Companies Act, 2013 | Chapter I - Preliminary

Section 2(1) to 2(9) of the Companies Act, 2013: Definitions Explained

Section 2 of the Companies Act, 2013 defines terms used throughout the Act. Clauses (1) to (9) cover the abridged prospectus, accounting standards, alteration, Appellate Tribunal, articles, associate company, auditing standards, authorised capital and banking company.

Reviewed: 7 October 2026 | Indian company law

Interpretation: Section 2 begins with the qualification "unless the context otherwise requires". Each definition must therefore be read alongside the applicable section, rules, notifications and, where relevant, SEBI regulations.

Section 2(1)

Abridged prospectus

Statutory meaning. A memorandum containing the salient features of a prospectus, as specified by the Securities and Exchange Board of India (SEBI) through regulations.

Explanation. It gives prospective investors a concise presentation of key offer information; applicable SEBI requirements govern its form and contents.

Section 2(2)

Accounting standards

Statutory meaning. The accounting standards, including any addendum, applicable to companies or classes of companies under Section 133 of the Companies Act, 2013.

Explanation. Section 133 empowers the Central Government to prescribe standards following the statutory consultation and recommendation process.

Section 2(3)

Alter or alteration

Statutory meaning. Includes making additions, omissions and substitutions.

Explanation. This inclusive definition applies when the Act refers to altering documents or provisions, subject to the relevant procedure and approvals.

Section 2(4)

Appellate Tribunal

Statutory meaning. The National Company Law Appellate Tribunal (NCLAT), constituted under Section 410.

Explanation. NCLAT hears appeals in matters assigned to it by law, including specified appeals from orders of the National Company Law Tribunal (NCLT).

Section 2(5)

Articles

Statutory meaning. The articles of association of a company as originally framed, as altered from time to time, or as applicable under an earlier company law or the Companies Act, 2013.

Explanation. The articles contain internal governance rules and operate subject to the Act and the company's memorandum.

Section 2(6)

Associate company

Statutory meaning. In relation to another company, a company over which that other company has significant influence, but which is not its subsidiary; the definition also includes a joint venture company.

Explanation. Significant influence means control of at least 20% of total voting power, or control of or participation in business decisions under an agreement. A joint venture is a joint arrangement whose jointly controlling parties have rights to its net assets.

Section 2(7)

Auditing standards

Statutory meaning. Standards of auditing, including any addendum, applicable to companies or classes of companies under Section 143(10).

Explanation. These standards inform how a statutory audit is performed and documented.

Section 2(8)

Authorised capital or nominal capital

Statutory meaning. The maximum amount of share capital that a company is authorised by its memorandum to have.

Explanation. It is a ceiling stated in the memorandum, not the same as issued, subscribed or paid-up capital.

Section 2(9)

Banking company

Statutory meaning. A banking company as defined by Section 5(c) of the Banking Regulation Act, 1949.

Explanation. Under that Act, the term refers to a company transacting the business of banking in India; the meaning of banking is further specified in Section 5(b).

Related legal provisions and official sources

These definitions should be applied together with the relevant provisions and subordinate legislation. In particular, Sections 133, 143(10) and 410, the Banking Regulation Act, 1949, and applicable SEBI regulations provide important context.