Company Law Summary Notes

Company law CS Executive
GAME
CHANGER
NEW
ADDITION
CS SHUBHAM ABAD
SR.NO PART ONE COMPANY LAW, PRINCIPLES &
CONCEPTS.
1. INTRODUCTION.
2. SHARE CAPITAL.
3. MEMBERS & SHAREHOLDERS.
4. DEBT INSTRUMENT.
5. CHARGES.
6. DISTRICBUTION OF PROFIT.
7. CSR.
8. ACCOUNTS & AUDIT.
9. TRANSPARENY & DISCLOSURE.
10. OVERVIEW IN INTER-CORPORATE LOANS ETC.
11. REGISTER & RECORDS.
12. OVERVEIW OF CORPORATE REORGANIZATION.
13. MCA-21 & FILLING OF XBRL.
14 GLOBAL TRENDS.
SR.NO PART TWO COMPANY ADMINISTRATION & MEETING/

LAW & PRACTICES.
15. BOARD CONSTITUTION & ITS POWER.
16. DIRECTORS.
17. KMP.
18. MEETINGS OF BOARD.
19. GENERAL MEETING.
20. VIRTUAL MEETING.
SR. PART THREE CS AS A PROFESSION SECRETARIES.

NO
21. LEGAL FRAME WORK GOVERNING CS
22. SECRETARIAL STANDARDS BOARD.
23. MEGA FIRMS.
MOMENTS OF PLEASURE.
DEDICATED TO MY PARENTS SHRI RIKHABCHAND

& PUSHPA ABAD.
SPECIAL THANKS TO;-
1) ASHISH & SIMPLE PARIKH FOR YOUR
SUPPORT.
2) UNIQUE ACADEMY TO GIVE ME THIS
PLATFORM.
3) MODI SIR FOR A MORAL SUPPORT .& YOU
ARE MY STRENGTH.
4) CHANCHAL SAKHRANI FOR GIVING BEAUTY
TO THE BOOK WITHOUT YOUR SUPPORT
THIS COULD BE POSSIBLE.
5) COMPETITORS FOR MAKING ME STRONG.
6) STUDENTS FOR WHICH EVERY THING IS.
LOVE YOU ALL 3000.
LAW*LOGIC*LOVE INTRODUCTION.
1. Introduction
Applicability
A) Company
B) Banking companies
C) Insurance companies
D) Electricity companies
E) Corporations establish under special act
F) Body corporate.
The word ‘companies’ is derived from the LATIN word ‘com & Panis’ com means
with or Panis -bread. Company means association of person who took their
meal together
Company 2(20):- company means a company registered under companies Act
2013 and any other previous company law.
EFFECTS OF INCORPORATION; SECTION-9
 T-Transferability of shares.
The ownership is represented by shares and shareholder can transfer the shares
of the company.
 O-Ownership &management both are separate.

Shareholder are the owners of the company where company is managed by
BOD
 P-Perpetual succession.
Member, promoter, may come and go but company will remain forever.
Death of member, promoter does not affect the company.
 C- Contractual capacity
Company can enter into contract on its own.
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Common seal.
UNIQUE ACADEMY CS SHUBHAM ABAD-
8007916622/33
Official signature of the company Optional- signed by 2 director and CS if any.
 L-Limited liability.
Liability is limited up to unpaid amount on shares
 A- Artificial legal person.
Company is created by human but creation will be judicial.
 S-Separate legal entity (Saloman vs. Saloman co. Ltd)
Company and its member both are different.
Company have its own identity distinct from member.
 S-Separate property (Macaura vs. northern insurance co. Ltd)
Company have its own identity and can own property on its own property of
company and member are separate.
Can sue& can be sued. Company can sue to third party and third party can
also file case against company.
Body corporate 2(11)

Means a company and it includes foreign company and any corporation
establish under special Act however it exclude
- Registered co-operative society
- Body corporate- specified by central government.
‘Every company is a body corporate but everybody corporate is not a company’.
Company is not a citizen because citizenship can only granted to natural person.
Company has residential status which depends upon place of incorporation/place
where governing body meets place of control. In general company cannot claim
fundamental right because it is given to citizen however few fundamental rights
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which is available to any person, company can claim such rights.

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8007916622/33
Illegal association 464
Any unregistered association or partnership having more than 50 person working
for acquisition of gain shall be treated as illegal association. It does not include
Hindu undivided family or partnership formed by professional who are governed
by special Act. If partnership formed by HUF having more than 50 major member
shall be treated as illegal association.
EFFECTS of illegal association
 Cannot enter into a contract.
 Cannot wound up.
 Disregard the entity.
 Taxable.
 Cannot sue to any member/creditor.
 Cannot be sued by members/creditors.
Lifting of corporate veil.
Where the fraudulent intension to misuse the veil for benefit of their own or
conducting illegal act, such person will not get the benefit of acting behind veil.
In simple words if any person committing fraud or illegal activity inside the
company then such person shall held personally liable.
To prevent dishonest practice court can lift corporate veil and look behind the
corporate face.
In following cases court can lift corporate veil.
 F-Fraudulent application for removal of name.

Company fraudulently file the application to remove the name of the company
so that creditors cannot claim in such situation court can lift the corporate veil.
 C-Criminal activity.
If company is carrying any criminal activity under the corporate name then
court can lift the veil.
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 S-Acquisition of SSI.
Company is formed to avail the benefit available to SSI.
 C-Conflict of public policy religious sentiments.

Company is carrying such activities which is against the public policy or which
hurt the religious sentiments.
 A-Avoidance of welfare legislation.

Where the sole purpose of the company was to use it as a device to reduce the
amount to be paid by way of bonus to workmen, the corporate veil should be
pierced to look at the real transaction.
 S-Submission of false information.

Company is incorporated by submitting the false information
 P-Prevention of fraud.
The formation of the company is to do fraud then court can lift the corporate
veil
 D-Determination of enemy character.

To determine the enemy character of the company court can break the
corporate veil.
 P-Protection of revenue.
Formation of the company is to evade the taxes then court can lift the veil.
SELF NOTES.
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LAW*LOGIC*LOVE Share capital.
2. Share capital
Types of capital
1. Authorized capital is the maximum share capital issued by company.
2. Issued capital means company issues for the time being for public
subscription and allotment.
3. Subscribed capital is that portion of the issued capital at face value which has
been subscribed for or taken up by the subscribers.
4. Called up capital is that portion of the subscribed capital which has been
called up or, demanded on the shares by the company.
5. Paid up capital means the portion of called up capital which has been paid by
shareholder.
Issue & allotment.
Prospectus2 (70)
Prospectus means any document issued as a prospectus.
 It includes red herring prospectus 32
 Shelf prospectus 31
 And notice, circulars, advertisements which
 Invite public
 To purchase/subscribe the securities of a body corporate.
Red herring prospectus Sec 32

 RHP is issued in case of book building method
 It does not include price and quantum.
 It includes price band i.e. Lower price and upper price
 RHP shall file with ROC at least 3 days prior to issue opening date.
Shelf prospectus (31)

- Shelf prospectus means a prospect issued for one or more issues over a
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certain period without the issue of a further prospectus.

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- Validity is one year from the date of opening of first issue.

- Single prospectus for multiple issue
UNIQUE ACADEMY CS SBHUBHAM ABAD-8007916622/33
- In case of material change file information memorandum in form no (PAS-2)
- Material changes means it includes new charges created, change in financial
information and other material information.
- Application may withdraw their application.
- Refund within 15 days with interest @15%p. a
Abridged prospectus 2(1) (Chotu).

 Summarized form of prospectus
 It contains silent features of prospectus
 Issued along with the application form
 No need to issue if shares offers to underwriters and securities not offer to
public & further issue of offer of same class.
Premium (sec 52)

- Anything above the face value is known as premium.
- It is transferred to security premium account.
- It is a capital profit.
- Cannot utilized for payment of dividend.
 Minimum application money=5% according to the company act- 25% as per
SEBI.
 Offer period-Minimum 3 days maximum 10 days in case of public issue
min/ 15 days max. 30 days in case of right issue.
 Minimum subscription-90% of issued capital and it should be received
within 30 days from the issue of prospectus.
 If failed received then refund within 15 days from closure of issue.
 Failed to pay within 15 days then penalty @ 15%p.a.
 The money received from the public is kept in a separate A/c. Known as
escrow A/c
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 File return on allotment in form PAS-3 within 30 days to ROC.

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Deemed prospectus (25)
 Inviting public to purchase or subscribe the security through intermediary.
 Document issued on behalf of the company to subscribe the security
(deemed prospectus).
 Condition to be fulfilled for deemed prospectus;
I. Offer for sale within 6 months after the allotment
Or.
II. Whole consideration is not received by the company at the time of
offer.
Additional disclosure in deemed prospectus: -
1) Net consideration received or to be received.
2) Time and place for inspection of contract
3) It should signed by 2 director or in case of firm by not less than ½ of the
partner.
Criminal and civil liability for misstatement in prospectus

Every person who authorised the issue of prospectus which contain untrue
statement or omission of any material information shall be liable u/s 447 i.e.
Liability of fraud
Share certificate.
Share certificate is a documentary evidence of title.
Form no SH-1
- Pass board resolution to issue share certificate and it should be issued
within specified time.
- In case of incorporation – 2 months
- In case of allotment – 2 months
- In case of transfer – 1 month
Sealing and signing:-

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a) Sign by 2 directors and CS if any and common seal.

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b) In absence of common seal sign by 2 directors or director and CS if any.

Issue of renewed or duplicate share certificate:-

Company shall not issue any duplicate share certificate in lieu of those lost or
destroyed without the board approval.
Duplicate share certificate shall be issued within 45 days in case of listed
company and within 3 months in case of unlisted company.
Legal effect of share certificate.

Estoppel as to title: Share certificate is a declaration by the company to the
entire world that the person in whose name the certificate is made out and to
whom it is given is a shareholder in the company. In other words the company is
estopped from denying his title to the shares.
Estoppel as to payment: If the certificate states that on each of the shares full
amount has been paid, the company is estopped as against a bona fide
purchaser of the shares, from alleging that they are not fully paid.
Share and share capital
Issue of differential voting rights (DVR) 43
 Authorised by AOA.
 GM-OR
 In case of listed company resolution by postal ballot.
 Maximum-26% of post issue paid up equity share capital.
 Distributable dividend for past 3 years (profitable company).
 No default in filling financial statement & annual returns in preceding last 3
years.
 No default in payment of interest on debenture other deposits.
 No default in redemption of preference shares or debentures.
 No default in payment of dividend on preference shares.
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 Not penalise under SEBI, RBI, depository, SCRA act

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 No conversation is allowed from DVR to EVR and EVR to DVR.

 File return on allotment in PAS -3 within 30 days to ROC.
Issue of preference shares (55)
 GM-SR (MGT - 14 – 30 days to ROC)

 No existing default in case of payment of dividend and redemption of PF
shares.
 Maximum period 20 years
 In case of infrastructure company – 30 years
 From 21st year redemption 10% every year.
 PAS-3 – 30 days – ROC.
Redemption of preference shares (55(2))

• By two ways
A) Proceeds of fresh issue
B) Surplus profit.
• Fully paid up shares can be redeemed.
• Out of profit some equal amount shall be transfer to CRR
(Capital redemption reserve).
• CRR is used to issue fully paid up bonus shares.
• Notice of redemption given to ROC in SH-7
Inability to redeem preference shares.

• Company is not in position to redeem preference shares
• Obtain 3/4th consent of preference shares and
• Approval from NCLT.
• Issue fresh preference shares equal to the amount due on redemption
including dividend it shall be considered the deemed redemption.
Right issue / pre-emption right:

• Shares issued to existing shareholder.
• Power to BOD – BR
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• Bod approve letter of offer (LOO)

• Send letter of offer (LOO) at least 3 days prior to issue opening date to
existing share holder.
• Issue open for min 15 days & max 30 days
• Private company – Obtain approval from 90% of shareholder - may be open
for less than 15 days.
Offer
Offer.
ACCEPTANCE RENUNCIATION REJECTION.

ALLOTMENT Transfer to other bod may
allot to other
Person person in
the interest
. of The
company.
Exceptions:
Right issue not applies in the following cases
1. Conversation of convertible debentures or pf shares.
2. Conversion of government loan as per the direction given by the
government.
Employee’s stock option scheme (ESOP)

It is an option given to the directors, employees or officers of company or its
holding company or subsidiary company which gives right to purchase or
subscribe shares at future date at pre-determined price.
*Eligibility:-
Director: - Whole time director (WTD) or other directors except independent
director.
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Employee: - Permanent employee working in or outside India

*Employee or director of the company its subsidiary company in India or
outside India or holding company in India
Non-eligibility
 Employee cum promoter or belonging to promoter group
 a director who either himself or through his relative or through anybody
corporate, holds more than ten percent of the outstanding equity shares
of the company
Conditions
 Public company pass SR
•Private company pass OR
•Vesting period – minimum 1 year
•Till exercise – no voting right & dividend
•If failed to subscribe or exercise the option then the amount paid shall be
forfeited.
•Freedom to specify the locking period
Status of ESOP
Death disable resignation

Given to its heir or vesting on the forfeited/ option expire
nominee same day.
*Disclosure in board report
Issue of shares on preferential basis (62)
Conditions:-
1.)Offer given to selected group of persons.
2.)Authorised by AOA.
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3.)Pass SR (MGT-14 -30 days -ROC.)

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4.)Completion of preferential allotment within 12 months from passing SR

5.) Failed to complete the procedure within 12 months pass another SR.
6.)Valuation of shares is done by registered value.
7.)Follow section 42 (private placement).
Private placement. (Sec-42)

 Issue private placement offer document (PPOD) (PAS-4) along with application
form.
 PPOD is given to selected person whom the offer is made.
 Issue PPOD within 30 days from recording the names.
 Issued to 200 persons in the financial year.
 At a time issued to max.50 persons which exclude qualified institutional buyers
and employee under ESOP.
 The above restriction is considered individually (200 equity shares, 200
debentures, 200 pf shares).
 Minimum investment size (20,000 face value)
 Fund through normal banking channel and not in cash.
 Fund kept in separate account till allotment and return of allotment is filed.
 Allotment within 60 days from receipt of application.
 Failed to allot within 60 days refund within 15 days
 Failed to refund within 15 days pay interest @12% pa from 61st. Day
 Return of allotment (PAS 3) file to ROC within 15 days.
Bonus issue (sec-63).

 Known as capitalisation of profit.
 Free shares given to existing shareholders (fully paid up)
 Sources *profit
*free reserve
* Security premium.
* CRR
 Recommended by BOD and approval by shareholder by passing OR
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
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RR (revaluation reserves) cannot be utilized for issue of bonus shares.

 No default in payment of interest or principle amount on fixed deposit or other
debt security.
 No default in payment of statutory dues
 No bonus in lieu of dividend
 File PAS 3 within 30 days to ROC.
Sweat equity shares. (Sec-54)

- Issued to directors or employees (permanent) at discount or consideration
other than cash for providing technical knowhow or intellectual property
rights. (IPR).
- Employee means:-
- A) a permanent employee of the company who has been working in India or
outside India, for at least last one year;
- (b) A director of the company, whether a whole time director or not,
- (c) An employee or a director of a subsidiary, in India or outside India, or of a
holding company.
- SR carries.
*no. Of shares issued
*total consideration.
*class of director/employee
*current market price
 SR is valid for 12 months.
 Limit:-
Financial year: - 15% of paid up equity share capital or issue value of 5 cr
whichever is higher.
Aggregate limit of life time: - 25% of paid up equity share capital.
 Price is determined by registered value
 Lock in period – 3 years
 Treated as a part of managerial remuneration if issued to directors or
manager and issued for consideration other than cash
 Disclosure in directors report
a) Class of directors or employee
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b) No. Of shares issued

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c) Terms and conditions

d) Justification of the issue
e) Class of shares
 Authenticated by CS
 No need to obtain approval from NCLT
 Maintain registrar form no. (Sh-3).
Buy back and reduction.

 Buy back.
Buy back means purchase of its own shares by company
Objectives of buy back
1. To return the surplus cash to shareholders
2. Increase the current market price
3. To avoid takeover bid
Sec.67 – prohibition on buy back
A) Company shall not directly or indirectly buy back its own shares or give
loan, guarantee, security, to any person for purchase of its own shares or
shares in its holding company
Sec.68 buy back subject to certain conditions
Sources;-
a. Free reserve
b. Security premium
c. Proceeds of specified securities .(other than same kind of securities)
Methods:-
1. Existing shareholders
2. Open market – stock exchange
3. Employee where shares issued under ESOP or sweat equity shares.
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Limit: - BOD-BR:-up to 10% of paid up equity share capital +free reserve+ security
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premium.

Gm-SR: - 25% of paid up share capital + free reserve + security premium
 Before buy back and after buy back share capital should remain constant
 Only fully paid up shares can buy back
 Debt equity ratio shall not exceed 2:1.
 Before buy back file letter of offers (loo) to ROC
(Form SH-8)
 Dispatch to all shareholders within 21 days from filing with ROC
 Issue shall remain open for min 15 days and max 30 days
 Completion within 12 months from passing SR/ BR
 No buy back within 1 year from closing of previous buy back
 File declaration of solvency with ROC & SEBI in form (SH-9) sign by 2 director
one of whom must be MD if any
 Extinguish and destroy the shares physically within 7 days from completion of
buy back
 No further issue of same kind of security in next 6 months except by way of
bonus issue
 File return of buy back within 30 days to ROC which is signed by 2 director
including MD.
 Maintain register of buy back
Transfer to CRR (69)
In case of buy back out of free reserve and security premium a/c sum equal
amount shall be transfer to CRR.
Sec.70 prohibition of buy back;-

 No buy back through subsidiary company including its own subsidiary.
 No buy back through Investment Company.
 No buyback if default in
A. Repayment of deposit.
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B. Redemption of preference shares and debenture.

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C. Payment interest on debt security.

D. Repayment on loan.
E. Payment of declared dividend.
No default in;-
a) Filing annul return.
b) Filing financial statement
c) Declaration of dividend.
d) Distribution of dividend.
Reduction of share capital. (66)
 Reduction of share capital means reduction in issued, subscribe and paid up

share capital.
 Following transaction results in reduction of share capital
1) By way of conversion of party paid up shares into fully paid up.
2) Cancellation of paid up share capital which is lost.
3) Pay off the excess amount.
*Procedure for reduction of share capital.
1.) Pass SR.

2.) Application to the NCLT.
3) NCLT forward the application to central government, ROC, SEBI and
creditors.
4) Can raise objection within 3 months.
5) Obtain consent from creditors or discharge the debt.
6) NCLT will confirm the reduction.
7) Order shall be published by the company as directed by NCLT.
8) Order file with ROC within 30 days.
9) After reduction liability of member is reduced.
10) add to its name the word ‘and reduced’.
11) Registrar issued certificate of reduction which is conclusive evidence.
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Diminution of share capital is not a reduction of capital.

Diminution of capital is the cancellation of the unsubscribed part of the issued
capital.
It can be effected by an ordinary resolution.
It does not need any confirmation of the tribunal under section 66.
(a) Redemption of redeemable preference shares.
(b) Purchase of shares of a member by the company on order of the tribunal
(c) buy-back of its own securities.
Diminution of share capital is not to be treated as reduction of the capital:
(i) Where the company cancels shares which have not been taken.
(ii) Where redeemable preference shares are redeemed
(iii) Where any shares are forfeited.
(iv) Where the company buys-back its own shares.
Shares and share capital.
Transfer
 Private company.
 Restriction on transfer of shares i.e. Right given to existing shareholders at a
price determined by director or auditor.
 Director may refuse the transfer.
Public company.2 (71)

 The shares of public company are freely transferable.
 Two parties – transferor and transferee.
 Execution of transfer document (SH-4).
 The instrument shall be duly stamped, dated and properly executed.
 Deliver transfer document to company within 60 days from the execution.
If the share are partly paid up then company send notice to transferee and
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transferee shall give no objection from receipt of notice within 2 weeks.

Delivery of share certificate within 1 month from the date of receipt of SH-4.

*Lost of transfer document.
 If the transfer document is lost, transferee submit the indemnity bond

 If BOD think fit may register the transfer.
 0.25% stamp duty is payable by transferee on the share value
Between the periods of transfer and register.

a. The company demands call money from transferor and transferor may recover
it from transferee.
b. The company pay dividend to transferor.
c. The transferor will vote but with the pre- direction of transferee.
Transferor‘s death
Company has no notice company has notice of his

death.
Of this death.
Company will register not to register until

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The transfer. Representative
referred to.
Transferee’s death.
Company has no notice of his Company has notice of his

death. death.
Register the transfer. Shares cannot be registered.
- Consent of transferor and legal
representative is required.
Appeal against refusal.
*If company refuse transfer then appeal against such refusa
Private company. Public company -

1.) Appeal to NCLT within 30 Appeal to NCLT within 60 days -
days from receipt of notice of from receipt of notice of refusal. -
refusal. -
2.) No notice send by company. No notice send by company. -
3.) Within 60 days from the Within 90 days. -
deposit of share transfer -
instrument (SH-4).
Transmission.
- Operation by law
- Death – legal representative or nominee.
- Insolvency – official assigns or receiver.
- Merger or amalgamation—resulting company.
- Lunatic – legal representatives or nominee.
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Blank transfer

 Transfer without the name of the transferee
 It is the transfer by mere delivery.
 Objective of blank transfer;-
a.)Avoidance of stamp duty.
b.)Concealment of indemnity of real owner
c.) Evasion of taxes.
d.)Until registration transferor will be the owner.
Forged transfer.
1. Signature of the transferor is forged

2. Forged transfer are null and void.
3. To avoid forged transfer company intimate to transferor about the
lodgement of instrument (SH-4).
Effects of forged transfer.
 Null and void and the original owner continues to be owner and company
will restore his name.
 No denial of transfer of shares in favour of buyer
 Company is liable against the innocent buyer if his name is removed.
Transposition of name;-
- Alteration or arrangement of name or wants to hold shares individual.

- Request to BOD.
- No need to execute transfer deed.
- No stamp duty.
SELF NOTES.
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LAW#LOGIC#LOVE Member & shareholders
3.Members and
shareholders
Member2 (55)
A) Subscribers to memorandum of association (deemed member)
Note-subscribers cannot rescind the contract even on the ground of

fraud by promoter.
B) Agreement in writing with the company.

 By way of application and allotment.
 Transfer of shares
 By transmission of shares.
 By acquiescence or estoppel
C) Beneficial owner
In the record of depository.
>Who can become a Member?
Company- Legal entity can be a member.

Subsidiary company cannot become a member in a holding company.
Partnership firm—Cannot be a member. However in case of sec 8
company firm may become a company.
LLP—legal entity can be a member.
Section 8 company— Can become a member unless prohibited by
AOA/MOA.
Foreigner—Foreigner can be a member (follow FEMA.)
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Minor:-
1. Cannot be a member.
2. If shares are transferred to minor transferor is liable for all future
calls till he attains majority.
3. Company may refuse the transfer if company knows of his minority.
4. Minor can hold fully paid up shares through guardian.
5. Minor after attaining majority, if he does not want to be a member
he must repudiate his liability on the shares on ground of minority
Insolvent:-
1. He is a member as long as his name is entered in register of member.

2. Having voting power.
3. Dividend to official assignee or receiver.
4. No corporate benefit.
Pawnee- Pawnee cannot be treated as member. He never has the
absolute ownership
Receiver- Cannot exercise any of his rights till his name is entered in
register of members.
Person taking share in fictitious share -Criminal liability for commission

of fraud. He is a member.
Trade union- Registered trade union can hold the share.
ADR/GDR holder
 Cannot be treated as member.

 ADR/GDR— not a member till conversion.
Joint member.

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 Two or more person applying for shares

 Joint holder treated separately except in case of private company for
the purpose of counting the member.
 In case of notice, dividend, voting rights treated as single member
 Max.4 member can hold one share jointly.
Restrictions on number of members
Opc-1
Pvt. Company- min 2 and max 200.
Public company- min 7 and max unlimited
If number is reduced below the minimum number then the liability

becomes unlimited or NCLT can order the winding up
Cessation of members.
 Cessation means cancellation of membership

 Occurs in the following situation.
A) Transfer of shares
B) Transmission.
C) Insolvent -Official assignee disclaims
D) Redemption of preference share
E) Surrender of shares
F) Winding up of the company
Register 88
1) Register of members separately for each class

2) Register of debenture holder
3) Register of other securities
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4) If there are more than 50 members then maintain index

5) Register of beneficial owner maintained by depository shall be
treated as register of member.
6) Register of foreign members
In register of members entry is made within 7 days from the allotment
or transfer. Registers shall keep at register office of the company or
such place as may be decided by passing SR
 At any place within same city town village where register office is
situated
 The place in India where more than 10% of the total members
resides.
 In case of any changes due to bonus, ESOP, right issue is made within
7 days from approval of board.
 Authentication by CS of by authorised person.
Inspection.
 Member’s debenture holder’s security holders are beneficial owners

without any fees can inspect.
 Any other person wants to inspect may inspect by paying fees not
exceeding Rs 50.
 Inspection during the business hours.
Copies.
 Any person can obtain copies by paying fees not extending RS.10 per
page.
 Company shall serve the copies within 7 days deposit of fees.
Foreign register.

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 Companies may keep foreign registers of members or debenture-

holders, other security holders or beneficial owners residing outside
India.
 If authorised by its articles, company may keep foreign register in
any country outside India.
Evidence.
Content true name entered in ROM
Treated as deemed member
Unless proved contrary.
Preservation of register
o Register of member-maintain permanently.
o Index of member is preserved permanently. Register of
debenture holder is preserved for 8 years from redemption.
o Annual return and financial statement-Preserved for 8 years from
filing with the ROC.
o Foreign register is preserved permanently.
Book closure 91
i. A company may close the register for any period or periods not
exceeding in the aggregate forty-five days in a year,
ii. Max 30 days at a time Give 7 days prior notice
Record date

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 Date on which records of company are closed advance 7 days’

notice.
SELF NOTES;-

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LAW#LOGIC#LOVE DEBT INSTRUMENT.
4. Debt capital
Borrowing Power (180)

Director can borrow upto 100% of PSC + FR except temporary loans.
GM-SR if borrowing exceed 100% of PSC+FR
Not applicable to private company.
Temporary loans means repayable within 6 months.
Ultra wires borrowing.

 Borrowing beyond the authority given in AOA is known as ultra vires
borrowing.
 Such contract is void and lender cannot sue the company for
repayment of the loan.
 Securities given for such ultra-borrowings are also void.
Remedies to the lender.

 Lender can obtain an injunction order from court and recover any
property which company has bought.
 Lender can sue to director for breach of warranty of authority if
director intentionally misrepresented their authority.
 Ultra wires borrowing is used to pay intra vires debt then lenders
substitute the position of creditors.
Ultra vires to BOD but intra vires to company.

 Company will liable for such borrowing if the borrowing is within the
ostensible authority and lender acted in good faith or transaction
was ratified by the company.
 Company would be liable, particularly if the money has been used
for the benefit of the company.
 If MD borrow large sum of money and misappropriated it and if such
borrowing is within limit then company will be liable if lender acted
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in good faith.
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UNIQUE ACADEMY CS SHUBHAM ABAD-8007916622

Debenture:-
 Debenture includes debenture stock, bonds, or any other instrument
of a company evidencing a debt, whether constituting a charge or
not.
 It exclude instrument such as derivatives and money market
instrument.
Features of debenture:-
A) It is in the form of certificate.
B) Acknowledge by the company of its indebtedness to a holder.
C) Fixed rate of interest
D) Company may issue perpetual or irredeemable debenture with no
undertaking to pay.
E) Usually contain a charge
F) No voting rights
G) Fixed deposit is not debenture.
Issue of debenture: -.
 Can be issued in same manner as shares in a company.
 Can be issued at discount or at premium.
 No ceiling, maximum, minimum limit for the rate of interest.
 Debentures are issued at pari passu clause which implies that no
difference will be made between the old and new debenture.
Provision of companies Act for issue of debenture.

A) Pass SR
B) Company may issue convertible debenture.
C) Max term-10 years.
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D) Following company may issue debenture for max term of 30

years.
1) Company engaged in setting up of infrastructure projects or
2) Infrastructure finance company or
3) Infrastructure debt fund non banking finance company or
4) Other companies specified by RBI/national housing board,
ministry of CG.
E) Create a charge on the assets of the company in case of secured
debenture.
F) Appoint debenture trustee before issue of prospectus to public or
members exceeding 500 and within 60 days from allotment
execute trust deed.
G) Name of trustee must be stated in offer document.
H) Obtain written consent before appointment.
I) Create the charge in favor of debenture trustee on specific
immovable property or movable property (not being in the nature
of pledge)
J) Creation of DRR
1) DRR created out of profit available for payment of dividend.

2) No DRR is required to
A) All India financial institution and banking company for both
publicly as well as privately placed debenture.
B) Listed NBFC registered under RBI and national housing
company registered with national housing board for both
publicly as well as privately placed debenture.
C) Other listed company for privately placed debenture.
D) Unlisted NBFC registered with RBI and housing finance
company registered with national housing board for
privately placed debenture.
3) Other unlisted company, the DRR should be maintained at least 10%
of the value of outstanding debenture.
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4) Every company required to create DRR shall deposit or invest at least

15% of debenture maturing during the current financial year ending
31st March
5) Deposit in schedule commercial bank or investment in
unencumbered securities of government/ trust securities.
6) Amount invested shall use for the redemption of debenture.
7) In case of partly convertible debenture create DRR for non-
convertible options.
Disqualification of debenture trustee
A person shall not be appointed as a debenture trustee, if he-
(i) Beneficially holds shares in the company;
(ii)Is a promoter/ director/ KMP/officer/ employee of the
company/holding/subsidiary or associate company;
(iii) Entitled to moneys which are to be paid by the company
otherwise than as remuneration.
(iv) Is indebted to the
company/subsidiary/holding/associate/subsidiary of such holding
company;
(v) Has furnished any guarantee in respect of the principal debts
secured by the debentures or interest thereon;
(vi) Has any pecuniary relationship with the company amounting to
two per cent Or more of its gross turnover or total income or fifty
lakh whichever is lower, during the two immediately preceding
financial years or during the current financial year;
(vii) Is relative of any promoter or any person who is in the
employment of the company as a director or key managerial
personnel
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(d) The Board may fill any casual vacancy provided that in case of
resignation the vacancy shall only be filled with the written consent
of the majority of the debenture holders.
(e) Any debenture trustee may be removed holders of not less than
three fourth in value of the debentures outstanding, at their
meeting.
Duties of debenture trustee

(a) Ensure letter of offer does not contain any matter which is
inconsistent with the terms of the issue of debentures or with the
trust deed;
(b) Condition in the trust deed are not prejudicial to the interest of
the debenture holders;
(c) Call for periodical status or performance reports from the
company.
(e) Appoint a nominee director on the Board of the company in the
event of-
(i) Two consecutive defaults in payment of interest to the
debenture holders; or
(ii) Default in creation of security for debentures; or
(iii) Default in redemption of debentures.
(g) Inform the debenture holders immediately of any breach of the
terms of issue of debentures or covenants of the trust deed;
(i) Ensure that the assets of the company issuing debentures and of
the guarantors, if any, are sufficient to discharge the interest and
principal amount at all times and that such assets are free from any
other encumbrances except those which are specifically agreed to by
the debenture holders;
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(4) The meeting of all the debenture holders shall be convened by

the debenture trustee on-
(a) Requisition by debenture holders holding at least one-tenth in
value of the outstanding debentures.
(b) The happening of any event, which affects the interest of the
debenture holders.
DEPOSIT
Deposits
Definition of deposit
Receipt of money by way of deposit or loan or in any other form but
does not include
A) Any amount received by CG/SG/local authority/statutory
authority or repayment is guaranteed by CG/SG.
B) Any amount received by foreign Govt/bank/multilateral financial
institution/collaborators/bodies corporate/citizens.
C) Received as a loan or facility from any banking company or from
SBI.
D) Received as a loan or financial assistance from public financial
institution, regional financial institution, schedule banks.
E) Amount received against issue of commercial paper or other
instrument issued accordance with RBI.
F) Amount received from other company.
G) Application money or advance received towards allotment if
securities not allotted within 60 days and failed to refund within
15 days after expiry of 60 days.
H) Amount received from director/relative of director of private
company if such fund is not borrowed by director from others.
I) Interest free security deposit from employee not exceeding
annual salary.
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J) Security deposit for the performance of the contract for supply of

goods or services.
K) Amount brought by promoter (unsecured loan)
L) Amount received under collective investment scheme.
M) Amount received by chit fund company/Nidhi company.
N) Amount of 25L or more received by startups, by way of a
convertible note (conversion within 5 years)
O) Amount received from alternate investment fund, domestic
venture capital fund, infrastructure investment trust.
Acceptance of deposits from public

A) Eligible public company(non govt)
1) Total Deposit from member shall not exceed 10% of aggregate
PSC+FR+SP
2) Total Deposit from public shall not exceed 25% of PSC+FR+SP.
B) Eligible public company(government)

1) Total deposit from member as well as public shall not exceed
35% of PSC+FR+SP.
C) Condition-
1) Obtain credit rating agency(required only if deposit accepted
from public)
2) In case of secured deposit create charge within 30 days from
acceptance.
3) File circular to ROC within 30days before the date of issue of
the circular.
4) Issue circular to its member with financial statement.
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5) Deposit on or before 30th April at least 20% of deposits

maturing in following year known as deposit repayment
reserve account.
6) No default in repayment of deposit or company made good the
default and a period of 5 years had lapsed since making good
the default.
Deposit from member

D) Public company other than eligible public company
1) Can accept deposit from member up to 35% of PSC+FR+SP
after fulfillment of condition.
E) Deposit by IFSC public company.

1) Can accept deposit from member up to 100% of PSC+FR+SP
from member after fulfillment of condition
F) Deposit by other private company

1) Can accept deposit from member up to 100% of PSC-FR+SP
without compliances of condition.
G) Deposit by start up private company.

1) Can accept deposit without limit from members without
compliances of condition.
H) Private company which satisfy the 3 condition mention below.

A) Which is not an associate or subsidiary company.
B) Borrowing is less than twice of PSC or fifty crore whichever is
lower.
C) No default in repayment of such borrowing.
:
Terms of deposit (both from public and member
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A) Term- Minimum 6 month and maximum 36 months.

B) Can accept deposit for less than 6 month such deposit shall
not exceed 10% of PSC+FR+SP and repayable not earlier
than 3 months.
C) Deposits may be accepted in joint names not exceeding
three
D) Rate of interest as prescribe by the RBI for NBFC
E) In case of premature deposit company can reduce the rate
of interest by 1%.
F) Register of deposit
1) Every company shall maintain register of deposit at the
register office
2) Entries in the register within 7 days from the issuance of
deposit.
3) Entries authenticated by a director or secretary
4) The register shall preserve for 8 years from FY in which
the latest entry made
G) File return of deposit on or before 30th of June of every year

in form DPT-3
H) Where a company fails to repay the deposit or interest, the

depositor concerned may apply to the Tribunal for an order
directing the company to pay the sum due or for any loss or
damage incurred by him and for such other orders as
the Tribunal may deem fit.
I) When company failed to pay deposit or interest or

deposited has been accepted for fraudulent purpose then
company and office in default is liable for penalty under
section 447.
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Punishment for Fraud.

447. Any person who is found to be guilty of fraud involving an amount
of at least ten lakh rupees or one per cent Of the turnover of the
company, whichever is lower, 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:
Provided that where the fraud in question involves public interest, the
term of imprisonment shall not be less than three years.
Provided further that where the fraud involves an amount less than
ten lakh rupees or one per cent. Of the turnover of the company,
whichever is lower, and does not involve public interest, any person
guilty of such fraud shall be punishable with imprisonment for a term
which may extend to five years or with fine which may extend to fifty
lakh rupees or with both.
SELFNOTES-
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LAW#LOGIC#LOVE CHARGES
5. Charge
1. In order to secure the loan

2. Charge is created on the assets of the
company (in or outside India)
3. Assets may be movable, immovable Tangible,
Intangible
Types of charge.
# Fixed charge or specific charge.

1) It cover assets which are ascertained or are capable of being
ascertained and defined.
2) Generally created on fixed assets.
3) Cannot deal in that property which has been charged.
# Floating charge / general charge

 It covers those assets which are not capable to ascertained
and defined.
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8007916622/33
 Generally it is created on current assets. It is created on such

class of assets which changing from time to time in the
ordinary course of business.
 Company may freely deal in the property which has been
charged. Company may sell, mortgage, or lease such charged
property.
Crystallization of floating charge.
Conversion of floating charge into fixed charge by order.

E- Enforce security by creditor debenture holder (default.)
C- Cease to carry out the business.
L- Liquidation.
Any other happening on such other events.
#Effects of crystallization.
A) Priority over any subsequent equitable charge and other and
unsecured creditors
B) However, preferential creditors like government, employee dues
gets priority over the floating charge.
Postponement of floating charge.

Floating charge leaves the company free to create equitable mortgage
on the same property until crystallized. Where such mortgage has
priority over the floating charge which gets postponed.
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 Situations where floating charges gets postponed

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8007916622/33
a) Landlord who restrain from rent

b) Creditor who obtain a garnishee order
c) Judgement creditor who attach and sold the property
d) Employee or other preferential creditors
e) Supplier under the hire purchase agreement under goods are
remain the property of seller.
f) Persons who take mortgage without notice of floating charge has
priority over floating charge.
g) Floating charge created within 12 months immediately preceding
the winding up shall be invalid unless it is proved that the
company was solvent after the creation of charge.
Difference between mortgage and charge
Mortgage Charge
1) Transfer of interest 1) Security for securing the
2) Act of the parties loan
2) Act of parties or
3) Registration is operation by law
compulsory
3) Charge created by
operation by law does not
4) Fixed term require registration.
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5) Carries personal liability 4) May be for perpetuity

8007916622/33
5) No personal liability
unless default.
# Registration of charge section 77.
1) Company shall register the charge within 30 days from creation.

2) Particulars of charge signed by company and charge holder.
3) Submit CHG. 1 for other than debenture and CHG. 9 for
debenture along with instrument creating charge.
4) Extension- can be granted by ROC.
A) Charge created before commencement of companies act 2019

!) Can be register within 300 days from creation of charge
!) Company shall register within 6 months from
commencement of amendment (2019) act by paying
additional fees.
B) Charge created after commencement of companies

amendment act (2019)
!) Register within 30 days from creation if not
!) Can be register within 60 days from creation by paying
additional fees
!) Further extension of 60 days after payment of ad valorem
duty
5) ROC issue certificate of registration of charge in form no.CHG. 2
6) Section not applicable to charge specified by CG after consultation
with RBI.
Consequences of non-registration.
A) Liquidator can ignore the charge and treat them as an
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8007916622/33
C) If subsequent charge is created and registered on the same

property than later charge would get priority.
Application for registration by charge holder.
 *Company failed to register within 30 days from creation

 *Charge holder may apply to ROC for registration
*ROC issue 14 days’ notice to company for registration of charge.
 If company failed to register the charge even after notice given by
ROC then ROC shall register the charge.
 Fees paid by charge holder can be recover from company.
Satisfaction of charges
A) Company intimate to ROC within 30 days from satisfaction
(CHG. 4).
B) Extension can be granted by ROC for a period of 300 days
after payment of additional fees.
C) ROC shall give 14 days’ notice to charge holder.
D) If no objection is received within 14 days then ROC shall
register the satisfaction of charge and issue certificate of
registration for satisfaction in form CHG. 5.
Register of charge.
Company’s register of charge.

Keep register of charge in form CHG. 7 containing particulars of
charge.
Register of charge shall be kept at register office of the
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company and preserved permanently.

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8007916622/33
Instrument creating charge shall preserve for 8 years from

satisfaction.
Register of charge can be inspected by member, creditors (free
of cost) and other person (fees) during business hour.
Registrar’s register of charge

www.mca.gov.in shall be deemed to be register of charge.
Application to central government condonation of delay section 87.
Company fails to register with specified time then company may apply
to central government for extension of time (CHG. 8) CG may grant
extension if satisfied that
A) Non-registration was accidental

B) Inadvertence or some other sufficient reason
C) Not of a nature to prejudice the position of creditors
D) Just and equitable grounds.
Order of CG shall be filed with ROC in form no. INC. 28 along
with the fees.
SELF NOTES-
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8007916622/33
LAW#LOGIC#LOVE Distribution of profit
6. Distribution of profit
Introduction
A) Part of net profit distributed to shareholder

B) It is not obligatory but once declared it becomes debt(except
preference dividend)
C) Return on the paid up share capital
D) It also include interim dividend.
E) Until and unless dividend is declared, the shareholder has no claim
against the dividend.
F) Distribution of dividend coupons shall not treated as deemed
dividend.
Types of dividend
1) Final dividend:-
A) Dividend declared at AGM
B) Once declared it becomes debt
C) Recommended by BOD and declared by shareholder by passing OR
D) Mentioned amount of dividend in board report
2) Interim dividend
A) Declared between two AGM
B) Declared by BOD
C) BOD may declare during current financial year or between closing of
financial to date of AGM.
UNIQUE ACADEMY 1 CS SHUBHAM ABAD-

8007916622/33
D) In case loss in current FY up to end of previous quarter in which

dividend is declared then rate shall not exceed average of three
immediately preceding financial year.
E) All provision relating to payment of dividend shall apply to interim
dividend.
F) Interim dividend once declared by BOD cannot revoked except with
the consent of shareholder or if it is declared illegally.
Declaration of dividend (123)
A) Authorized by AOA
B) Out of current year or previous year profit or both or out of fund
provided by CG/SG in pursuance of guarantee.
C) First set off previous year losses and depreciation (schedule 2).
D) While computing profit exclude notional gain/unrealized
gain/revaluation profit.
E) Company may transfer such amount to reserve before declaration.
Dividend in case of loss or inadequacy of profit
A) May declared out of previous year’s accumulated profit.

B) Rate shall not exceed average rate of 3 immediately preceding
financial year (not apply if company has not declared dividend in
each preceding 3 year.)
C) Withdrawal from accumulated profit shall not exceed 10% of PSC
and FR as per latest financial statement.
D) Balance in reserve shall be at least 15% of PSC.
E) Before declaration first set off the loss incurred in FY.
F) No dividend from other reserve except free reserve.

8007916622/33
Process for approval and payment of dividend
A) Recommendation by BOD and approved/declared by shareholder in

AGM by passing BR
B) Interim dividend can be declared by BOD
C) Deposit in a schedule bank within 5 days and payment within 30
days from declaration.
D) If dividend has not paid within 30 days then transfer to unpaid
dividend account within 7 days and kept for 7 years. Company shall
prepare the list of unpaid dividend account and placed on the
website within 90 days from transfer to unpaid dividend account
E) If failed to transfer within 7 days than liable to pay interest @ 12%
on remaining unpaid amount.
F) After 7 years it should transfer to investor education protection fund
account(IEPF)
G) Shareholder and their legal heirs can claim his dividend or shares
from IEPF.
Investor education protection fund
A) Established by CG
B) To educate the investor and protect the interest of investor.
C) Amount credited to the fund
! Unpaid dividend
! Unclaimed application money
! Unclaimed matured deposit.
! Unclaimed matured debenture
! Interest thereon
! Grant given by CG/SG/BC/Institution
! Interest or other income received,
8007916622/33
Utilization of investor education protection fund
A) Refund in respect of unclaimed dividend/matured

deposit/debenture/application money/interest thereon.
B) Promotion of investor education
C) Distribution amongst shareholder/debenture holder/deposit holder/
who suffered the losses if ordered by court.
D) Reimbursement of legal expenses in pursuing to class action suit.
Dividend during registration of transfer of share.
A) Instrument of transfer has been delivered to company but not

registered then transfer such amount to unpaid dividend account
unless registered holder authorized to pay to transferee.
B) Any right issue/bonus issue shall keep in abeyance.
A Punishment for failure to distribute dividend
A) Every Director in default shall be punishable with imprisonment up to 2

years and fine shall not less than 1000 per day of default.
B) Company shall liable to pay interest @ 18%
C) Exception
! Dividend could not paid because of operation of law.

! If direction is given by shareholder and such direction cannot be
complied by company
! Dispute regarding the right to receive dividend.
! Dividend is lawfully adjusted against the sum due from member.
! Dividend warrant is post within with in period

8007916622/33
SELF NOTES-

8007916622/33
LAW*LOGIC*LOVECSR
8. Corporate social responsibility
Applicability:-
Company fulfills any of the following criteria during immediately
preceding financial year. It applies to every company including its
holding, subsidiary and a foreign company having its branch office or
project office in India.
A) Net worth 500 Crore or more

B) Turnover 1000 Crore or more
C) Net profit 5 Crore or more
However if company does not satisfy the criteria for 3 consecutive

financial year then no need to follow CSR provision
Composition of CSR committee
A) Listed company- 3 director out of one shall be ID

B) Unlisted public or private company- at least 2 director if
provision of ID not applies to such company.
C) Foreign company- 2 person out of one person should be person
resident in India.
D) CSR committee shall formulate CSR policy and amount of
expenditure recommend to BOD.
E) CSR shall monitor the implementation of the CSR policy from
time to time.
CSR activity

8007916622/33
LAW*LOGIC*LOVECSR
A) By charity- money donate to various charitable trust, society, and

NGO etc.
B) By contract- contract with NGO to carry out the CSR activity on
behalf of company.
C) By it self- Company can create its own trust for CSR activity.
Eligible social activities
Social welfare work like eradicating poverty, health care, sanitation,

making available safe drinking water.
A) Promotion of education including special education and

employment enhancing vocational skills
B) Promoter of gender equality, empowering women, setting up
homes and hostels for women
C) Environment protection, ecological balance, animal welfare,
conservation of natural resources etc.
D) Protection of national heritage, art, and culture.
E) contribution to the prime minister’s national relief fund set up by
CG/SG
F) Contribution towards combating HIV-AIDS, or other maternal
diseases.
Activities not consider as CSR
Activities undertaken outside India

Activities that benefit only the employee and their families of the
company.
A) Contribution to any political party. Event such as
marathon/awards/sponsorship of TV programed

8007916622/33
LAW*LOGIC*LOVECSR
B) Expenses incurred to fulfillment of any ACT/statue.

C) Expenditure incurred in normal course of business.
Formulation of CSR policy
A) CSR committee shall prepare CSR policy and recommend to the

board.
B) BOD shall ensure activities formulate by CSR are duly complied
by company.
C) Company shall spend at least 2% of average net profit of 3
Immediately preceding financial year.
A) Where the company has not completed three

financial years then average profit of preceding financial
years shall be consider.
B) Net profit shall be calculated as per section 198 of the Act.
C) Give preference to local area.
Failed to spend CSR amount then give reasons in Board
report.
SELF NOTES-

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LAW*LOGIC*LOVECSR

8007916622/33
LAW#LOGIC#LOVE ACCOUNTS & AUDIT
8. Accounts and audit.
Books of accounts.
 Maintain on accrual basis which shows true and fair view and
includes.
A) All some received and expended
B) Income and expenditure
C) Assets and liabilities
 Books of account shall keep at registered office or other place
decided by BOD.
 In case of change in place file notice within 7 days to ROC in
form AOC-5.
 Books of account of branch office may be kept at that office
however send summarized account at regular interval not
more than 3 month.
 Preserve for at least 8 years immediately preceding the
Current year.
Financial statement
 Trading and profit and loss account or income or expenditure
account.
 Balance sheet
 Cash flow statement
 Statement showing changes in equity if applicable
 Explanatory notes forming part of financial statement.
 It includes consolidated financial statement.(financial
statement of subsidiary and associate company)
 Financial statement shall laid before AGM
 For OPC, small, and dormant company, financial statement
2
exclude cash flow statement.

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 Attach along with financial statement a statement containing

salient feature of financial statement of subsidiary company.
Responsible person for keeping books of accounts.

 Managing director or manager
 Whole time director
 CFO
 Other such person authorised by the board
*Inspection of books of accounts.

 Director or his agent or representative during business hours.
ROC, SEBI, CG, or person appointed by such authority.
 Members if authorised by board of company in GM.
 Auditor has the right to access at all time books of account of
company account.
Approval and signing of financial statement.

A) Financial statement shall be approved by BOD before
signing.
B) It should be signed by:
1) Chairperson if authorised by BOD
or
2) Two director one should be MD if any
and
3) CEO (if he is director) CFO and CS if any.
C) One person company- Signed by only one director before

2
submitting to the auditor.

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D) Auditor report and board report shall be attached to the

financial statement
Right to get copies of audited financial statement.

 Send copies of the audited financial statement at least 21 days
(14 days in case of the section 8 company) before general
meeting to members and debenture trustee and other person
who are so entitled.
 Shorter period than 21 days is sufficient if:
A) Company having share capital-approval from majority in
number and holding at least 95% of the PSC having voting
power
B) Company not having share capital- 95% of member holding
voting power.
 Listed company deemed to complied this section
A) If copies made available for inspection at RO at least 21
days before meeting and
B) Statement containing the salient features of financial
statement is sent at least 21 days before meeting.
C) However send full copy if requested by any member.
 Listed company and other public company having Net worth
more than 1 crore and turnover of more than 10 crore can
send financial in following manner
A) Electronic form to Demat account holder whose email id is
registered
B) Members who hold shares in physical form but consented in
writing to receive in electronic form.
C) In physical form to other member.
2 Page

Re-opening of accounts if ordered by court or tribunal

 Company can reopen after order of competent court and
NCLT.
 Application can be made by
A) CG/income tax authorities/SEBI/Regulatory
Body/competent court.
Ground for re-opening
A) Accounts are prepared in a fraudulent manner.

B) Affairs of the company were mismanaged.
C) Doubt on the reliability of the financial statement.
Books of account of past 8 financial year can be re-opened

If CG gives direction period of 8 years can be extended.
Voluntary revision of financial statement or board’s report

A) BOD can prepare revised financial statement or board’s
report of any of the three past year after obtaining
approval of the tribunal if:
1) Financial statement do not comply with 129
2) Board report do not comply with 134.
Annual compliances of financial statement(private and public

company )
File adopted or un-adopted financial statement with ROC within 30

days from the date of AGM to ROC in form AOC-4
2 Page

If AGM not held file financial statement along with the reasons of not
holding AGM within 30 days from last of meeting to ROC.
Annual compliances for OPC
A) File adopted financial statement within 180 days from closure

of FY
Audit and auditors
Qualification of statutory auditor
A) Charted accountant or a firm where majority of partner

practicing in India
B) However in case of LLP only CA partner shall be authorised to
act and sign.
Disqualifications of auditors section 141(3)
 Body corporate under than LLP.

 Officer or employee of company.
 Partner/employee of such officer or employees of the
company.
 Persons/ partner /relative hold security or interest in the
company/ holding /subsidiary/ associate company however
relative can hold upto Rs 1 lakh (face value) corrective action
within 60 days.
 Person whose partner/relative indebted to company
/holding/subsidiary / associate/subsidiary of such holding
2 Page
company in excess of rupees 5 lac.

 Person /partner/ relative has given guarantee or security in

excess of Rs. 1 lac to company.
 Person or firm has business relationship with the
company except professional services and commercial
transaction as a customer engaged in the business of
telecommunication, airlines, hospitals, hotels at arm's length
price.
 Relative is a director or in employment as a director or KMP.
 Full time employment elsewhere or appointed as an auditor or
more than 20 companies exclude one person company small
company/dormant company/ private having share capital less
than 100 cr.
 Convicted by court offence including fraud and the 10 years
has not elapsed from such conviction.
 Cannot render certain services under section 144.
 Account and bookkeeping
 Internal audit
 Design and implementation of any financial information
system
 Actuarial services
 Investment advisory services
 Investment banking services
 Rendering of outsourced financial services
 Management services.
Note:- If auditor incurs any disqualification then he shall
vacant his office and it would result into casual vacancy.
Appointment of 1st auditor other than govt company

A) First director shall be appointed within 30 days of registration by
2
BOD
Page

B) Hold office till the conclusion of first AGM.

C) BOD failed to appoint then member shall appoint within 90 days
from incorporation.
D) Inform to ROC in form ADT-1 within 15 days from appointment.
Subsequent auditor other than govt company

A) Appointment at first AGM
B) Individual or firm who shall hold office till the conclusion of
Sixth AGM.
C) No need to ratify the appointment.
Appointment of auditor in govt company.

A) First auditor shall be appointed by C&AG within 60 days
from incorporation.
B) C&AG failed to appoint then BOD shall appoint within next
30 days.
C) If BOD failed then members shall appoint within next 60
days at EGM.
D) Hold office till the conclusion of AGM.
Subsequent auditor in govt company.

A) Appointment within 180 days from the commencement
of financial year by C&AG.
B) Term- till the conclusion of next AGM.
Manner of appointment of auditor
A) BOD consider the qualification of auditor and recommend to the

member.
2
B) If company constitute audit committee

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1) Audit committee consider the qualification of auditor and

recommend to BOD
2) If BOD agrees with the recommendation then BOD further
proposed the name in AGM
3) If BOD disagrees then BOD shall refer back to audit committee.
4) Audit committee shall reconsider the decision and if BOD
agrees then they proposed the name at AGM
5) If audit committee does not reconsider, then BOD shall send its
own recommendation to the AGM
6) Members will appoint auditor at AGM by passing OR.
Re-appointment of retiring auditor
Retiring auditor cannot be reappointed if
A) If he is disqualified
B) He shows unwillingness to be re-appointed.
C) Sr has been passed that somebody else is appointed or retiring
director shall not be appointed
D) If auditor is not appointed or re-appointed than existing auditor
shall continue to be auditor.
Rotation of auditor
Applicability
A) Listed company
B) Unlisted public company having PSC 10 Crore or more.
C) Private company having PSC 50 Crore or more.
D) Any company having public borrowing and public deposit of Rs
50 crore or more.
2 Page

Provision of rotation
A) Individual- 1 tem of 5 consecutive years
B) Firm- 2 terms of 5 consecutive years.
C) Cooling period - 5 continuous years.
D) Member may make voluntary provision in article.
*Appointment of auditor other than retiring auditor
 Special notice by member at least 14 days before the meeting.

 Special notice is not required if provision of cooling period applies.
 Company forward a copy to retiring auditor.
 Auditor may make a representation in writing.
a) State the facts of representation in the notice.
b) Send the copy of representation to all the members.
c) If copy of representation is not sent the same shall file to
ROC.
* Auditor may require the company to read out the representation in
the meeting if not notified to member.
 Hold GM pass OR.
*Removal of auditor ;-
 Hold BM-BR
 Application to CG within 30 days from passing BR in form no ADT-2
 Within 60 days pass SR from the date of receipt of order
 Opportunity of being heard shall be given before removal.
Resignation of auditor
 Auditor may resign from office by giving notice to company in
writing.
 Non-government company
2 Page

 Within 30 days from resignation file reasons of resignation to

company and ROC
 Government company –
 Within 30 days from resignation file statement to the company roc ,
C&AG
 File ADT-3 to ROC indicating the reasons of resignation.
Casual vacancy
Non govt company

A) BOD within 30 days except in case of resignation.
B) In case of resignation appointed by BOD and approved by
member within 3 months.
C) Term- till the conclusion of next AGM
Govt company
A) C&AG within 30 days from vacancy.
B) If C&AG failed than BOD shall appoint within next 30 days.
C) Term- till the conclusion of next AGM
 Power of NCLT to remove the auditor

 NCLT many remove any auditor Suo moto or an application by CG. Or
other concern person
 Removal if director acted in fraudulent manner.
 NCLT pass the order within 15 days from application
 If application made by CG then CG shall appoint new auditor
 Once removed further disqualified for further 5 years
 Penalty under section 447(fraud)
2
Imprisonment: For 6 months to 10 years.

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Fine: Upto 3 times of amount of fraud.
Powers and duties of auditors.

A) Access the books of account.
B) Inquiry about the loans and advances/assets.
C) Verify the assets
D) Charging of personal expenses to revenue account.
Audit report
A) Auditor shall make a report to the member on financial

statement.
B) Audit report shall consider the provision of companies
act/accounting and auditing standard.
C) Audit report shall state that to the best of his information and
knowledge
D) Auditor shall sign the audit report.
E) Adverse opinion of auditor shall read out in the general meeting.
F) It should remain open for inspection.
Branch audit
Branch audit can be performed by–
 Auditor of the company or
 Any other qualified person
 Foreign branch-company’s auditor/ other competent person under
foreign laws.
 Branch auditor shall submit his report to the company’s auditor.
 Follow auditing standard.
2 Page

Report on fraud by auditor

*Amount involved is 1 crore or more than he shall report to CG
Report to BOD or audit committee within 2 days of his knowledge.
BOD should reply within 45 days
Auditor shall forward his report to CG along with his comment
within 15 days.
If BOD failed to reply within 45 days than auditor shall forward
his report to CG.
*If amount of fraud involved is less than Rs 1 crore.

Auditor shall report to BOD or audit committee within 2 days from
his knowledge of the fraud.
Disclose in directors report
*Internal audit sec ( 138)

 Applicable to all listed company.
 Every unlisted public company having
 Outstanding deposit- of Rs 25 Cr or more
 PSC- 50 Cr or more
 Outstanding loan- 100 Cr or more
 Turnover-200 Cr or more.
* Every private company having

Outstanding loan- 100 crore or more or
Turnover -200 crore or more.
*Internal auditor may or may not be a CA
*Employee of the company can act as an internal auditor.
2
*Statutory auditor cannot act as an internal auditor.

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*Internal auditor should have knowledge of legal and regulatory

framework, accounting.
*Cost audit Sec(148).

 Conducted by cost accountant.
 Cost audit report submitted to BOD
 Company within 30 days from the receipt of cost audit report shall
furnish to CG
 Maintain cost record in form no (CRA-1)
 Appoint cost auditor within 180 days from commencement of FY
 Qualification of cost audit report along with his observation or
suggestion in from CRA-3
 CG may direct the cost audit of certain class of company eg.
Manufacturing drugs telecommunication fertilizers etc.
Secretarial audit(204)
A) Secretarial audit is also known as compliances report.
B) It is part of total compliances management.
C) Conducted by PCS
D) Secretarial auditor is appointed by BOD.
E) Secretarial report will form part of board report.
Applicability
1) Listed company
2) Unlisted public company having PSC of Rs 50 crore or more or
3) Turnover of Rs 250 crore or more.
Objective of secretarial audit
1) Check & report on compliances of applicable laws and SS.

2
2) Point out non compliances

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3) Protect the interest of various stakeholders.

4) Avoid the unwarranted legal action.
SELF NOTES-
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LAW#LOGIC#LOVE TRANSPARENCY & DISCLOSURE.
9. Transparency and
disclosure
 Annual report
 Comprehensive report issued by the company to its shareholders
About the financial and other aspects
 Disclosure file within 21 days meeting to stock exchange
Content of annual report
 Audited financial statement

 Consolidated financial statement
 Cash flow statement
 Directors report
 Management discussion and analysis report listed company
 Business responsibility report top 500 listed company.
Additional disclosure in annual report.
Related party disclosure

Management and discussion analysis
Industry structure and development
Opportunities and threats
Segment wise or product wise performance
Risk and concern
Internal control system and their adequacy
Discussion of financial performance with operational performance.
Corporate governance report
Code of governance
Details of BOD and board meeting
Details of AC and meeting.
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Details of NRC and SRC committee and meeting.

8149221250
Remuneration to directors.
Details of General Meeting.
Declaration by so about code of conduct.
Compliance certificate from auditor or PCS.
Distribution of annual report to the stakeholders.
Listed entities send annual report to all stakeholders at least 21 days

before the Annual General Meeting.
Annual report may be in soft copy if the email ID is registered.
If the email is not registered then submit hard copy of report.
If requested for full annual report then provide full copy.
Boards report
Report attached to financial statement laid before any General

Meeting
It includes.
Extract of annual return in MGT 4
Number of board meetings
Director’s responsibility,
Report declaration by ID
Policy on appointment and remuneration of directors
Particulars of low investment guarantee
Related party transaction
Material changes if any
Conservation of energy Technology
Director’s responsibility statement
Statement about setting standards have been complied.

Books of account shows true and fair view.
Proper and sufficient care for the maintenance of adequate
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accounting record.
8149221250
Annual accounts on a Going Concern.

Internal financial control are adequate.
Independent director should hold office for 5 consecutive years past
SR for further reappointment of 5 years.
SIGNING and dating of boards report.
If authorised by board of directors what are who should be a

Managing Director if any fore by one director where the one
director.
Signed copy of financial statement including consolidated financial
statement along with.
Notes and next to financial statement.
Auditor's report.
Board report.
Issue circulated.
File with ROC within 30 days from AGM.
Annual return mgt 7.
File with RAC within 60 days from Annual General Meeting or date of
AGM.
Sign by director and CS.
OBC and small company signed by CS.
Abridged annual return.
Government may prescribe abridge format annual return for small

company and prescribed company.
Certification of annual return.
Listed company.
Company having paid up share capital 100 cr or more or turnover
1
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than 50 cr or more.
8149221250
Certified by PCS stating compliances with all the provisions of this

act.
Whistle blower policy.
Accept deposit from public borrowed money bank in excess of 50 CR.
Disclosure under sexual harassment of women.
Applicable to all companies having more than 10 women employee.

It was also disclose the following.
Complaints received in a year.
Complaints disposed of during the year.
Complain pending for more than 90 days.
Number of workshop against sexual harassment carried out.
Number of action taken by the employer or district officer discuss in
board meeting.
Liability For statement section 448.
Liable under Section 447 if
Report certificate prospectus file.
Any material know is to be false or women’s any material facts to it
is to be material.
Penalty for section 447.
Imprisonment for 6 months to 10 years.
Fine upto three times of the amount of fraud.
SELF NOTES-
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8149221250
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8149221250
LAW#LOGIC#LOVE LOANS.
10. Loan and Investment By

Company (186)
CONDITION-
 Investment through not more than two layers of investment company.
 Exclude wholly owned subsidiary.
 However, acquisition of company incorporated outside India having more than
two layers of subsidiary is allowed.
 Subsidiary company is required to have further layer of subsidiary for meeting
the requirements of law
 No company shall directly or indirectly give loan, guarantee security,
investment to any person
 Any person does not include employee of the company.
LIMIT-
 BOD by passing UR can invest or give loan, or guarantee or security to any
person except employee up to
A) 60% of PSC + free reserve+ security premium or
B) 100% of free reserve and security premium
C) Pass SR if existing and proposed investment +loan +guarantee +security
exceeds such limit
Investment means subscription, purchase of securities of a body corporate.
Exemption if I+ L + G+ S provided to wholly owned subsidiary, joint venture

Company.
 Approval from public financial institution if default in repayment of loan and

interest thereon and the existing and proposed loan, investment, guarantee,
security, exceeds the limit of 60% of PSC+FR+SP or 100% of FR+SP.
 Rate of interest on such loan shall be at least the yield return 1 year 3 year 5
year 10 year of government security.
 No default in deposit and interest.
 Disclosure the details in financial statement.
1
 186 shall not apply to.

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Banking company
Insurance company
Housing finance company
Business of financing industrial enterprises or infrastructure facility.
B. Investment made by
Investment company in right issue.
NBFC in business of acquiring securities.
Exemptions.
> Government Company engaged in defence produce.
> Government unlisted company with the approval of central government.
Investment in the name of the Company (187) -

a) All investment shall be made and held by the company on its own name.
b) Company may hold any shares in its subsidiary in the of any nominee if it is
necessary to do so.
c) Any share or securities not held by it in own name, then company shall
maintain a register which contain the particular of such investment and
kept open for inspection during business hours.
Related party transaction section 188.
Related party 2(76)

 Director or his relative.
 KMP or his relative.
 A firm in which director, manager or his relative is a partner
 Private Company in which director, manager or his relative is a director or
member.
 Public company in which director or manager is a director and holds more
than 2% of his paid up share capital along with his relatives.
 Body corporate whose board, MD or manager is accustomed to act as per the
directions given by the director or manager.
 Any person on whose advice or director or manager is a customised to act.
1
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 Any body corporate which is holding, subsidiary, associate company of such

company.
 Body corporate which is a subsidiary company of a holding company to which
it is also a subsidiary company.
 Any body corporate which is an investment company or the venture of the
company.
The investing company or the venture of a company” means a body
corporate whose investment in the company would result in the
company becoming an associate company of the body corporate.]
Relative :-
(i) They are members of a Hindu undivided family;
(ii) they are husband and wife; or
Following person as may be prescribed
A person shall be deemed to be the relative of another, if he or she is
related to another in the following manner, namely:-
(1) Father: (includes step-father)
(2) Mother (includes the step-mother)
(3) Son: (includes the step-son.)
(4) Son’s wife.
(5) Daughter.
(6) Daughter’s husband.
(7) Brother: (includes the step-brother)
(8) Sister: (includes the step-sister)
Related party transaction with the approval of BOD.

A) Contract regarding goods and services
B) Contract of immovable property
C) Leasing of property of any kind
1Page
D) Availing or rendering of any services

E) Appointment of any agent for the purchase or sale of goods, material,

services or property
F) Appointment of any related party as employee (holding place of profit)
of the company, its subsidiary, or associate company
G) Underwriting for any securities or derivatives of the company.
Related party transaction by passing OR if the value exceeding the
lower of following limit.
A) Sale/supply/purchase of goods – 10% of turnover or Rs. 100 cr.

B) Selling/disposing/buying any property- 10% of net worth or
Rs.100 cr.
C) Leasing of property - 10% of net worth or Rs.100 cr.
D) Availing or rendering of services- 10% of turnover or Rs. 50 cr.
E) Any regarding appointment at office or place of profit- Rs 2.5 lacs
per month.
F) Underwriter where remuneration to underwriter- 1% of net
worth.
Note :- Transaction shall be considered individually or cumulatively

for entire FY.
Turnover or net worth shall be based on audited financial statement

of preceding year.
Section 188 shall not apply retrospectively i.e. Person becomes

related party after entering into contract.
Exceptions :
 Transaction in ordinary course of business at an arms length price

 Transaction between holding or wholly owned subsidiary company.
 Transactions between government companies.
1
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 Unlisted Government Company with the related party, approval

from central or state government.
Emergency contract.
 Directors on employees enter into related party transaction without
approval
 Can be rectified within 3 months by passing BR or OR as the case
may be.
 Such contract shall be voidable at the option of the BOD or company
as the case may be.
 Director shall indemnify such contract.
Interested member
a. Interested member shall not vote at the meeting, such
restrictions shall not apply if 90% or more members are relative of
promoter or related party.
Interested director.
Interested director shall not participate in such resolution, not be
counted for quorum and shall not vote on such resolution.
Role of audit committee.

*All RTP shall require prior approval of the audit committee.
*Audit committee can grant omnibus approval.
SELFNOTES-
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LAW#LOGIC#LOVE REGISTER & RECORDS.
11. Register and records
Statutory books/register
A) Register of charges
B) Register of member
C) Register of debenture holder
D) Register of security holder
E) Register of deposit
F) Register postal ballot
G) Register of KMP
H) Register of buy back.
1) Register of charges
- Every company shall keep register of charges at its register
office in CHG-7.
- It includes particular of all charges including floating charges.
- Entries shall made after creation, modification or satisfaction of
charges.
- All entries shall be authenticated by a director or CS or other
authorised person.
- Preserve permanently.
2) Register of member
Every company shall maintain following register along with
index
- Register of member for each class separately.
1 Page
- Register of debenture holder
UNIQUE ACADEMY CS SHUBHAM ABAD.

- Register of other security holder

- Foreign register of member and debenture holder.
3) Place of keeping books of account.

- Prepare and keep at its registered office.
- However books of account may be kept at such other place
approved by BOD
- In case of change in place give notice to ROC within 7 days.
4) Maintenance of books of account in electronic form

- Books can be maintain in electronic form
- It remains accessible in India.
- It should retained in the format in which they were originally
generated.
- Information received from branch office shall not be altered
- Electronic record of the document shall be capable of being
displayed in legible form.
5) Right to inspect the register of director & KMP.

- Member can inspect and take extract within 30 days from
request to company.
- Kept open for inspection at every AGM.
- If any inspection is refused or failed to send copies within 30
days then ROC on application can order to company to provide
the same.
- Non applicability- 100% Govt. company
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SELFNOTES-

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LAW#LOGIC#LOVE C, A&A
12. Corporate reorganization
Introduction-
Corporate restructuring is a comprehensive process by which
company can consolidate its business operation and strengthen its
position for achieving long term and short term objective.
Merger
Fusion and absorption of one or more company by another.
Amalgamation-
Two or more companies are joined together to form a new entity or
one or more companies are to be absorb or blended with another.
Compromise or arrangement with member or creditors. (230)
A) BM-BR
B) Application to NCLT by following person
- Company
- Member and creditors
- Liquidator(before or after wound up)
C) Applicant should provide affidavit containing
- All material facts
- Latest financial position.
- Reduction of share capital shall be included in scheme
- Scheme shall approved by at least 75% of the secured creditors
in value.
- Creditors responsibility report
- Valuation report
D) Tribunal may give direction for holding the meeting
E) Notice of the meeting
1
- Notice send to all creditors, member and debenture holder.

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UNIQUE ACADEMYCS SHUBHAM ABAD-8007916622/33

- Notice send shall be accompanied by the complete details of

the scheme, copy of valuation report, effect of the scheme.
- Notice shall also be placed on the website of the company.
F) Notice send to all regulators
- Notice send to CG, Income tax authorities, SEBI, CCI, Stock
exchange or other regulatory authorities.
- Such authorities can make representation within 30 days from
the receipt of the notice.
G) Approval of the scheme
- Scheme shall be approved by majority in number representing
the 3/4th in value of the creditor or member presented and
voted.
- Scheme once approved shall be binding on the company,
creditors, members, liquidator and contributaries as the case
may be.
H) File certificate by the auditor that proposed scheme is in
conformity with the AS.
I) Objection-
- Person who holds at least 10% of the shareholding or
- Person having outstanding debt amounting to not less than
5% of total debt
Merger and amalgamation of companies (sec. 232)

A) Tribunal’s power to call meeting
- If compromise or arrangement involve merger and
amalgamation of any two companies than on application
tribunal may order the meeting of member/creditors as the
case may be.
B) Circulation of documents
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- Draft of proposed schemed, statement showing effects of

merger, report of expert shall be circulated to all members or
creditors as the case may be
- Draft scheme shall be filed with ROC.
C) Approval from shareholder and member.
- Scheme shall be approved by majority in number representing
the 3/4th in value of the creditor or member presented and
voted.
D) Sanctioning of scheme by tribunal
- Tribunal after satisfying confirm the compromise and make
provision for the following
A) Transfer of whole or part or undertaking, property, or
liabilities
B) Allotment of share, debenture by transferee company
C) Continuation of legal action against the transferee company.
D) Dissolution without winding up of the transferor company.
E) Provision for dissented shareholder.
F) If the transferor company is listed company and the
transferee company is unlisted company the transferee
company remains unlisted until it becomes a listed company.
G) Transferee Company cannot hold shares in its own name or
under any trust as a result of merger.
E) Auditor’s certificate
- File certificate by the auditor that proposed scheme is in
conformity with the AS
F) Transfer of property or liabilities.
- By virtue of the order of tribunal, all the properties and
liabilities of the transferor company shall be transferred to the
transferee company.
G) Certified copy of order shall be filed with ROC for registration.
1
H) Effective date
Page
- Scheme shall clearly indicate an appointed date.

I) Every company shall file annual statement duly certified by

CA/CS/CWA in practice until the completion of the scheme
indicating scheme is being complied with the accordance with
the order of tribunal.
Merger and amalgamation of certain companies (233)

# Simplified procedure for M&A
- 2 or more small companies or
- Between holding and its wholly owned subsidiary or
- Such other class of companies specified by CG
Procedure
A) Issue of notice to ROC and official liquidator of respective
company or person affected by the scheme
B) Objection within 30 days from receipt of notice
C) Objection shall be considered by the company
D) Schemed shall be approved by at least 90% of the total number
of shares
E) Each companies shall file declaration of solvency with ROC
F) Approval from 90% of the creditor(value)
G) Transferee company shall file a copy of the scheme so
approved with the CS/ROC/official liquidator
H) CG shall issue the confirmation if no objection is received from
ROC/official liquidator within 30 days.
I) CG if received the objection or if the scheme is not in public
interest than CG may apply to NCLT within a period of 60 days
from receipt of observation.
J) On receipt of an application tribunal may modify or confirm the
scheme
K) Copy of order confirming the scheme shall be filed with ROC by
1
the transferee company.

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L) Transferee company shall file an application indicating the

revised authorized capital with the ROC
Cross border merger
A) Foreign company with the RBI approval merge with into Indian
company
B) Consideration may be in the form of cash/ depository receipt.
Merger and amalgamation of companies in public interest

A) If CG may by notification can pass the amalgamation order of
two or more companies if it is in public interest
B) Companies can make suggestion or modification within 2
months from the date of receipt of draft copy of scheme
C) Right of member, debenture holder, creditor shall nearly
remain the same after amalgamation
D) Any aggrieved party may appeal to tribunal within 30 days
from the date of order.
E) Condition of the order
- Send draft copy of the scheme to each companies concerned.
- Appeal shall be disposed off by the CG
- Copies of the order to be laid before each house of parliament.
SELFNOTES
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LAW#LOGICMCA-21 & XBRL.
13. An introduction to MCA 21 &

filling in XBRL.
INTRODUCTION.
 MCA-21 has made things easier by connecting the
companies with ROCs, RDs & even MCA.
 It has saved the time of the representative & helped
them to focus on other tasks.
Benefits.
 Enables to register documents quickly & easily.
 Gives easy access of public documents.
 Faster & effective resolution of public grievance.
 Registration & verification of charges only.
 Ensures proactive & effective compliance.
 Enables the MCA employees to deliver best of breed
services.
SERVICES OFFERED.
 Obtain digital signature certificate-The information
technology act 2000 has permitted to use Digital
Signature on the documents submitted in electronic
form to ensure the security & authenticity of the
documents filed electronically.
 LLP Services for business User- A business can enter
or update partner details of an LLP. In form 3 or
form 3 & 4.
 Complaints-User can raise service-related
complaints, track thee complaints created & can also
give feedback or suggestion to MCA-21.
 Fee & Payment services – User can avail services
through enquire fees, pay later, link NEFT payment
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etc.

8149221250
 Investor services-User can upload investor details&

confirm uploaded files.
CENTRAL REGISTRATION CENTRE (CRC).

 CRS is an initiative of MCA with specific objective of
providing speedy incorporation related services.
CORPORATE IDENTITY NUMBER (CIN).

 Every company get a Corporate identity number (CIN).
 CIN is found from MCA-21 based on the following; -
 ROC Registration no.
 Existing company name.
 Old name of company
 Inactive CIN.
 All Indian company gets a unique 21-digit CIN.
 This is required to be quoted on all e-form.
 The CIN given to the company indicates listing status,
economic activity& state, year of incorporation,
ownership& sequential number assigned by ROC.
FOREIGN COMPANY REGISTRATION NUMBER(FCRN).

 Every foreign company is allotted with FCRN.
 Every Indian company is allotted with CIN.
DIRECTOR IDENTIFICATION NUMBER. (DIN).

 DIN is mandatory for directors of Indian companies
who are not citizen of India.
 DIN is not mandatory for directors of foreign company
having branch office in India.
 DIN no. once obtained is valid for life time of a director.
 A single DIN is only required irrespective of the no. of
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directorship.
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8149221250
RUN FACILITY.
 Reserve Unique Name is a way of reserving a name for
a company or for a change of name of the company.
 Only MCA portal user can use this facility
 In case of change of name of a company (CIN) should
be submitted at the time of application through RUN
process.
INTREGATED PROCESS OF NAME RESERVATION,

COMPANY INCORPORATION, DIN TAN THROUGH
SPICE(FORM INC-32) BY MCA-21.
 An INTREGATED PROCESS OF NAME RESERVATION,
COMPANY INCORPORATION, DIN TAN THROUGH form
INC- 32(SPICE).
 After filling the form & making the payment user is
required to visit MCA portal & submit application for
PAN & TAN.
 Download form 49A (PAN) &49B (TAN).upload them
along with DSC.
 He has to fill the form within 2 days. Or it would be
invalid.
 As soon as the e-form is found complete, company
would be registered & CIN would be given
 DIN gets issued to the proposed directors who do not
have a valid din.
 MAX.3 DIN is allowed. For the filling of form SPICe-32.
 On approval a COI is issued with PAN as allotted by
income tax department.
 In case of non-receivable of PAN. Track the status on
www.TINNSDL.COM.
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DIGITAL SIGNATURE CERTIFICATE. (DSC).

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8149221250
a. E-forms are required to be authenticated by the

authorized signatories using digital signatures as
defined under the Information technology act, 2000
b. It is duly issued by a certifying authority.
c. It is equivalent of a written signature.
 The following are 4 types of users which are
identified as users of digital signatures.
 MCA (govt.) employees
 Professionals.
 Authorized signatory of the company.
 Representative of bank & financial institutes.
 Foreign directors are required to obtain digital
signature certificate from an Indian company.
IMPORTANT TERMS USED IN E-FILLING.

 PRE-FILL- It is used for filling automatically the repeated
question in e-form.
 ATTACHMENT-A document which needs to be sent

along with the form in adobe PDF format. & my MCA
portal has a facility to convert a document it into pdf.
(Not more than 2.6 MB).
 MODIFY-After selecting check form you cannot do any

editing on it. If any modify is to be done click on modify
n edit the form.
 RADIO BUTTON- This is used most while filling the e-

form. It helps select the option of the two.
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8149221250
 CHECK BOX- Applicable check box is required to tick out

of the two or more boxes wherever it appears in the
form.
 DROP-A drop down appears n gives you the option to
select the required highlight.
 TEXT BOX- It provides detail information of the person.

Space given I enough for the info to be written. If space
is less continuing in annexure given.
 COUNTRY CODE-Sometimes this is to be filled as per

the info given.
 STOCK EXCHANGE CODE-All stock exchange is required

to select their respective stock exchange code from the
given options (A OR B).
 CHECK FORM- By clicking on this user will come to

know of mandatory details not filled. Or size of the
document is not proper.
 PRE- SCRUTINY-This is an option where checking of

core aspects has been filled or not & pdf is attached
properly. Also allows to affix sign digitally
 SUBMIT- E-form can be submitted after it is digitally

signed. the submission is given below; -
 Log in into MCA-21 portal & uses e-form upload
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services.
8149221250
 Browses the e-form & click on ‘submit’.

 Errors will be shown if any.
 If successfully filled n submit user will be takin to fee
payment page.
 A digital certification will be provided to ensure that
certificate has not expired or suspended.
SERVICE REQUEST NUMBER- Each transaction gets a

unique service request number. After filling e form a e-
character alpha numeric string starting with Alphabets (A-
Z), called a SRN.
 User can track the status by SRN number.
Digital signature certificate

- E-form shall be digitally verified by authorised
signatory by using DSC
- it is equivalent to written signature
- user of DSC
1) MCA employee
2) Professionals
3) Authorised signatory of the company including
MD/director/manager/secretary
4) Representative of bank and financial institution
- Authority can issue DSC for one or two year however
registration is one time activity.
- Foreign director are required to obtain DSC from an
Indian certifying authority.
XBRL.
 XBRL stand for extensible business Reporting language.
 XBRL is a language for the electronic communication.
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8149221250
 The most common language for transmitting

information via internet is XBRL
 It was made to communicate between business and
other users
 XBRL provides a common electronic format for business
reporting
 XBRL is a worldwide standard
BENEFITS OF XBRL.
 It offers major benefits to business
 The benefits are automation, cost saving faster more
reliable and more accurate in handling of data and in
better quality of decision making
 All types of organisation can use XBRL to save cost and
improve efficiency.
 It is extensible and flexible.
SELFNOTES
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8149221250
LAW#LOGIC#LOVE GLOBAL TREND
14. GLOBAL TREND.
Q.1 Discuss director’s remuneration report in the light of Companies

Act, 2006 of the United Kingdom.
Answer:-
Duty to prepare director’s remuneration report under UK

Companies Act, 2006 (Section 420 & 422)
The directors of a quoted company shall for each financial

prepare a director’s remuneration report which shall contain the
information specified in the schedule to act and comply with any
requirement to that schedule as to how the information is to be set out
in the report. The director’s remuneration report shall be approved by
the Board of Directors and signed on behalf of the Board by a director
or the secretary of the company. Every copy of said report which is laid
before the company in General Meeting or which otherwise circulated,
published or issued, shall state the name of the person who signed it on
the behalf of the Board. The copy of the directors’ remuneration report
which is delivered to the registrar shall be signed on behalf of the Board
by a Director or the Secretary of the Company.
Q.2 State the requirement for audit of the financial accounting

statements under the UK Companies Act, 2006.
Answer:-
Requirement for audited accounts (Section 475 of the UK

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Companies Act, 2006)
UNIQUEACADEMY CS SHUBHAM ABAD-8149221250

A company’s financial statements for a financial year must be audited

in accordance with this part unless the company-
a) It is exempt from audit under Section 477 (small companies) or

Section 480 (Dormant Companies) or,
b) It is exempt from the requirements of this part under Section 482
(Non Profit making companies subject to public sector audit)
A company is not entitled to any such exemption unless its
balance sheet contains a statement by the directors to that effect.
A company is not entitled to exemption under any of the
provisions mentioned in Sub-Section (1) (a) unless
Its balance sheet contains a statement by the directors to that
effect that-
a) The members have not required the company to obtain an
audit of its accounts for the year in question in accordance with
Section 476, and
b) The directors acknowledge their responsibilities for complying
with the requirements of this Act with respect to accounting
records and the preparation of accounts.
Q.3 During a period of about past one and a half decades a number of
countries in the world have engaged themselves in modernizing their
respective company laws. Can you identify the motivating factors
underlying this efforts ? Mention Indian scene in particular-
Answer:-
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A various no. of countries such as India, Australia, Canada,

Hong Kong and U.K. have initiated comprehensive effort to modernize
their respective company laws. The need to become more:-
a) More competitive
b) Simple to understand
c) Interpret to facilitate greater compliance
d) Economic to operate
e) Attractive as a worthwhile investment destination to accelerate
economic growth’
f) Corporate Social responsibility and,
g) Better regulation and greater transparency in corporate
governance.
In India, the process has started to evolve the modern the modern,
transparent, investor friendly, well governed company law i.e.
company bill 2009. Modernization of corporate regulation governing
setting up and running of enterprises, governance and accountability
to the investor and other stake holders. By putting in place, a best
legal frame work would unable the Indian Corporate Sector to
operate in an environment of best international practices in a global
competitive market.
Q.4 Account for the significance of Hong Kong as a vibrant business

Centre, having some special advantage. Name the law that governs
companies in Hong Kong ?
Answer:-
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Hong Kong is an international city with advanced information,

and the free harbor for trading in the world. It is a wonderful business
situations for entrepreneurs and business men. The advantage for
setting up Hong Kong Company are as follows.
i. Free to choose the name of the company:-

The Hong Kong government allows to choose the name of
the company to include the words such an international,
chamber of commerce, united group, foundation, association
for promotion; etc.
ii. Little Restriction of the Business Areas:-
Jewelry, Treasury, Shipment, Transportation, Import &
Export, House Estate, Website, Research Institution and other hi-
tech industry. All these can be business.
iii. Great Development in Low Taxation Environment:-
The Taxation in Hong Kong is very low.
iv. Easy to get International Credit:-
Hong Kong is economic and financial center in Asia, every
street of which has banks. Credit is the basis to develop
international business and is easily available.
v. Doing Best to get the Inhabitant Right in Hong Kong:-
If your enterprises have done contributions to Hong Kong.
You can apply to the people’s inbound affairs office of the Hong
Kong to arrange the advice for Doing Business. If people have
inhabitanted in Hong Kong for 7 years, they can get the eternal
inhabitation right in Hong Kong.
Q.5 a) Mention the provisions of the Singapore Companies Act

relating to formation of companies
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b) “The Provision of the Hong Kong Companies Ordinance relating to

formation of an incorporated company are broadly similar to the
provisions of the Companies Act, 2013”
Answer:
A.) Formation of the Companies under the provisions of Singapore

Companies Act. Any person may, whether alone or together with
another person, by subscribing his name or their names to a
memorandum and complying with the requirements as to registration
from an incorporated company.
A company may be:
a) A company limited by share
b) A company limited by guarantee on unlimited company.
Provisions:-
A company must have at least one members- the first consideration is

to decide on the right business entity that will meet the business needs.
The most common three business entities available in Singapore are:-
a) Sole Proprietorship
b) Limited Liability Partnership
c) Private Limited Company
a) Sole Proprietorship: The following requirements are given below:-

 Minimum one owner
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 A Singapore registered office-address

 For foreign individual and companies only : one manager who
must be a Singapore resident
Following documents are needed for registration of a sole

proprietorship
 Proposed sole proprietorship name

 Copies of NRIC
 Brief description of business activities
 Registered office address for the sole proprietorship
Limited Liability Partnership:- A LLP gives owner the flexibility of

operating as a partnership while having a separate legal entity in
Singapore. It has a separate legal entity from its shareholders and
directors, who have limited liability for the debt and losses of the
company. It usually has the words Pvt. Ltd. as parts as its name.
Q.6 a) Explain the salient features of the Australian

Corporations Act, 2001 relating to appointment of auditors.
Answer:-
The following may be appointed as auditor of a company for

the purposes of the Australian Corporations Act, 2001
(a) An individual
(b) A firm
(c) A Company
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1. In case Proprietary Company, the directors may appoint an

auditor for the company.
2. The company may have more than one auditor. The appointment
of a firm as auditor of a company is taken to be an appointment of
all persons who, at the date of the appointment, are
a) Members of the firm; and
b) Registered company auditors. This is so weather or not those
persons are resident in Australia.
3. The directors of a public company must appoint an auditor of the
company within one month after the day on which a company is
registered as a company unless the company at a general meeting
has appointed an auditor.
4. A public company must appoint an auditor of the company at its
first AGM and appoint an auditor of the company to fill any
vacancy in the office of auditor at each subsequent AGM.
Q.7 What are the special features of the Corporations Act, 2001 of
Australia, which are distinct and different from the provisions of
the Companies Act, 2013 in India?
Answer:-
Corporations Act, 2001 and the Corporate Regulations, 2001

framed under the Corporations Act, 2001 govern the functioning of
the companies in Australia. Following are the special and distinct
features of the corporate laws in Australia as compared to the Indian
Companies Act, 2013:
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1. The Australian Corporations Act imposes duties on directors and

officers of incorporated bodies. Breach of statutory duties draws
penalties under the act which range upto $ 2,20,000. Defaulting
officers or directors may also be required to pay compensation or
to account for profits. In some cases, directors may also be
disqualified from office.
2. It distinguishes proprietary company and public company. A
public company must have at least 3 directors out of whom at
least 2 directors must ordinarily reside in Australia.
3. Australian securities and Investment Commission (ASIC) controls
and regulates the affairs of companies. A person who is not
disqualified from managing corporations may only be appointed
as director of company if the appointment is made with
permission granted by Australian Securities and Investments
Commission under the leave granted by the Tribunal.
4. A person who is the only director and only shareholder of a
proprietary company can exercise all the powers of the company.
5. A company secretary’s obligations may continue even after the
company has been deregistered.
6. The company secretary must notify ASIC about changes:-
i.) To the identities, names and addresses of the company’s
directors and company secretaries; and
ii.) To the register of members; and
iii.) To any ultimate holding company;
Q.8 The concept of treasury shares in United Kingdom is same as

buy-back of shares in India. Examine.
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Answer:-
Section 124 read with chapter 6 of U.K Companies Act, 2006

deals with treasury shares. Treasury shares are purchased by the
company out of the distributable profits of the company and the
company is allowed to hold such shares. The aggregate nominal
value of shares held as treasury shares must not exceed 10 percent
of nominal value of issued share capital.
In India, the section 68 of companies Act, 2013, provides that the

buyback of its own shares but does not allow a company to hold
shares. Bought back shares are to be cancelled within seven days,
thus in India, bought back shares cannot exceed 25% of total paid
capital in any Financial year.
Q.9 What types of companies can be formed in Singapore as per

Singapore Companies’ act? (Dec 2019)
SELF NOTES-
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LAW#LOGIC#LOVE BOARD & ITS POWERS
15.Board Constitution and Its Powers.
Section 179 powers of board.

• A-amalgamation and reconstruction.
• B-buyback or borrow money.
• C-calls on shares for contribution to political party.
• D-debenture security issued in or outside india.
• E-investment.
• F-financial statement and board report.
• G-grant loan guarantee or security.
• H-holding or acquisition of substantial stake.
• I-internal auditor and secretarial auditor
• Board made delegate powers to any committee, managing director

manager or principal officer.
• Banking company is not covered under this section.
• In case of section 8 company following matters may be decided by
circulation.
A. Borrow company.
B. Investment.
C. Grant loan guarantee or security.
Restriction on powers of board section 180.
• Board can exercise following powers by passing sr only.
• Sale of whole undertaking or substantially the whole undertaking.
(undertaking means investment in such unit exceeds 20% of net
worth or it generate 20% or more of the total income , substantially
whole undertaking means 20% or more value of the undertaking)
borrowing power.
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UNIQUE ACADEMY CS SHUBHAM ABAD -8149221250

• Money already +proposed borrowing –(if exceeds psc+fr+sp)

Borrowed (excluding temporary loan)
. (upto 6 months.)
• To invest compensation received due to merger for amalgamation
except specified security of trust act.
• To remit or give time for the repayment of any debt due from
director.
• Section 180 is not applicable to private company.
Charitable contribution section 181.

Pass or to contribute in excess of 5% of average net profit for last
three immediately preceding years.
Political contribution section 182.
• Non government company which has been existence from not less
than three financial year can contribute without any limit by passing
br
• Disclosure in p&l account.
• Contribution through normal banking channel or through any
instrument notified by law.
• It includes direct or indirect contribution.
Defence contribution section 183.
• Board can contribute without any limit if fund is approved by central
government.
• Disclosure in profit and loss account.
• Audit committee section 177.

Applicability.
• Listed company
• Unlisted public company having paid up share capital 10 cr or more
2
• Turnover hundred crore or more

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• Outstanding loan, deposit, borrowings, debenture 50 crore more.

• Not applicable to unlisted public company which is
A) Joint venture
B) Dormant company
C) Wholly owned subsidiary.
No. Of directors
Listed company Unlisted company.
A. Chairman shall be Chairman shall be independent
independent director. person.
B. All members shall be Chairman shall be financially
financially literate. literate.
C. Atleast 4 board meeting gap -
shall not exclude -120 days b/w
two audit committee meeting.
a. Quorum 2 directors or 1/3 of Quorum min no. Of meeting
total director which ever is may be decided by bod.
higher (min-2-id)
b. Cs shall act as a secretary. -
c. Minimum 3 director out of Minimum 3 director- majority
2/3rd shall be independent shall be independent director.
Function of audit committee.

A) Recommendation the appointment, terms and remuneration of
auditor except in case of govt company.
B) Review auditor’s performance
C) Approving and modify related party transaction.
D) Scrutinise the inter-corporate loan and investment.
E) Approve and modify the transaction with related party
3
1) make omnibus approval for related party transaction.

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2) in other transaction which is not approved by audit committee

shall make its recommendation to the board.
3 ) any transaction not exceeding 1 crore is entered by director or

office without approval and is not rectified within 3 month by audit
committee shall be voidable at the option of audit committee and
transaction is with related party to any director or is authorised by
any director then the concerned director shall indemnify the
company against any loss incurred by it.
4 Not applicable in case of transaction between holding company

and wholly owned subsidiary company.
F) Evaluation of inter-corporate loans and investments.
G) Oversee the vigil mechanism
Audit committee and vigil mechanism.
*applicable to every listed company.
*companies which accept deposits from public.
* companies who borrow money from bank and financial institute in
excess of 50 crore.
*audit committee shall oversee the vigil mechanism.
*in case of repeated complaints filed by director or employee audit
committee may take suitable action.
*details of vigil mechanism to be disclosed on the website and board
report.
Audit committee shall mandatory review the following info.

*management decision and analysis of financial condition.
*statement of significant related party transaction.
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*internal audit report.

*appointment removal and terms of internal auditor.
Nomination and remuneration committee
* applicability to listed company.

*other public company.
A .paid up share capital 10 crore or more.
B. Turnover 100 crore more.
C. Aggregate loan, borrowing, deposits, debenture 50 crore more.
Non applicability.
Unlisted public company.

A. Joint venture.
B. Wholly owned subsidiary company.
C. Dormant company.
D. Section 8 company.
Minimum 3 or more non executive directors.
Majority independent director.
Chairman shall be independent director.
Chairperson of the company shall not be chairman of the such
committee.
Main function is to identify the person qualified to become director of
the company.
Nrc shall recommend appointment and removal.
Quorum
*One third of the total members or two members which ever higher.
*Minimum one independent director.
*Meeting once in a year.
5
*Chairman of the committee may be present at the AGM

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stakeholders relationship.
*more than 1000 shareholder, or 1000 debenture holder, or 1000 any
other security holder during the financial year .
*chairperson shall be non executive director.
*main function is to resolve the complaint of stakeholder.

*chairman of search committee shall attend the AGM authorised
person.
*listed company having less than 1000 stakeholder shall required to
constituted src
risk management committee.
*applicable to top 500 listed company.
Based on market capitalisation.
Csr committee
1.every company shall constitutes csr committee having net worth 500
cr more or turn over 100 cr or more or net profit 5cr or more.
2. It shall consists of three directors one shall be independent director.
Selfnotes-
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LAW#LOGIC#LOVEDIRECTORS
16. Directors.
Number of directors
OPC-Minimum one director
Public company-Minimum 3 director
Private company-Minimum 2 director
Maximum 15 director and max limit can be extended by GM-SR,

For govt co. by passing OR
Top 500 listed company shall have one woman independent
director.
BOD of top 1000 listed company shall have at least 6 directors on the
board
Number of directorship
1) Maximum 20 directorship(max 10 public company) including
alternate directorship
2) Holding or subsidiary company of public company is treated as
public company
3) Directorship in dormant company and section 8 co. shall not be
included.
4) The number of directorship can be reduce by passing SR.
Director identification number
Every director shall mandatory hold DIN
Central government may prescribe any other identification number

which can be used as a DIN
20
DIN is valid for life time

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UNIQUE ACADEMY CS SHUBHAM ABAD- 8148221250

Procedure.
Obtain DSC
Application in form DIR 3.
Sign by applicant using own DSC and digitally verified by
CS/MD/Director/CEO/CFO of the company in which such applicant is to
be appointed as a director.
Within one month CG shall approve or reject the application and
communicate to concern person
Within one month intimate DIN to all companies where he is a director.

Company shall within 15 days shall intimate to ROC regarding the
DIN.
Change in particulars of directors.

File DIR 6 within 30 days from such changes.
Attach copy of the proof.
Pre certification from CA/CS/CWA in practice.
CG confirms the change and imitates to director.
Directors shall intimate to company within 15 days of such change.
Cancellation of DIN
DIN is found to be duplicate.
DIN obtained in wrongful manner.
Death/insolvency/insanity of director
Before cancellation opportunity of being heard shall be given.
20
Appointment of first directors 152.

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Name mention in AOA or follow the procedure given in the articles.

If AOA does not provide a manner, all subscribers who are

individuals shall be the first directors.
On or before his appointment obtain consent in DIR-2
Company shall file consent to ROC within 30 days in form DIR-12.
(60 days in case of IFSC)
Disqualifications of director.
* Individual disqualification section 164(1)
1. Unsound mind.
2. Undercharged insolvent.
3. Applied to be insolvent adjudicated as an insolvent and his
application is pending.
4. Convicted by court and sentenced for 6 months and 5 years has
not elapsed from expiry of such sentence. If sentenced for 7 years
and more, he becomes ineligible for lifetime.
5. Disqualified by NCLT or court and order is in force.
6. Convicted under related party transaction during last 5 preceding
years.
7. Not paid call money for a period of 6 months from due date.
8. Not got the DIN.
Default in last three points will be continue even the appeal is filed.
Company Disqualification164(2)
1) Not filed financial statements or annual reports for continuous 3
years.
2) Fail to pay deposit, declared dividend, debentures and interest
20
thereon and such failure to pay continues for one year or more
Page

3) All directors of such company shall not be eligible to be reappointed

as a director of the company or appointed in other company for a
period of next 5 years from such failure.
4) Continue in the defaulting company until the compliances is done.
5) All director shall vacant the office in all the companies expect for
defaulting companies.
6) If a person is appointed as a director of a defaulting company shall

not incur such disqualification until a period of 6 months from the date
of his appointment.
7) Directors information to company before appointment for

reappointment about his company disqualification in DIR-8 company is
in default u/s 164(2) shall inform to ROC in DIR-9
Vacation of office section 167.

A) Disqualified under section 164
Disqualified u/s 164 (2) (company disqualification) vacation from all

companies except company in default.
B) Absent from all board meeting during 12 months with or without

notice
C) Convicted under section 184 – voting on such resolution in which
he is interested
D) Failed to disclose interest.
E) Disqualified by order court or tribunal.
F) Converted by court and sentenced for not less than 6 months.
G) Removal of director u/s 169 or by CG/NCLT.
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H) Cease to hold such employment by virtue of which was appointed

as director
.Note- office shall not vacated under clause (e) and (f) above;-
For 30 days from such order
And if appeal or further appeal is filed until the expiry of 7 days from
disposal of such appeal or further appeal as the case may be.
In case of vacation of all director then promoter or in absence of
promoter, CG shall appoint required no. of directors who shall hold
the office till the directors are appointed by company in general
meeting.
Appointment of subsequent director section 160.(other than retiring
director)
1.Appointment of director other than for retired director
2. Candidate or any member shall give 14 days’ advance notice to the

company at registered office with fees of Rs.1,00,000.
Refund of deposit.
A. In case of appointment of such director or
B. Who got more than 25% of total votes.
Provided that no need to deposit Rs. One lakh in case of
1. Independent director
2. Director recommended by nomination and remuneration (NRC)

committee, or director recommended by bod if no need to constitute
NRC.
3. Company shall inform to all members at least 7 days before the
meeting by way of individual notice or through email, or by
advertisement in newspaper one in English and one in regional.
20
4. Forward copy to stock exchange in case of listed company.

Page
5. Obtain consent of director in form no. DIR-2.

6. Company shall file DIR-12 within 30 days ROC
Non applicability:-
A) Private company
B) 100% govt company or
C) Wholly owned subsidiary of govt company
Rotational or non rotational director section 152(6)(7).
1. Minimum two third of total number of directors are liable to retire
by rotation.
2. Maximum one third can be non- rotational directors.
3. Article may provide higher number of rotational director.
4. One third of rotational director shall compulsory retire at each
AGM. Who have been longest in the office.
6. Appointment on same day then they shall retire by mutual
agreement and if there is no agreement then by lot system.
7. Retiring director shall be eligible for reappointment.
Note- Retiring director shall not include proportional representational

director, nominee director appointed by CG/NCLT/bank/FI/BIFR, small
shareholder director, additional director, nominee director of BOD and
independent director
8. Company may reappoint the same director or appoint new director

on the place of retired director or pass the resolution not to full fill the
vacancy.
9. If vacancy is not filled and meeting has not resolved, for not filing the
vacancy the meeting shall be adjourned to same day, same time, same
20
place in the next week.

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10. In adjourned meeting also vacancy is not filled and resolution for

not filing the vacancy is not passed then retiring director shall get
automatically appointed unless,
A. Resolution put and lost.
B. Director express his unwillingness.
C. Disqualified section 164.
D. Separate resolution required for appointment.
E. Original appointment in contravention of section 162.

If vacancy is not filled by automatic reappointment then it result into
casual vacancy (filled out by board).
Note- If AGM is not held then retiring director shall vacant office on
the last date of AGM.
If MD/WTD are rotational then they shall vacant office as per the
provision of 152(6) i.e. Max 3 years. However, on reappointment they
can continue their remaining term as MD/WTD i.e. For 2 years
Non applicability.
Unlisted government company.
Subsidiary of such govt. Company.

Private company.
Small shareholder director section 151.

1. Listed company may have one small shareholder director by passing
20
OR
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2. Small shareholders (equity as well as preference) means holding

shares up to Rs. 20000 nominal value.
3. Application is by 1,000 small shareholders or one tenth of total
small shareholders whichever is lower.
4. 14 days advance notice along with consent to act as a director, DIR 2.
And showing he is qualified.
5. Fulfill condition of ID.
6. Term three consecutive years.
7. Not eligible for reappointment for next 3 years.
8. Not liable to retire by rotation.
9. Serve the post of SSD in maximum 2 company.
10. Second company shall not be in competitive business.
11. Shall not associate with company for next 3 years.
12. SSD should be qualified to be independent director and also give

such declaration in such regard.
13. Vacation of SSD.
Ceases to be small shareholder.
Disqualified.
Vacation u/s 167.
Ceases to meet the criteria of independent director.
Appointment by system of proportional representation section 163.

Representative of minority shareholder.
Article may provide minimum two third of total directors in accordance

20
with the principle of proportional representation.

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Proportional representation can also be adopted in case of CG order

appointments can be single transferable voting or cumulative voting or
any other method.
Term- 3 years
Not eligible for retire by rotation.
Independent director section 149.

Applicability
*All listed companies shall appoint at least one third of the total
directors.
*Other public company having
A) Paid up share capital of rupees 10 cr or more.

B) Turnover rupees 100 crore or more
C) Aggregate outstanding loan, debentures, deposits of Rs. 50 crore or
more.
Shall appoint at least two independent director.
Non applicability.
1. Unlisted company which is joint venture, wholly owned
subsidiary company or dormant company.
2. Vacancy fill up by the board of directors within 3 months or
immediate next board meeting whichever is later.
3. Cease to fulfil the above three conditions for three consecutive
years no need to appoint ID
4.Due to audit committee if higher id needed appoint such higher
number of ID.
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Independent director definition.
Conditions.
*Other and managing director WTD or nominee director.
*Does not have any material or pecuniary relationship with the
company or its director.
*He is a non-executive director.
Conditions.
A. Person of integrity, ability and relevant expertise.
B. Shall not be a promoter or related with the promoter of the company
holding, subsidiary, associate company.
C. Does not have any material or pecuniary relation during the two
immediately preceding financial year and during current financial year
with the company promoter director holding subsidiary and associate
amounting to more than 10% of his total income except by way of
remuneration.
D. Relative of such person shall not hold any security or interest in the
company, holding, subsidiary, associate company during two
immediately preceding financial year or current financial year however
relative may hold up to 2% of the paid up share capital or 50 lacs face
value whichever is lower.
E. None of his relative indebted to the company, holding, subsidiary
associate company or promoter or director of the company
none of the relatives has given guarantee or provide security in
connection with the indebtedness of any third person to company
holding, subsidiary, associate, promoter, director of the company.
20
D. None of is relative has any pecuniary transaction amounting to 2%

Page

or more of the gross turnover or total income in the individually or

combination with the above transaction.
E. He or his relative shall not be a KMP or employee of the company its
holding, subsidiary, associate company in preceeding 3 financial years.
Who himself or his relatives cannot be employee, proprietor, partner in
the firm of a CA, CS, CMA which provide services to the company
holding, subsidiary, associate in any of three preceding financial years
or employee, promoter, partner in legal from whose income from the
company, holding, subsidiary, associate company constitute 10% or
more of the gross turnover of such firm.
F. He or his relative or together holds 2% or more of the total voting
power of the company
g. He or his relative is a chief executive or director of any non profit
organization that receives 25% or more receipt from the company
holding, subsidiary, associate company or from promoter or director of
the company or his 2% or more voting powers of the company.
Declaration of independent director.

At the first board meeting appointed by independent director.
First board meeting of every financial year.
First board meeting after the changes in the status of independent
director.
Remuneration of independent director.
Not eligible for stock option or sweat equity shares.
Remuneration by way of sitting fees.
Reimbursement of expenses and profit related commission.
Term of independent director.
20
Five consecutive years.

Page

Reappointment for the 5 years by passing SR

After completion of 2 terms cooling period of 3 years and shall not
associate with the company directly or indirectly.
Appointment for less than 5 years treated as one term.
Not liable to retire by rotation.
Hold at least one meeting of independent director only.
Independent director shall review the performance of the non-
independent directors.
Director appointed by board of director.
Additional director. Section 161(1)

If authorized by AOA BOD can appoint additional director.
If AOA is silent then appointment by passing OR

To reduce the workload additional director is appointed by bod
board of directors by passing BR can appoint additional director.
Additional director shall continue till the conclusion of AGM or last date
of AGM whichever is earlier.
Person fail to appoint as a director in general meeting, board of director
cannot appoint such person as additional director.
Appointment within maximum limit fixed by AOA.
AD can be appointed as MD or WTD and shall hold office till the AGM.
Can be appointed by resolution by circulation.

20 Page
Director file DIR 2 and company shall file DIR 12.

Alternate directors section 161(2)

*Appointed by the board of directors if authorised by articles of
association or pass Ordinary resolution.
*Original directors absent himself from India for at least three months
but not more than 12 months with notice, an alternate director in his
place shall be appointed.
* One person cannot act as alternate director for more than one
director.
An existing director cannot act as an alternate director.

*If original director is ID then alternate director shall satisfy the
condition of ID.
*Can be appointed by passing a resolution by circulation.
*Term:- Original director returns to India or expiry of the term of the
original director whichever is earlier.
*Provision of automatic reappointment applies to original director.
*Alternate directorship is counted to determine the total number of
directorship.
Rights and liability of alternate director are same as original director.
Can act as an alternate director for the same person for two or more
different companies.
File DIR 2 by director and DIR 12 by company.
Nominee director section 161(3).

*Subject to provision in AOA.
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*Board may appoint a person nominated by bank, financial institute,

Private equity partners, CG or SG.
*Nominee director appointed to protect the interest of the bank
financial institution.
*Nomination cannot be rejected by board of director.
CG/SG by virtue of holding shares in the co.
Even third party can appoint nominee director as per the agreement
with co.
Casual vacancy director section 161(4)

*Casual vacancy director can be appointed by bod in the following
cases.
A) If original director(OD) is on leave for more than 12 month

B) Od resign u/s 168
C) OD’s office is vacated by casualty.
Appointment shall be subject to the approval at next AGM by
passing OR.
Term:- Remaining term of original director.
CVD cannot be appointed by resolution by circulation.
Duties of directors section 166.

1. Acts as per AOA.
2. Acts in good faith.
20
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3. Avoid conflict of interest.

4. Shall not achieve any undue gain or advantages.
5. Shall not assign his office.
6. Exercise due care
7. Protect the interest of members.
Resignation of director section 168.

*May resign by giving notice to the company.
*Company within 30 days from the date of notice file DIR 12 and post
on its website.
*Director within 30 days from his resignation may file DIR 11 along
with the reasons.
*Effective date:- On which notice is received by company or the date
specified in the notice whichever is later.
*All directors resign due to 167 director shall be appointed by promoter
or central government.
*Place the facts of resignation in next general meeting.
Removal of director section 169.

1. Special notice given by members as per section 115 (1% of total
voting power or Rs. 5 lakh paid up having voting power)
2. Company send copy of notice to concern director.
3. Company send notice of general meeting to all members along with
the representation made by the director.
4. If representation is received to late it shall be read out at the
meeting.
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5. Representation used to secure needless publicity, on application by

Page

the company the tribunal shall confiscate such right and demand the
cost incurred by the company.
6. Company by passing OR can remove the director.
7. Following director cannot be reappointed by member
A) Director appointed by tribunal
B) Proportional representational director.
C) Nominee director appointed by FI/bank
8) If ID is appointed for second term, can be removed by passing SR

company file DIR 12 within 30 days from the removal.
9. General notice in newspaper.
10. Appointment of director in place of removed director, process u/s

160 shall be followed and this director shall hold office till the
completion of remaining period of removed director.
11. If company failed to fill vacancy then such vacancy can be filed by
BOD u/s 161(4) (CVD)
12. Removed director shall receive the compensation as per the terms
of agreement or the terms of appointment.
Disclosure of interest by director(184)

*Disclosure of interest at first board meeting in which he participate as
director.
*First meeting of the board in every financial year.
20
*In case of changes in interest, first BM after such changes.

*If director becomes interested after the contract then disclose his
Page

interest when he becomes interested or at the first board meeting after

the contract.
*Director shall disclose interest in any company body corporate form in
form number MBP 1.
*Director is interested in
A. Any body corporate in which director or directors holds more than
2% of shareholding or he is a promoter, manager, CEO of that
company.
B .Firm/entity in which such director is partner, owner, member.
Interested director shall not participate in such meeting and he is not

counted as for quorum.
C. If disinterested director fall below than required quorum then
remaining disinterested director shall form the quorum only if they
are 2 or above,
D. If disinterested director fall below 2 then resolution automatically
becomes void.
C. 184 shall not apply if.

Contract is between two company or between one or more company
and one or more body corporate where any of the directors
(individually or jointly) of the company hold not more than 2% of
paid up share capital.
Notes:- Contract entered in contravention shall be voidable at the

option of company.
Interested director of private company can participate in meeting

after disclosure and counted for the quorum as well as can vote.
20 Page

Loans to directors (185)
*No company shall directly or indirectly advance any loan or give

guarantee or provide security (Prohibited category)
A) Director of the company and its holding company
B) Partner or relative of such director
C) Firm in which such director or relative is partner
 Restricted category
- Company may advance loan or can give guarantee or
provide security to any person in which director is interested
- Condition – Pass SR and such loans are utilised by the
borrowing company for its principal business activity.
- Any person in whom any of the director of the company is
interested means
A) Private company of which any such director is a director or
member
B) Any body corporate in which 25% or more voting power is
controlled by director or directors.
C) Any body corporate, BOD, MD, manager is accustomed to
act in accordance with the direction given by director or
directors of the lending company.
Permitted category.
Section 185 does not apply to following categories
A) Loan to MD, WTD

- Loan is given as part of the condition of services extended to
all its employees
20
- Such scheme is approved by SR.

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B) Loan/guarantee/security in ordinary course of business and

interest rate shall not be less than the rate of prevailing yield of
one year, three year, or ten year government security.
C) Loan/guarantee/security to wholly owned subsidiary for its
principal business activities.
D) Guarantee/security provided to subsidiary company in respect
loan provided by bank or financial institution however such loan
shall be utilise for the purpose of principal business activities.
Note – If company sells flat to one of its director on receipt of 50%
cash and 50% agrees to receive by instalment does not amount to
loan.
Members right to inspect register of director or KMP(171)
- Member can inspect register of director or KMP during

business hours and member can take extract
- Company shall provide copies within 30 days(free of cost)
- Registers shall kept open for inspection at every AGM
- If inspection during business hours is refused or copies not
send within 30 days than on request the registrar shall on an
application made to him order immediate inspection and
supply of copies.
Selfnotes-
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LAW#LOGIC#LOVE KMP
17. Key Managerial Personnel
Key managerial personnel 2(51)

 CEO/MD/manager
 CS
 WTD
 CFO.
 Any person who is in whole time employment and not more than
one level below the rank of director.
 Such officer as may be prescribed.
MD 2(54)
A. Director who is by virtue of AOA or

B. Agreement with the company or
C. Resolution passed in GM or BOD
D. Entrusted with substantial power and include the director
occupying the position of MD
Manager
 An individual
 Who manage whole or substantially whole affairs of the Company.
 Includes any person holding such position.
Appointment of MD/ whole time director/ manager (section 196).
 MD or manager.
 Term cannot exceed 5 years reappointment not earlier than one
year before the expiry of term.(last year)
 Age 21 years to 70 years if after 70 years pass SR/OR + CG
1
approval
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LAW#LOGIC#LOVE KMP
 Not insolvent
 Not suspended the payment of creditor
 Not convicted by court and sentenced for more than 6 months.
 Appointment by passing ordinary resolution
 If appointed by passing BR then rectify by passing OR
 If disapproved by member then any act done before disapproval
shall be valid. (Act between BR and OR)
 File MR-1 within 60 days from appointment
File DIR. 2 by director and DIR. 12 by company.
Schedule v part 1 in addition to section 196.
 He had not been sentence for any period and or to a fine exceeding
rupees 1000 under 19 act.
 Shall not be detained under conservation of foreign exchange and
preservation of smuggling activity act 1974.
 Age 21 years to 70 years above 70 pass special resolution.
 Resident in India.
A. Staying in India for continuous period of 12 months before his
appointment.
B. Who comes to stay in India for taking unemployment or carrying
business in India (this condition not apply to SEZ).
Exemptions to specified company.
Private company.
- No need to ratify the appointment in general meeting.
- Can pay remuneration above limits
Government Company.
- The provision relating to term of MD/manager.
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LAW#LOGIC#LOVE KMP
- No need to rectify the appointment in general meeting
IFSC International finance service centre company)

- No need to ratify the appointment in general meeting.
- Can pay remuneration above limits
Managerial remuneration adequate profit section 197.
Adequate profit.
 Total remuneration by public company shall not exceed 11% of

the net profit to all its directors.(executive as well as NED)
 Remuneration to any one executive director shall not exceed 5% of
the net profit.
 Remuneration to all executive director shall not exceed 10% of net
profit.
 Remuneration to all NED shall not exceed 1% of net profit if there
is ED.
 Remuneration to all NED shall not exceed 3% if there is no ED.
 Above such limit pass SR.
 Default in repayment to any bank, public financial institution and
non-convertible debenture holder or secured creditors then obtain
prior approval before passing resolution.
 Remuneration for services rendered in professional capacity and
having equal qualification shall be excluded from above mentioned
limit.
 Sitting fees may be paid for board meeting or committee meeting
subject to maximum of rupees 100000 per director per meeting
even in case of loss, company can pay sitting fees.
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 Equal sitting fees to independent director and women director.

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LAW#LOGIC#LOVE KMP
 Remuneration either by way of monthly payment or specified

percentage of net profit or combination.
 If director withdraws excess remuneration without approval the
same shall be refunded to the company within 2 years or lesser
period specified by the articles till that hold it in trust.
 Company shall not waive the recovery unless SR is passed and
obtain approval from bank financial institution non-convertible
debentures or secured creditors in case of default.
 Premium paid on insurance taken by company on behalf of
MD/manager/CFO/CEO/CS for indemnify the company against
liability in respect of negligence, fraud shall not treated as part of
managerial remuneration unless if the person proved guilty.
 Auditor shall make statement whether remuneration paid to
director is in accordance of section 198.
Managerial remuneration in two companies.
Managerial person may draw total remuneration up to the

maximum limit of 5% from any one of the companies in which
he is a managerial person. However director can receive
remuneration from holding and subsidiary company.
Non applicability
 Private company
 Government company
 IFSC company individual limit shall not apply.
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LAW#LOGIC#LOVE KMP
Inadequate profit follow schedule V part II
A):
(1) (2)
Limit of yearly remuneration
Where the effective capital is
payable shall not exceed (Rupees)
(I) Negative or less than 5 cores 60 Lakhs
(ii) 5 cores and above but less than
84 Lakhs
100 cores
(iii) 100 cores and above but less
120 Lakhs
than 250 cores
120 lakhs plus 0.01% of the
(iv) 250 cores and above effective capital in excess of Rs. 250
cores:
A) The above limit can be exceeded by Passing SR

Period less than one year, the limits shall be pro-rated and
Effective capital: - PSC+FR+SP+ Long term loan and deposit+ debenture-
investment- preliminary expense-accumulated losses.
(B) In case of a managerial person who is functioning in a

professional capacity and
 Not having any interest in the capital of the company or its holding
company or any of its subsidiaries company and
 Not having any, direct or indirect interest or related to the directors
or promoters of the company or its holding company or any of its
subsidiaries at any time during the last two years before or on or
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after the date of appointment and

LAW#LOGIC#LOVE KMP
 Possesses graduate level qualification with expertise and

specialised knowledge in the field in which the company operates:
 Provided that any employee can hold up to 0.5% of its paid up
share capital under Employees Stock Option Plan or by way of
qualification shares shall be deemed to be a person not having any
interest in the capital of the company;
 Remuneration shall be approved by NRC committee and there is no

default on payment of debenture, debt, deposits, and interest for
30 days in preceding FY of appointment.
 The OR/SR shall be valid for 3 years.
 Newly incorporated company for a period of 7 years, or sick

company whom a scheme of revival has been ordered by board for
industrial and financial reconstruction or NCLT may pay any
remuneration without any limit.
Perquisite not included in managerial remuneration
A) Contribution to provident fund, superannuation fund or

annuity fund
B) Gratuity payable at a rate not exceeding half a month’s salary
for each completed year of service; and
encashment of leave at the end of the tenure.
C) Children’s education allowance
D) Holiday passage for children studying outside India.
Compensation for loss of office of managing director whole time
director manager section 202.
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LAW#LOGIC#LOVE KMP
a) Company may pay compensation for loss of office to managing

director or whole time director manager.
b) Remuneration not exceed: - Remuneration which he could earn if he
had been in the office for the remaining term or 3 years whichever
is lower.
c) Salary calculated as average remuneration during past 3 years
No payment shall be made if he.

A) He resigns due to the reconstruction and he is appointed as a
manager director whole time director manager of resulting
company.
B) Resign otherwise than amalgamation.
C) Vacation under section 167.
D) Winding up of the company due to negligence or default of
such director
e) Director has been guilty of fraud or mismanagement the
affairs of the company its holding, subsidiary company.
 Termination of office.
 No remuneration if commencement of winding up before or at the
time of within 12 months from the date of which he cease to hold
office.
Appointment of KMP section 203.
Applicability.
Every listed company.
Other public company having paid up share capital of RS. 10cr or
more.
Conditions.
Company shall appoint the following

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LAW#LOGIC#LOVE KMP
A) MD or manager or CEO and in their absence, WTD.

B) CS
C) CFO
MD or CEO shall not be appointed as chairman of the company
unless
A) Authorised BY AOA
B) Company does not have multiple business
C) In case of multiple business, only company having different CEO
for each business
Public company having PSC 100cr or more and turnover 1000cr or
more that are engaged in multiple business can appoint different
CEO for each business.
Appointment by passing board resolution.

1) Whole time KMP shall not hold office in more than one
company except subsidiary company, however can hold
directorship with the permission of the board.
2) Company may appoint managing director if he is managing
director or manager of not more than one other company
if unanimous resolution is passed in board meeting.
3) Casual vacancy filled out by the board within 6 month
Secretarial audit (204)
Applicability.
 Listed company
 Every public company having paid up share capital of 50 crore or
more
 Turn over 250 crore or more.
 Secretarial audit reports inform number MR-3.
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 Secretarial audit report attached to board report.

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LAW#LOGIC#LOVE KMP
 Board of directors explain in full any qualification mark by PCS.
Appointment of a company secretary section 205.
 Company having PSC 5 crore or more, appoint whole time CS (Rule

8A)
 CS shall report to board of director about compliances.
 Ensure that the company complies with the applicable standard.
Other duties.
 Guidance to director with regard to duties, responsibilities, and

Power.
 Facilitate the convening the meeting and attend board meeting,
committee meeting and GM
 Obtain approval from board, shareholders, government as required
under the act.
 Give representation before various regulatory authority.
Appointment of cs.
BM-BR
File DIR-12 within 30 days to ROC.
File MGT-14 within 30 days to ROC.
Entry in register of KMP.
Inform stock exchange in case of listed company.
Removal of company secretary.

Can be removed like any other employee.
BM-BR.
File DIR-12 and MGT-14 within 30 days to ROC.
Entries in the register of KMP.
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Inform stock exchange in case of listed company.

LAW#LOGIC#LOVE KMP
SELFNOTES-
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LAW#LOGIC#LOVE Board meeting
18. Board meeting

s(173)
*First board meeting within 30 days from the incorporation.
*Subsequent four board meetings in financial year in addition
to first board meeting
 Gap between two BM should not be more than 120 days.
 1 meeting in each quarter-SS 1.
Gap shall not exceed 120 days.
In case of OPC/small Company/dormant company /start up
private company /section 8 company/IFSC company
One meeting in half calendar year.
 Gap minimum 90 days.
OPC having single director- no need to hold board meeting.
Notice 173.
 At least seven clear days’ notice to all director before the
meeting.
Exclude day on which notice is served and date of board
meeting.
 Notice given to all directors including alternate director and
interesting director at their registered address.
 Give notice by hand delivery or post or electronic mode.
 Shorter notice is allowed if one ID is present in the meeting or
decision taken in the meeting is ratified by at least one ID.
Mode of participation in BM
a. In person
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b. Video conferencing
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c. Audio visual means

8149221250
Imp note:-
If meeting is called within 120 days but adjourned due to lack of

quorum, it would still be considered in counting the number of
meeting to be held in a year.
Notice to a director staying aboard shall be given at his foreign

address, it can also be given by electronic mode.
Where adjourned meeting will be held as per AOA or at the same

time, place in the next week of original meeting, no notice is
required.
If notice is not sent to even one director, the meeting shall be

considered invalid however if director attends the meeting then
the meeting is valid.
Quorum section 174.
 Quorum should be present throughout the meeting.

 Director should present themselves by permissible mode.
 No quorum no meeting.
 Quorum:-One third of total director or two director whichever
is higher.
 Interested director cannot be counted for the purpose of
quorum
5
 If more than 2/3rd director are interested then remaining

Page
director shall form the quorum, provided they are at least 2 in

number.
8149221250
 If disinterested director is less than 2 then resolution shall be

void.
 When quorum is not sufficient then continuing director can act
to bring the quorum to requisite number or summon a GM and
appoint director to meet the quorum.
 Lack of quorum: - Adjournment of meeting on the same day,
time, and place in next week which is not a national holiday or
if such day is national holiday then till the succeeding day
which is not a national holiday.
 Video conference, audio visual mode shall be counted for
quorum.
Attendance register.
*Maintain separate register.

*Loose leaf and serial number bound periodically.
*Maintain at registered office or other approval place by
director.
*May be taken to any place where board meeting is held.
*Open for inspection by the director even after ceased to be a
director if meeting is held during the period of his directorship.
*Preserve for 8 financial years from last entry.
Chairman of the meeting.

A. Chairman of the meeting shall be the chairman of the board.
B. Company does not have chairman BOD shall elect one of
themselves as chairman.
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Resolution passed by circulation:-

8149221250
Resolution paper circulated to all the directors as well as

committee members in India.
 Send draft resolution by following means
 Speed post /Courier /Electronic mode
 Resolution must be passed by majority of directors.
 If request by one third of director that the resolution must be
decided at the meeting chairman shall put the resolution at
meeting.
 Resolution passed by circulation shall be part of subsequent
meeting and made part of the minutes of such meeting.
 Respond within 7 days from the circulation of draft
 Effective date (last date for signing or assent has been received
or date on which assent is received by requisite majority.)
Whichever is earlier?
Minutes.
Prepare within 30 days from meeting.

 Shall prepare sign and keep minutes of meeting.
 Circulated among all the directors within 15 days from date of
board meeting in writing or electronic mode.
 Every director who attend the meeting shall confirm or give
comment about accuracy within 7 days after receipt of draft
minutes.
 Entry in minutes book and signed by chairperson within 30
days from conclusion of board meeting.
 Signed by chairman of the meeting or chairman of the next
5
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meeting.
 All pages initiated and last page to be signed and dated.
 Preservation permanently.
8149221250
SELF NOTES-
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8149221250
LAW#LOGIC#LOVE GENERAL MEETING.
19. General meeting

A) AGM (96)- Compulsory, ordinary as well as special business
B) EGM (100) - voluntary, only special business.
AGM: - First AGM.
1. Within 9 months from closing of financial year.
2. No extension by any authority.
3. Financial year- Incorporation before 31st December- Next year.
4. Financial year- Incorporation between 1st Jan to 31st March-

Subsequent year.
5. No need to call annual general meeting in the year of incorporation.
Subsequent AGM.
 Once in a calendar year within 6 months from closing of financial

year
 Extension for a period not exceeding 3 months by ROC on special
ground. (like natural calamities, registered office is locked or books
seized by authority)
 Gap between 2 AGM shall not exceed 15 months.
Day- Any day except national holiday Or other day specified by central
government as a national holiday, however if company has already
send notice of the meeting then such day declared by CG shall not be
treated as national holiday for that particular company.
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Time: - During business hours i.e. 9 to 6 may continue even after

business hours.
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Place: - a) Registered office, or any place within city, town, village

where RO is situated. GM of unlisted company- Any place in India with
prior approval of all members. (Approval in writing or by electronic
means)
C) AGM of govt company- Any place with the approval of CG
Business: -Ordinary as well as special business
AGM by NCLT (97)
A) Any default is made in holding AGM or

B) Application is made by any member
C) The tribunal may call AGM
D) Tribunal may give such ancillary direction as may be necessary.
E) Direction include any single member by person or proxy may hold
valid meeting.
F) AGM held by NCLT shall deemed to be AGM of the company
EGM by NCLT (98)
A) Impractical to hold EGM

B) Application is made by any member(having voting power) or
director
C) Tribunal may suo moto call EGM if necessary
D) The tribunal may call EGM
E) Tribunal may give such ancillary direction as may be necessary.
F) Direction include any single member by person or proxy may hold
valid meeting.
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Default in complying section 96 to 98 (99)

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A) One time default- Rs 100000

B) Continuing default- Rs 5000 per day for the defaulting period.
EGM (100)
EGM may be called by following methods.
A) BOD
B) Requisition
C) Member
D) NCLT.
EGM by BOD:-
BOD by passing BR may call EGM to transact special business.
A) EGM by requisition
1) Requisition by 1/10th of paid up share capital having voting
power in case company having share capital.
2) 1/10th of total voting power if company not having share
capital.
3) Deposit reacquisition at registered office of the company.
4) Board of directors shall proceed within 21 days and shall hold
meeting within 45 days from the date deposit of requisition.
5) If BOD failed to call meeting then member may call meeting
within 3 months from date of deposit of requisition
6) Reimbursement of expenses to requisitions by company.
7) Fails to call meeting if company-
*Fails to proceed within 21 days.
*Hold meeting after 45 days.
*Part of business is pending.
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 Day- Any day including national holiday.

Time- Any time even after business hours.
Place- Any place in India.
 Meeting called by the acquisition- Registered office or such other
place within city town, village where registered office is situated.
 Meeting of wholly owned subsidiary of a company incorporated
outside India- Any place in or outside India.
One person company

>No need to hold general meeting.
>Resolution is communicated to company and recorded in minutes
book.
>Class meeting. Can hold if required.
Notice (101)
Clear 21 days’ notice.
1) Either in writing or electronic mode.
2) Exclude the day on which notice is served and date of meeting.
(Exclude 2 days)
3) If notice is send by post then it deemed to be served after the expiry
of 48 hours from post.(exclude total 4 days to count 21 clear days)
4) Omission to send notice on mistaken ground that he is not member
will not be considered as accident omission.
Shorter notice-
 AGM- Approval from not less than Ninety-five per cent of the
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members entitled to vote thereat; and

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 EGM (Company having share capital) - Majority in number of

members entitled to vote and who represent not less than
ninety-five per cent. Of such part of the paid-up share capital of
the company as gives a right to vote at the meeting; or
 EGM (Company not having share capital) -Not less than ninety-
five per cent. Of the total voting power exercisable at that
meeting:
101(2) Content of the notice.

# Specified day, date, time, place, proxy form, agenda.
# Member by person or proxy can attend GM.
101(3) Entitlement of notice.

# M- Member or his legal representative (equity and preference)
# A- Auditor statutory.
# D- Directors.
SS- 2
Additional entitlement of notice give to.
-Secretarial auditor.
-Debenture trustee.
-Other specified member.
Mode of notice.
-Writing, by hand, ordinary post, registered post, speed post, and fax.
-Section 102 explanatory statement.

-In case of special business attach explanatory with notice.
- It includes the nature of interest in respect of each item of every
director, manager, KMP and relatives of such person.
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Ordinary business: -
A) Adoption of financial statement

B) Declaration of dividend
C) Appointment of retiring director
D) Appointment of, and the fixing if the remuneration of auditor.
Special business: -
Any business other than ordinary business.
Section 103 quorum.
1. Minimum number of members required to be present in the

general
2. Meeting to constitute valid general meeting.
3. No quorum no meeting.
4. Private company: - Two members personally present
5. Proxy are not counted for the purpose of quorum.
6. Public company: -
Up to 1000 members -Minimum five members.
1001 to 5000 member- Minimum 15 members
Member exceeding 5000- Minimum 30 member
7. Representative of governor, president, or body corporate
treated as member.
8. Joint shareholders are counted separately for purpose of quorum.
9. Interested members are counted for the purpose of quorum but
cannot vote on that particular business.
10. One person can be representative of more than one body
corporate he will be counted separately if one more individual
present at the meeting.
Adjournment of meeting: -
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If the quorum is not presented within half an hour then

A) Meeting shall stand adjourned to the same day, time, place in the
next week or such other place, time, date decided by BOD
B) Meeting shall stand cancelled if called by requisitions.
Notice of adjourned meeting.
In case of any changes in time, day, place by BOD then the company
shall give notice of not less than 3 days either individually or by way
of advertisement in newspaper.
Quorum in case of adjourned meeting.

a) If adjournment is because of lack of quorum- the presented
member shall form the valid quorum. (at least 2)
b) If meeting is adjourned because of other reasons- original quorum
is required
c) Resolution is passed at an adjourned meeting shall be treated as
passed on the day it was actually pass and not on any earlier date.
d) Even a single member by person and proxy can hold valid meeting
if directed by NCLT.
Chairperson (104).
- The name of chairman or procedure to appoint chairperson is
mentioned in article of association.
- If AOA is silent then member shall be elected by members by
show of hand.
- Generally members elect the chairperson but if articles of
association provide then directors can elect the chairperson.
- If poll is demanded taken immediately.
- The chairman elected on a show of hands shall continue to be the
chairman of the meeting.
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- Poll can be demanded by members or proxy.

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- If chairman is not present within 15 minutes, one of the director

can act as a chairperson.
- Directors are unwillingness to act as a chairman then select one of
the members as a chairman of the general meeting.
Proxy section—105.
 Proxy means a person appointed by member to attend the general

meeting.
 Proxy need not be member accept section 8 company
 Company not having share capital cannot appoint proxy accept AOA
permit.
 Proxy is not counted for the purpose of quorum.
 Not allowed to speak and vote unless poll is demanded.
 Deposit proxy form at least 48 hours before the meeting at the
registered office of the company
Article cannot prescribe longer period than 48 hours.
A person can act as a proxy on behalf of maximum 50 member and

holding 10% of total share capital.
If a single member holds 10% or more capital than proxy can act on
behalf of such member only.
Proxy must be in writing and signed by member his duly authorized.

If appointer is body corporate affix a common seal.
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Company cannot send invitation to appoint proxy at company’s

expenses, however if a member has requested in writing then company
can send the invitation.
Revocation of proxy;-
 Person himself attend the meeting and voted.

 Deposit of new proxy form within specified time.
 Written notice has been given before commencement or
adjournment of meeting.
 Notice of revocation signed by a member who signed the proxy
form.
Inspection of proxy.
 Inspection by members entitled to vote.
 3 days advance notice should be given to the company.
 Inspection between 24 hours before the commencement of
meeting till the conclusion of meeting. Inspection between
business hours.
Restriction on voting rights 106.

The holder of partly paid up shares cannot vote.
Section 107 voting by show of hands.

 Voting firstly taken by show of hands.
 Count the hands raised in favour or against the motion.
 Chairman announces the resolution whether it is carried or lost
and entered in minute book.
 One member one vote.
Voting through electronic mode section 108.

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Applicability.
Listed company. (Equity shares are listed)
Company having more than 1000 or more members.
Non applicability
whether debenture/ preference shares are only listed.
Listed on SME platform.
Listed on institutional trading platform.
Nidhi Company.
 Notice is send to all members, auditors, directors

 Notice shall specify the details about the e voting facility.
 Notice also post on the website.
 Also published in newspaper at least 21 days before gm one in
english and one regional language.
 E-voting shall remain open for minimum 3 days and close at 5 pm
on the day preceding the general meeting.
 Members can physically attend general meeting but can vote
through one mode only.
 Once voted cannot change subsequently.
 BOD shall appoint scrutinizer who is not in employment.
 Scrutinizer shall declare result within 3 days from the conclusion of
meeting.
 Result should be displayed at register office, head office, corporate
office and website of the company.
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Voting by poll (109)

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Poll can be demanded before or on the declaration of the result by

show of hands.
Poll can be demanded by member or proxy or chairperson.
A poll demanded may be withdrawn at any time.
Who can demand poll:-
Company having share capital:-Member by person or proxy having 10%

of the total voting power or aggregate holding not less 5,00,000
Company not having share capital: - Member or proxy having 10% of

total voting power.
Time of poll:-
A) Adjournment of meeting and appointment of chairman- Taken
immediately.
B) Other cases- Within 48 hours
 Poll paper shall be given to all members having voting rights.
 Chairman will appoint the scrutinizers, person other than in
employment.
Scrutinizer will submit the report to chairman.
Chairman declared the result. Result of the poll shall be deemed
to be the decision of the meeting.
Voting by postal ballot (110)
Business compulsory transacted by postal ballot
A) Alteration of object clause, alteration of AOA to determine private

company.
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B) Buy back
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C) Change in the register office outside local limits.

D) Demerger/ merger/takeover/acquisition
E) Election of small shareholder director
F) For selling whole or substantially whole of the undertaking.
G) Giving loan or extending guarantee or provide security in excess
of the limit
H) Variation of right attached to shareholder and debenture holder.
Business compulsory transacted at general meeting.
A) Ordinary business
B) Transaction where director or auditor have right to be heard.
Procedure.
1) Optional for OPC and other company having up to 200 members.
1) Send notice to all member along with draft resolution.
2) Notice shall be send by registered post, speed post, through
electronic mode, courier service.
3) Advertisement in newspaper one in English and one in regional
language.
4) Notice shall also post on the website of the company.
5) Members shall give assent or dissent within 30 days from
dispatch of notice.
6) Vote received after 30 days shall not be consider.
7) BOD shall appoint one scrutinisers who is not in employment.
8) Scrutinisers shall submit report within 7 days from last date of
voting or last ballot paper received, whichever is earlier.
9) The result shall be declared by posting on the website of the
company.
10) Business transacted by postal ballot, may be transacted by
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electronic means under section 108.

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Circulation of member’s resolution: -

A) Requisition made in writing by 1/10th of paid up equity share
capital in case company having share capital
B) If company not having share capital then requisition by 1/10th of
total voting power.
C) Notice shall be deposited at least 6 weeks before the meeting in
case requisition proposing the resolution.
D) However, meeting is called within 6 weeks then the notice shall
deem to be deposited within time.
E) Notice shall be deposited at least 2 weeks before the meeting if
requisition wants to circulate any statement with respect to
proposed resolution.
F) The company shall circulate the notice to all member.
G) However, company is not bound to circulate any statement if CG
is satisfied that member wants to secure needless publicity.
 Minutes section 118.

 Recorded within 30 days.
 Serially number.
 Fair and correct summary of proceeding.
 All appointments made shall be included in minutes.
 In case of board meeting includes name of the directors
present at the meeting
 And the names of directors who descended the resolution.
 Distinct minutes book for different meeting.
 Can be in loose leaf form but bound periodically.
 Can kept at registered office or such other place approved by
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board.
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Preserved permanently with the custody of CS.

 Can be in physical or electronic mode.
 Signed by chairperson of the meeting or duly authorised
director.
 CS can never sign the minutes of the company.
Report on annual general meeting section 121

Applicable to every listed company.
Prepare a report on each annual general meeting and filed with the
ROC within 30 days from conclusion of annual general meeting in
form MGT 15.
Signed by chairman of the meeting or by two directors one of whom
shall be a managing director.
It contains for and correct summary of the proceedings.
Resolution requiring special notice section 115.

1) Special notice is required to move resolution.
2) Notice shall be signed individually or collectively.
3) Members holding not less than one percent of total voting power or
4) Aggregate sum of not less than rupees 500000 paid up.
5) Notice not earlier than 3 months but at least before 14 days before
meeting.
6) Company shall send notice to members at least 7 days before the
meeting.
7) If it is not practicable to give notice then published in newspaper one
in English and one in vernacular language at least 7 days before the
meeting.
(114) Types of resolution

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Ordinary resolution- Vote casted in favor is more than voted casted

against the motion. (Simple majority)
Special resolution- Vote casted in favor is three times more then vote
casted against the motion. (75% or more).
Self notes
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LAW#LOGIC#LOVE VIRTUAL MEETING.
20. VIRTUAL MEETING.
 Requirement of virtual meeting.

I. Meeting room
II. Software
III. High quality, mike system.
IV.Hardware equipment like monitor LED screen
V. Projector
VI.Leased lines
VII. High speed wireless internet.
 Virtual board meeting.

I. Any director may participate through electronic mode.
II. Notice of meeting shall be send to all directors. & inform the
directors about the option of video conferencing.
III. Director shall prior intimate to chairperson or company
secretory.
IV.Chairman or CS shall make suitable arrangements
V. Director may intimate at the start of the calendar year, which
shall be valid for such calendar year.
VI.Counted for the purpose of the quorum.
VII. Attendance register shall be deemed to be signed.
 Matters not to be dealt with in a meeting in video conference.

I. Approval of annual financial statement.
II. Approval of boards report.
III. Audit committee meeting for consideration of financial
statement.
IV.Demerger, merger acquisition & takeover.
V. Approval of prospectus.
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 Virtual general meeting(Advantages).

I. Increase shareholders participation in meeting.
II. Save time on travel & cost.
III. Encourages more participation by investors across the world.
IV.Reduce the cost of conducting & holding shareholders meeting.
V. Save time of company’s personal.
 Difficulties in holding virtual GM.

I. Security of the system used
II. Streaming with quality without interruption.
III. Providing with secure login id.
IV.Customised instant result & detailed audit reporting
V. Data security.
 Role of chairperson & CS

I. Safeguard the integrity of the meeting
II. Record proceeding& prepare minutes.
III. To store safekeeping marketing the tape recording.
IV.Ensure no unauthorized access
V. Other necessary measures.
SELF NOTES- 1 Page

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LAW*LOGIC*LOVE. SECRETARIAL BOARD.
22. SECRETARIAL
BOARD
Composition of SSB. (SS board.)

 Representatives from major industries.
 Federation of Indian chambers of commerce & industries.
 Confederation of Indian industries.
 The association of chambers & commerce & industry of India.
 PHD chamber of commerce & industry
 Representative of regulatory authority such as MCA, SEBI, RBI,
SIX, BSE, NSE, ICAI, ICSI, ICWAI.
Function of SSB
 Formulate secretarial standard.
 Clarifying issues arising out of SS
 Issuing guidance notes &
 Reviewing & updating the SS
 Note- SS do not substitute any existing law or rules but only
supplementary of such act rules.
 In case if the SS is inconsistent with any law the provision of the
said law shall prevail.
Procedure for formulation and issue of SS.
 SSB in consultation with Council determine the areas of Need
and priority
 SSB main constituent working group to formulate draught of
proposed standard.
 Draft Circulated among the members of working group for
discuss and shall be modified appropriately.
 Draft also circulated to regulatory authorities for their views.
 Prepare and publish in the chartered secretary the journal of
ICSI and placed on the website of ICSI.
1
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 SSB shall finalize & submit to council

UNIQUE ACADEMY. CS SHUBHAM ABAD-
8007916622/33.
LAW*LOGIC*LOVE. SECRETARIAL BOARD.
 Council will consider the final draught an issue SS

SS issued by ICSI (complementary) (compulsory.)
SS1—BM
SS2—GM
SS3—DIVIDEND
SS4--- REGISTER & RECORD.
Meeting
Class meeting.
1. Meeting of separate class is known as class meeting.

2. In case of variation of the right attached to class Holder Company
shall hold separate meeting and obtain consent of class holders
(SR).
3. Quorum-Two persons are representing by proxy one third of
issued capital
SELF NOTES.
1
Page
UNIQUE ACADEMY. CS SHUBHAM ABAD-

8007916622/33.

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Company law CS Executive

SR.NO PART TWO COMPANY ADMINISTRATION & MEETING/

SR. PART THREE CS AS A PROFESSION SECRETARIES.

DEDICATED TO MY PARENTS SHRI RIKHABCHAND

 O-Ownership &management both are separate.

Body corporate 2(11)

‘Every company is a body corporate but everybody corporate is not a company’.

which is available to any person, company can claim such rights.

UNIQUE ACADEMY CS SHUBHAM ABAD-

In following cases court can lift corporate veil.

 F-Fraudulent application for removal of name.

UNIQUE ACADEMY CS SHUBHAM ABAD-

 C-Conflict of public policy religious sentiments.

 A-Avoidance of welfare legislation.

 S-Submission of false information.

 D-Determination of enemy character.

UNIQUE ACADEMY CS SHUBHAM ABAD-

UNIQUE ACADEMY CS SHUBHAM ABAD-

Red herring prospectus Sec 32

Shelf prospectus (31)

certain period without the issue of a further prospectus.

- Validity is one year from the date of opening of first issue.

Abridged prospectus 2(1) (Chotu).

Premium (sec 52)

 File return on allotment in form PAS-3 within 30 days to ROC.

UNIQUE ACADEMY CS SBHUBHAM ABAD-8007916622/33

Criminal and civil liability for misstatement in prospectus

Sealing and signing:-

a) Sign by 2 directors and CS if any and common seal.

b) In absence of common seal sign by 2 directors or director and CS if any.

UNIQUE ACADEMY CS SBHUBHAM ABAD-8007916622/33

Issue of renewed or duplicate share certificate:-

Legal effect of share certificate.

 Not penalise under SEBI, RBI, depository, SCRA act

 No conversation is allowed from DVR to EVR and EVR to DVR.

Issue of preference shares (55)

 GM-SR (MGT - 14 – 30 days to ROC)

Redemption of preference shares (55(2))

Inability to redeem preference shares.

Right issue / pre-emption right:

• Bod approve letter of offer (LOO)

ACCEPTANCE RENUNCIATION REJECTION.

Employee’s stock option scheme (ESOP)

Employee: - Permanent employee working in or outside India

Death disable resignation

3.)Pass SR (MGT-14 -30 days -ROC.)

4.)Completion of preferential allotment within 12 months from passing SR

Private placement. (Sec-42)

Bonus issue (sec-63).

RR (revaluation reserves) cannot be utilized for issue of bonus shares.

Sweat equity shares. (Sec-54)

b) No. Of shares issued

c) Terms and conditions

Buy back and reduction.

UNIQUE ACADEMY CS SBHUBHAM ABAD-8007916622/33

Sec.70 prohibition of buy back;-

B. Redemption of preference shares and debenture.

C. Payment interest on debt security.

 Reduction of share capital means reduction in issued, subscribe and paid up

*Procedure for reduction of share capital.

1.) Pass SR.

Diminution of share capital is not a reduction of capital.

UNIQUE ACADEMY CS SBHUBHAM ABAD-8007916622/33

Shares and share capital.