Companies Act, 1956 And Companies Bill, 2012

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Companies Act, 1956 And Companies Bill, 2012

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COMPANIES ACT, 1956
AND

COMPANIES BILL, 2012
(BILL NO. 121-C OF 2O11)
A Comparative By Team Manupatra
-...

-December

2012

- THE HISTORY - TOPICAL COMPARATIVE

-December

2012

... THE HISTORY

-

December 2012

2008 Bill •Introduced in Lok Sabha on 23.10.08 •To replace the Companies Act, 1956 • Lapsed due to dissolution of Parliament

2009 Bill •2008 bill modified •Re-introduced in 2009 on 3.8.09

Bill referred to Standing Committee for review Report tabled in Lok Sabha on August 31, 2010

2011 Bill •Introduced in Lok Sabha on December 14, 2011

Was shelved for taking up the same in winter session of Parliament on December 22, 2011

2011 Bill • Passed by Lok Sabha on December 18, 2012 as the Companies Bill 2012

December 2012

THE ACT OF 1956 & THE ACT AS PROPOSED TO BE....

Details Parts/ Chapter Sections Schedules No. of clauses in Section 2 (Definitions)

Companies Act, 1956 13 658 15 67

Companies Bill, 2012 29 470 7 95

... TOPICAL COMPARATIVE

-

December 2012

DEFINITIONS
Details Companies Bill, 2012 New Definitions – as Some of the new definitions as introduced are of Accounting introduced Standards, Auditing Standards, Associate Company, Chief (Clause 2) Executive Officer, Chief Financial Officer, Control, Deposit, Employee Stock Option, Financial Statement, Global Depository Receipt, Indian Depository Receipt, Independent Director, Interested Director, Key Managerial Personnel, Promoter, One Person Company, Small Company, Turnover, Voting Right etc.. Details Definitions – Modified/ other important terms Companies Act, 1956 vis-à-vis Companies Bill, 2012 • Incase of Private Limited Company [Section 3 & Cl. 2(68) – Maximum number of members proposed to be increased from 50 to 200 • Private company which is a subsidiary of a public company shall be deemed to be a public company. • Key Managerial Person (KMP) – Cl. 2(51) states that KMP includes the Chief Executive Officer or the managing director or the manager; the company secretary; the Chief Financial Officer if the Board of Directors appoints him; and such other officer as may be prescribed;

DEFINITIONS
Details Definitions – Modified/ other important terms Companies Act, 1956 vis-à-vis Companies Bill, 2012
• Scope of the term “officer who is in default” enlarged – The term was defined in Section 5 of the Act. Its scope has now been enlarged. It now states includes as under: (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified; (iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; (vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer.

DEFINITIONS
Details Definitions – Modified/ other important terms Companies Act, 1956 vis-à-vis Companies Bill, 2012
• Definition of the term “Subsidiary Company” modified – The term is defined in Section 4 of the Act. Its scope has now been modified to mean a Company in which the holding Company – (i) Controls the composition of the Board of Directors; or (ii) Exercises or controls more than one half of the total share capital (instead of equity share capital as prescribed under the 1956 Act) either at its own or together with one or more of its subsidiary companies. Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

NEW CONCEPTS/ TERMS
Details
Concept of One Person Company (OPC) – Cl. 2(62) Concept of Small Companies – Cl. 2(85)

Companies Bill, 2012
It means a Company which has only one person as a member; means a company, other than a public company — with paid-up share capital not exceeding fifty lakh rupees or such amount as may be prescribed, not to be more than five crore rupees; or turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees. This will include a holding company or a subsidiary company; a company formed with charitable objects; or a company or body corporate governed by any special Act; (i) Promoter is one who has been named as such in a prospectus or is identified by the company in the annual return, or (ii) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (iii) in accordance with whose advice, directions or instructions the Board of Directors is accustomed to act. Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity.

Term ‘Promoter’ defined – Cl. 2(69)

NEW CONCEPTS/ TERMS
Details
Directors

Companies Bill, 2012
• Duties of the directors towards a company prescribed (not provided in the Companies Act, 1956). • Maximum there can be15 directors. This number can go up on the passing of special resolution. • In certain prescribed companies atleast one woman director should be appointed • Every company to have one resident director, i.e. a director who has stayed in India for minimum 182 days in the previous calendar year. • Every company belonging to such class or description of companies as may be prescribed shall have Managing Director (MD) or Chief Executive • Director (CEO) or Manager and in their absence, a Whole time Director (WTD) TD and a Company Secretary. • Individual not to be the Chairman of the company as well as the MD or CEO of the company at the same time (AoA can provide for this); • Every whole time KMP to be appointed by a resolution at BOD meeting; • A WTKMP not to hold office in more than one company at the same time. • Any vacancy in the office of any KMP to be filled up by the BOD within 6 months. • Provisions relating to separation of office of Chairman and Managing Director (MD) modified to allow, in certain cases, a class of •companies having multiple business and separate divisional MDs to appoint same person as ‘Chairman as well as MD’

NEW CONCEPTS/ TERMS
Details
Concept of Independent Directors – Cl. 149(5)

Companies Bill, 2012
All listed companies shall have at least one-third of the Board as independent directors. • Such other class or classes of public companies as may be prescribed by the Central Government shall also be required to appoint independent directors. • The independent director has been clearly defined in the Bill. • Nominee director nominated by any financial institution, or in pursuance of any agreement, or appointed by any government to represent its shareholding shall not be deemed to be an independent director. • An independent director shall not be entitled to any remuneration other than sitting fee, reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members. • An Independent director shall not be entitled to any stock option. •Only an independent director can be appointed as alternate director to an independent director. [clause 161(2)].

NEW CONCEPTS/ TERMS
Details
Duties of Directors – Cl. 166

Companies Bill, 2012
• To act in accordance with the articles of the company. • To act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. • To exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. • Not to involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. • Not to achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company. • Not to assign his office and any assignment so made shall be void. • A Director may resign from his office by giving a notice in writing and the Board shall, on receipt of such notice take note of the same and the company shall intimate the Registrar and place such resignation in the subsequent general meeting of the company. The director shall also forward copy of resignation with reasons to Registrar. The clause further provides for the date on which the notice of resignation shall take effect. The director shall be liable for the offences occurred during his tenure.

Resignation of Director [Cl. 168]

NEW CONCEPTS/ TERMS
Details
Cross Border Mergers

Companies Bill, 2012
• The Bill provides for Cross Border Mergers which means that a foreign Company may with due prior approval of the Reserve Bank of India, merge or amalgamate in to a Company registered under this Act or vice-versa. • Payment of consideration to the shareholders of the merged Company in cash, or in Depository Receipts (DRs) or partly by cash and DRs. • Company can maintain Books of Account in electronic mode • The Bill provides for conduct of internal audit of prescribed class or classes of companies. • 5 Year Tenure for Auditors: - Audit firm or an individual including an LLP to be appointed for 5 yrs, i.e. to hold office upto the date of the sixth AGM. - Appointment of auditors for five years shall be subject to ratification by members at every Annual General Meeting. Company or body corporate to adopt uniform financial year i.e. 1st April to 31st March every year except in certain exceptional cases. Existing Companies not adopting 1st April to 31st March as financial year for the purposes of Companies Act to align themselves with this within two years of commencement of the Companies Act, 2012.

Account Books/ Audit/ Auditors

Uniform Financial Year

NEW CONCEPTS/ TERMS
Details
Serious Fraud Investigating Office (SFIO) [Cl. 211]

Companies Bill, 2012
• This is a new clause and seeks to provide that the Central Government shall constitute Serious Fraud Investigation Office (SFIO). • The SFIO will be headed by a director and will consist of experts from various disciplines. • The Central Government shall also appoint a Director in the SFIO not below the rank of Joint Secretary and may also appoint such experts and other officers as it considers necessary for efficient discharge of functions.

Corporate Social Responsibility [Cl. 135]

• Every company having specified net worth or turnover or net profit during any FY shall constitute the Corporate Social Responsibility Committee of the Board. The composition of the committee shall be included in the Board's Report. • The Board shall disclose the content of policy in its report and place on website, if any of the Company. • The Board shall endeavour to ensure that atleast two per cent of average net profits of the Company made during three immediately preceding financial years shall be spent on such policy every year. If the company fails to spend such amount the Board shall give in its report the reasons for not spending.

NEW CONCEPTS/ TERMS
Details
E-governance Auditor’s Accountability/ NFRA

Companies Bill, 2012
• Maintenance and allowing inspection of documents by companies in electronic form being allowed for the first time • Rotation of auditors and audit firms being provided for. • Stricter and more accountable role for auditor being retained. Provisions relating to prohibiting auditor from performing nonaudit services revised to ensure independence and accountability of auditor. • Subject to the maximum prescribed number of companies, the members of a company may resolve that the auditor or audit firm of such company shall not become auditor in companies beyond the number as may be specified in such resolution. • National Advisory Committee on Accounting and Auditing Standards (NACAAS) proposed to be renamed as National Financial Reporting Authority (NFRA) with a mandate to ensure monitoring and compliance of accounting and auditing standards and to oversee quality of service of professionals associated with compliance. • Authority to consider the International Financial Reporting Standards and other internationally accepted accounting and auditing policies and standards. Contd...

NEW CONCEPTS/ TERMS
Details Companies Bill, 2012
… contd.
• The Authority is also proposed to be empowered with quasi judicial powers to ensure independent oversight over professionals. • Cost Audit: Cost records to be mandated for companies engaged in production of such goods or rendering of such services as may be prescribed. The concept of "cost auditing standards" being mandated. • Secretariat Audit: Prescribed class of companies would need to attach with the Board's Report, a Secretarial Audit Report given by a company secretary in practice.

NEW CONCEPTS/ TERMS
Details
Managerial Remuneration

Companies Bill, 2012
• Provisions relating to limits on remuneration provided in the existing Act (11% of net profits) included. • For companies with no profits or inadequate profits remuneration shall be payable in accordance with new Schedule of Remuneration annexed to the Bill and in case a company is not able to comply with such Schedule, approval of Central Government would be necessary. • Individual limits for remuneration enhanced in the Bill vis-avis the existing limits. • Concept of payment of periodic fees which shall include sitting fees to directors being included in the Bill. • Independent Directors (IDs) not to get stock option: IDs not to get stock option but may get payment of fees and profit linked commission subject to limits specified in the Bill/rules. • Central Government may prescribe amount of fees under the rules. • It is proposed to create and maintain as "Mediation and Conciliation Panel" for facilitating mediation and conciliation between parties during any proceeding under the proposed Legislation before the Central Government or Tribunal.

Mediation and Conciliation Panel

NEW CONCEPTS/ TERMS
Details
Protection for Minority Shareholders

Companies Bill, 2012
• Exit option to shareholders in case of dissent to change in object for which public issue was made. • Specific disclosure regarding effect of merger on creditors, key managerial personnel, promoters and non-promoter shareholders is being provided. The Tribunal is being empowered to provide for exit offer to dissenting shareholders in case of compromise or arrangement. • The Board may have a director representing small shareholders who may be elected in such manner as may be prescribed by rules. • Acceptance of deposits from public subject to a more stringent regime. • Central Government to have power to prescribe class or classes of companies which shall not be permitted to allow use of proxies. The Bill also to have provisions to provide that a person shall have proxies for such number of members /such shares as may be prescribed. • Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included.

Investor Protection

NEW CONCEPTS/ TERMS
Details
Insider Trading [Cl. 195]

Companies Bill, 2012
• This is a new clause and seeks to prohibit directors or key managerial person of the company to deal in securities of a company, or counsel, procure or communicate, directly or indirectly, about any non-public price-sensitive information to any person. • This clause further provided for penal provision in case of contravention. • Acceptance of deposits from public subject to a more stringent regime. • Central Government to have power to prescribe class or classes of companies which shall not be permitted to allow use of proxies. The Bill also to have provisions to provide that a person shall have proxies for such number of members /such shares as may be prescribed. • Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included.

Investor Protection

HOLDING COMPANY AND SUBSIDIARY
Details Meaning/ Restrictions in regard to Subsidiary Companies Act, 1956 No restriction Companies Bill, 2012 Class or classes of holding Companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed [Cl. 2(87)]

SHARES - TRANSFER
[S. 111
OF THE

1956 ACT AND CL. 58 OF THE BILL]

Details Transfer of Shares – Public Company

Companies Act, 1956 Securities or other interest of any member freely transferable. [sub-sections (1) and (2) of section 111]

Companies Bill, 2012 Freely transferable, however there needs to be a contract/agreement with regard to the transfer of securities which can be made enforceable as a contract. [Cl. 58]

SECURITIES – BUY-BACK
Details Companies Act, 1956 Companies Bill, 2012

Restriction – further offer of Buy-back

Where buyback is by Board (10 per cent of the total paid up equity capital and free reserves), no further offer of buyback is permissible within one year from the date of last offer of buyback. [S. 77A]

No offer of buy-back shall be made within a period of one year reckoned from the date of the closure of the preceding offer of buy-back, if any. [Cl. 68]

ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Companies Act, 1956 Companies Bill, 2012 [Cl. 73]

Eligibility – for acceptance from public and shareholders

Public Companies are permitted to accept deposits from public and shareholders in accordance to Companies (Acceptance of Deposit) Rules. [Section 58A)

No Company except Banking Company and such other Company as may be specified in this behalf shall invite, accept or renew deposits from the subject to fulfillment of certain conditions. A Company may, subject to the passing of a resolution in general meeting and prescribed rules accept deposits from its members on such terms and conditions as may be agreed upon between the Company and its members, subject to the conditions prescribed:

ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Eligibility – for acceptance from public and shareholders Companies Act, 1956 Companies Bill, 2012 … contd. The conditions are: - statement showing the financial position of the company, the credit rating obtained, the total number of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company - depositing such sum which shall not be less than 15 per cent of the amount of its deposits maturing during a FY and the FY next following, and kept in a separate bank account in a scheduled bank to be called as deposit repayment reserve account;

ACCEPTANCE OF DEPOSITS BY COMPANIES
Details Companies Act, 1956 Companies Bill, 2012

Eligibility – for acceptance from public and shareholders

-

… contd. - providing deposit insurance in the manner and extent prescribed - certifying that the Company has not defaulted in the repayment of deposits or payment of interest - providing security, if any for the due repayment of the amount of deposit or the interest thereon including the creation of such charge on the property or assets of the company. However, where a Company does not secure the deposits or secures such deposits partially, then, the deposits shall be termed as 'unsecured deposits' and shall be so quoted in every circular, form, advertisement or in any document related to invitation or acceptance of deposits.

ACCEPTANCE OF DEPOSITS
Details Companies Act, 1956 Companies Bill, 2012

Eligibility – for acceptance from public and shareholders

-

… contd.
The deposit repayment reserve account referred to in clause (c) of sub-section (2) shall not be used by the company for any purpose other than repayment of deposits. No Company except Banking Company and such other Company as may be specified in this behalf shall invite, accept or renew deposits from the public except in the manner provided. A Company may, subject to the passing of a resolution in general meeting and prescribed rules accept deposits from its members on such terms and conditions as may be agreed upon between the Company and its members, subject to the conditions prescribed:

DIVIDEND – DECLARATION & PAYMENT
Details
Declaration of Dividend Transfer of Reserves

Companies Act, 1956
[Section 205]

Companies Bill, 2012
A voluntary transfer by Company to be made, as considered appropriate before declaration of any dividend. [Cl. 123]

No dividend to be declared or paid by a Company for any FY out of the profits of the Company for that year arrived at after providing for depreciation except after the transfer to the reserves of the Company of such percentage of its profits for that year, not exceeding ten per cent. Dividend to be declared in accordance to Companies (Declaration of dividend out of Reserves) Rules, 1975 with a maximum rate prescribed as 10 per cent No restrictions

Declaration in the event of inadequate profits

Dividend to be declared out of the accumulated profits transferred to reserves in accordance to applicable rules

Declaration of interim dividend – Any restrictions

Interim declaration may be declared out of the surplus in P&L Account as well as profits of the FY in which dividend is sought to be declared. Failure in compliance will bar the Company to declare dividend during the period of non compliance

BOOKS OF ACCOUNT
Details Consolidated Statements Companies Act, 1956 Companies Bill, 2012 [Cl. 129] No Provisions The financial statement shall be laid in the AGM of that FY. In case of subsidiary companies, the company shall prepare a consolidated financial statement of the Company and all subsidiaries and lay before the AGM. The Central Government shall have the power to exempt a class or classes of companies from any of the requirement of this section. The clause also provide the penalty where company contravenes the provision of this section. For the purpose of above, "subsidiary" shall include 'associate company' and 'joint venture'

LOAN AND INVESTMENT BY COMPANY
Details Exemptions Companies Act, 1956
[Section 372A] Any loan made, any guarantee given or any security provided or any investment made by Banking company, or an insurance company, or a housing finance company in the ordinary course of its business, or a company established with the object of financing industrial enterprises, or of providing infrastructural facilities; Company whose principal business is the acquisition of shares, stock, debentures or other securities; A private company, unless it is a subsidiary of a public company; To investment made in shares allotted in pursuance of clause (a) of sub-section (1) of section 81; To any loan made by a holding company to its wholly owned subsidiary; To any guarantee given or any security provided by a holding company in respect of loan made to its wholly owned subsidiary; or To acquisition by a holding company, by way of subscription, purchases or otherwise, the securities of its wholly owned subsidiary.

Companies Bill, 2012
[Cl. 186] - Loan made, guarantee given or security provided by a banking company or an insurance company or a housing finance Company in the ordinary course of its business or a company engaged in the business of financing of companies or of providing infrastructural facilities; - To any acquisition (i) made by a non-banking financial company whose principal business is acquisition of securities. - Exemption to NBFC shall be in respect of its investment and lending activities; - Acquisition made by a company whose principal business is the acquisition of securities; - Acquisition of shares allotted in pursuance to further issue of capital

RELATED PARTY TRANSACTIONS
Details
Provisions/ scope thereof

Companies Act, 1956
[Section 297] A company is debarred from entering into: - Contracts relating to sale, purchase or supply of any goods or materials and services; -Contracts relating to underwriting subscriptions of shares, debentures of a company. Contracts cover the following specified persons:-- Director/Relative of Director of a Company; Firm where such Director/Relative is a partner; Any other partner of such firm as above; Private company where such Director is Director or member Such transactions are subject to prior approval by resolution passed by the Board of Directors in a Board Meeting. In case of paid up capital of Company exceeds one crore, prior approval of the Regional Director is required.

Companies Bill, 2012
[Cl. 188] A Company is debarred from entering into: -Contracts relating to: sale, purchase or supply of any goods or materials; buying/selling /disposing otherwise any property; leasing of any property; availing/ rendering of any services; appointment of any agents for purchase or sale of goods, materials, services or property; such related party's appointment to any office or place of profit in the company, its subsidiary or associate company; underwriting subscription of any securities/ derivatives of the company. Contracts cover specified persons under Section 2 clause 76 of the Bill defining the term Related Party.

RELATED PARTY TRANSACTIONS
… CONTD.

Details

Companies Act, 1956 Exemptions are provided in the case of: 1.Purchase/ Sale of goods and materials: (a) for cash at current Market price (b) Also services, the cost of which does not exceed Rs. 5000 in any year during tenure of Contract 2.Transactions by Banking / Insurance Companies in the ordinary course of Business.

Companies Bill, 2012 Such transactions are subject to prior approval by resolution passed by the Board of Directors in a Board Meeting. In case the paid up capital of the Company/transaction exceeds prescribed limit, prior approval of the shareholders is required. Exemptions are provided in the case of transactions in ordinary course of business, other than those which are not an arms length basis

COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS
Details How this can be approved Companies Act, 1956 To be approved by Majority representing 3/4th in value of the creditors or members or class thereof present and voting or by proxy. Approval of High Court (NCLT) Companies Bill, 2012 Voting by Postal Ballot added Approval of High Court (NCLT) [Clause 230]

About the Valuation Report

Valuation report not to be given to shareholders/ creditors alongwith notice convening meeting
Objection can be made by any shareholder or creditor. Such objection can be made irrespective of their shareholding/ debt outstanding

It now needs to be given

Objections against the purpose

Objection to be made only by: • persons holding more than 10% shareholding; or • having outstanding debt of more than 5% of total outstanding debt as per the last audited balance sheet

COMPROMISE, ARRANGEMENT AND AMALGAMATION
Details Buy back of Securities On the Takeover offer Companies Act, 1956 The scheme can include any buyback of securities Scheme cannot include a Take over offer Companies Bill, 2012 It can form part of it as per the provisions of buyback. As per the manner prescribed. In the case of listed Companies such offer has to be as per SEBI Regulations Notice needs to be served on IT department, RBI, SEBI, the Stock Exchanges, CCI, Sectoral regulators/ authorities

Transfer – Listed Company with Unlisted Company

No specific requirement to serve notice on Income tax department and other regulatory body

COMPROMISE, ARRANGEMENT AND AMALGAMATION
Details Merger – Indian Companies with Foreign Company Takeover offer Companies Act, 1956 No Companies Bill, 2012 Yes, with prior approval of RBI It may include in a prescribed manner . In the case of listed Companies such offer has to be as per SEBI Regulations May sell at the price determined in accordance to applicable rules

Scheme cannot include a Take over offer

Offer to sell (Minority Shareholders to Majority shareholder)

No

COMPROMISE, ARRANGEMENT AND AMALGAMATION
Details Purchase – Minority shareholding by Majority shareholder Companies Act, 1956 No specific provision Companies Bill, 2012 •Acquirer and/ or PAC or person/ group of persons holding 90 per cent or more of the issued equity capital of the Company by virtue of amalgamation, share exchange, conversion of securities or for any other reasons, can purchase the remaining equity shares of the Company from minority shareholders at a price determined by registered valuer •Minority shareholders may also offer to the majority shareholders to purchase their equity shareholding in the Company at the price determined by registered valuer.

LOAN TO DIRECTORS
Details Provisions Companies Act, 1956 [S. 295]
• Provisions are application only to Public Companies subject to the following exceptions: - Banking Companies; Holdings to subsidiary Company ; Private Company; • Prior approval of the CG is mandatory before any Public Company directly/indirectly makes loan, gives guarantee or provides security to its Directors or other specified persons.

Companies Bill, 2012 [Cl. 185]
•Provisions are applicable only to both Public and Private Companies subject to the following exceptions: • Managing or whole-time conditions of service extended by company director, as part of to all its employees or in furtherance to any scheme approved by a special resolution of its members. • Company which in the ordinary course of business provides loans ,gives guarantees or securities for the due repayment subject to the condition that rate of interest is not less than the bank rate declared by the Reserve Bank of India.

REGISTERED VALUER
Details Companies Act, 1956 Companies Bill, 20112 [New Provision – Cl. 247] Where valuation is to be made under the Act, in respect of any property, stocks, shares, debentures, ,securities or goodwill or other assets or net worth of a Company or its liabilities, such valuation shall be done by a registered valuer.

Provision relating to Registered Valuer

No provisions prescribed

REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES
Details Grounds Companies Act, 1956 [Section 560] A Company may be struck off by ROC if it has reasonable cause to believe that a Company is not carrying on business or operations Companies Bill, 2012 [Cl. 248] Reasons for Strike off: • subscribers to the memorandum have not paid the subscription money with 180 days from the date of incorporation • Company has failed to commence its business within one year of its incorporation • Company is not carrying on any business or operation for two immediately preceding financial year and has within such period applied for status of a dormant Company

WINDING-UP
Details Companies Act, 1956 [Ss. 433 & 434] Companies Bill, 2012

Grounds

• By Special resolution • If Company is unable to pay its debt. • Business not commenced within one year of its incorporation or suspends its business for the whole year • Minimum number of member goes below than as prescribed i.e. 2 and 7 incase of Pvt. and Public limited Company

[Cl. 271] • Requirement of minimum number of member removed • Following additional grounds added: i. Management of company affairs in fraudulent manner ii. Formation of Company for fraudulent and unlawful purpose iii. Persons involved/ concerned in the formation of Company guilty of fraud, misfeasance or misconduct in connection therewith.

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