Overview on Companies Act, 1956

The Companies Act of 1956 was a parliamentary act passed in the year 1956. It empowered companies all over India to register themselves as legal entities. It also enabled an informed and systematic structure of roles, responsibilities, and organisations within a business organisation. The Indian Companies Act, 1956 set forth a systematic organisation of business ventures and enabled a smoother functioning of the businesses. Through the Indian Company Act, the government made it mandatory for any business organisation to be considered legal to register themselves to obtain a licence. The Companies Act also specified the kind of roles and responsibilities of managerial positions. 

Companies Act 1956

The Indian government passed and enacted the Indian Companies Act of 1956 under the guidance of the Ministry of Corporate Affairs. The Indian Company Act had been the centre of many repeals taking place almost periodically after its conception. The Act was mandated by the Government through institutions like the Official Liquidators, Ministry of Corporate Affairs, Director of Inspector, Offices of Registrar of Companies, and Public Trustee. Not only did it provide a thorough line for businesses but it also set forth precedence. This was the basic law that guided all other associated laws regarding businesses. The Act comprised of sections such as:

• Membership of company,
• AoA (Articles of Association)
• Memoranda and related provisions
• Private Companies
• Changes made to the registration details of companies
• Naming Companies
• Matters of Companies
• Preliminary
• Law Administration
• Service documents
• Contracts and deeds
• Prospectus
• Shares Capitals and more

There were many other Parts to the Act as well, all that laid down the functioning and organisation of the company. 

Companies Act

There are 13 Parts in the Companies Act and many Schedules with lots of articles. The entire document is an exhaustive and comprehensive list of important rules and regulations that are provided by the government. This aids businesses to operate within a set boundary by constitutional validation. The provision of AoA and an MoA (Memorandum of Association) are two of the most important documents for any legally recognised business organisation. These provisions are provided for in the Act. The AoA has defined the various responsibilities of a company and contains the MoA. The MoA is the official charter of any company and is prepared during the registration and naming process. There are around 70 provisions that a company has to follow. The Act also lays down how a company should handle its shares and capital. It also contains certain clauses regarding employee and workplace relations. The Companies Act also specified the kind of roles and responsibilities of managerial positions. Through many amendments made to the Act, it was made to reflect the changing time and requirements. 

Indian Company Act Repeal

The Company Act of 2013 is divided into 470 sections, with 29 Parts and 658 sections. Most of these sections have been removed and only around 484 sections remain in their present state.      An additional 183 sections were enforced since 2014 under the Company Act. The 2013 Act increased the responsibilities and stipulations that corporate sectors, IT sectors, and other tech sectors had in the country to increase accountability. Another Amendment was introduced to the 2013 Company Act in 2020. 

Conclusion

The Indian Companies Act, 1956, was responsible for consolidating many important rules and regulations regarding business operations, relations, and responsibilities. The 1956 Company Act was repealed in 2013 and was almost partially replaced by the Companies Act of 2013.