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Companies Act in India

Companies Act in India

The Indian Companies Act, the main rule of law which regulates the manner in which investors can register a company in India, was modified in 2013. The legislation changed a part of the provisions established under the Companies Act 1956 and the new regulation became applicable in September 2013; it is important to know that the previous Act is still in force. Our team of specialists in company formation in India can offer legal assistance on the main provisions established under the new sections of the Companies Act

New regulations under the Companies Act 2013

The Companies Act 2013 is comprised of 29 chapters and 470 sections. The Act provides new definitions regarding the procedure on how to open a company in India, related to the types of business forms that can be set up here, as well as on the number of shareholders a legal entity can have. 

One of the main modifications refers to the incorporation of a new type of company, namely the one-person company, a business form that can be registered by a single member. New regulations have been introduced for the private company in India, which can now be formed with a maximum number of 200 shareholders, compared to the previous regulations that prescribed a lower number regarding the number of shareholders (set up at 50). The new Act also offers a new understanding on the definition of a small company and our team of consultants in company registration in India may provide in-depth assistance on this matter. 

Incorporating an Indian company  

Investors who want to open a company in India are required to follow the legal procedures established by the local government. Under the new Act, the incorporation procedure was modified for specific categories of companies.

For example, the new rules stipulate that during the registration, the investors are still required to follow the regulations of the previous Act, but in the case of the company’s statutory documents, new requirements were added. Those starting a local company should also verify the provisions regarding the tax registration of the company, including the VAT registration

When starting a company in India which has as a main purpose charitable objects, it is important to know that new activities were introduced, such as: 

environmental protection;



social welfare.  

Businessmen can receive further advice on other modifications brought by the new Companies Act for other corporate aspects, such as the on the company’s financial statements or the procedures for mergers and acquisition. Please contact our team of agents in company formation in India for a detailed presentation on this subject.