• Sep
  • 26
  • 2013

COMPANIES ACT 2013 [Provisions w. e .f. 12-09-2013]

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CS Kiran Mukadam

1)            Section 19: Subsidiary company not to hold shares in its holding company:-

The company shall not either by itself or through its nominees, holds any shares in its holding company and no holding company shall allot or transfer its shares to any of its subsidiary companies and any such allotment or transfer of shares of a company to its subsidiary company shall be void. The subsidiary company can hold shares as legal representative of deceased member of holding company, as a trustee and the subsidiary company is a shareholder even before it became a subsidiary company of the holding company.

2)            Section 21: Authentication of documents, proceedings and contracts- 

Following documents may be signed by any key managerial personnel or an officer of the company duly authorized by the Board in this behalf.

  • Document or proceeding requiring authentication by a company; or
  •  contracts made by or on behalf of a company

3)            Section 22: Execution of bills of exchange, etc.- 

  • The  authorized person shall made, accepted, drawn or endorsed a Bill of Exchange, Hundies, Promissory Notes on behalf of a company if made, accepted, drawn, or endorsed in the name of Company.
  • The authorized person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India.
  •  A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the effect as if it were made under its common seal.

4)            Section 23-Public Offer:

  • A public company may issue securities to public through prospectus, a rights issue or a bonus issue.
  • The Public Company need to follow SEBI guidelines.
  • A private company may issue securities by way of rights issue or bonus issue in accordance with the provisions of this Act.

5)            Section 24:Power of Securities and Exchange Board to regulate issue and transfer of securities:

The SEBI shall make regulation for issue and transfer of securities, non-payment of dividend for listed Companies. The Central Government shall make regulation for issue and transfer of securities, non-payment of dividend for other than listed Companies

6)            Section 25: Document  containing offer of securities for sale to be deemed prospectus:

If a company allots or agrees to allot any securities of the company with a view to all or any of those securities being offered for sale to the public, any document by which the offer for sale to the public is made shall, for all purposes, be deemed to be a prospectus issued by the company.

7)            Section 29: Public offer of securities to be in dematerialized form.

  • Every company making public offer  or other class of public companies as may be prescribed shall issue the securities in dematerilised form.
  • Any other Company may convert its securities into dematerialised form or issue its securities in physical form in accordance with the provisions of this Act or in dematerialised form in accordance with the Depositories Act.

8)            Section 30: Advertisement  of prospectus-

The Company who shall publish prospectus through advertisemnt shall be necessary to specify therein the contents of its memorandum as regards the objects, the liability of members and the amount of share capital of the company, and the names of the signatories to the memorandum and the number of shares subscribed for by them, and its capital structure.

9)            Section 31: Shelf prospectus-

Any class or classes of companies, as the Securities and Exchange Board may provide by regulations in this behalf, may file a shelf prospectus  and information memorandum with the Registrar at the time of issue shares to Public.

10)         Section 32: Red herring prospectus  -

A company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus and file to Registrar.

11)         Section 33: Issue of application forms for securities-

No form of application for the purchase of any of the securities of a company shall be issued unless such form is accompanied by an abridged prospectus.

12)         Section 34: Criminal liability for misstatements in prospectus.-

If a prospectus, issued, circulated or distributed under this Chapter, includes any statement which is untrue or misleading in form or context in which it is included or where any inclusion or omission of any matter is likely to mislead, every person who authorizes the issue of such prospectus shall be liable under section 447.

13)         Section 35: Civil liability for misstatements in prospectus-

The company and every person who (a) is a director of the company at the time of the issue of the prospectus; (b) has authorised himself to be named and is named in the prospectus as a director of the company, or has agreed to become such director, either immediately or after an interval of time; (c) is a promoter of the company; (d) has authorised the issue of the prospectus; shall, without prejudice to any punishment to which any person may be liable under section 36, be liable to pay compensation to every person who has sustained such loss or damage.

14)         Section 36:Punishment for fraudulently inducing persons to invest money:-

Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or (b) any agreement, the purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or (c) any agreement for, or with a view to obtaining credit facilities from any bank or financial institution, shall be liable for action under section 447.

15)         Section 37:Action by affected persons-

A suit may be filed or any other action may be taken under section 34 or section 35 or section 36 by any person, group of persons or any association of persons affected by any misleading statement or the inclusion or omission of any matter in the prospectus.

16)         Section 38: Punishment for personation for acquisition, etc., of securities-

Any person who (a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447.

17)         Section 39: Allotment of Securities:-

  • Require to receive minimum amount of subscription in case of public offering  before allotment
  • Application Money= Minimum 5 % of total nominal amount
  • If the stated minimum amount has not been subscribed and the sum payable on application is not received within a period of thirty days from the date of issue of the prospectus, or such other period as may be specified by SEBI the amount received  shall be returned within such time and manner as may be prescribed.

18)         Section 40:Securities to be dealt with in stock exchanges-

  • Before public offering, the Company shall make an application to one or more recognised stock exchange or exchanges and obtain permission for the securities to be dealt with in such stock exchange or exchanges.
  • All monies received on application from the public for subscription to the securities shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any  purpose other than for adjustment against allotment of securities and for the repayment of monies within the time specified by SEBI

19)         Section 44: Nature of shares or debentures-

            The shares or debentures or other interest of any member in a company shall be movable property  transferable in the manner provided by the articles of the company.

20)         Section 45: Numbering of Shares-

Every share in a company having a share capital shall be distinguished by its distinctive number except shares in demat form.

21)         Section 49 to 51-Call on Shares-

  • If any calls for further share capital are made on the shares of a class, such calls shall be made on a uniform basis on all shares falling under that class (Section 49)
  • A company may, if so authorised by its articles, accept from any member, the whole or a part of the amount remaining unpaid on any shares held by him, even if no part of that amount has been called up and  A member of the company limited by shares shall not be entitled to any voting rights in respect of the amount paid by him. (Section 50)
  • A company may, if so authorised by its articles, pay dividends in proportion to the amount paid-up on each share (Section 51)

22)         Section 57:Punishment for personation  of shareholder.-

If any person deceitfully personates as an owner of any security or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such security or interest or any such share warrant or coupon, or receives or attempts to receive any money due to any such owner, he shall be punishable with imprisonment.

23)         Section 58: Refusal for Transfer of Share -

  • If a private company limited by shares refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interest of a member in the company, it shall within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the  company, send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.
  • If a private company limited by shares refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interest of a member in the company, it shall within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal.
  • If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no intimation has been received from the company, within ninety days of the delivery of the instrument of transfer or intimation of transmission, appeal to the Tribunal.
  • The Tribunal after hearing shall direct that the transfer or transmission shall be registered by the company and the company shall comply with such order within a period of ten days of the receipt of the order; or  direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved.

24)         Section 59: Rectification of register of members-

  • If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted there from, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Tribunal.
  • The Tribunal may either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to  pay damages, if any, sustained by the party aggrieved.

25)         Section 60- Publication of authorised, subscribed and paid-up capital -

  • If any notice, advertisement or other official publication, or any business letter, billhead or letter paper of a company contains a statement of the amount of the authorised capital of the company, such notice, advertisement or other official publication, or such letter, billhead or letter paper shall also contain a statement, in an equally prominent position and in equally conspicuous characters, of the amount of the capital which has been subscribed and the amount paid-up.
  • In case of default, the company shall be liable to pay a penalty of ten thousand rupees and every officer of the company who is in default shall be liable to pay a penalty of five thousand rupees, for each default.

26)         Section 65-Unlimited company to provide for reserve share capital on conversion into limited company:-

Unlimited Company into Limited Company, the Company shall follow following two conditions In case of conversion

  • Increase the nominal amount of its share capital by increasing the nominal amount of each of its shares,
  • A specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.

27)         Section 69-Transfer to Capital Redemption Reserve:

  • The Company shall be transferred to the capital redemption reserve account a sum equal to the nominal value of the shares so purchased under the buyback of share and details of such transfer shall be disclosed in the balance sheet.
  • Apply CRR amount only for fully paid bonus shares

28)         Section 70-Prohibition for buy-back:

The Company shall directly or indirectly purchase its own shares or other specified securities through any subsidiary company including its own subsidiary companies or through any investment company or group of investment companies;

29)         Section 86-Punishment for contravention  of Chapter VI [Section 77 to 87]

30)         Section 91- Power to close register of members or debenture holders or other security holders:

Max= 45 days aggregate in the year and Max.30 days at one time. Min. Seven days notice before closing.

31)         Section 100- Calling of extraordinary general meeting:

  • The Board may, whenever it deems fit, call an extraordinary general meeting of the company.
  • Request from shareholders- holders who holds more than 1/10 of total paid up capital
  • Requisitionists sent its requisition to the registered office of the company.
  • The Board does not, within twenty-one days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitonists themselves within a period of three months from the date of the requisition.

32)         Section 102-Statement to be annexed to notice-

  • Ordinary Business at AGM-
    • Øthe consideration of financial statements and the reports of the Board of Directors and auditors;
    • Øthe declaration of any dividend;
    • Øthe appointment of directors in place of those retiring;
    • Øthe appointment of, and the fixing of the remuneration of, the auditors;
    • Other Business other than above in AGM and all business in General meeting other than AGM shall be treated as Special Business.
    • Annex Explanatory statement for every Special Business containing-
      • ØThe nature of concern or interest, financial or otherwise, if any, in respect of each items of (i) every director and the manager, if any; (ii) every other key managerial personnel and their relatives
      • Ømeaning, scope and implications of the items of business for understanding of member and taking the decision
      • ØDetails of affection on shareholding pattern of another company, if any
      • Øthe time and place where such document can be inspected

33)         Section 103-Quorum for meetings-

  • Minimum Quorum for General Meeting of Public Company-
    • Five members personally present if the number of members as on the date of meeting is not more than one thousand.
    • Fifteen members personally present if the number of members as on the date of meeting is more than one thousand but up to five thousand
    • Thirty members personally present if the number of members as on the date of the meeting exceeds five thousand
    • Minimum Quorum for General Meeting of Private Company is two members personally present.
    • If Quorum is not present within half an hour, the meeting should be adjourned. The adjourned meeting shall be called on same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine. the company shall give not less than three days notice to the members either individually or by publishing an advertisement in the newspapers

34)         Section 104- Chairman of meetings-

The members personally present at the meeting shall elect one of themselves to be the Chairman thereof on a show of hands, unless the articles of the company otherwise provide,

35)         Section 105-Proxy-

  • Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf.
  • A proxy shall not have the right to speak at such meeting and shall not be entitled to vote except on a poll.
  • In every notice calling a meeting of a company, there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and vote instead of himself, and that a proxy need not be a member.
  • The instrument appointing a proxy shall (a) be in writing; and (b) be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a body corporate, be under its seal or be signed by an officer or an attorney duly authorised by it.
  • During the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, Every member entitled to vote at a meeting of the company, or on any resolution to be moved thereat to inspect the proxies lodged, at any time during the business hours of the company. Minimum three days notice need to given to the Company.

36)         Section 107- Restriction on voting rights-

The Company shall prohibit voting rights of member in case of unpaid call or lien on share.

37)         Section 108-Voting by show of hands-

At any general meeting, a resolution put to the vote of the meeting shall, unless a poll is demanded under section 109 or the voting is carried out electronically, be decided on a show of hands.

38)         Section 111-Circulation of members’ resolution-

  • On requisition in writing of such number of members, A company shall give notice to members of any resolution which may properly be moved and is intended to be moved at a meeting; and circulate to members any statement with respect to the matters referred to in proposed resolution or business to be dealt with at that meeting.
  • A copy of the requisition signed by the requisitionists is deposited at the registered office of the company not less than six weeks before the meeting in the case of a requisition requiring notice of a resolution. Otherwise, not less than two weeks before the meeting.
  • Requisitionists is deposited a sum reasonably sufficient to meet the company’s expenses in giving effect this resolution.

39)         Section 112-Representation of President and Governors in meetings.

  • The President of India or the Governor of a State, if he is a member of a company, may appoint such person as he thinks fit to act as his representative at any meeting of the company or at any meeting of any class of members of the company.
  • Such Member shall be deemed to be a member of such a company and shall be entitled to exercise the same rights and powers, including the right to vote by proxy and postal ballot, as the President or, as the case may be, the Governor could exercise as a member of the company.

40)         Section 113- Representation of corporations at meeting of companies and of creditors-

  • The Company /body corporate  authorise¸ by resolution of its Board of Directors  any person to act as a representative at any meeting of the company, if the Company is member / creditor of a Company
  • Such authorised person shall be entitled to exercise the same rights and powers, including the right to vote by proxy and by postal ballot, on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the company.

41)         Section 114- Ordinary and Special Resolution:

Ordinary resolution requires 51% majority and Special Resolution requires ¾ majority required for passing the same

42)         Section 116- Resolutions passed at adjourned meeting-

If a resolution is passed at an adjourned meeting of the Company or Board of Directors, the resolution shall be treated as having been passed on the date on whichit was in fact passed, and shall not be deemed to have been passed on any earlier date.

43)         Section 127- Punishment for failure to distribute dividends-

  • Failure to distribute dividend within 30 days from date of declaration , every director shall be liable imprisonment may extend to two years and with fine which shall not be less than one thousand rupees for every day during which such default continues.
  • The company shall be liable to pay simple interest at the rate of eighteen per cent. per annum during the period for which such default continues
  • Exception to this rule-
    • Where the dividend could not be paid by reason of the operation of any law;
    • Where a shareholder has given directions to the company regarding the payment of the dividend and those directions cannot be complied with and the same has been communicated to him;
    • Where there is a dispute regarding the right to receive the dividend;
    • Where the dividend has been lawfully adjusted by the company against any sum due to it from the shareholder; or
    • Where, for any other reason, the failure to pay the dividend or to post the warrant within the period under this section was not due to any default on the part of the company.

44)         Section 133 : Central Government to prescribe accounting standards-

The Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949, in consultation with and after examination of the recommendations made by the National Financial Reporting

Authority.

45)         Section 161-Appointment of additional director, alternate director and nominee director-

  • The Board of Directors, if  so authorised by its Articles,  have power to appoint additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.
  • The Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence for a period of not less than three months from India. No person shall be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of this Act .[Not effective now]
  • The Board, subject to provision of Articles,  may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company.
  • In the case of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, be filled by the Board of Directors at a meeting of the Board.

46)         Section 162-Appointment of directors to be voted individually-

At a general meeting of a company, a motion for the appointment of two or more persons as directors of the company by a single resolution shall not be moved unless a proposal to move such a motion has first been agreed to at the meeting without any vote being cast against it. Otherwise, it is void. A motion for approving a person for appointment, or for nominating a person for appointment as a director, shall be treated as a motion for his appointment.

47)         Section 163- Proportional representation for appointment of directors.

The articles of a company may provide for the appointment of not less than two-thirds of the total number of the directors of a company in accordance with the principle of proportional representation, whether by the single transferable vote or by a system of cumulative voting or otherwise and such appointments may be made once in every three years and casual vacancies of such directors shall be filled through passing a resolution in Board Meeting.

48)         Section 176- Defects in appointment of directors not to invalidate actions taken.

If there was subsequently noticed that his appointment was invalid by reason of any defect or disqualification or had terminated, act done before this noticed by a person as a director shall not be deemed to be invalid.

49)         Section 180-Restrictions on powers of Board-

The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution-

  • To sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.
  • To invest otherwise in trust securities the amount of compensation received by it as a result of any merger or amalgamation.
  • To borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the ordinary course of business. In Special resolution, it shall specify the total amount up to which monies may be borrowed by the Board of Directors.
  • To remit, or give time for the repayment of, any debt due from a director.

50)         Section 181- Company to contribute to bona fide and charitable funds-

The Board of Directors of a company may contribute to bona fide charitable and other funds. Prior permission of the company in general meeting shall be required for such contribution in case any amount the aggregate of which, in any financial year, exceed five per cent. of its average net profits for the three immediately preceding financial years.

51)         Section 182-Prohibitions and restrictions regarding political contributions-

  • A company, other than a Government company and a company which has been in existence for less than three financial years, may contribute not exceed seven and a half per cent of its average net profits during the three immediately preceding financial years directly or indirectly to any political party.
  • Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed.
  • Amount of Contribution includes-
    • Advertisement on behalf or for the advantage of Political Party.
    • A donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which can reasonably be regarded as likely to affect public support for a political party

52)         Section 183-Power of Board and other persons to make contributions to national defense fund, etc.-

The Board of Directors of any company or any person or authority exercising the powers of the Board of Directors of a company, or of the company in general meeting, may, contribute such amount as it thinks fit to the National Defense Fund or any other Fund approved by the Central Government for the purpose of national defense. Every company shall disclose in its profits and loss account the total amount during the financial year to which the amount relates.

53)         Section 185 –Loan to Directors

  • The Company shall not, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person.
  • A company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.
  • The section not apply to the giving of any loan to a managing or whole-time director (i) as a part of the conditions of service extended by the company to all its employees; or (ii) pursuant to any scheme approved by the members by a special resolution;

54)         Section 192: Restriction on non-cash transactions involving directors-

  • Without prior approval in General Meeting, Company shall not enter into an arrangement by which (a) a director of the company or its holding, subsidiary or associate company or a person connected with him acquires or is to acquire assets for consideration other than cash, from the company; or (b) the company acquires or is to acquire assets for consideration other than cash, from such director or person so connected.
  • If the director or connected person is a director of its holding company, approval under this sub-section shall also be required to be obtained by passing a resolution in general meeting of the holding company.
  • Resolution contain the particulars of the arrangement along with the value of the assets involved in such  arrangement duly calculated by a registered valuer.

55)         Section 194-Prohibition on forward dealings in securities of company by director or KMP-

Director of a company or any of its key managerial personnel shall not buy in the company, or in its holding, subsidiary or associate company (a) a right to call for delivery or a right to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures; or  (b) a right, as he may elect, to call for delivery or to make delivery at a specified price and within a specified time, of a specified number of relevant shares or a specified amount of relevant debentures.

56)         Section 202- Compensation for loss of office of managing or whole-time director or manager.

  • A company may make payment to a managing or whole-time director or manager, but not to any other director, by way of compensation for loss of office, or as consideration for retirement from office or in connection with such loss or retirement. No payment allowed in following situation-
    • Øwhere the director resigns from his office as a result of the reconstruction of the company, or of its amalgamation with any other body corporate or bodies corporate and is appointed as the managing or whole-time director, manager or other officer of the reconstructed company or of the body corporate resulting from the amalgamation
    • Øwhere the director resigns from his office otherwise than on the reconstruction of the company or its amalgamation as aforesaid;
    • Øwhere the office of the director is vacated under sub-section (1) of section 167;
    • Øwhere the company is being wound up, whether by an order of the Tribunal or voluntarily, provided the winding up was due to the negligence or default of the director
    • Øwhere the director has been guilty of fraud or breach of trust in relation to, or of gross negligence in or gross mismanagement of, the conduct of the affairs of the company or any subsidiary company or holding company thereof;
    • ØWhere the director has instigated, or has taken part directly or indirectly in bringing about, the termination of his office.
    • Any payment made to a managing or whole-time director or manager shall not exceed the remuneration which he would have earned if he had been in office for the remainder of his term or for three years, whichever is shorter, calculated on the basis of the average remuneration actually earned by him during a period of three years immediately preceding the date on which he ceased to hold office, or where he held the office for a lesser period than three years, during such period.
    • such payment shall not be made to the director in the event of the commencement of the winding up of the company, whether before or at any time within twelve months after, the date on which he ceased to hold office, if the assets of the company on the winding up, after deducting the expenses thereof, are not sufficient to repay to the shareholders the share capital, including the premiums, if any, contributed by them.

57)         Section 379-Application of Act to foreign companies-

If  one or more citizens of India or by one or more companies or bodies corporate incorporated in India, or by one or more citizens of India and one or more companies or bodies corporate incorporated in India, whether singly or in the aggregate holds not less than fifty per cent. of the paid-up share capital, whether equity or preference or partly equity and partly preference, of a foreign company , such company shall comply with the provisions of this Chapter and such other provisions of this Act as may be prescribed with regard to the business carried on by it in India as if it were a company incorporated in India.

58)         Section 382-Display of name, etc., of foreign company-

  • Every foreign company shall exhibit on the outside of every office or place where it carries on business in India, the name of the company and the country in which it is incorporated, in letters easily legible in English characters, and also in the characters of the language or one of the languages in general use in the locality in which the office or place is situate
  • Every foreign company shall  cause the name of the company and of the country in which the company is incorporated, to be stated in legible English characters in all business letters, billheads and letter paper, and in all notices, and other official publications of the company.
  • If the liability of the members of the company is limited, cause notice of that fact (i) to be stated in every such prospectus issued and in all business letters, bill-heads, letter paper, notices, advertisements and other official publications of the company, in legible English characters; and (ii) to be conspicuously exhibited on the outside of every office or place where it carries on business in India, in legible English characters and also in legible characters of the language or one of the languages in general use in the locality in which the office or place is situate.

59)         Section 383-Service on foreign company.

Any process, notice, or other document required to be served on a foreign company shall be deemed to be sufficiently served, if addressed to any person whose name and address have been delivered to the Registrar under section 380 and left at, or sent by post to, the address which has been so delivered to the Registrar or by electronic mode.

60)         Section 386- Interpretation- For CHAPTER XXII,

  • the expression “director”, in relation to a foreign company, includes any person in accordance with whose directions or instructions the Board of Directors of the company is accustomed to act; and
  • The expression “place of business” includes a share transfer or registration office.

61)         Section 394- Annual reports on Government companies.

If the Central/ State government is a member of a Government company, the Central Government shall cause an annual report on the working and affairs of that company to be (a) prepared within three months of its annual general meeting before which the comments given by the Comptroller and Auditor-General of India and the audit report is placed under the proviso to sub-section (6) of section 143; and (b) as soon as may be after such preparation, laid before both Houses of Parliament/ State Legislature  together with a copy of the audit report and comments upon or supplement to the audit report, made by the Comptroller and Auditor-General of India.

62)         Section 405-Power of Central Government to direct companies to furnish information or statistics-

The Central Government may, by order, require companies generally, or any class of companies, or any company, to furnish such information or statistics with regard totheir or its constitution or working, and within such time, as may be specified in the order.

63)         Section 407-National Company Law Tribunal and Appellate Tribunal- Definition

64)         Section 408-Constitution of National Company Law Tribunal-

The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, a Tribunal to be known as the National Company Law Tribunal consisting of a President and such number of Judicial and Technical members, as the Central Government may deem necessary, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force.

65)         Section 409- Qualification of President and Members of Tribunal.

66)         Section 410-Constitution of Appellate Tribunal-

67)         Section 411-Qualifications of chairperson and Members of Appellate Tribunal-

68)         Section 412-Selection of Members of Tribunal and Appellate Tribunal

69)         Section 413- Term of office of President, chairperson and other Members.

70)         Section 414-Salary,Allowances and other terms and conditions of service of Members.

71)         Section 439-Offences to be non cognizable-

  • Every offence under this Act except the offences referred to in sub-section (6) of section 212 shall be deemed to be non-cognizable within the meaning of the said Code.
  • No court shall take cognizance of any offence under this Act which is alleged to have been committed by any  company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder of the company, or of a person authorised by the Central Government in that behalf
  • The court may take cognizance of offences relating to issue and transfer of securities and non-payment of dividend, on a complaint in writing, by a person authorised by the Securities and Exchange Board of India:

72)         Section 443-Power of Central Government to appoint company prosecutors.

73)         Section 444- Appeal against acquittal.

74)         Section 445-Compensation for accusation without reasonable cause.

75)         Section 446-Application of fines.

76)         Section 447-Punishment for fraud.

Any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud.

77)         Section 448-Punishment for false statement

78)         Section 449-Punishment for false evidence.

If any person intentionally gives false evidence (a) upon any examination on oath or solemn affirmation, authorised under this Act; or (b) in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act, he shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and with fine which may extend to ten lakh rupees.

79)         Section 450-Punishment where no specific penalty or punishment is provided-

The company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues in case contravention of provision of the act and no penalty or punishment is provided elsewhere

80)         Section 451-Punishment in case of repeated default-

If a company or an officer of a company commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second or subsequent occasions within a period of three years, then, that company and every officer thereof who is in default shall be punishable with twice the amount of fine for such offence in addition to any imprisonment provided for that offence.

81)         Section 452-Punishment for wrongful withholding of property.

82)         Section 453-Punishment for improper use of “Limited” or “Private Limited”-

If any person or persons trade or carry on business under any name or title, of which the word “Limited” or the words “Private Limited” or any contraction or imitation thereof is or are the last word or words, that person or each of those persons shall, unless duly incorporated with limited liability, or unless duly incorporated as a private company with limited liability, as the case may be, punishable with fine which shall not be less than five hundred rupees but may extend to two thousand rupees for every day for which that name or title has been used.

83)         Section 456-Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government or any other person in respect of anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or orders made thereunder, or in respect of the publication by or under the authority of the Government or such officer, of any report, paper or proceedings.

84)         Section 457-Nondisclosure of Information in certain cases.

The Registrar, any officer of the Government or any other person shall not be compelled to disclose to any court, Tribunal or other authority, the source from where he got any information.

85)         Section 458-Delegation by Central Government of its powers and functions.

The Central Government may, by notification, and subject to such conditions, limitations and restrictions as may be specified therein, delegate any of its powers or functions under this Act other than the power to make rules to such authority or officer.

86)         Section459- Powers of Central Government or Tribunal to accord approval, etc., subject to conditions and to prescribe fees on applications-

The Central Government or the Tribunal is required or authorised by any provision of this Act (a) to accord approval, sanction, consent, confirmation or recognition to, or in relation to, any matter; or (b) to give any direction in relation to any matter; or (c) to grant any exemption in relation to any matter.

every application which may be, or is required to be, made to the Central Government or the Tribunal under any provision of this Act shall be accompanied by such fees as may be prescribed:

87)         Section 460-Condonation of delay in certain cases.

If any application required to be made to the Central Government / ROC under any provision of this Act in respect of any matter is not made within the time specified therein, that Government may, for reasons to be recorded in writing, condone the delay.

88)         Section 461-Annual report by Central Government.

89)         Section 462-Power to exempt class or classes of companies from provisions of this Act.

90)         Section 463-Power of court to grant relief in certain cases.

91)         Section 467-Power of Central Government to amend Schedules.

92)         Section 468-Powers of Central Government to make rules relating to winding up.

93)         Section 469-Power of Central Government to make rules.

94)         Section 470-Power to remove difficulties.


2 Responses to “COMPANIES ACT 2013 [Provisions w. e .f. 12-09-2013]”

  1. Nem Singh says:

    Application of section 19 of the Companies Act 1013 whether has override effect where there in the case subsidiaries already hold shares in their holding company before the application of this section”s provisions.

  2. Atul Gupta says:

    Dear Mam,

    In this Companies Act i have found some correction, point no. 36 and 37 in these points i have found that they are define wrong section (107 instead of 106 and 108 instead of 107), and in this draft Section 195 have not shown by admin so kindly correct all these mistake.

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