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WELCOME TO

INDIAN COMPANIES ACT 1956

PART 3

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P w r f Dir t r

The Board of Directors are entitled toexercise all such powers of the companyand to do all such acts and things as thecompany is authorized to exercise and do.

The powers cover all the day to dayactivities for the company and the actions ofthe Board of Directors cannot be called intoquestion.

The Board of Directors however cannotexercise any power which is required to beexercised by the company in general

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Examples where the powersr t f m t n f th

Issue of shares at discount (Section293)

Undertaking lines of business not

provided for in the Memorandum ofAssociation (Section 293) Borrowings in excess of the aggregate

paid up capital plus free reserves ofthe company (Section 293)

Contributions to charitable fundsunrelated to its business beyond certainspecified limits, during a financial year

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Examples where the powersr t f m t n f th

Reorganizing capital andamendments of memorandum orarticles of association

Winding up unless ordered by aCourt/Selling/

leasing or disposing in whole or part

of the companys undertaking;remission or reschedulment of anydebts due by a director

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D ti f Dir t r

i. They are trustees of the wealth ofthe company

ii. They are agents of the company

for various transactions entered intoon behalf of the company.

iii. They should act in utmost good

faith and exercise as much care as aman of ordinary prudence shouldtake in running the affairs of thecom an .

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Duties of Directors

iv. They should ensure to maintainthe records and accounts of thecompany accurately

v. It is their duty to protect theinterests of the share holders byproper conduct of affairs of thecompany in every respect.

vi. They should ensure complianceof all legal and statutoryre uirements while in office as

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Li iliti f Dir t r

i. The Directors are liable to shareholders or public for any acts ofnegligence

ii. They are liable for any act thatresults in breach of trust. iii. They are liable for any ultra viresacts

that arise when they exceed theirauthority in any manner

iv. A director may also become liablefor acts of other directors or employees,if he has willfully allowed any acts of

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Company Meetings

1. Meeting of Share holders or Members:

(b)Statutory Meeting

(c)Annual General Meeting

Extraordinary General Meeting

6. Meeting of Creditors andcontributories

in winding up

9. Meeting of creditors otherwise

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Company Meetings

4. Meeting of Directors

(a) Board Meetings(b) Committee Meetings

5. Meeting of Debenture Holders

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Fr n f B r

A Board should meet at least once in 3months whether a private or publiccompany (Sec285)

[that means four meetings in a year to beconducted]

[Note: The Central Government, bynotification in the official

azette, is em owered to reduce or enhance

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N ti f M tin

Notice of Every Board Meeting shouldbe served in writing on each director .

Normally the company secretaryis charged with the

responsibility of serving thismandatory notice failing whichhe is liable for penal measures

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R l ti n

i. Those passed at Board Meetingii. Those passed by Circulation[According to Section 289, a

resolution by circulation is notdeemed to have been passedunless a draft thereof is circulatedto all directors or all committeemeetings and approved by majorityof members present at that time inthe country].

iii.Those signed by all members of

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DI L TI N F A

A. By removal of companyname from the register by theRegistrar of Company

B. By order of a Court or Order ofthe Central Government u/s 396

C. By winding up

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Official Liquidator

He is the person appointed by theCentral Government.

His role is to ensure satisfaction of

debts and obligations of a companyin liquidation and distributesurplus assets amongst themembers according to their right

of share of such surplus assets. An official liquidator is attached to

each High Court where the

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Provisional Liquidator

Appointed by a court when awinding up petition is filed in thecourt, but before passing awinding up order, after servingdue notice on the company.

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Powers of a Liquidator

i. To institute, defend any suit,prosecution or legal proceeding (civilor criminal) in the name and on behalfof the company

ii. To carry the business of thecompany so far as may be necessaryfor its beneficial winding up

iii. To sell the assets of the company bypublic auction or private contracteither wholly or piecemeal

iv. To raise money against the securityof the assets of the company.

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Who ma file a etition for

i.The company

ii. Any creditor or creditors

iii. Any contributory orcontributories

iv. Any one or all of the abovetogether or separately

v. The Registrar of Companies

vi. Any person authorized by the

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End of Part 3

THANK YOU!