Companies Act Section 2(66) Prescribed

Prescribed Section 2 (66)

The term "Prescribed" under the Companies Act, 2013, denotes actions, requirements, or provisions that are specified, determined, or required by regulations, rules, or other legal instruments enacted under the authority of the Act.

It includes rules, forms, standards, procedures, notifications, and guidelines that companies and stakeholders must comply with as per the regulatory framework.

Key Points:

1. Regulatory Framework: 

"Prescribed" provisions are established under the Companies Act itself or by rules prescribed by the Ministry of Corporate Affairs (MCA).

They define the procedural requirements, standards of conduct, disclosure norms, and administrative procedures that companies must adhere to for compliance.

2. Implementation: 

The term "Prescribed" indicates that certain actions or conditions are mandatory and must be followed as per the specified regulations.

It ensures uniformity, clarity, and consistency in legal interpretations and application across different aspects of corporate governance and operations.

3. Examples: 

Prescribed Forms: Formats for filing documents such as annual returns, financial statements, and incorporation forms prescribed under the Companies (Registration Offices and Fees) Rules, 2014.

Prescribed Standards: Accounting standards, auditing standards, and corporate governance guidelines prescribed under the Companies Act and regulations issued by regulatory authorities.

Prescribed Procedures: Procedures for conducting board meetings, general meetings, appointment of auditors, and resolutions passed under specific provisions of the Act.

4. Compliance and Enforcement: 

Companies are required to comply with prescribed requirements and procedures to ensure adherence to legal obligations, transparency in corporate practices, and protection of stakeholder interests.

Non-compliance with prescribed provisions may lead to penalties, fines, legal proceedings, or other regulatory actions as stipulated under the Companies Act.

Legal Framework:

Companies Act, 2013: 

Specifies provisions for framing rules, regulations, and standards that are prescribed for companies, directors, officers, auditors, and other stakeholders.  

Rules and Notifications: 

The MCA and other regulatory bodies issue notifications, circulars, and guidelines to prescribe specific requirements and procedures for implementation and enforcement.