INTERPRETATION OF STATUTES - CA Study...INTERPRETATION OF STATUTES 1 CIT V/s Sodra Devi Haydon's...

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Compiled by CA.Punarvas Jayakumar 9

A FEW IMPORTANT CASE LAWS

Sl

No Case Law Description

INTERPRETATION OF STATUTES

1 CIT V/s Sodra Devi Haydon's case is applicable only when the words used

are ambiguous and are reasonably capable of more than

one meaning

2

Hemraj Gordhandas V/s H.H

Dave Haydon's rule : does not normally apply to fiscal statutes

like Income Tax Act. ( Words of the statute are given plain

meaning)

3

Sultana Begum V/s Premchand

Jain Rule of Harmonious Construction:

i) 2 provisions conflicting - Harmonious interpretation

ii) Head On Clash - Avoided

iii) Not possible to harmonise - Effect is given to all of them

iv) 1 provision - not be allowed to defeat the other provision

Unless : Impossible

v) An interpretation which reduces one of the provisions

to a dead letter is not Harmonious Interpretation

4

Royal Hatcheries Pvt Ltd V/s

State of AP Rule of Ejusdem Generis : Of the same class or species

Eg: oxen, bulls, goat, sheep, cows, horses etc

5

Kemka & Co V/s State of

Maharashtra

Expresio Unius Est Exclusio Alterius : Express mention of

one thing

means the

exclusion of another

Sub Section - CST 2 parts - i) tax payable ii) Tax & Penalties

6

Shree Sajjan Mills Ltd V/s

CIT

Marginal Notes - give an indication as to what exactly the

mischief

that was intended to remembered and throws light on the

intention

of the legislature. It is a relevant factor to be taken into

consideration

in construing the ambit of the section

7 Ram Narian Sons Ltd V/s

It is a cardinal rule of interpretation that a proviso to a

particular

Assistant Commissioner of

Sales Tax

provision of a statute embraces the field which is covered by

the main

provision It carves out an exception to the main provision to

which it

has been enacted and to no other


Compiled by CA.Punarvas Jayakumar 0

8

Waman Lal Chotanlal Parekh

V/s

Rule of Reasonable Construction : words of statute must be

construed

Scindia Steam Naviation Co.

Ltd.

so as to lead to a

sensible meaning

In order to determine whether a transaction is intra vires the

Objects

of the Co, the object clause must be construed neither with

rigidity

nor with laxity

OPPRESSION & MIS - MANAGEMENT

9

Herberstson Ltd V/s Kishore

Rajaram Chabaria Shareholders of a Holding Co cannot file a petition against the

subsidiary of the Holding Co

10

Re, Sindri Iron Foundry Pvt

Ltd

There may be oppression where a minority by physical force

or other

wrongful act oust the majority, so as to prevent the lawful

exercise

of their rights as SHs

- Unauthorised persons claimed to be SHs / Directors

WINDING UP

11

ROC V/s Bihar Wire & Wire

Products P. Ltd

Winding up By Court - Non Commencement/ Suspension of

Biz

i) Mere fact - by itself is not a ground - although they give

the

jurisdiction to the court

ii) Find out whether there is some good reason accounting for

this

iii) Evidence - No intention of carrying on Biz or that it is not

likely

to do so

iv) Reasonable hope - Commencing / resuming - at profit

v) Whether the substratum of the Co has disappeared

12 ROC V/s Winding up By Court - Inability to pay debts

Ajanta Lucky Scheme &

Investments Ltd

i) Mere fact that certain liabilities might accrue in future

which could

exceed the existing assets of the company, would not

necessarily

lead to a conclusion that the company would be unable to


Compiled by CA.Punarvas Jayakumar Page 21

meet its

liabilities when they will accrue due

13 Tata Iron & Steel Co V/s Winding up By Court - Inability to pay debts

Micro Forge(India) Ltd

i) Not Obligatory for the court - even if 1 or more grounds of

S.433 exist

ii) Court has Discretionary Power

iii) Check - Winding up - in the interest of Justice

iv) Loss of employment to existing employees & diminishing

employment opportunities

v) Take into consideration the entire status & Position of the

Co

in the market & the element of public policy

vi) Paying taxes to Govt Regularly - Loss of revenue to the

govt

vii) Creditors have opposed the winding up petition

viii) Temporary Cash crisis - Court would give some time

ix) Assess Effect of Winding up on the larger interest of the

society

14

Manjulabai V/s Jayant

Vitamins Ltd

Winding up By Court - Just & Equitable Grounds - Public

Interest

- Co Employed about 700 employees who opposed winding up

- From its accounts the Co appeared to be making profits

- It could not be said that the substratum had failed or that

there were

Just & Equitable grounds to wind up the Co

15

National Textile Worker's

Union V/s Winding up By Court - Petition by Co - Workers

P. R. Ramakrishnan - The Act Does not authorise the worker to file petition

- There is in the act expressly prohibiting workers from being

heard

in a winding up petition. Accordingly the workers are

entitled to

be heard - as interveners & not as parties

COMPROMISE & ARRANGEMENTS

16

Hindustan Lever Employees

V/s

Whether exchange ratio approved by SHs of merging Cos can

be

Hindustan Level Ltd questioned by a small group of dissenting SHs ??

- Approved by majority - No basis to doubt their judgement

- Valuation has been confirmed to be fair by firm of Auditors



- Cannot be questioned unless it is unfair & Unreasonable

DIRECTORS PROVISIONS

17

Rama Narang V/s Ramesh

Narang S. 164 - Disqualification of Directors

Appellate Tribunal cannot remove disqualification pending the

disposal of appeal

18 Bejoy Kumar Karnani Adjourned AGM to be held within the due date

19 Ambica Tea Company Ltd Continuation of Retiring directors - Special Circumstances

Special circumstances may justify continuation of retiring

directors

, if the meeting is not held, as there cannot be vacuum in the

BOD

20

Janson Engineering & Trading

Pvt Ltd S.161(2) - Alternate Director

- Actual attendance at the BM of the Director appointing him

had

not been contemplated

- Return to the India would NOT suffice

- Not only a temporary return , but an intention to stay in

India

so as to enable him to transact the business of the company

- Return should have some amount of permanence

21 LIC V/s Escorts Ltd Special Notice

The special notice is not bound to give reasons for removal of

the

Director

22

Oriental Metal Pressing Pvt

Ltd V/s S.166 - Distinction B/w "Appointment" & "Assignment"

B. K. Thakoor

- The word "his" indicates that the prohibition applies only

when

an office held by a director is assigned to any other person.

Where

a director dies the office becomes vacant and therefore

such office

cannot be assigned to anybody. Thus assignment of office of

director

usually takes place when the director is alive.

23

Elley V/s Positive Life

Assurance Co Ltd Articles Cannot create a Binding Contract

24 Port Darwin Mining Co Articles cannot create a binding contract however articles can

provide a basis for the contract



25 Sussen Textiles Bearings Ltd Guarantee Commission

Guarantee commission paid to directors for giving surety

against loans or credit facilities taken by the company from

financial institutions is not a remuneration. The directors

giving guarantee does not render manual, clerical, technical,

supervisory or administrative service. He gets commission for

the risk which he bears & has nothing to do with his

directorship

Matters requiring Ordinary Resolution

Section Subject

123 Declaration of dividend

139(1) Appointment of auditors at the AGM

139(1) Reappointment of the retiring auditors at the AGM

139(3) Members may resolve that-

(a) the auditing partner and his team shall be rotated at such

intervals as may be resolved by members, or

(b) the audit shall be conducted by more than one auditor.

139(8)(i) Casual vacancy caused by resignation of auditor to be filled by

Board, and the recommendation so made by the Board shall be

approved in GM by passing an ordinary resolution.

142(1) Fixation of remuneration of auditor (in all cases, except

remuneration of first auditor appointed by the Board)

150(2) Approval of appointment of independent director by the members

in the GM.

151 Appointment of Small Shareholders‟ Director by small shareholders

by a listed company.

152(2) Appointment of every director shall be made in GM, unless

otherwise expressly provided in the Act.

152(6)(a) To appoint the rotational directors, not being less than 2/3rd of

total number of directors (Applicable to a public company only.)

152(6)(b) To appoint the non-rotational directors in default of, and subject

to any regulations in the articles of a public company.

152(6) To reappoint the retiring director at the AGM.

160 To appoint as a director a person who is not a retiring director.

161(2) To authorize the Board of directors to appoint the alternate

directors (Alternatively, the articles may contain a provision

authorizing the Board to appoint alternate directors.)

169(1) To remove a director before the expiry of his term of office (This

resolution may be passed only if the special notice of the intended

removal was given to the company.)

169(5) To appoint director (in place of a director removed before the



expiry of his term of office) at the meeting at which a director is

removed (This resolution may be passed only if the special notice of

the intended appointment was given to the company)

181 Authorizing the Board to contribute to bonafide charitable and

other funds exceeding 5% of average net profits of preceding 3

financial years.

183 This power is generally exercised by the Board, whether by passing

a resolution in Board meeting or by passing resolution by circulation

or by delegating this power to any person [Alternatively, the

shareholders can authorise any person to contribute to National

Defence Fund or any other fund approved by the Central

Government for the purpose of National Defence ]

188 + Rule

15

Approval for entering into related party transactions exceeding the

prescribed limits.

191 Payment of compensation to a director for loss of office in

connection with transfer of undertaking, property or shares.

192 Entering into any arrangement involving non-cash consideration.

196(4) Approval of appointment, remuneration and other terms and

conditions of managing director or whole time director or manager.

First

proviso to

Sec.

197(1)

To authorize the payment of remuneration exceeding 11% of net

profits of the company to the directors and manager (subject to

the approval of the Central Government and Schedule V).

197(4) To approve the remuneration payable to the directors or manager

(Alternatively, the articles may contain a provision authorizing such

payment of remuneration.)

197(7) Authorizing payment of remuneration (excluding stock options) to

Independent directors.

Matters requiring Special Resolution

Section Subject

139(9) Appointment of a person other than the retiring auditor at the AGM.

140(1) Removal of auditor before the expiry of his term of office (Board

resolution and approval of the Central Government are also required,

and opportunity of being heard is to be given to the auditor).

149(1) Appointment of directors exceeding 15.

149(10) Reappointment of independent director on completion of his term of

office.

165(2) Members may specify any number of companies (lesser than 20) in

which a director of the company may act as directors.

180(1)(a) To give consent to the Board of directors to sell, lease or otherwise



dispose of the whole, or substantially the whole of one or more

undertakings of the company (This resolution is to be passed by

postal ballot if the provisions of section 110 are applicable to the

company.)

180(1)(b) To invest the compensation received by the company as a result of

any merger or amalgamation (except in case of investment of

compensation in trust securities).

180(1)(c) To give consent to the Board of directors to borrow moneys

exceeding the aggregate of the paid-up capital and free reserves of

the company.

180(1)(d) To give consent to the Board of directors to remit or extend time for

repayment of any debt due by a director.

185 (2) To approve Loan, loan represented by book debt, Guarantee and

Security in connection with a loan made by company to a person in

whom directors are interested

185(3) To approve a scheme providing for giving of loans by the company to

its managing director or whole time director

186(3) Power to make loan, investment, guarantee or security exceeding the

limit given u/s 186(2) (The special resolution is to be passed by postal

ballot if the provisions of section 110 are applicable to the company.)

196(3) To appoint a person as managing director or whole time director or

manager who has attained the age of 70 years.

197(4) To approve the remuneration payable to managing director or whole

time director, or manager, if the articles require such approval by a

special resolution (Alternatively, the articles may contain a provision

authorizing such payment of remuneration.

210(1) To resolve that investigation into the affairs of the company be

conducted (On receipt of intimation of special resolution, the Central

Government may order investigation.)

212 To resolve that investigation into the affairs of the company be

conducted (On receipt of intimation of special resolution, the Central

Government may order investigation by the Serious Fraud

Investigation Office).

455 Application to the Registrar for obtaining the status of a dormant

company.

Matter requiring approval of members – No vote cast against the resolution

Section Subject

162 Appointment of 2 or more directors by a single resolution can be

made only if a resolution that the appointment shall be so made, is

first passed without any vote being cast against it.



Matters requiring Special Notice

Section Subject

140(4) Appointment as auditor, of a person other than the retiring

auditor.

140(4) Providing expressly that the retiring auditor shall not be

reappointed.

169(2) Removal of a director before the expiry of his term of office.

169(2) Appointment of a director (in place of a director removed before

the expiry of his period of office) at the meeting at which a

director is removed.

Matters requiring passing of resolution by postal ballot

Section Subject

12 Change in place of Registered office outside the local limits of any

city town or village

13 Alteration of the Object Clause of MOA

13 Change in objects for which a company has raised money from

public through prospectus and still has any unutilized amount out of

the money so raised.

14 Alteration of articles for insertion or removal of provisions

defining a private company

43 Issue of shares with differential rights as to voting or dividend or

otherwise.

48 Variation in the rights attached to a class of shares or debentures

or other securities.

68 Buy-back of own shares by the company.

151 Election of a Small Shareholders‟ Director.

180(1)(a) Sale of the whole or substantially the whole of one or more

undertakings of the company.

186(3) Giving loans, or extending guarantees or providing security in

excess of the limits specified u/s 186(3).

Matters requiring resolution to be passed in Board meeting only

Section Subject

161(4) Filling a casual vacancy in the Board

179(3) (a) Power to make calls on shares.

(b) Power to authorize buy-back of securities upto 10% of

aggregate of paid up equity share capital and free reserves.

(c) Power to issue securities, including debentures, whether in India

or outside India.

(d) Power to borrow money.



(e) Power to invest the funds of the company

(f) Power to grant loans or give guarantee or provide security in

respect of loans.

(g) Power to approve financial statement and the Board‟s report.

(h) Power to diversify the business of the company

(i) Power to approve amalgamation, merger or reconstruction.

(j) Power to takeover a company or acquire a controlling or

substantial stake in another company.

(k) Any other matter which may be prescribed.

(l) Power to appoint or remove key managerial personnel (KMP)

(m) Power to appoint internal auditors and secretarial auditor.

Proviso to

Sec.

179(3)

Power to delegate the powers enumerated under section 179(3)(d),

(e) and (f).

182 Making any political contribution.

184 Disclosure of interest by a director.

186(5) Making loan or giving guarantee or providing security or making

investment of any amount.

188 Giving consent to any contract or arrangement (covered under

section 188) with a related party.

Third

proviso to

Sec. 203

Appointing a person as the managing director of the company, if he

is the managing director or manager of one, and of not more than

one, other company.

Matters requiring unanimous resolution of the Board

Section Subject

186(5) Making loan or giving guarantee or providing security or making

investment of any amount.

203 Appointing a person as the managing director of the company, if he

is the managing director or manager of one, and of not more than

one, other company.

Provisions of the Companies Act, 2013 whose applicability is either "derived from"

articles or "in default and subject to " articles

Section Subject

152(1) Subject to any provision contained in the articles of the company,

the subscribers to the memorandum who are individuals shall be

deemed to be the first directors of the company until the

directors are duly appointed as per section 152.

152(6) The articles of a public company may provide for retirement of all

the directors at every AGM.

152(6) Subject to any provision contained in the articles of the company,



the appointment of non-rotational directors of a public company

shall be made in general meeting only.

161(1) The Board can appoint an additional director only if it is authorized

by the articles.

161(2) The Board can appoint an alternate director only if it is authorized

by the articles or by way of a resolution passed in general meeting.

161(3) Appointment of nominee director shall be subject to the provisions

contained in the articles of the company.

161(4) Any casual vacancy in the office of a director may be filled by the

Board, in default of any subject to any provision contained in the

articles of the company.

163 Appointment of directors by proportional representation can be

made only if the articles so provide.

164(3) A private company may, by its articles, provide for additional

disqualifications for appointment as a director.

167(4) A private company may, by its articles, provide for additional

grounds of vacation of office of a director.

174(4) In case of absence of quorum in a Board meeting, the meeting shall

stand adjourned to the same day, at the same time and place in the

next week or if that day is a national holiday, till the next

succeeding day, which is not a national holiday, at the same time

and place. However, the articles of a company may provide

otherwise.

First

proviso to

Sec.

179(1)

The Board shall exercise its powers subject to the provisions

contained in the Act, memorandum and articles.

Second

proviso to

Sec.

179(1)

The Board shall not exercise any power which is directed or

required, by reason of any provision contained in the Act,

memorandum or articles, to be exercised in general meeting.

197(4) The remuneration payable to the directors shall be determined in

accordance with the provisions of the articles or by way of a

resolution passed in general meeting or by way of a special

resolution if the articles so require.

First

proviso to

Sec.

203(1)

The articles of a company may provide that a person may be

appointed or reappointed as the Chairperson as well as the

managing director or Chief Executive Officer at the same time.



Matters requiring approval of the Central Government

Section Subject

140(1) Removal of auditor before the expiry of his term of office (Board

resolution and special resolution are also required, and opportunity

of being heard is to be given to the auditor).

196(4) Appointment of managing director or whole time director or

manager requires approval of the Central Government, if such

appointment is at variance to the conditions specified in Par I of

Schedule V (Such appointment also requires approval of the Board

and approval of members in the GM).

Sec.

197(3)

Payment of remuneration to the directors and manager by a

company having no profits or inadequate profits, if the company is

not able to comply with Part I of Schedule V

Applicability of various provisions of the Companies Act, 2013

Section Provision Nature of Company

Sec. 135 Corporate

Social

Responsibility

Any company (including a foreign company) having-

(i) Net Profit > Rs. 5 crore; or

(ii) Net Worth > Rs. 500 crore; or

(iii) Turnover > Rs. 1,000 crore

If the company ceases to fulfill above criteria for

3 consecutive FYs, then, section 135 shall not

apply.

Sec. 136

and Rule

11

Circulation of

financial

statements by

electronic

mode

(i) Listed company; or

(ii) Public company having net worth > Rs. 1 crore

and turnover > Rs. 10 crore. In case of above

companies, the financial statements shall be

circulated-

(i) by electronic mode, in the following 2 cases:

(A) Where a member holds shares in

dematerialized form and his email Id is registered

with the Depository for communication purposes.

(B) Where a member does not hold shares in

dematerialized form, but he has positively

consented in writing for receiving such documents

by electronic mode.

(ii) by dispatch of physical copies through any

recognized mode of delivery as specified u/s 20, in

all other cases.

Sec. 137

and Rule 3

Filing of

financial

statement and

(i) All listed companies and their Indian

subsidiaries

(ii) All companies having paid up capital of Rs. 5



other

documents in

XBRL form

with the

Registrar

crore or above

(iii) All companies having (turnover of Rs. 100 crore

or above)

(iv) All companies which were hitherto covered

under the Companies (Filing of Documents and

Forms in Extensible Business Reporting Language)

Rules, 2011.

However, the companies in banking, insurance,

power sector, non-banking financial companies and

housing finance companies need not file financial

statements in XBRL.

Sec. 138 Mandatory

internal audit

(i) Listed companies

(ii) Unlisted public companies:

(a) Deposits > Rs. 25 crore

(b) Paid up capital > Rs. 50 crore

(c) Borrowings or loans from Banks and PFI > Rs.

100 crore or more

(d) Turnover > Rs. 200 crore

(iii) Private companies:

(a) Borrowings or loans from Banks and PFI > Rs.

100 crore or more

(b) Turnover > Rs. 200 crore

Sec.

139(2) +

Rule 5

Rotation of

auditors

Applicability:

(i) Listed Companies

(ii) Unlisted Public companies having paid up share

capital > Rs. 10 crore

(iii) Private Companies having paid up capital > Rs.

50 crore

(iv) All Companies having public borrowings from

financial institutions, banks or public deposits > Rs.

50 crore

Non-applicability:

(i) One Person Companies

(ii) Small Companies

Second

Proviso to

Sec.

149(1) +

Rule 3

Mandatory

appointment

of Woman

Director

(i) Listed companies

(ii) Public companies having paid up share capital >

Rs. 100 crore

(iii) Public companies having turnover > Rs. 300

crore

Sec.

149(3)

One Resident

Director

Mandatory

All Companies



Sec.

149(4)

Independent

Directors

Listed Companies

Requirement Independent Directors > 1/3rd of

TNOD

Sec.

149(4) +

Rule 4

Independent

Directors

Applicability:

(i) Public companies having paid up capital > Rs. 10

crore

(ii) Public companies having turnover > Rs. 100 crore

(iii) Public companies having aggregate of

outstanding loans, debentures and deposits > Rs. 50

crore.

Non-applicability:

The following classes of unlisted public companies

shall not be required to have any independent

director.

(a) A joint venture

(b) A wholly owned subsidiary

(c) A dormant company as defined under section

455 of the Act.

Legal Requirement: Independent Directors > 2

Sec. 151

+ Rule 7

Small

Shareholders

Director

Listed Companies

Sec. 177

+ Rule 6

Mandatory

constitution

of Audit

Committee

Applicability:


(ii) Public companies having paid up capital > Rs. 10

crore


crores

(iv) Public companies having aggregate of

outstanding loans, borrowings, debentures and

deposits > Rs. 50 crores

Non-applicability:


shall not be required to constitute audit

committee.

(a) A joint venture



455 of the Act.

Composition of Audit Committee:

(i) No. of directors > 3

(ii) Majority: Independent directors



(iii) Majority: Ability to read and understand F. St.

Sec. 178

+ Rule 6

Mandatory

constitution

of Nomination

and

Remuneration

Committee

(NRC)

Applicability:



crore


crore

(iv) Public companies having aggregate of

outstanding loans, borrowings, debentures and

deposits > Rs. 50 crore

Non-applicability


shall not be required to constitute Nomination and

Remuneration Committee.

(a) A joint venture



455 of the Act.

Composition of Nomination and Remuneration

Committee

(i) No. of non-executive directors > 3

(ii) Independent directors > one half

(iii)Chairperson of the company not to be

Chairperson of NRC

Sec. 177

+ Rule 7

Vigil

mechanism


(ii) Any company which accepts deposits from the

public

(iii) Any company which has borrowed money from

banks and public financial institutions > Rs. 50

crore

Sec. 178 Mandatory

constitution

of

Stakeholders

Relationship

Committee

Any company having > 1,000 shareholders,

debenture-holders, deposit-holders and any other

security holders

Sec. 185 Loans to

directors etc.

All companies except a private company-

(a) in whose share capital no other body corporate

has invested any money:

(b) if the borrowings of such a company from banks

or financial institutions or ay body corporate is



less than twice of its paid up share capital or Rs.

50 crore, whichever is lower; and

(c) such a company has no default in repayment of

such borrowings subsisting at the time of making

transactions under this section.

Sec. 197

+ Rule 7(2)

Managerial

remuneration

> ceiling

specified in

Section II of

Part II of

Schedule V,

without CG

approval

Any company other than-

(i) a listed company, and

(ii) a subsidiary of a listed company

Rec.

203(1) +

Rule 8

Mandatory

appointment

of KMP


(ii) Public companies having paid up share capital >

Rs. 10 crore.

Sec.

203(1) +

Rule 8A

Mandatory

appointment

of whole-time

CS

Any company other than a company covered under

Rule 8, which has a paid up share capital > Rs. 5

crore.

Sec.

203(1) –

2nd Proviso

Chairman may

be appointed

as MD/CEO

Public companies having paid up share capital > Rs.

100 crore and turnover > Rs. 1000 crore which are

engaged in multiple business and have appointed

CEO for each such business.

Sec. 204

+ Rule 9

Mandatory

secretarial

Audit



crore

(iii) Public Companies having turnover > Rs. 250

crore.

Contraventions and punishments under various provisions of the Companies Act, 2013

Section Nature of

contravention

Nature of punishment

127 Failure to pay dividend

within 30 days of

declaration of dividend

Director (i) Imprisonment: Maximum 2

years; and

(ii) Fine: Minimum: Rs. 1,000

per day for each day of

default.

Company Liable to pay simple interest

@ 18% per.



128(6) Contravention of Sec.

128 (Maintenance of

proper books of

account)

Persons

responsible

(i) Managing director

(ii) Whole-time director in

charge of finance

(iii) Chief Financial Officer

(iv) Any other person of a

company charged by the

Board with such duty

Punishment

for

contravention

(i) Imprisonment upto 1 year,

or

(ii) Fine: Minimum Rs. 50,000;

Maximum Rs. 5,00,000.

(iii) Both


129 (Financial

Statement)

Persons

responsible

(i) Managing director

(ii) Whole-time director in

charge of finance

(iii) Chief Financial Officer

(iv) Any other person of a

company charged by the

Board with such duty

(v) All the directors, in the

absence of any of the

officers mentioned above.

Punishment

for

contravention

(i) Imprisonment upto 1 year,

or


Maximum Rs. 5,00,000, or

(iii) Both


134 (Board‟s Report)

Company Fine: Minimum Rs. 50,000;

Maximum Rs. 25,00,000.

Every officer

in default

(i) Imprisonment upto 3

years; or

(ii) Fine: Minimum Rs. 50,000,

Maximum Rs. 5,00,000; or

(iii) Both


136 (Circulation of

financial statements)

Company Fine: Rs. 25,000

Every officer

in default

Fine: Rs. 5,000


137 (Filing of financial

statement and other

documents with the

Company Fine of Rs. 1,000 for every

day during which the failure

continues but which shall not

be more than Rs. 10 lakh.



Registrar)

MD and CFO (i) Imprisonment upto 6

months; or

(ii) Fine: Minimum Rs. 1 lakh;

Maximum Rs. 5 lakh; or

(iii) Both.

In case there is no MD and

CFO, a director who is

charged by the Board with

the responsibility of

complying with the provisions

of this section, shall be liable

to punishment. However, if no

director is so charged by the

Board, then, all the directors

of the company shall be liable

to punishment.


140(2) (Failure to file

the Statement in Form

ADT – 3 by the auditor

within 30 days of

resignation)

Person liable

for

contravention

The auditor

Punishment

for

contravention

(i) Minimum fine: Rs. 50,000

or remuneration whichever

is less

(ii) Maximum fine: Rs.

5,00,000

147(1)

and

148(8)

Contravention of Sec.

139 to 146

OR


148

Company (i) Minimum Fine: Rs. 25,000

(ii) Maximum Fine: Rs.

5,00,000

Officer in

default

(i) Maximum Imprisonment: 1

year, or


Maximum Rs. 1,00,000; or

(iii) Both

147(2)

and

148(8)


139, 143, 144 or 145

by the auditor

OR


148 by the cost

auditor

Person liable

for

contravention

(i) The auditor

(ii) The cost auditor

Punishment

for

contravention

(a) Fine: Minimum Rs. 25,000;

Maximum Rs. 5,00,000 or

four times the remuneration

of the auditor, whichever is

less



(b) If a contravention is

committed knowingly or

willfully with the intention to

deceive the company or its

shareholders or creditors or

tax authorities, then

punishment shall be-

(a) Maximum Imprisonment: 1

year; and

(b) Fine: Minimum Rs. 1 lakh;

Maximum Rs. 25 lakh or eight

times the remuneration of

the auditor, whichever is

less

157(2) Failure to intimate

DIN by the company

to the Registrar

Persons liable

for

contravention

(i) The company

(ii) Every officer of the

company who is in default

Punishment

for

contravention

(i) Minimum fine: Rs. 25,000

(ii) Maximum fine: Rs. 1 lakh

159 Contravention of Sec.

152, 155 and 156

(i) Imprisonment upto 6 months; or

(ii) Fine upto Rs. 50,000 plus upto Rs. 500 per

day in case of continuing default.

165(6) A person accepts

directorships

exceeding the

maximum number of

directorships

(i) Minimum fine of Rs. 5,000 for every day

after the first during which the contravention

continues.

(ii) Maximum fine of Rs. 25,000 for every day

after the first during which the contravention

continues.


166 (Duties of

directors)

The director shall be punishable with-

(i) Minimum fine of Rs. 1 lakh:

(ii) Maximum fine of Rs. 5 lakh.

167(2) A person functions as

a director even when

his office is vacated

(i) Imprisonment upto 1 year; or

(ii) Fine: Minimum Rs. 1 lakh; Maximum Rs. 5

lakh; or

(iii) Both

172 Contravention of any

provision of Chapter

XI of CA, 2013 (viz.

Sec. 149 to 172) for

which no specific

punishment is provided

The company and every officer of the

company who is in default shall be punishable

with-

(i) Minimum fine of Rs. 50,000

(ii) Maximum fine of Rs. 5 lakh



173(4) Failure to give notice

of Board meeting

Person liable for

contravention

Every officer of the

company whose duty is to

give notice of Board

meeting.

Punishment for

contravention

Fine of Rs. 25,000


177 or 178 (Audit

Committee, Vigil

Mechanism and

Nomination and

Remuneration

Committee)

Company (i) Minimum Fine: Rs. 1 lakh

(ii) Maximum Fine: Rs. 5

lakh

Officer in

default

(i) Maximum

Imprisonment: 1 year

(ii) Fine: Minimum Rs. 1

lakh; Maximum Rs. 5 lakh;

or

(iii) Both


182 (Political

contribution)

Company Fine: Upto 5 times the

amount so contributed

Officer in

default


months, and

(ii) Fine upto 5 times the

amount so contributed

184(4) Failure to disclose

interest u/s 184(1) or

184(2) or participation

in the contract or

arrangement

Person liable for

contravention

The director concerned

Punishment for

contravention


year; or

(ii) Fine: Minimum Rs.

50,000; Maximum Rs. 1

lakh; or

(iii) Both


185 (Loans to

directors. Etc.,)

Company Fine: Minimum: Rs. 5 lakh,

Maximum: Rs. 25 Lakh

Any other

person to whom

loan is advanced

(i) Imprisonment:

Maximum 6 months

(ii) Fine: Minimum: Rs. 5

Lakh; Maximum: Rs. 25

Lakh

(iii) Both


186 (Loans,

investments etc. by a

company)

Company Fine: Minimum: Rs. 25,000;

Maximum: Rs. 5 Lakh

Officer in

default

(i) Imprisonment:

Maximum: 2 years; and



(ii) Fine: Minimum: Rs.

25,000; Maximum: Rs. 1

Lakh


187 (Investments of

company to be held in

its own name)

Company Fine: Minimum Rs. 25,000;

Maximum: Rs. 25 Lakh

Officer in

default

(i) Imprisonment:

Maximum: 6 months; or

(ii) Fine: Minimum: Rs.

25,000; Maximum: Rs. 1

Lakh; or

(iii) Both


188 (Related party

transactions)

Person liable for

contravention

The director or any other

employee who had entered

into such contract or

arrangement.

Punishment for

contravention

(i) In case of a listed

company, he shall be

punishable with

(a) Imprisonment upto 1

year, or

(b) Fine: Minimum Rs.


lakh; or

(c) Both.

(ii) In case of any other

company, he shall be

punishable with fine:

Minimum Rs. 25,000;

Maximum Rs. 5 lakh.


188 (Registers of

contracts or

arrangements in which

directors are

interested)

Person liable for

contravention

Every director who fails

to comply with the

provisions of this section

and the rules made

thereunder.

Punishment for

contravention

Fine of Rs. 25.000


190 (Contract of

employment with

managing or whole-

time directors)

Company Fine of Rs. 25,000

Officer in

default

Fine of Rs. 5,000 for each

default

191(5) Contravention of Sec. Person liable for Director concerned



191 (Payment to

directors for loss of

office, etc. in

connection with

transfer of

undertaking, property

or shares)

contravention

Punishment for

contravention

Fine: Minimum Rs. 25,000;

Maximum Rs. 1 lakh


194 (Prohibition on

forward dealings in

securities of company)

Person liable for

contravention

(i) Director concerned

(ii) KMP concerned

Punishment for

contravention


years; or


lakh; Maximum: Rs. 5 lakh;

or

(iii) Both


195 (Prohibition on

insider trading of

securities)

Person liable for

contravention

Any person who enters

into insider trading.

Punishment for

contravention


years; or


lakh, Maximum: rs. 25

Crore or 3 times the

amount of profits made

out of insider trading,

whichever is higher, or

(iii) Both


197 (Managerial

remuneration)

Person liable for

contravention

Any person who

contravenes the provisions

of Sec. 197

Punishment for

contravention

Fine: Minimum: Rs. 1 Lakh;

Maximum Rs. 5 lakh


204 (Secretarial

audit)

Person liable for

contravention

Any person who

contravenes the provisions

of Sec. 204

Punishment for

contravention

Fine: Minimum Rs. 1 lakh;

Maximum Rs. 5 lakh


206 (Furnishing of

information, inspection

and conduct of

inquiries)

Person liable for

contravention

(i) Company

(ii) Every officer who is in

default

Punishment for

contravention

(i) Fine upto Rs. 1 lakh; and

(ii) Fine upto Rs. 500 per

day after the first during



which the failure continue,

in case of a continuing

default.


207 (Conduct of

inspection and inquiry)

Person liable for

contravention

(i) Company

(ii) Every officer who is in

default

Punishment for

contravention

(i) Fine upto Rs. 1 lakh; and

(ii) Fine upto Rs. 500 per

day after the first during

which the failure

continues, in case of a

continuing default

(iii) Vacation of office in

the company

(iv) Disqualified from

holding any office in any

company.

217(6) Non-fulfillment of

duties u/s. 217 (viz.

disobeying the

direction issued by

Registrar or inspector)

Person liable for

contravention

The director or officer

concerned

Punishment for

contravention


year



lakh

(iii) Vacation of office in

the company

(iv) Disqualified from

holding any office in any

company.

217(8) Non-fulfillment of

duties u/s. 217 (Duties

to produce books,

furnish information,

sign notes of

examination, etc.,)

Person liable for

contravention

The person concerned.

Punishment for

contravention


months.



lakh

(iii) Further fine upto Rs.

2,000 for every day after

the first during which the

failure or refusal

continues.

221(2) Contravention of Sec. Company Fine: Minimum Rs. 1 lakh;



221 (Removal, transfer

or disposal of assets in

contravention of the

order of the Tribunal)

Maximum Rs. 25 lakh

Officer in

default


months; or



lakh; or

(iii) Both


222 (Issue or transfer

of securities in

contravention of the

order of the Tribunal)

Company Fine: Minimum Rs. 1 lakh;

Maximum Rs. 25 lakh

Officer in

default


months; or



lakh; or

(iii) Both

392 Contravention of

Chapter XXII of CA,

2013 (viz. Sec. 379 to

393)

Foreign company (i) Fine: Minimum Rs. 1

lakh; Maximum Rs. 3 lakh

(ii) Additional fine upto

Rs. 50,000 for every day

after the first during

which the contravention

continues, in the case of a

continuing offence.

Officer in

default


months; or



lakh; or

(iii) Both

405 Contravention of Sec.

405 (Failure to furnish

the required

information)

Company Fine upto Rs. 25,000

Officer in

default


months; or



lakh, or

(iii) Both

446B Contravention by a

One Person Company

or a small company of

1.sub-section (5) of

Company and

Officer in

default

Not be more than one half

of the penalty specified in

such sections



section 92 (Annual

Return)

2. sub-section (2) of

section 117 (Filing of

MGT-14)

3. sub-section (3) of

section 137 (Filing of

Financial Statement

with ROC)

447

and

448

Punishment for fraud

and punishment for

false statement

Person liable for

contravention

Any person who is guilty

of fraud or furnishing

false statement involving

an amount of at least

ten lakh rupees or one

percent, of the turnover

of the company,

whichever is lower

Punishment for

contravention

(i) Minimum imprisonment:

6 months (3 years, in case

the fraud involves public

interest);

(ii) Maximum

imprisonment: 10 years;

(iii) Minimum fine: Amount

involved in the fraud:

(iv) Maximum fine: 3 times

the amount involved in

fraud:

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



twenty lakh rupees or

with both.

449 Punishment for false

evidence

Person liable for

contravention

Any person who

intentionally gives false

evidence.

Punishment for

contravention

(i) Imprisonment: Minimum

3 years; Maximum 7 years.

(ii) Fine upto Rs. 10 lakh

450 Penalty for a

contravention for

which no specific

penalty is specified

Person liable for

contravention


Punishment for

contravention

(i) Fine upto Rs. 10,000

and

(ii) Fine upto Rs. 1,000 for

every day after the first

during which the

contravention continues,

where the offence is of

continuing nature.

451 Punishment, where

same offence is

committed within 3

years

Person liable for

contravention


Punishment for

contravention

(i) Fine: Twice the amount

of fine for such offence;

(ii) Imprisonment: Same

imprisonment as provided

for that offence.

452 Penalty for wrongful

withholding of

property

Person liable for

contravention

Officer or employee of

the company who

wrongfully withholds the

property of the company.

Punishment for

contravention

(i) Fine: Minimum Rs. 1

lakh; Maximum Rs. 5 lakh

(ii) Imprisonment upto 2

years.

453 Punishment for

improper use of

„limited‟ or „private

limited‟

Person liable for

contravention


Punishment for

contravention

(i) Minimum fine: Rs. 500

per day.

(ii) Maximum fine: Rs.

2,000 per day.

464 Association or

partnership of persons

exceeding 50 persons

Person liable for

contravention

Every member of such

association or partnership.

Punishment for (i) Fine upto Rs. 1 lakh



contravention (ii) Personal liability for all

the liabilities.

An introduction to E-Forms under the Companies Act, 2013

Chapter No. of

the Companies

Act, 2013

Name of the Chapter

Name of E-Forms (viz.

Initials of the E-Forms)

Chapter I Preliminary -

Chapter II Incorporation of Company and

Matters Incidental Thereto

INC

Chapter III Prospectus and Allotment of

Securities

PAS

Chapter IV Share Capital and Debenture SH

Chapter V Acceptance of Deposits by

Companies

DPT

Chapter VI Registration of charges CHG

Chapter VII Management and

Administration

MGT

Chapter VIII Declaration and Payment of

Dividend

DIV

Chapter IX Accounts of Companies AOC

Chapter X Audit and Auditors ADT

Chapter XI Appointment and Qualifications

of Directors

DIR

Chapter XII Meetings of Board and its

Powers

MBP

Chapter XIII Appointment and Remuneration

of Managerial Personal

MR

Chapter XIV Inspection, Inquiry and

Investigation

-

Chapter XV Compromises, Arrangements

and Amalgamations

-

Chapter XVI Prevention of Oppression and

Mismanagement

-

Chapter XVII Registered Values -

Chapter XVIII Removal of Name of companies

from the Register of

Companies

-



[Chapter XIX Revival and Rehabilitation of Sick Companies: Omitted]

Chapter XX Winding Up -

Chapter XXI Companies Authorised to

Register Under This Act &

Winding Up of Unregistered

Companies

URC

Chapter XXII Companies Incorporated Outside

India

FC

Chapter XXIII Government Companies -

Chapter XXIV Registration offices and fees GNL

Chapter XXV Companies to Furnish

Information or Statistics

-

Chapter XXVI Nidhis NDH

Chapter

XXVII

National Company Law Tribunal

and Appellate Tribunal

-

Chapter

XXVIII

Special Courts MAC

Chapter XXIX Miscellaneous ADJ and MSC

Forms prescribed under various provisions of the Companies Act, 2013

Forms prescribed under the Companies (Declaration and Payment of Dividend) Rules,

2014

Form Particulars Section Number

DIV-

5

Statement of amounts credited to

Investor Education And Protection Fund

124(5) and

125

Forms prescribed under the Companies (Accounts) Rules, 2014

Form Particulars Section

Number

AOC-1 Statement containing salient features of

the financial statement of subsidiaries or

associate companies or joint ventures

129

AOC-2 Form for disclosure of particulars of

contracts/arrangements entered into by

the company with related parties

referred to in sub-section (1) of section

188 of the Companies Act, 2013 including

134



certain arms length transactions under

third proviso thereto

AOC-3 Form of Abridged Financial Statements 136

AOC-4 Form for filing financial statement and

other documents with the Registrar

137

AOC-4

CFS

Form for filing consolidated financial

statements and other documents with the

Registrar

137

AOC-4

XBRL

Form for filing financial statements and

other documents with the Registrar by

the companies covered under the

Companies (Filing of Documents and

Forms, in Extensible Business Reporting

Language) Rules, 2015

137

AOC-5 Notice of address at which books of

account are to be maintained

128

Forms prescribed under the Companies (Filing of documents and forms in XBRL)

Rules, 2015


Number

AOC-4

XBRL

Form for filing XBRL document in respect of

financial statement and other documents

with the Registrar

137

Forms prescribed under the Companies (Audit and Auditors) Rules, 2014


Number

ADT-1 Notice appointment of auditor by the

company

139(1)

ADT-2 Application for removal of auditor(s) from

his/their office before expiry of term

140(1)

ADT-3 Notice of Resignation by the Auditor 140(2)

ADT-4 Reporting of fraud by the Auditor to the

Central Government

143(12)

Forms prescribed under the Companies (cost records and audit) Rules, 2014


Number

CRA-1 Form in which cost records shall be 148(1)



maintained

CRA-2 Form of intimation of appointment of cost

auditor by the company to Central

Government

148(3)

Forms prescribed under the Companies (Appointment and Qualification of Directors)

Rules, 2014


Number

DIR-1 Omitted -

DIR-2 Consent to act as a director of a company 152(5)

DIR-3 Application for allotment of DIN 153

DIR-3A Declaration, where a person does not have

a last name

-

DIR-3B Intimation of allotment of DIN to the

company by the director

156

DIR-3C Intimation of DIN by the company to the

Registrar

157

DIR-4 Omitted -

DIR-5 Application for surrender of DIN 153

DIR-6 Intimation of change in particulars of

director to be given to the Central

Government

-

DIR-7 Verification of applicant for change in

DIN particulars

-

DIR-8 Intimation by Director (Declaration by the

director that he is not disqualified for

appointment)

164 and

152(4)

DIR-9 Report by the company to Registrar with

respect to disqualification of directors

u/s 164(2)

164(2)

DIR-10 Form of application for removal of

disqualification of directors

164(2)

DIR-11 Notice of resignation of a director to the

Registrar

168

DIR-12 Particulars of appointment of directors

and the Key Managerial Personnel and the

changes among them

168 and

170



Forms prescribed under the Companies (Meeting of Board and its Powers) Rules,

2014


Number

MBP-1 Notice of interest by director (viz.

Disclosure of interest by director)

184(1)

MBP-2 Register of loans, guarantee, security and

acquisition made by the company

186(9)

MBP-3 Register of investments not held in its own

name by the company

187(3)

MBP-4 Register of contracts with related party

and contracts and Bodies etc. in which

directors are interested

189(1)

Forms prescribed under the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014


Number

MR-1 Return of appointment of Key Managerial

Personnel

196 and 197,

Schedule V

MR-2 Form of application to the Central

Government for approval of appointment or

reappointment and remuneration or increase

in remuneration or waiver for excess or over

payment to managing director or whole time

director or manager and commission or

remuneration to directors

196, 197, 200,

201(1) and

203(1),

Schedule V

MR-3 Secretarial Audit Report 204(1)

Forms prescribed under the Companies (Compromises, Arrangements and

Amalgamations) Rules, 2014


Number

CAA-1 Creditor‟s Responsibility Statement 230(2)

CAA-2 Notice and advertisement of notice of the

meeting of creditors or members

230(3)

CAA-3 Notice to Central Government and

Regulatory Authorities

230(5)

CAA-4 Report of result of meeting by chairperson -

CAA-5 Petition to sanction compromise or

arrangement

230



CAA-6 Order on petition 230(7)

CAA-7 Order under section 232 232

CAA-8 Statement to be filed with Registrar of

Companies

232(7)

CAA-9 Notice of the scheme inviting objections or

suggestions

233(1)(a)

CAA-

10

Declaration of solvency 233(1)(c)

CAA-

11

Notice of approval of the scheme of

merger

233(2)

CAA-

12

Confirmation order of scheme of merger or

amalgamation

233

CAA-

13

Application by the Central Government to

the Tribunal

233(5)

CAA-

14

Notice to dissenting shareholders 235(1)

CAA-

15

Information to be furnished along with

circular in relation to any scheme or

contract involving the transfer of share or

any class of shares in the transferor

company to the transferee company

238(1)(a)

Forms prescribed under the Companies (Authorised to Register) Rules, 2014


Number

URC-1 Application by a company for registration

under section 366 (conversion from firm

into company, and LLP into company)

366

URC-2 Advertisement giving notice about

registration under Part I of Chapter XXI

374(b)

Forms prescribed under the Companies (Registration Offices and Fees) Rules, 2014

Form Particulars

GNL-1 Form for filing an application with

Registrar of Companies

GNL-2 Form for submission of documents with the

Registrar

GNL-3 Particulars of person(s) or Key Managerial

Personnel charged or specified for the

purpose of sub-clause (iii) or (iv) of clause

60 of section 2



Forms prescribed under the Nidhi Rules, 2014


Number

NDH-1 Return of Statutory Compliances 406

NDH-2 Application for extension of time 406

NDH-3 Half yearly return 406

Forms prescribed under the Companies (Adjudication of Penalties) Rules, 2014


Number

ADJ Memorandum of Appeal 454(5)

Forms prescribed under the Companies (Registration of Foreign Companies)

Rules, 2014


Number

FC-1 Information to be filed by foreign company 380(1)(h)

FC-2 Return of alteration in the documents filed

for registration by foreign company

380(3)

FC-3 Annual accounts along with the list of all

principal places of business in India

established by foreign company

381

FC-4 Annual Return of a Foreign Company 384(2)

FC-5 Nomination by IDR Holder 390

Forms prescribed under the Companies (Miscellaneous) Rules, 2014


Number

MSC-1 Application to Registrar for obtaining the

status of dormant company

455(1)

MSC-2 Certificate of status of a dormant company 455(2)

MSC-3 Return of dormant companies 455(5)

MSC-4 Application for seeking status of active

company

455(5)

MSC-5 Certificate of status of an active company 455(5)



Forms prescribed under the Companies (Removal of Names of Companies from the

Register of Companies) Rules, 2016


Number

STK-1 Notice by Registrar for removal of name of

the company from the register of

companies

248(1)

STK-2 Application by company to ROC for

removing its name from register of

companies

248(2)

STK-3 Indemnity Bond -

STK-4 Affidavit 248(2)

STK-5 Public Notice 248(1) and

248(4)

STK-

5A

Public Notice 248(1) and

248(4)

STK-6 Public Notice 248(2) and

248(4)

STK-7 Notice of striking off and dissolution 248(5)



Section- Wise percentage weight-age as per ICAI



Skill-wise percentage weightage as per ICAI



IMPORTANT AMENDMENTS

CONSOLIDATED LIST OF EXEMPTIONS DATED 05-06-2015 IN TABULAR

FORMAT

EXEMPTIONS FOR NIDHI COMPANIES

Section Description

Section 20- Service of

documents

Shall apply subject to the modification that in the case of a

Nidhi company, the document may be served only on members

who hold shares of more than one thousand rupees in face

value or more than one per cent, of the total paid-up share

capital of the Nidhis whichever is less.

For other shareholders, document may be served by a public

notice in newspaper circulated in the district where the

Registered Office of the Nidhi is situated and publication of

the same on the notice board of the Nidhi. [Section 20 (2)]

Section 42 -Offer or

invitation for

subscription of securities

on private placement

Except sub-sec (1), explanation (II) to sub-sec (2), sub-sec

(4), (6), (8), (9) and (10), the entire section shall not apply

Section 47- Voting

rights

Shall apply, subject to the modification that no member shall

exercise voting rights on poll in excess of five per cent, of

total voting rights of equity shareholders. [Section 47(1)

(b)]

Section 62 -Further

issue of share capital Shall not apply.

Section 67 -

Restrictions on purchase

by company or giving of

loans by it for purchase

of its shares

Shall not apply, when shares are purchased by the company

from a member on his ceasing to be a depositor or borrower

and it shall not be considered as reduction of capital under

section 66 of the Companies Act, 2013.

Section 123-Declaration

of dividend

Shall apply, subject to the modification that any dividend

payable in cash may be paid by crediting the same to the

account of the member, if the dividend is not claimed within

30 days from the date of declaration of the



dividend. [section 123(5)]

Section 127 -Punishment

for failure to Distribute

dividends

Shall apply, subject to the modification that where the

dividend payable to a member is one hundred rupees or less,

it shall be sufficient compliance of the provisions of the

section, if the declaration of dividend is announced in the

local language in one local newspaper of wide circulation and

announcement of the said declaration is also displayed on the

notice board of the Nidhis for at least three months.

Section 136 - Right of

member to copies of

audited Financial

statement

Shall apply, subject to the modification that, in the case of

members who do not individually or jointly hold shares of

more than one thousand rupees in face value or more than one

per cent, of the total paid-up share capital whichever is less,

it shall be sufficient compliance with the provisions of the

section if an intimation is sent by public notice in newspaper

circulated in the district in which the Registered Office of

the Nidhi is situated stating the date, time and venue of

Annual General Meeting and the financial statement with its

enclosures can be inspected at the registered office of the

company, and the financial statement with enclosures are

affixed in the Notice Board of the company and a member is

entitled to vote either in person or through proxy. [Section

136(1)]

EXEMPTIONS FOR GOVERNMENT COMPANIES

Section Description

Section 4 -Memorandum The name of a Government company whether public

limited or private limited shall end with the word

“Limited” even if it is private limited [Section 4(1) (a)]

Section 56- Transfer

and transmission of

securities

The requirement related to submission of proper

instrument of transfer duly stamped, dated ,

executed for registering the transfer of shares by

the company shall not apply with respect to the

bonds issued by a Government company, provided

that an intimation by the transferee specifying his

name, address and the occupation, if any, has been

delivered to the company along with the certificate



relating to the bond; and if no such certificate is in

existence, along with the letter of allotment of the

bond: [Section 56(1) second proviso)

The requirement related to submission of proper

instrument of transfer duly stamped, dated ,

executed for registering the transfer of shares by

the company shall not apply in respect of shares

held by the nominee of the Central Government

[Section 56(1) third proviso)

Section 89- Declaration

in respect of Beneficial

interest in any share

Shall not apply.

Section 90-

Investigation of

beneficial ownership of

shares in certain cases.

Shall not apply

Section 96 (2) -Annual

general meeting.

Modification in sec 96(2) The Annual General Meeting

can be held at registered office of the company or such

other place within the city, town or village in which the

registered office of the company is situated or such

other place as the Central Government may approve in his

behalf. Earlier pursuant to modification notification

issued under section 462 , a government company can hold

an annual general meeting either at its registered office

or such other place, as may be approved by the central

government

Section 123 -

Declaration of dividend.

The provisions related to declaration of dividend out of

accumulated profits earned by the company in the

previous years and transferred to reserves , due to

inadequacy or absence of profits in any financial year shall

not apply to a Government Company in which the entire

paid up share capital is held by the Central Government,

or by any State Government or Governments or by the

Central Government and one or more State

Governments. [Section 123(1) second proviso]

Section 123 -

Declaration of dividend.

The provisions related to deposit of the amount of

dividend including interim dividend in a scheduled bank

within 5 days of declaration of such dividend shall not

apply to a Government Company in which the entire paid up

share capital is held by the Central Government, or by any

State Government or Governments or by the Central



Government and one or more State Governments or by one

or more Government company. [ Section 123(4)]

Section 129.- Financial

Statement

Shall not apply to the extent of application of Accounting

Standard 17 (Segment Reporting) to the companies

engaged in defence production.

Section 134 - Financial

statement, Board‘s

report, etc.

The requirement related ti disclosure of company‟s policy

on directors‟ appointment and remuneration including

criteria for determining qualifications , positive

attributes, independent of a director and other matters

provided under sub-section (3) of section 178 shall not

apply [Section 134(3) (e)]

Section 134 - Financial

statement, Board‘s

report, etc.

The provisions related to disclosure of the manner in

which performance of Board, its committee and Directors

is evaluated shall not apply in case the directors are

evaluated by the Ministry or Department of the Central

Government which is administratively in charge of the

company, or, as the case may be, the State Government,

as per its own evaluation methodology.[Section 134(3)

(p)]

Appointment of

director. Section 152(6)

& (7)

Exemption The requirement related to rotation of

directors along with manner of filling vacancy arising due

to retiring director shall not apply to:-

a. a Government Company, which is not a listed

company, in which not less than fifty-one percent

of paid up share capital is held by the Central

Government or by any State Government of

Governments or by the Central Government and one

or more State Governments;

b. a subsidiary of a Government company, referred to

in (a) above.

EXEMPTIONS FOR PRIVATE COMPANIES

Section Description

Section 2 - Related

party

Provision of section 2 (76) (vii) i.e. Holding, subsidiary or an

associate company or a subsidiary of holding company to

which it is also a subsidiary (fellow subsidiary) will not be



considered as related party for the purpose of section

188. [Section 2(76)(viii)]

Definition of financial

statement - Section 2(40)

Modification in proviso to sec 2(40) Exemption has been

provided to one person company, small company, dormant

company and private company (if such private company is a

start-up) from including cash flow statement, as a part of

financial statements Explanation. - For the purposes of this

Act, the term 'start-up' or "start-up company" means a

private company incorporated under the Companies Act,

2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956)

and recognized as start-up in accordance with the

notification issued by the Department of industrial Policy

and Promotion, Ministry of Commerce and Industry."

Section 3 - Formation of

company.

Only two persons are required to form a Private

Company. [Section 3(1)b]

A private company other than a company registered under

section 8 of the Act having paid up share capital of Rs 50

lakhs or less or average annual turnover during the relevant

period is Rs 2 crore or less may convert itself into one

person company by passing a special resolution in the

general meeting. [Section 3 read with rule no 7 of the

Companies (Incorporation) Rules, 2014]

Section 39- Allotment of

securities by company

Requirement related to minimum subscription and minimum

application money is not application

Section 43 -Kinds of

share capital

Provisions of sec 43 shall not apply where memorandum or

articles of association of a Private Company so provides.

Section 47- Voting

rights

Provisions of sec 47 shall not apply where memorandum or

articles of association of a Private Company so provides

Section 54- Issue of

sweat equity shares

Not required to comply SEBI guidelines for issue of sweat

equity shares

Section 62- Further issue

of share capital A private company is not required to comply with the

provision with respect to minimum time period to open an



offer and dispatch of offer notice through registered post

or speed post or through electronic mode if 90%, of the

members of a private company have given their consent in

writing or in electronic mode. [Section 62 (1) (a) (i) & 2]

Section 62 -Further

issue of share capital

A private Company can offer shares to employees under a

scheme of employees‟ stock option by passing ordinary

resolution instead of a special resolution.[Section 62 (1)

(b)]

Section 67 -

Restrictions on purchase

by company or giving of

loans by it for purchase

of its shares.

Provisions of sec 67 shall not be applicable to Private

Companies :

in whose share capital no other body corporate has

invested any money;

if the borrowings of such a company from banks or

financial institutions or any body corporate is less

than twice its paid up share capital or fifty crore

rupees whichever is lower; and

such a company is not in default in repayment of such

borrowings subsisting at the time of making

transactions under this section.

Section 68- Power of

company to purchase its

own securities

Not required to comply SEBI guidelines for issue of sweat

equity shares ,file declaration of solvency and return of

buy-back with SEBI

Prohibition on acceptance

of deposits from public.

Section 73(2) (a) to (e)

Exemption subject to The scope of exemption from

complying with the provisions relating to manner of

acceptance of deposits has been changed to include the

following

A. which accepts from its members monies not

exceeding one hundred per cent of aggregate of the

paid up share capital, free reserves and securities

premium account; or

B. which is a start-up, for five years from the date of

its incorporation; or

C. which fulfils all of the following conditions, namely:-

a. which is not an associate or a subsidiary



company of any other company;

b. if the borrowings of such a company from

banks or financial institutions or anybody

corporate is less than twice of its paid up

share capital or fifty crore rupees, whichever

is lower; and

c. such a company has not defaulted in the

repayment of such borrowings subsisting at

the time of accepting deposits under this

section:

Provided that the company referred to in clauses (A), (B) or

(C) shall file the details of monies accepted to the

Registrar in such manner as may be specified.

Section 92(1)(g) -

Annual Return

Modification in sec 92(1)(g) subject to For small

companies, clause (g) read as:- “(g) aggregate amount of

remuneration drawn by directors” Existing clause (g)

“(g) remuneration of directors and key managerial

personnel”

Modification in proviso to sub-section (1) of section

92 In addition to One Person Company, small company, in

case of a private company which is a start-up, the annual

return shall be signed by the company secretary, or where

there is no company secretary, by the director of the

company

Section 101- Notice of

meeting

Shall apply unless otherwise specified in section or the

Articles of the company provide otherwise

Section 102- Statement

to be annexed to notice



Section 103- Quorum

for meetings



Section 104- Chairman

of meetings





Section 105- Proxies Shall apply unless otherwise specified in section or the


Section 106- Restriction

on voting rights



Section 107- Voting by

show of hands



Section 108- Voting

through electronic means

Not required to provide facility to members to exercise

their right to vote at general meeting by electronic

means. [Section 108 read with rule 20(1) of the

Companies (Management and Administration) Rules, 2014]

Section 109 - Demand

for poll



Section 110- Postal

ballot

Not required to pass mandatory business by way of postal

ballot. [Section 110 read with Rule 22(16) of the

Companies (Management and Administration) Rules, 2014]

Section 117 -

Resolutions and

agreements to be filed

Board resolution passed u/s 179 (3) are not required to be

filed with Registrar in MGT-14 [Section 117 (3) (g)]

Section 120-

Maintenance and

Inspection of documents

in electronic form

Not required to maintain records in electronic

format [Section 120 read with Rule no 27 (1) of the

Companies (Management and Administration) Rules 2014]

Section 121- Report on

annual general meeting

Not required to file report on annual general meeting with

Registrar

Section 134- Financial

Statement, Board's

report, etc

Private company is not required to state in its boards‟

report the manner in which formal annual evaluation

has been made by the Board of its own performance

and that of its committees and individual directors.

Not required to disclose in the directors

responsibility statement , any statement regarding

internal control



Section 136- Right of

member to copies of

audited financial

statement

Not required to place its financial statement including the

consolidated financial statement along with all other

documents required to be attached or annexed to, on its

website, if any.

Section 143(3)(i)-

Powers and duties of

auditors and auditing

standards

Exemption subject to The provisions relating to statement about

internal financial controls system in the auditor‟s report shall not

apply to a private company:-

i. which is a one person company or a small company; or

ii. which has turnover less than rupees fifty crores as per

latest audited financial statement AND

which has aggregate borrowings from banks or financial

institutions or anybody corporate at any point of time

during the financial year less than rupees twenty five

crore."

MCA, vide F.No. 1/1/2014-CL-V dated 25thJuly, 2017 has

clarified that the aforesaid exemption shall be applicable for

those audit reports in respect of financial statements pertaining

to financial years commencing on or after 1st April, 2016, which

are made on or after the date of the said notification.

Section 173(5)-

Meetings of Board

Modification in sec 173(5) A One Person Company, small

company, dormant company and a private company (if such private

company is a start-up) shall be deemed to have complied with the

provisions of this section if at least one meeting of the Board of

Directors has been conducted in each half of a calendar year and

the gap between the two meetings is not less than ninety days:

Section 174(3)-

Quorum for meetings

of Board

Exemption subject to Interested director may also be counted

towards quorum in such meeting after disclosure of his interest

pursuant to section 184.



EXEMPTIONS FOR SECTION 8 COMPANIES

Section Description

Section 2 -Company Secretary The definition of the term „Company Secretary‟

Shall not apply. [section 2(24)]

Section 2-Definition of Private

Company

The requirement of having minimum paid-up share

capital shall not apply. [section 2(68)]

Section 2 -Definition of Public

Company

The requirement of having minimum paid-up share

capital shall not apply. [section 2(71)]

Section 96 -Annual General

Meeting

The requirement of holding the annual general

meeting during business hours between 9am and

6pm on day that is not a national holding and at the

registered officer of the company or at some other

place within the city, town or village in which the

registered office is company situate shall not apply

where the Time, date and place of each annual

general meeting are decided upon before-hand by

the board of directors having regard to the

directions, if any, given in this regard by the

company in its general meeting. [section 96 (2)]

Section 101 - Notice of

meeting

Section 8 Company may call a general meeting of a

company by giving fourteen days notice instead of

twenty one days notice. [section 101(1)]

Section 118 -Minutes of

proceedings of general Meeting,

meeting of Board of Directors

and other meeting and

resolutions passed by postal

ballot.

The section shall not apply as a whole except that

minutes may be recorded within thirty days of the

conclusion of every meeting in case of companies

where the articles of association provide for

confirmation of minutes by circulation.

Section 136 -Right of member

to copies of audited Financial

statement

Shall send a copy of the financial statements,

including consolidated financial statements, if any,

auditor‟s report and every other document required

by law to be annexed or attached to the financial

statements, to every member of the company, to



every trustee for the debenture-holder of any

debentures issued by the company, and to all

persons other than such member or trustee, being

the person so entitled, not less than fourteen

days instead of twenty one days before the date of

the meeting. [section 136 (1)]

Loan and investment by

company. Sub-section (7) of

section 186.

Modification in sec 186(7) The provisions with

respect to minimum rate of interest shall not apply

to a company in which twenty-six per cent. or more

of the paid-up share capital is held by the Central

Government or one or more State Governments or

both, in respect of loans provided by such company

for funding Industrial Research and Development

projects in furtherance of its objects as stated in

its memorandum of association.

COMPANIES AMENDMENT ACT 2017

AMENDMENTS NOTIFIED AS ON 30th May 2019

COMPANIES ACT,2017

COMPANIES

ACT,2013

CHAPTER

NUMBERS

Marginal Notes NOTIFIED DATE

Section 1 Section 1 I Short title, extent, commencement and applications

23/01/2018

Section 2

except clause

(i) and clause (xiii)

Section 2 Definitions 09/02/2018

Section 2 clause (i) and clause (xiii)

Section 2 Definitions [ 2(6) and 2(87)] 07/05/2018

Section 3 Section 3A

II

09/02/2018 Section 4 Section 4 Memorandum 23/01/2018 Section 5 Section 7- Incorporation of company 27/07/2018 Section 6 Section 12 Registered office of company 27/07/2018 Section 7 Section 21 Authentication of documents,

proceedings and contracts 09/02/2018

Section 8 Section 26 III

Matters to be stated in prospectus

07/05/2018

Section 9 Section 35 Civil liability for mis-statements in prospectus

09/02/2018



Section 10 Section 42 Offer or invitation for subscription of securities on private placement

07/08/2018

Section 11 Section 47 IV

Voting rights 09/02/2018 Section 12 Section 53 Prohibition on issue of share at

discount 09/02/2018

Section 13 Section 54 Issue of sweat equity shares 07/05/2018 Section 14 Section 62 Further issue of share capital 09/02/2018 Section 15 Section 73

V

Prohibition on acceptance of deposits from public

15/08/2018

Section 16 Section 74 Repayments of deposits etc., accepted before commencement of this act

15/08/2018

Section 17 Section 76A

Punishment of contravention of section 73 or section 76

09/02/2018

Section 18 Section 77 VI

Duty to register charges, etc. 07/05/2018 Section 19 Section 78 Application for registration of

charge 07/05/2018

Section 20 Section 82 Company to report satisfaction of charge

05/07/2018

Section 21

clause (i) and

clause (ii)

Section 89

VII

Declaration in respect of

beneficial interest in any share

07/05/2018

Section 21

clause (iii)

Section 89 Declaration in respect of

beneficial interest in any share

13/06/2018

Section 22 Section 90 Investigation of beneficial ownership of shares in certain cases

13/06/2018

Section 23 Clause (iii) and (iv)

Section 92 Annual returns 07/05/2018

Section 24 Section 93 Return to be filed with registrar in case promoters‟ stake changes

13/06/2018

Section 25 Section 94 Place of keeping and inspection of registers, returns , etc.

13/06/2018

Section 26 Section 96 Annual general meeting 13/06/2018 Section 27 Section 100 Calling of extraordinary general

meeting 09/02/2018

Section 28 Section 101

Notice of meeting 09/02/2018


Postal ballot 09/02/2018


Resolutions and agreements to be filed

07/05/2018


Report on annual general meeting 07/05/2018

Section 32 Section 123 VIII Declaration of dividend 09/02/2018 Section 33 Section 129

Financial statement 07/05/2018 Section 34 Section 130 Reopening of accounts on court‟s

or tribunal‟s order 09/02/2018

Section 35 Section 132 Constitution of National Financial 09/02/2018



IX

Reporting Authority Section 36 Section 134 Financial statement , Board‟s

report ,etc. 31/07/2018


Corporate Social Responsibility 19/09/2018

Section 38 Section 136 Right of member to copies of audited financial statement

09/02/2018

Section 39 Section

137

Copy of financial statement to be

filed with Registrar

07/05/2018

Section 40 Section 139 X

Appointment of auditors 07/05/2018 Section 41 Section 140 Removal, resignation of auditor

and giving special notice 09/02/2018


Eligibility , qualifications and disqualifications of auditors

09/02/2018

Section 43 Section 143 Powers and duties of auditors and auditing standards

09/02/2018


Punishment for contraventions 09/02/2018

Section 45 Section 148 Central government to specify audit of items of cost in respect of certain companies

09/02/2018


XI

Company to have Board of Directors 07/05/2018 Section 47 Section

152 Appointment of directors 09/02/2018


Application for allotment of Director Identification Number

09/02/2018


Company to inform Director

Identification Number to Registrar

07/05/2018

Section 50 Section 160 Section 160-Right of persons other than retiring directors to stand for directorship

09/02/2018


Appointment of additional director,

alternate director and nominee

director

09/02/2018

Section 52 Section 164 Disqualifications for appointment of

director

07/05/2018

Section 53 Section 165-

Number of directorships 09/02/2018


Vacation of office of director 07/05/2018

Section 55 Section 168 Resignation of director 07/05/2018


XII

Meetings of Board 07/05/2018


Audit committee 07/05/2018


Nomination and Remuneration

Committee and Stakeholders

Relationship Committee

07/05/2018

Section 59 Section 180 Restrictions on powers of Board 09/02/2018



Section 60 Section 184 Disclosure of interest by director 09/02/2018

Section 61 Section 185 Loan to directors, etc. 07/05/2018 Section 62 Section 186 Loan and investment by company 07/05/2018

Section 63 Section 188 Related party transactions 09/02/2018

Section 64 Section 194 Prohibition on forward dealings in

securities of company by director

or key managerial personnel

09/02/2018


Prohibition on insider trading of

securities

09/02/2018


XIII

Appointment of managing director,

whole-time director or manager

12/09/2018

Section 67 Section

197

Overall maximum managerial

remuneration and managerial

remuneration in case of absence or

inadequacy of profits

12/09/2018

Section 68 Section 198 Calculation of profits 12/09/2018


Central Government or company to

fix limit with regard to

remuneration

12/09/2018

Section 70 Section 201 Forms of, and procedure in relation

to, certain applications

12/09/2018

Section 71 Section 216 XVI

- Investigation of ownership of company

13/06/2018


Inspector„s report 09/02/2018


XV Purchase of minority shareholding 09/02/2018


XVII Valuation by registered valuers 09/02/2018

Section 75 Section 366 XXI

Companies capable of being

registered

15/08/2018


Obligations of companies registering

under this Part

15/08/2018


XXII

Application of Act to foreign

companies

09/02/2018

Section 78 Section

384

Debentures, annual return, registration of charges, books of account and their inspection

09/02/2018


Application of sections 34 to 36 and

Chapter XX.

09/02/2018


XXIV - Fee for filing, etc. 07/05/2018

Section 81 Section

406 XXVI

Power to modify Act in its

application to Nidhis

Yet to be notified


Qualification of President and

Members of Tribunal

09/02/2018




XXVII

Constitution of Appellate Tribunal 07/05/2018


Qualifications of Chairperson and

members of Appellate Tribunal

09/02/2018

Section 85 Section 412 Selection of Members of Tribunal

and Appellate Tribunal

09/02/2018


Establishment of Special Courts 07/05/2018


XXVIII

Application of Code to proceedings

before Special Court

07/05/2018


Offences to be non-cognizable 07/05/2018


Transitional provisions 07/05/2018

Section 90 Section 441 Compounding of certain offences 09/02/2018

Section 91 Section 446A/446B

Application of fines 09/02/2018

Section 92 Section 447 XXIX

Punishment for fraud 09/02/2018


Delegation by Central Government

of its powers and functions

09/02/2018

Companies Amendment Ordinance

Companies (First) Ordinance, 2019

12-1-2019 President Lapsed on 13-3-2019

The Companies (Amendment) Bill, 2019

4-1-2019 Lok sabhaRajya Sabha – Jan 2019

winter session expiry

Companies (Amendment) Ordinance, 2018

2-11-2018 President 21-1-2019 Expired

To keep Companies (Amendment) Ordinance, 2018 alive, Second ordinance

was promulgated on 21-2-2019, which is w.r.e.f 2-11-2018 and expires in

August 2019, 5 weeks from next session of parliament in June 2019



CLUSTER 1

Board of Directors: A director of a company includes any person occupying the position

of director by whatever name called. Also individually a person has no role to play as the

director of the company unless specific authority is given to him by either the Act or the

shareholders . Therefore the directors of the company collectively are the individuals

who direct, manage ,supervise and control the affairs of the company in the form of

board of directors. Thus, the day-to-day management of the company is collectively

vested with the board of directors of the company.

Who is more powerful ? The Shareholders or Board of Directors ?

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