The Companies Act is a legislation that governs the formation, functioning, and management of companies. Explore the key provisions, compliance requirements, and legal framework under the Companies Act.
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Company Law : Explore the Calcutta High Court's decision in Uphealth Holdings, INC. Vs Dr. Syed Sabahat Azim & Ors. regarding the applicability ...
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The ITAT held that for the computation of MAT, profits disclosed as per the audited accounts should be adopted, provided the accounts are prepared in the prescribed format. If the accounts are not so prepared, the Tax Authority may substitute the amount declared as per the Profit and Loss Account (P&L) with the appropriate amount, regardless of the fact that the accounts are certified as complying with the prescribed format by auditors.
In view of the vastness of the subject, the complications and listening at many of my colleagues, I have decided to present a small brief on Companies to be formed under the provisions of Companies Act, 1956, the difference between Private Limited and Public Limited Companies, the applicable law and also the complications. I know the vastness of the subject and I just want to present a small brief as follows:
The assessee earned a capital profit of Rs. 10.38 crores on sale of rights to immovable property. The said profit was directly credited to the capital reserves in the balance sheet instead of being routed through the Profit & loss account. The accounts of the assessee company were duly certified by the auditors and were also adopted in the AGM. The audited accounts were filed with ROC. In the computation of “book profits” for s. 115JB, the said capital profits were not included.
Section 195 of Companies Act, 1956 says that where minutes of the proceedings of any general meeting of the company or of any meeting of its Board of directors or of a committee of the Board have been kept in accordance with the provisions of section 193, then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and in particular, all appointments of directors or liquidators made at the meeting shall be deemed to be valid.
Understanding settled principles of law is very very important while presenting or pursuing a case before a Court of law, Board or any Tribunal. Keeping into mind the object of the enactment, the subject, the societal scenario etc. our Courts settled certain principles and the same are to be followed by all Courts or Tribunals unless overruled by the Competent Court or by a larger bench. There is a principle in Criminal Law that an offence should be proved beyond reasonable doubt and an innocent should not be punished. It is an example and the Courts had laid down many principles and certain principles are inherent in the enactment itself.
The transaction involves a global acquisition of a banking business by the Purchaser from the Seller. Consequent thereto, all assets and liabilities in India will be acquired by the Purchaser from the Seller. The acquisition of the assets and liabilities in India will either be through: (a) slump sale process, in which the undertaking as a going concern will be transferred by the Seller to the Purchaser for a lump sum consideration, or (b) through a court approved scheme of reconstruction under section 394 of the Companies Act and section 44 of the Banking Regulation Act under which all the assets and liabilities will be transferred from the Seller to the Purchaser, or (c) individual transfer of assets and liabilities by the Seller to the Purchaser.
A brief about Arbitration Mechanism: In order to reduce the delay in courts in the process of traditional adjudication mechanism, the Alternative Disposal Mechanism (ADR) was mooted. The dispute resolution through Conciliation, Arbitration and Mediation etc., is regarded as alternative mechanism to resolve the disputes between or among the parties in a defined legal relationship.
With the experience of looking at the litigation before the Company Law Board and the Company Court, with the privilege of looking at various judgments under the provisions of Companies Act, 1956 while writing a commentary on Company Law and with what I have heard from few shareholders when they have grievance against the Company or the majority, I would like to express my views on the dispute resolution mechanism under the provisions of Companies Act, 1956.
Section 397 and 398 of the Companies Act, 1956 deals with “oppression” and “mismanagement” by the majority in a Company against the Minority Shareholders. How to construe “minority” for the purpose of section 397/398 is dealtwith under section 399 which prescribes qualification to approach the Company Law Board under section 397/398 of the Act. What amounts to “oppression” and is oppression completely different from “mismanagement” as dealwith under section 398; is another interesting issue to look into.
S. 115JB(1) of the Income-tax Act, 1961 (Act in short) provides for payment of a minimum alternate tax in case the Income-tax computed on the total income falls short of 10% of the book profits of the company. For ensuring that companies do not adopt accounting practices to render the provision otiose, Ss.(2) requires the profit and loss account of companies to be prepared as per Parts II and III of Schedule VI to the Companies Act, 1956. Proviso to this sub-section further ensures that the accounting policies, accounting standards and the method and rates of depreciation adopted for the purposes of S. 210 of the Companies Act, are not varied while computing ‘book profit’ u/s.115JB.
