The Companies Act, 2013 (Act No. 18 of 2013) is an Act of the Parliament of India that serves as the primary legal framework governing the incorporation, functioning, and dissolution of companies in the country. It received Presidential assent on 29 August 2013. The Act was created to modernize Indian corporate law, enhance transparency, and improve corporate governance, replacing the nearly six-decade-old Companies Act, 1956, which was considered outdated.
The Act works by introducing several key mechanisms and concepts. It enabled the formation of a new type of entity called a One Person Company (OPC), defined in Section 3(1). It mandates Corporate Social Responsibility (CSR) spending for large companies under Section 135, requiring them to spend at least two percent of their average net profits on social activities. The Act also introduced stricter governance norms, such as requiring certain public companies to appoint a woman director and independent directors under Section 149.
The Act connects directly to the Companies Act, 1956, which it largely superseded. It also led to the establishment of related institutions like the National Company Law Tribunal (NCLT), constituted on 1 June 2016, and the National Financial Reporting Authority (NFRA), established in March 2018.
The Act has been subject to recent amendments, reflecting the government's focus on Ease of Doing Business. A significant change was the amendment to the definition of a small company, with the threshold for paid-up share capital being enhanced to ₹10 crore and turnover to ₹100 crore via a notification on 1 December 2025. This change, which further increased limits previously raised in September 2022, allows more companies to benefit from reduced compliance burdens.