Things You Must Know About The New Company's Bill 2013

5) One-Man Army and Class Action Suits: This is the best concept that the Bill has come up with. It allows a single individual to set up a one-person company. And shareholders could now file class action suits. A doubt though lingers on the mind whether government can be sued by the shareholders of government owned companies.

Impact: The Bill is encouraging the small investors but holding promoters and management more accountable.

6) Limitation on Number of Investment Subsidiaries: The major concern for Indian incorporations is the concept of limit on the number of layers of investment companies. According to the Bill, a company can have a maximum of two-layers of subsidiaries. And number of step-down subsidiaries for any holding company will also be decided by the Centre. There is no limit on lateral subsidiaries.

Impact: A command over companies creating several layers of subsidiaries to fulfill ulterior motives.

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