in practice if the company has not appointed a company secretary.
The registrar cannot search and seize the books and documents of any bodies corporate or its managing personnel for search and seizure of documents, registrar shall be required to seek order from special court.
Examination into affairs of company
Act 1956
No such provision in this act
An application to the tribunal for ordering an consideration into the matter of the company may be made by a minimum of 200 members keeping not less than 1/10th of the total person concerned in the company registration or the management of its affairs have in connection therewith been repentant of fraud, all the persons concerned in company registration or in management of its affairs, shall be punishable for the offence of fraud as provided under section 447 of this act.
Now an application to the tribunal for ordering an examination into the company affairs, may be made by a minimum of 100 members keeping not less than 1/10th of the total voting power, for consideration of the payment and costs of securities
Serious Fraud Investigation office (SFIO)
Act 1956
No such provision in this act.
Act 2013
An SIFO will be established with experts from all technical and judiciary fields relevant for investigation of affairs of any company. The nomination persons of government may knowledge in the fields of management accounting, cyber forensic, financial accounting, cost accounting, investigations, and any other filed as may be required for the efficient discharge of functions of SFIO under the act.
Powers of inspectors
Act 1956
Central government’s approval is required by the inspector to authorize a person to whom the information /documents/books of accounts are to be produced by the entity under investigation.
Documents obtained from the body corporate shall be returned if certified copies are made available to the inspector.
No corresponding provisions in this act.
Act 2013
No provision for approval
The provision that documents obtained from body corporate shall be returned if certified copies are made available to the inspector has been dispensed with.
Central government may enter into any agreement with the government of a foreign state for reciprocal arrangements to assist in any inspection and investigations under this act or under any corresponding law in force of state.
The inspector with the validation of the central government can help the assistance of officers of Central/State, statutory authority or police for the purpose of investigation.
If in the course of investigation into the company matters, an application is made to the competent court in India by the inspector stating that evidence is or may be available in a country or place outside India, such court may issue a letter of request to a court or authority in such country, competent to deal with such request to examine such person supposed to be acquainted with the facts of the case, to record his statements made in the course of the examination an forward all evidence collected, to the court in India which has issued such letter of request.
Inspector’s Report
Act 1956
The central government shall forward a copy of any report made by the inspector of the company to whom the report relates or to the applicants on whose request investigation started.
Only members or creditor whose interests were affected can obtain a copy of the report on payment of fee prescribed.
Act 2013
The copy of inspector report may be obtained by making an application in this regard to the central government.
Any person can get the inspectors report without payment of fee.
Expenses of Investigation
Act 1956
The amount of expenses can be recovered as an arrear of land revenue from the company, manager, body corporate, managing director who are responsible to reimburse those expenses to the central government.
Expenses incurred by central government in connection with proceedings for recovery of damage or property shall be treated as investigation expense.
The expenses which are not recoverable can be recovered by the company from the parliament.
The provision to indemnify in case prosecution is not instituted as per section 242 of the act.
Act 2013
In case of investigation by the central government under the prescribed sections in the act, the central government may, before appointing the inspector, need the applicant to give such security not exceeding Rs.25 thousand for the payment of the costs and expenses of the investigation.
Penalty for furnishing false statement, mutilation, destruction of documents
Act 1956
No such provision in this act
Act 2013
During the inquiry of inspection, process of investigation, if any person destroys, falsifies or mutilates or conceals any document relating to the property, affairs or assets of body corporate or company or make any false entry in the document concerning the body corporate or company or provide any false information intentionally. It shall be liable to punishment for fraud under section 447.