Part I
Preliminary

1. Short title, commencement and extent

2. Definitions

2-A. Interpretation of certain words and expressions

3. Definitions of "company", "existing company", "private company" and "public company"

4. Meaning of "holding company" and "subsidiary"

4-A. Public Financial Institutions

5. Meaning of "officer who is in default"

6. Meaning of "relative"

7. Interpretation of "person in accordance with whose directions or instructions directors are accustomed to act"

8. Power of Central Government to declare an establishment not to be a branch office

9. Act to override memorandum, articles, etc.

10. Jurisdiction of Courts

10-A. [* * *]

10-B. [* * *]

10-C. [* * *]

10-D. [* * *]

Part I-A

board of company law administration

10-E. Constitution of Board of Company Law Administration

10-F. Appeals against the orders of the Company Law Board

10-FA. Dissolution of Company Law Board

Part I-B

National Company Law Tribunal

10-FB. Constitution of National Company Law Tribunal

10-FC. Composition of Tribunal

10-FD. Qualifications for appointment of President and members

10-FE. Term of office of President and members

10-FF. Financial and administrative powers of Member Administration

10-FG. Salary, allowances and other terms and conditions of service of President and other members

10-FH. Vacancy in tribunal

10-FI. Resignation of President and member

10-FJ. Removal and suspension of President or member

10-FK. Officers and employees of tribunal

10-FL. Benches of Tribunal

10-FM. Order of Tribunal

10-FN. Power to review

10-FO. Delegation of powers

10-FP. Power to seek assistance of Chief Metropolitan Magistrate and District Magistrate

Part I-C

appellate Tribunal

10-FQ. Appeal from order of tribunal

10-FR. Constitution of Appellate Tribunal

10-FS. Vacancy in Appellate Tribunal, etc

10-FT. Term of office of Chairperson and members

10-FU. Resignation of Chairperson and members

10-FV. Removal and suspension of Chairperson and members of Appellate Tribunal

10-FW. Salary, allowances and other terms and conditions of service of Chairperson and members

10-FX. Selection Committee

10-FY. Chairperson, etc., to be public servants

10-FZ. Protection of action taken in good faith

10FZA. Procedure and powers of tribunal and Appellate Tribunal

10-G. Power to punish for contempt

10-GA. Staff of Appellate Tribunal

10-GB. Civil Court not to have jurisdiction

10-GC. Vacancy in tribunal or Appellate Tribunal not to invalidate acts or proceedings

10-GD. Right to legal representation

10-GE. Limitation

10-GF. Appeal to Supreme Court

Part II

11. Prohibition of associations and partnerships exceeding certain number

12. Mode of forming incorporated company

13. Requirements with respect to memorandum.

14. Form of Memorandum

15. Printing and signature of Memorandum

15-A. Special provision as to alteration of memorandum consequent on alteration of name of State of Madras

15-B. Special provision as to alteration of memorandum consequent on alteration of name of State of Mysore

16. Alteration of memorandum

17. Special resolution and confirmation by Central Government required for alteration of memorandum

17-A. Change of registered office within a State

18. Alteration to be registered within three months

19. Effect of failure to register

20. Companies not to be registered with undesirable names

21. Change of name by company

22. Rectification of name of company

23. Registration of change of name and effect thereof

24. Change of name of existing private limited companies

25. Power to dispense with "Limited" in name of charitable or other company

26. Articles prescribing regulations

27. Regulations required in case of unlimited company, company limited by guarantee or private company limited by shares

28. Adoption and application of Table A in the case of companies limited by shares

29. Form of articles in the case of other companies

30. Form and signature of articles

31. Alteration of articles by special resolution

32. Registration of unlimited company as limited, etc

General provisions with respect to memorandum and articles

33. Registration of memorandum and articles

34. Effect of registration

35. Conclusiveness of certificate of incorporation

36. Effect of memorandum and articles

37. Provision as to companies limited by guarantee

38. Effect of alteration in memorandum or articles

39. Copies of memorandum and articles, etc., to be given to members

40. Alteration of memorandum or articles, etc., to be noted in every copy

41. Definition of "member"

42. Membership of holding company

43. Consequences of default in complying with conditions constituting a company a private company

43-A. Private company to become public company in certain cases

44. Prospectus or statement in lieu of prospectus to be filed by private company on ceasing to be private company

Reduction of number of members below legal minimum

45. Members severally liable for debts where business carried on with fewer than seven, or in the case of a private company, two members

46. Form of contracts

47. Bills of exchange and promissory notes

48. Execution of deeds

49. Investments of company to be held in its own name

50. Power for company to have official seal for use outside India

51. Service of documents on company

52. Service of documents on Registrar

53. Service of documents on members by company

Authentication of documents and proceedings

54. Authentication of documents and proceedings

Part III

55. Dating of prospectus

55-A. Powers of Securities and Exchange Board of India

56. Matters to be stated and reports to be set out in prospectus

57. Expert to be unconnected with formation or management of company

58. Expert’s consent to issue of prospectus containing statement by him

58-A. Deposits not to be invited without issuing an advertisement

58-AA. Small depositors

58AAA. Default in acceptance or refund of deposits to be cognizable

58-B. Provisions relating to prospectus to apply to advertisement

59. Penalty and interpretation

60. Registration of prospectus

60-A. Shelf prospectus

60-B. Information memorandum

61. Terms of contract mentioned in prospectus or statement in lieu of prospectus, not to be varied

62. Civil liability for mis-statements in prospectus

63. Criminal liability for mis-statements in prospectus

64. Document containing offer of shares or debentures for sale to be deemed prospectus

65. Interpretation of provisions relating to prospectuses

66. Newspaper advertisements of prospectus

67. Construction of references to offering shares or debentures to the public, etc

68. Penalty for fraudulently inducing persons to invest money

68-A. Personation for acquisition, etc., of shares

68-B. Initial offer of securities to be in dematerialised form in certain cases

69. Prohibition of allotment unless minimum subscription received

70. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar

71. Effect of irregular allotment

72. Applications for, and allotment of, shares and debentures

73. Allotment of shares and debentures to be dealt in on stock exchange

74. Manner of reckoning fifth, eighth and tenth days in Sections 72 and 73

75. Return as to allotments

76. Power to pay certain commissions and prohibition of payment of all other commissions, discounts, etc

77. Restrictions on purchase by company, or loans by company for purchase, of its own or its holding company’s shares

77-A. Power of company to purchase its own securities

77-AA. Transfer of certain sums to capital redemption reserve account

77-B. Prohibition for buy-back in certain circumstances

78. Application of premiums received on issue of securities

79. Power to issue shares at a discount

79-A. Issue of sweat equity shares

80. Power to issue redeemable preference shares

80-A. Redemption of irredeemable preference shares, etc

81. Further issue of capital

Part IV

share capital and debentures

Nature, numbering and certificate of shares

82. Nature of shares or debentures

83. Numbering of shares

84. Certificate of shares

Kinds of share capital

85. Two kinds of share capital

86. New issues of share capital to be only of two kinds

87. Voting rights

88. [* * *]

89. Termination of disproportionately excessive voting rights in existing companies

90. Savings

Miscellaneous provisions as to share capital

91. Calls on shares of same class to be made on uniform basis

92. Power of company to accept unpaid share capital, although not called-up

Subject Index

 

Business enterprise

Company

Corporations

Partnership

Company and partnership distinguished

Advantages of a registered company

Advantages of a partnership

Company a "creature of statutes"

Company is a legal persona distinct from its members

One-man companies under 1913 Act : Salomon's case

Fraudulent trading under guise of one-man companies—Personal liability of Directors from the company's debts—English Act, 1929

Salomon's case

Member's non-liability for contracts or tortious acts of company

Execution against members for decrees obtained against the company, not permissible under 1913 Act

A member or Director, though holding the bulk of the shares, not personally liable for the debts or torts of the company

Public company

Grant of probate or letters of administration to company

Private companies—Duties and obligation of

Share holder's liability restricted to amount unpaid on his share

Majority rights of members

Merits of Company Law in general

Minimum subscription clause

Company and corporation—Separate legal entities

Company—Not a property

Holding company

Dissolution of companies

Liquidation

Winding-up

Protection of members of companies—Shareholder's right

Rights of, and protection afforded to members

Prospectus must give full information

Liability for issue of a misleading prospectus

Intending purchasers of shares entitled to true disclosures in the prospectus

Law relating to non-disclosures

Moneys received from applicants for shares to be kept deposited in a scheduled bank

Statement in lieu of prospectus

Waiver of compliance is null and void

Protection of the interests of creditors

 

Protection of employees

Directors and provisions in the interests of commercial morality

Doctrine of dolus malus

Checks on Directors

Restrictions on Managers

Prevention of oppression and mismanagement

Investigation by Inspectors

Constitution of the Board of Company Law Administration

Issue of shares at discount

Issue of shares at premium

Reduction of share capital

Variation of shareholders' rights

Provisions regarding issue of Redeemable Preference Shares

Construction of Memorandum of Association

Annual General Meeting

Statutory Meeting and Statutory Report

Provisions for enforcing the submission of returns and documents to the Registrar of Companies

Relief from civil and criminal liability

Inadvertent defaults

Duties cast upon Auditors

Auditors can attend meetings

Articles cannot relieve Auditors of any of the duties cast upon them by law

Rights and duties of Auditors

Illegal associations—Consequences of formation of such associations

Doctrine of the lifting of the veil of corporate personality

Grounds of lifting of the corporate veil

Where companies are in the relationship of holding and subsidiary companies and the subsidiary company acts as an agent of the holding company

Position of European Court

Where fraud or improper conduct is intended to be prevented

Where the law itself contemplates lifting the veil

Where protection of public interest is of paramount importance

Where obligations laid down by tax law or a beneficent law are sought to be evaded

Other exceptional cases

Classification of companies under the Act

Meaning of Company Law

Major economic themes in the development of Modern Company Law

Origin and growth of company legislation

Origin of the Companies Act, 1956 (Act 1 of 1956)

Amending Acts and Adaptation Orders

The Jammu and Kashmir (Extension of Laws) Act, 1956 (Act 62 of 1956)

The Adaptation of Laws (No. 3) Order, 1956

The Repealing and Amending Act, 1957 (Act 36 of 1957)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1962 (Act 43 of 1962)

The Companies (Amendment) Act, 1963 (Act 53 of 1963)

The Goa, Daman and Diu Laws (No. 2) Regulation, 1963

The Companies (Amendment) Act, 1964 (Act 32 of 1964)

The Repealing and Amending Act, 1964 (Act 52 of 1964)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 1966 (Act 34 of 1966)

The Companies Tribunal (Abolition) Act, 1967 (Act 17 of 1967)

The Central Laws (Extension to Jammu and Kashmir) Act, 1968 (Act 25 of 1968)

The Companies (Amendment) Act, 1969 (Act 17 of 1969)

The Madras State (Alteration of Name) (Adaptation of Laws on Union Subjects) Order, 1970

The Companies (Amendment) Act, 1971 (Act 80 of 1971)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Mysore State (Alteration of Name) (Adaptation of Laws on Union Subjects) Order, 1974

The Companies (Amendment) Act, 1977 (Act 46 of 1977)

The Monopolies and Restrictive Trade Practices (Amendment) Act, 1984 (Act 30 of 1984)

The Companies (Amendment) Act, 1985 (Act 35 of 1985)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Monopolies and Restrictive Trade Practices (Amendment) Act, 1991 (Act 58 of 1991)

The Depositories Act, 1996 (Act 22 of 1996)

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Depositories Related Laws (Amendment) Act, 1997 (Act 8 of 1997)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

The Trade Marks Act, 1999 (Act 47 of 1999)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Amendment) Act, 2001 (Act 57 of 2001)

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002)

The Companies (Amendment), Act, 2002 (Act 1 of 2003)

The Companies (Second Amendment), Act, 2002 (Act 11 of 2003)

The Election and other Related Laws (Amendment) Act, 2003 (Act 46 of 2003)

The Enforcement of Security Interest and Recovery of Debt Laws (Amendment) Act, 2004 (Act 30 of 2004)

Scope of Company Law

Object and scheme of the Act

Purpose of the Act

Act is not retrospective

Application of the preamble

Act not exhaustive

Applicability of English Decisions

Extent to which old decisions are applicable

 

Application of the Act

Companies to which the Act applies

Companies to which the Act does not apply

Modification of the Act in its application to Nidhis and Mutual Benefit Societies

Interpretation of statutes

Concept of

Object of

Purpose of

Title of the Act

Preamble as an aid to interpretation

General principles of interpretation of statutes

Fundamental rules of interpretation

Cardinal rule of interpretation

Golden rule

Clear and unambiguous language

Equity of the statute

Harmonious interpretation

Purposive interpretation

Commencement of an Act

Notification

Intention of Legislature

Reasons of enactment

Policy and object of the statute

Historical facts

Recommendations of the Law Commission

Statement of Objects and Reasons

Determination of object of statute

Rule of construction

Object of, and words and phrases

Common commercial meaning of the words

Same word to have same meaning

Effect to words used

Each word is important

Two different words expressions

Definition clause

Context

Grammatical construction

Punctuation

Court cannot legislate

Court cannot rewrite a section

Heading of the section

Inclusive definition

Adjectives

Ejusdem generis rule

Assistance of statutes in pari materia

Incorporation of the provisions of another statute

Conflict between two similar statutes

Incorporation of provisions of an earlier statute

Generalia specialibus non derogant

 

Constitutional validity of a statute

Contemporanea expositio

Doctrine of severability

Enabling provision

Dictionary meanings

Encyclopaedias and technological books

Marginal notes

Explanation

Schedule

Illustration

Non obstante clause

Internal aids

External aids

Provision creating legal fiction

Deeming provision

Directory or mandatory provision

Prescribed manner

Exception

Savings clause

Proviso

General and particular powers

Executive instructions

Amending Act

Repeal of a statute

Amendment and repeal

Prospectivity and retrospectivity

Effect of amendment on pending proceedings

Implied repeal

Doctrine of eclipse

Doctrine of prospective overruling

Construction of judgment

Construction by implication of a notification

Defect in a notification

Beneficent legislation

Disqualifications imposed by provisions

Taxing and fiscal statutes

Principle of rateable distribution

Penal statutes

Remedial statute

Procedural law

Interpretation of compromise decree

Interpretation of the Constitution

Interpretation of documents

Ex praecedentibus et consequentibus optoma fit interpretatio

Interpretation of declaratory statute

 

Ubi jus ibi remedium

Principles of natural justice and audi alteram partem rule

Order passed contrary to mandatory provision of statute

Rule of res judicata

Part I

1. Short title, commencement and extent

Scope of the section

Commencement of the Act

Territorial jurisdiction of the Act

India

Special provisions as to applicability in Sikkim

Special provisions as to applicability in Goa

Special provisions as to applicability in Jammu and Kashmir

2. Definitions

Definition clause

"Abridged prospectus" [Section 2 (1)]

"Alter" and "alteration" [Section 2 (1-A)]

"Appellate Tribunal" [Section 2 (1-B)]

"Articles" [Section 2 (2)]

"Banking company" [Section 2 (5)]

"Board of Directors" or "Board" [Section 2 (6)]

"Body corporate" or "corporation" [Section 2 (7)]

Institution or body which can be regarded body corporate

Status of Registered Societies

Societies registered under the Societies Registration Act—Whether "body corporate" ?

Department's Circular I

Department's Circular II

ONGC notified as a body corporate—Notification

"Book and paper" and "book or paper" [Section 2 (8)]

Books and documents statutorily required to be maintained by a company

"Branch office" [Section 2 (9)]

Department's Circular

Branch outside India is not a foreign concern

"Company" [Section 2 (10)]

Classification of companies under the Act

"Company Law Board" [Section 2 (10-A)]

"The Court" [Section 2 (11)]

"Debenture" [Section 2 (12)]

Meaning of debentures

Debentures and debenture stock

Debentures and debenture stock—Debenture includes debenture stock

Debenture documents and stamp duty

Debentures, shares and stock—Distinguished

Debentures—Where payable ?

Kinds of debentures

Debentures with a floating charge distinguished from debentures with a fixed charge

Main characteristic of a floating charge

Restriction on banking companies

Debentures payable to registered holders distinguished from debentures payable to bearer

Debenture holder—Whether a consumer ?

Fixed deposit—Whether constitutes a debenture ?

"Depository" [Section 2 (12-A)]

"Derivative" [Section 2 (12-B)]

"Director" [Section 2 (13)]

Position of Directors where management of the company vests in the Central Government—Department's Clarification

"District Court" [Section 2 (14)]

"Dividend" [Section 2 (14-A)]

"Document" [Section 2 (15)]

"Employees stock option" [Section 2 (15-A)]

"Existing company" [Section 2 (16)]

"Financial year" [Section 2 (17)]

"Government company" [Section 2 (18)]

"Holding and subsidiary companies" [Section 2 (19)]

"Hybrid" [Section 2 (19-A)]

"Industrial company" [Section 2 (19-AA)]

"Industrial undertaking" [Section 2 (19-AB)]

"Information Memorandum" [Section 2 (19-B)]

"Insurance company" [Section 2 (21)]

"Issued generally" [Section 2 (22)]

"Limited company" [Section 2 (23)]

"Listed public companies" [Section 2 (23-A)]

"Manager" [Section 2 (24)]

Factory Manager—Whether covered under Section 2 (24) ?

Department's Clarification

"Managing Director" [Section 2 (26)]

When Director is to be regarded as Managing Director ?

Managing Director—Whether company may have more than one—Department's Clarification

Managing Director—Whether an 'agent' or 'servant' of the company

Managing Director—Dual capacity of agent and servant

Decree against the company and its Managing Director for recovery of dues—Managing Director not the judgment-debtor in individual capacity

"Member" [Section 2 (27)]

"Memorandum" [Section 2 (28)]

Purpose of the Memorandum

"Modify" and "modification" [Section 2 (29)]

"Net worth" [Section 2 (29-A)]

"Officer" [Section 2 (30)]

Person holding position of responsibility—Whether an officer of the company ?—Clarification

When employee can be treated as an officer ?

Debenture-trustee—Whether an officer ?

"Officer who is in default" [Section 2 (31)]

"Option in securities" [Section 2 (31-A)

"Operating agency" [Section 2 (31-AA)]

"Paid-up capital" or "capital paid-up" [Section 2 (32)]

"Prescribed" [Section 2 (33)]

"Previous companies law" [Section 2 (34)]

"Private company" [Section 2 (35)]

"Prospectus" [Section 2 (36)]

Liability in connection with issue of prospectus

Invitation to the public

Facts of, and holding in Nash v. Lynde

"Public company" [Section 2 (37)]

"Public holiday" [Section 2 (38)]

"Recognised Stock Exchange" [Section 2 (39)]

Stock Exchanges notified as recognised Stock Exchanges

Change of name of Bombay Stock Exchange to BSE

SEBI's caution against unrecognised Stock Exchanges

Persons convicted of offence—Not eligible for membership

Exclusive trading right to function as Stock Exchange

Remedy of writ of mandamus against Stock Exchange

National Stock Exchange—Suspension of trading in a particular scrip and postponement of settlement

Suspension/cancellation of membership

"Registrar" [Section 2 (40)]

"Relative" [Section 2 (41)]

"Schedule" [Section 2 (42)]

"Scheduled bank" [Section 2 (43)]

"Secretary" [Section 2 (45)]

Companies with Rs. 50 lakhs capital to have qualified Secretary

Authentication of accounts by the Secretary—Department's view

Authorisation for making corrections in defective documents filed by Companies with the Registrar of Companies—Department's circular

Certification of documents relating to charges

Delay in Registration of Charges

Secretary whether competent to sign and verify pleadings

Institute of Companies Secretaries of India—An "authority"

Removal of Company Secretary

"Secretary in whole-time practice" [Section 2 (45-A)]

"Securities" [Section 2 (45-AA)]

"Scrip certificates"

"Securities and Exchange Board of India" [Section 2 (45-B)]

"Share" [Section 2 (46)]

'Share' and 'share certificate'

Some points of distinction between shares and stock

Securities

Investment companies

Units issued by Unit Trust of India, not shares

Shares and debentures—Distinguished

Public issue of shares to raise capital—Whether a trading activity?

"Share with differential rights" [Section 2 (46-A)]

"Sick Industrial Company" [Section 2 (46-AA)]

"State Level Institution" [Section 2 (46-AB)]

"Subsidiary company" or "subsidiary" [Section 2 (47)]

"Total voting power" [Section 2 (48)]

Total voting power on issue of shares with differential rights

"Trading corporation" [Section 2 (49)]

"Tribunal" [Section 2 (49-A)]

"Variation" and "vary" [Section 2 (50)]

2-A. Interpretation of certain words and expressions

Legislative history—The Depositories Act, 1996 (Act 22 of 1996)

Scope of the section

Definitions under Depositories Act, 1996

3. Definitions of "company", "existing company", "private company" and "public company"

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Jammu and Kashmir (Extension of Laws) Act, 1956 (Act 62 of 1956)

The Central Laws (Extension to Jammu and Kashmir) Act, 1968 (Act 25 of 1968)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

"Company"

Companies incorporated by Royal Charter

Companies incorporated by special Acts of the Legislature

'Registered companies' and 'firms'

Company distinguished from Hindu joint family business

Company distinguished from 'Club'

Societies registered under the Societies Registration Act

"Existing company"

"Private company"

Meaning and characteristics of 'private company'

One-man or family companies

Special privileges of all private companies

Special disability of a private company

Special privileges of a private company which is not subsidiary of a public company

Prohibition on private companies from accepting deposits from persons other than its members, Directors or their relatives

Deposits received from joint shareholders by a private limited NBFC

Transfer of shares in a private company—Private agreement between members

Transfer of shares in a private limited company—Previous sanction of the Board of Directors

Transmission under a Will

Value of shares of a private company

"Public company"

Private company which is a subsidiary of a public company

Refusal by company to register transfer of shares—Validity of reasons

Transfer of shares—Consequences of failure to send notice of refusal

4. Meaning of "holding company" and "subsidiary"

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Concept of 'group of companies', 'holding company' and 'subsidiary company'

Points for determining whether the business of the subsidiary company is the business of the parent company

Company—When a holding company of a subsidiary company ?

Subsidiary company—Delinking from holding company

When subsidiary and holding company to be treated as one ?

Whether business of subsidiary company is to be considered as business of the holding company ?

The United Kingdom position

Limited recognition of the group in the English Companies Acts

Definition of holding and subsidiary corporation—American context

Purposes of holding company device

Contract

Tort

Control

Holding company—Manner of reckoning "half in nominal value of its equity capital" mentioned in Clause (b) (ii)—Department's view

4-A. Public Financial Institutions

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002)

The Enforcement of Security Interest and Recovery of Debt Laws (Amendment) Act, 2004 (Act 30 of 2004)

Scope of the section

Power of the Central Government to specify public financial institutions

Institutions specified by the Central Government as public financial institutions

Right of Unit Trust of India to file recovery proceedings

5. Meaning of "officer who is in default"

Corresponding provisions

Legislative history—The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Scope of the section

Term "officer"—Interpretation of

"Officer in default"

'Officer'—Connotation of—Department's circular

When Directors to be treated as 'officer who is in default' under Section 5

Immunity from prosecution of officers other than the Managing Director, whole-time Directors or Manager of the company

Wilful default

Position in other Acts

The Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981

The Imports and Exports (Control) Act, 1947

The Payment of Bonus Act, 1965

The Employee's Provident Funds and Miscellaneous Provisions Act, 1952

The Factories Act, 1948

The Employees' State Insurance Corporation Act, 1948

The Equal Remuneration Act, 1976

The Minimum Wages Act, 1948

The Water (Prevention and Control of Pollution) Act, 1974

The Insecticides Act, 1968

The Prevention of Food Adulteration Act, 1954

The Essential Commodities Act, 1955

The Drugs and Cosmetics Act, 1940

The Consumer Protection Act, 1986

The Central Excises and Salt Act, 1944

The Income-tax Act, 1961

The Negotiable Instruments Act, 1881

Notice to company sufficient to charge others

No notice to the company

Averment of being in-charge

Complaint filed prematurely

Defence and burden of proof

Resignation and quashing of complaint

Absence of signature and company seal

Issue of process

Jurisdiction for filing complaint

Representation of corporation in Court proceedings

Relief under Section 633

Compounding of offences

6. Meaning of "relative"

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope of the section

Purpose and object of the section

Members of Hindu undivided family—Department's clarification

Reciprocal relationships

Effect of adoption

Deceased spouse

Relationship by half blood

Relative

Who can be regarded as relative within the meaning of Section 6 ?

Sale of goods to dealers on principal to principal basis—Whether dealers to be regard as related persons ?

Illegitimate child

7. Interpretation of "person in accordance with whose directions or instructions directors are accustomed to act"

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

'Accustomed to act'

Shadow Directors

De facto Directors

Directors of holding company

8. Power of Central Government to declare an establishment not to be a branch office

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope and object of the section

"Branch office"

Delegation of powers to the Company Law Board

9. Act to override memorandum, articles, etc.

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Articles of Association—Whether overriden by Act ?

Agreement

Provisions of Memorandum and Articles conflicting with other laws equally void

10. Jurisdiction of Courts

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Retrospectivity of the section

"Central Government" Definition

"Court"

"High Court"

Conferment of jurisdiction on Courts

Jurisdiction of the Courts

Jurisdiction to Courts at place of branch office of the company

Jurisdiction of the High Courts

Jurisdiction of District Courts

Notification delegating jurisdiction to District Courts

Inherent powers of Company Court

Challenging automatic vacation of office under Section 283

Civil Courts

Jurisdiction of Consumer Forum and MRTP Commission

Alteration of jurisdiction

Judicial non-interference in company matters

Judicial interference in company matters

Facts of Foss v. Harbottle

Exceptions to the rule in Foss v. Harbottle

Ultra vires and illegal acts

Fraud on the minority

Application of principles of natural justice

Appropriation of corporate property

Negligence

Resolutions obtained by trick

Motives of personal benefit

Wrongdoer control

Form of action

Derivative action

Representative action

Cause of action

Territorial jurisdiction

Registered office

Foreign companies

No jurisdiction without notification

Registered office and domicile

Residence and jurisdiction

Proceedings in a wrong Court

Appeal

Transfer of cases

10-A. Constitution of Tribunal

[Omitted by Act 17 of 1967, Section 4, read with Schedule, w.e.f. 1-7-1967]

10-B. Procedure of Tribunal

[Omitted by Act 17 of 1967, Section 4, read with Schedule, w.e.f. 1-7-1967]

10-C. Powers of Tribunal

[Omitted by Act 17 of 1967, Section 4, read with Schedule, w.e.f. 1-7-1967]

10-D. Appeals against decisions, etc., of the Tribunal

[Omitted by Act 17 of 1967, Section 4, read with Schedule, w.e.f. 1-7-1967]

Part I-A

10-E. Constitution of Board of Company Law Administration

Legislative history—The Companies (Amendment) Act, 1963 (Act 53 of 1963)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1977 (Act 46 of 1977)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Sachar Committee recommendations

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Constitution of Company Law Board

Powers and functions of the Company Law Board

Powers under the M.R.T.P. Act, 1969

Powers under Securities Contracts (Regulation) Act, 1956

Powers under Reserve Bank of India Act, 1934

Company Law Board and the Consumer Protection Act, 1986

Delegation of powers

Powers of the Central Government that cannot be delegated

Delegation of powers to the Regional Directors

Delegation of powers to the Registrars of Companies

Delegation of powers to the Company Law Board

Withdrawal of notifications

Constitution of Company Law Board

Constitutional validity

Validity of acts of Company Law Board

Protection of acts done in good faith

Qualifications, age and experience of Company Law Board members

Chairman of Company Law Board

Vice-Chairman of Company Law Board

Eligibility of Company Secretaries for appointment as member of Company Law Board—Department's clarification

Constitution of benches

Additional Principal Bench of Company Law Board at Chennai

Jurisdiction of the benches

Jurisdiction of Company Law Board extended

Powers of Company Law Board under Code of Civil Procedure

Powers under Code of Criminal Procedure and Indian Penal Code

Compounding of offences

Applicability of Indian Evidence Act and Code of Civil Procedure to proceedings before the Company Law Board

Bench has power to impose conditions in its order or withdraw the same

Enforcement of order of Company Law Board

Power to grant interim relief

Principles of natural justice—Quasi-judicial adjudication

Exercise of discretion and principles of natural justice

Reasoned decisions—Necessity of recording reasons

Whether bench of Company Law Board is a Court under the Act

Company Law Board is a Court for the purposes of Contempt of Court Act

Company Law Board whether a substitute of the High Court

Procedure to be followed by the Company Law Board

Company Law Board Regulations, 1991

Matters to be dealt with by benches of Company Law Board

Transfer of matters to Principal Bench

Jurisdiction of bench

Language of the bench

Sitting hours

Seal of the bench

Petition in writing and divided in paras

General heading

Procedure for filing petition

Presentation and scrutiny of petition

Contents of petition

Interlocutory application

Documents to accompany the petition

Rights of appearance before the bench

Plural remedies

Service of notice and process issued by the bench

Filing of reply and documents by the respondents

Filing of counter-reply

Power of the bench to call for further information/evidence

Hearing of petition

Procedure upon non-appearance of the party

Substitution of legal representative

Order of the bench

Inspection of records and certified copies

Payment of fees

Reference to Company Law Board

Petition under Section 17

Application by depositors and debenture holders

Petition under Section 397/398

Petition under Section 407

Reference under Section 621-A

Petition under Section 2-A of M.R.T.P. Act

Enlargement of time

Inherent powers of the bench

Amendment of order

Bench to be deemed to be a Court for certain purposes

Company Law Board bound to follow procedural laws of the land

Power of Company Law Board to enlarge period of two months for filing reference

Matter heard by three members of the Company Law Board, can be decided by two members

Validity of order based on unsigned compromise

Exclusion of time taken in certified copies of Company Law Board's order

Review of order by Company Law Board

Appeal from orders of the Company Law Board

Nature of power and functions conferred on Company Law Board at-a-glance

Under Companies Act, 1956

Under M.R.T.P. Act, 1969

Under R.B.I. Act, 1934

Destruction of records in offices of benches

Transitional provisions

10-F. Appeals against the orders of the Company Law Board

Legislative history—The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Scope of challenge

Limitation period for filing of appeal

"Any person aggrieved"

Constitutional right of appellant

"Arising out of such order"—Meaning of

Issue not raised and argued before Company Law Board cannot be said to have arisen out of the order of the Board

No appeal on finding of fact

Order for refund of deposits—Not a question of law and is not appealable

Question of law and fact

Appeal against consent orders

Finding of fact—Powers of the High Court

Question of law—Appealable

Order passed by the Company Law Board in a manner unknown to law—Constitutes a question of law

Jurisdiction of High Court limited to question of law

Appeal to Division Bench from order of single Judge

Power of review

Necessity and availability of judicial review

Nature of jurisdiction of the High Court

Appeal against orders of the Company Law Board rendered in exercise of powers conferred on it under other laws

Forum of appeal

Territorial jurisdiction of High Court for appeal against decisions of the Company Law Board

Applicability of Court Rules to appeals

10-FA. Dissolution of Company Law Board

Legislative history—The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Part I-B

Legislative history—The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Creation of National Company Law Tribunals and Appellate Tribunals—Constitutional validity of

10-FB. Constitution of National Company Law Tribunal

Legislative history

Scope of the section

10-FC. Composition of Tribunal

Legislative history

Scope of the section

10-FD. Qualifications for appointment of President and members

Legislative history

Scope of the section

10-FE. Term of office of President and members

Legislative history

Scope of the section

10-FF. Financial and administrative powers of Member Administration

Legislative history

Scope of the section

10-FG. Salary, allowances and other terms and conditions of service of President and other members

Legislative history

Scope of the section

10-FH. Vacancy in tribunal

Legislative history

Scope of the section

10-FI. Resignation of President and member

Legislative history

Scope of the section

10-FJ. Removal and suspension of President or member

Legislative history

Scope of the section

10-FK. Officers and employees of tribunal

Legislative history

Scope of the section

10-FL. Benches of Tribunal

Legislative history

Scope of the section

10-FM. Order of Tribunal

Legislative history

Scope of the section

10-FN. Power to review

Legislative history

Scope of the section

10-FO. Delegation of powers

Legislative history

Scope of the section

10-FP. Power to seek assistance of Chief Metropolitan Magistrate and District Magistrate

Legislative history

Scope of the section

Part I-C

Legislative history—The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

10-FQ. Appeal from order of tribunal

Legislative history

Scope of the section

10-FR. Constitution of Appellate Tribunal

Legislative history

Scope of the section

10-FS. Vacancy in Appellate Tribunal, etc

Legislative history

Scope of the section

10-FT. Term of office of Chairperson and members

Legislative history

Scope of the section

10-FU. Resignation of Chairperson and members

Legislative history

Scope of the section

10-FV. Removal and suspension of Chairperson and members of Appellate Tribunal

Legislative history

Scope of the section

10-FW. Salary, allowances and other terms and conditions of service of Chairperson and members

Legislative history

Scope of the section

10-FX. Selection Committee

Legislative history

Scope of the section

10-FY. Chairperson, etc., to be public servants

Legislative history

Scope of the section

10-FZ. Protection of action taken in good faith

Legislative history

Scope of the section

10FZA. Procedure and powers of tribunal and Appellate Tribunal

Legislative history

Scope of the section

10-G. Power to punish for contempt

Legislative history

Scope of the section

10-GA. Staff of Appellate Tribunal

Legislative history

Scope of the section

10-GB. Civil Court not to have jurisdiction

Legislative history

Scope of the section

10-GC. Vacancy in tribunal or Appellate Tribunal not to invalidate acts or proceedings

Legislative history

Scope of the section

10-GD. Right to legal representation

Legislative history

Scope of the section

10-GE. Limitation

Legislative history

Scope of the section

10-GF. Appeal to Supreme Court

Legislative history

Scope of the section

Part II

11. Prohibition of associations and partnerships exceeding certain number

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Grounds for the existence of Section 11 of the Act

Section 11 of the Act and Hindu joint family doing business

Meaning of the term 'person'

Male and female members to be included—Department's views

'Association'

Association to which the section applies

Effect of non-incorporation

Non-compliance with Section 11 of the Act—Illegal associations

Partnership

A partnership firm cannot be a member of a company—Department's view

Whether incorporated companies can enter into partnership

"Carrying on business"—Meaning of

"Acquisition of gain"

Position of joint families

Purpose for which a company is formed must be a lawful one

Sub-section (5)

12. Mode of forming incorporated company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Company—Legal status

Persons

Subscriber—Subscriber to Memorandum

"Member", "shareholder" and "holder of a share"

Memorandum of Association—Whether general authorised agent can sign Memorandum or any amendment thereto on behalf of subscriber

Kinds of companies which may be formed under the Act

Absence of authorised capital

Mode of forming a company under the Act

Incorporated company as subscriber

Partnership cannot be member—Department's clarification

Subscription by persons residing abroad

General permission to NRIs to subscribe to the Memorandum and Articles of Association under FERA, 1973

Permission further liberalised with effect from 31-10-1995

Direct investment in firms/companies in India by NRIs

Practice Notes

"Seven or more persons" : "Two or more persons"

Partnership converted into company

"One-man company"

Lawful purpose

Signatories to Memorandum

Members

Third persons

Legal entity

Nationality

Domicile

Residence

Enemy character

Situs of shares

Company as a partner

Practice Notes—Incorporation

Commencement of business by a public company

Precaution to be taken in registering Prize Chit Business Companies—Department's Instructions

13. Requirements with respect to memorandum.

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Memorandum of Association

Contents and form of the Memorandum of Association

Name

Registered office

Objects of the company

Arrangement of objects clause—Department's view

Inclusion of items and activities in the object clause of Memorandum and Articles of Association of a company

Companies with the main objects of conducting Prize Chit Business

Purpose of the objects clause

Main objects and incidental objects

Any purpose which may benefit the company

Independent objects

Indefinite objects

Main objects of the company should correlate with the nature of the business—Department's instruction

Objects must not be illegal

Canons for construction of objects clause

'Memorandum' and 'Articles of Association'—Distinguished

Memorandum or Articles cannot supersede statutory rights

Invalid Articles

Articles may explain but cannot modify Memorandum

Objects alone required to be stated in the Memorandum—Powers should be relegated to the Articles

Inherent powers

Implied powers

Powers which are not implied

Ratification of acts

Estoppel

Injunction

Meaning of ultra vires

Doctrine of ultra vires

Manner of exercising powers and the ultra vires rule

Loans, borrowings, guarantees, etc. and the ultra vires rule

Who could plead the rule of ultra vires ?

Officers' acts binding on company

Third party and ultra vires

Limited liability clause

Share capital

Association clause and subscription

Nominal, issued, subscribed and paid-up capital

Shares of a fixed amount

Different classes of shares

Flexibility of fixing any denomination of issue of equity shares

Freedom to determine the denomination of shares for public/rights issues and to change the standard denomination

Abolition of standard denomination for equity shares

Government company

Scrutiny by Registrar of Draft Memorandum and Articles—Department's Instructions

14. Form of Memorandum

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Constitution of the company

Distinction between Memorandum and Articles

Directory or mandatory nature of the forms

15. Printing and signature of Memorandum

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Printing and signing of the Memorandum

"Print" or "Printed"—Meaning of

Whether computer printing is included in printing

Zerox copies of Memorandum and Articles of Association not acceptable—Department's views

Acceptance of Memorandum and Articles of Association by off-set printing method for the purpose of registration

Acceptance of computer printed documents for registration of companies

Signatures of subscribers

Persons who can sign the Memorandum—Department's view

Requirement as to signature by a subscriber who is illiterate

Attestation by witnesses

Power-of-attorney need not be insisted from each of the subscriber of Memorandum

Stamp duty

15-A. Special provision as to alteration of memorandum consequent on alteration of name of State of Madras

15-B. Special provision as to alteration of memorandum consequent on alteration of name of State of Mysore

16. Alteration of memorandum

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

"Condition" contained in Memorandum are unalterable

When transfer does not amount to alteration

Alteration of Memorandum

Spelling and grammatical mistakes

17. Special resolution and confirmation by Central Government required for alteration of memorandum

Corresponding provision

Legislative History—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Objects clause—Alteration

Business conveniently or advantageously combined with existing business

Diversification of objects—Department's view

Change of name during pendency of petition under Section 17—Department's view

Alteration of objects clause to convert into a Nidhi company

Negative objects

Interest of the creditors

Creditor's objection

Registered office—Alteration of

Objection by persons interested

Objection by creditor of group company

Objection by employees

Non-cooperation by host State in setting-up an industry

Change in registered office—When takes effect ?

Considerations for exercise of discretionary jurisdiction

Initiation of proceedings for unauthorised shifting

Discretion of Company Law Board

Cases where no sanction of the Company Law Board is required

Form of petition

Procedure

Factors for consideration

Appeal

Stay

17-A. Change of registered office within a State

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Change of Registered Office within a State—Enforcement of Section 17-A

Scope of the section

Filing of confirmation with Registrar of Companies

Registration—A conclusive evidence

18. Alteration to be registered within three months

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

The Company Law Board Regulations, 1991—Department's clarification

Registration of the alteration

Registration of alteration of objects clause—Whether time in drawing-up order of Court and obtaining a copy should be excluded in computing prescribed period of three months

Computation of time for filing order

Limitation for filing documents

Extension of time

Limitation for registration of alteration

Power of Court to extend time

Alteration to be registered within three months—Department's view

Change of the State in which the registered office of the company is situated

Registration of alteration for inter-State change of registered office—Department's clarification

No time limit prescribed under sub-section (3)—Department's clarification

Failure to file confirmation of alteration by Company Law Board within three months—Effect

No remedy available when proceedings become void

19. Effect of failure to register

Corresponding provision

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Applicability of the section

Period within which to file

Sufficient cause

Consequences of non-registration of the alteration within time

Extension of time

Revival of Company Law Board's order—Department's clarification

20. Companies not to be registered with undesirable names

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Trade Marks Act, 1999 (Act 47 of 1999)

Name of the company not to be identical with trade mark registered or applied for

Assignment of trade mark to a company

Infringement of registered trade marks

Name of the company and its objects—Correlation between

Name which a company may adopt

Admissibility of name at common law

Similar names—Injunction against use of

Use of name and monopoly

Passing-off

Use of corporate name for joint-venture company

Use of family or surname

Undesirable names

When name of a company is considered undesirable for registration—Instances of

Availability of names

Department's guidelines for deciding cases for availability of names

Guiding instructions for availability of names

Guiding instructions for deciding cases of making a name available for registration

Department's Circular, dated 31-3-1993

Press Note, dated 5-5-1993

Department's Circular, dated 16-2-1995

Clarification

Judicial review of the Department's circular

Further Guidelines for availability of names

Department's clarification

Use of Name of "Chamber of Commerce" in UK

Guidelines as to use of key words

Availability of name—Instructions regarding

No objection from applicants who do not sign Memorandum and Articles

Department's Circular I

Department's Circular II

Department's Circular III

Incorporation of Stock Exchanges—Advance approval of name by SEBI

Copy of SEBI's letter, dated 18-3-1996

Incorporation of Venture Capital Companies—Department's Circular

Guidelines for registration of Asset Management Companies

Department's Circular I

Department's Circular II

Use of the words 'Nidhis' or 'Mutual Funds'

Delegation of powers to Registrar

Corporate Identity Number

E-Corporate Business Working Group to synergise the provisions of the Companies Act, 1956, with the Information Technology Act, 2000

Allocation of specific economic activity based upon the main object clause of a company while allocating Corporate Identity Number (CIN) instead of entering the Code "00000"

Prescribed Rules and Form

Department's Circular to Registrar of Companies

Change of name by a company during the pendency/hearing of petition for alteration of object clause/s under Section 17

Fees for making application for availability of name of new company to Registrar of Companies is raised from Rs. 100 to Rs. 500

21. Change of name by company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1956 (Act 31 of 1965)

Scope of the section

Rights not affected by change

Compliance with this Act and other statutes required

Change of name of banking company

Prior RBI approval for change in names of NBFC

Guidelines regarding change of names—Department's view

Guidelines for availability of names

Form and Procedure

Application form for change of name

Application to Central Government for approval of change of name

Application form for availability of names

Application for the approval of the Central Government for conversion of a public company into a private company

Clarification

Approval policy about change of name on adoption of new business—Department's instructions

Abbreviated names of companies and approval by Registrar of Companies—Department's circular

Department's Circular and Press Note

Change of name during pendency of petition under Section 17—Department's circular

Listing companies to notify Stock Exchange

Delegation of powers to the Registrars of Companies

Government company

22. Rectification of name of company

Corresponding provision

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Trade Marks Act, 1999 (Act 47 of 1999)

Scope of the section

The Emblems and Names (Prevention of Improper Use) Act, 1950—Effect of

Company's name

Right to use name

Injunction

Registrar's power

Distinction

Delegation of powers to the Regional Directors

Compulsion to change name on directions of Central Government

Penalty

Compoundable offence

23. Registration of change of name and effect thereof

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Fresh certificate of incorporation

Certificate under Section 23

Consequences of change of name

Change of name when a private company converts itself in a public limited company

Mutation of name in other company's register of members

English law

Modification with reference to Government companies

24. Change of name of existing private limited companies

Scope of the section

Change of name of existing Private Limited Company

25. Power to dispense with "Limited" in name of charitable or other company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Exemption from use of word "Limited" or "Private Limited"

Licence

Companies (under Section 25) as juristic persons

Income-tax

Procedure concerning application for the grant of licence

Procedure for dealing with application for grant of licence under the provisions of Section 25—Department's view

Meaning of "Charity" and "Science"

Charitable company and other allied institutions

Partnership firm as a member

A firm may be a member of company licensed under Section 25—Department's view

Whether firm recognised only for limited purpose of membership of companies licensed under the section ?

Privileges available to association/body upon incorporation

Applicability of Section 293—Department's Clarifications I

Applicability of Section 370 [see now Section 372-A]—Department's Clarification II

Nomination by member—Company which has not paid subscription—Subsequent election as committee member—Validity of

Conditions for existing company to obtain licence

Central Government may impose conditions

Exemption from some provisions

Exemption to Secretaries of companies, licenced under Section 25, from the requirement of the prescribed qualifications

Amalgamation of business undertakings with a charitable institution

Directions issued by the Central Government in exercise of powers conferred on it by the Articles of Association of a company licensed under Section 25

Requisites for alteration of objects clause

Alteration of Memorandum

Revocation of licence

Discontinuation of name after revocation of licence

Applicability of the section to trust-companies

Jurisdiction where trust registered under the Act

Club

Association

Applicability of the provisions of Section 370 of the Companies Act, 1956, to Section 25 Companies limited by guarantee and having no share capital—Department's view

Bombay Chambers of Commerce and Industry exempted from Sections 370 and 372

Associated Chambers of Commerce and Industry exempted from Section 370

Western U.P. Chamber of Commerce and Industry exempted from provisions of Section 372

Election of Directors in case of Section 25 companies

Payment of registration fees consequent upon increase in the authorised capital by a Section 25 company

The Manufacturing and other Companies (Auditor's Report) Order, 1988

Delegation of powers to the Regional Directors

Form and Procedure

Penalty

26. Articles prescribing regulations

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Nature, scope and functions of the Articles of Association

Binding force of Articles

How far binding on the company

In relation to members as members

In relation to outsiders

Articles are subordinate to the Memorandum of Association

Invalidity of Articles by reason of conflict with the Act, Memorandum of Association and other laws

Restriction on transfer of shares of a private company

Construction and interpretation of Articles

Terms in Articles by implication

President's power to nominate Directors and give directions

Constructive notice of the Act and Articles

27. Regulations required in case of unlimited company, company limited by guarantee or private company limited by shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Unlimited company

Company limited by guarantee

Transfer of interest in a guarantee company

Private company

28. Adoption and application of Table A in the case of companies limited by shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

"Articles" & "Table A" in the First Schedule—Regulation deemed to be included in Articles—Application of Table A

Company limited by shares

Company registered prior to April, 1956

Company registered after 1st April, 1956

Articles of a private company

Options to a public company regarding Articles of Association

Interpretation

Method by which Memorandum and Articles may be proved

Removal of lacunae in the Articles of Association

Courts' power to rectify the Articles

Remuneration of Directors

Shareholders' rights

Company's lien on shares

Articles of Association restricting transfer of shares to outsiders—Effect

Articles and third parties

29. Form of articles in the case of other companies

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope, purport and effect of the section

Company other than limited by shares

30. Form and signature of articles

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Printing includes computer printing

Form and signature of Articles

Meaning of term 'description'

Subscribers and witnesses

Stamp duty on Articles of Association

Improperly stamped Articles of Association

31. Alteration of articles by special resolution

Corresponding provisions

Legislative history—The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Alteration of Articles

Scope and limits of power of alteration

Alterations to be made in good faith, bona fide and for the benefit of the company as a whole

Limitations of alterations

Adoption of new set of regulations—Department's circular

When altered Articles can be acted upon ?

Alteration effective as original

Amendment of Articles by special resolution

Notice of meeting for alteration of the Articles

Retrospective alteration of Articles

Alteration of Articles by consent or by unanimous agreement

Informal resolutions

Adoption of Articles by long acquiescence

Omnibus resolution to amend several Articles

Irregular alterations

Ratification of Directors' irregular acts

Alterations against Memorandum of Association

Alteration of Articles of Association so as to empower to Board of Directors to expel members in certain circumstances—Department's Circular

Increase in number of Directors

Alteration in Articles enabling permanent Director to be removed : "Benefit to the company"

Alteration in Articles of Association increasing members liability

Alteration of Articles in breach of contract and liability in damages

Court's jurisdiction

Alteration of Articles providing for compulsory transfer of shares

Injunction to restrain alterations of Articles

Power of Company Law Board to order alterations

Conversion of public company into private company

Approval of Central Government—Departmental instructions

Guiding principles—Government for converting public into private company

Department's clarification I

Department's clarification II

Rectification of mistake in the Articles of Association

Minor defect shall not render the amendment of Articles null and void

Delegation of power to Registrar

Articles duly altered, to be filed

Contravention

When Registrar may refuse to register ?

"New" Articles of Association—Stamp Duty

32. Registration of unlimited company as limited, etc

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Registration of unlimited company as limited

Re-registration

Conversion of limited company into a unlimited company

33. Registration of memorandum and articles

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Sachar Committee Recommendations

Scope of the section

Agreement

Declaration

Form

Memorandum and Articles are "public documents"—Notice and inspection of

Place of filing

Conclusiveness of Certificate of Incorporation

Registrar's discretion

Judicial review and writ remedies

Date of registration

Filing documents with Registrar of Companies, whether tantamount to "Registration" under the Registration Act

Requirement of Stamp Act

Registration fee—Table of fees

Amendment to Schedule X to the Companies Act and of Companies (Central Government's) General Rules and Forms, 1956

Guidelines for additional fees for belated filing of documents

Fees paid for registration whether refundable

Cancellation of registration

Memorandum of Association—Signing of

Power-of-attorney

Procedure

34. Effect of registration

Corresponding provisions

Scope of the section

Certificate of Incorporation

Registration of company—Effect of such registration

Common seal—Clarification of Section 34 read with Sections 50 and 147—Department's view

Legal entity of a company

Holding company and subsidiary company—Liability of subsidiary company

Company not a citizen

Perpetual succession

"Legal personality"—Company a 'person' under Money Lenders Act

"Capable forthwith of exercising all the functions of an incorporated company"

Statutory existence of a company

Exercise of powers by a company

Residence, domicile and nationality of a company

Government company as a separate legal entity

Government company not an agent of Central Government

Co-operative society

Company and its undertaking

Company is distinct from its shareholders

Guarantors not discharged by change of management

Company not an agent of its shareholders

Company's assets cannot be treated by the shareholders as their own

Property of the shareholders is not the property of the company

Company's liability is not shareholder's liability

Decree against company is not decree against another company in same group

Common management

Liability of Directors/shareholders is not liability of the company

No personal liability of Managing Director/shareholders for the dues of the company

Director is not employer of the company's employees

When Director's/employee's knowledge is company's knowledge

Service of summons of Court

Company cannot be a witness

Company's privilege against self-incrimination

Substitution of representative in complaint by the company

Dismissal of company's complaint on default in appearance

Signing and verification of pleadings

Forma pauperis suit by company

Legal aid when corporate body involved in action in representative capacity

Suits by or against the company

Corporate identity not affected by change of ownership

Right of company to sue for defamation and other wrongs

Complaint by company against dishonour of cheque

Criminal complaint by company

Company's right to privacy

Offences

Offences punishable only with imprisonment

Offences by officer of company

Liability of member's

Liability of a company

Company's liability in torts

Company's responsibility for slander or libel

Company's liability for fraud

Company's liability in crime

Liability for perjury

Liability for contempt

Prosecution of company for contravention of laws

Company's prosecution for tax evasion

Mens rea of company

Lease to company and tenancy rights

Doctrine of lifting the corporate veil

Lifting the corporate veil—Principle or policy

Doctrine of economic entity

35. Conclusiveness of certificate of incorporation

Corresponding provisions

Scope and application of the section

Registrar incompetent to probe into the motives to form a company

Evidentiary value of certificate of incorporation—Absolutely conclusive for all purposes

Power of review when company formed for unlawful objects

Incorporated company—A legal person but not a citizen

Cancellation of Registration

Revision of registration numbers allotted to companies incorporated under the Act

36. Effect of memorandum and articles

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Meaning of Articles of Association

Effect of Articles—Regulation of Articles

Notice

Outsiders

Construction of the Memorandum of Association

Social contract

Binding contract

Binding upon the company

Binding upon the members

Company as also the members of the company bound by its Memorandum and Articles

Members inter se bound by the Memorandum and Articles, suits and legal proceedings by and against members, company, Directors and officers of the company

Binding on Directors

Memorandum and Articles—Outsiders

Third parties

"Debt due"

Company's contractual and borrowing powers—Contracts

Effect of Memorandum—Doctrine of ultra vires

Suggestions for reform of the doctrine of ultra vires

Memorandum—Rule in Royal British Bank v. Turquand—Doctrine of indoor management

Conclusion in regard to the doctrine of indoor management

37. Provision as to companies limited by guarantee

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Object and scope of the section

Guarantee company

Provision as to companies limited by guarantee

Shares of no nominal amount or no par-value

Debentures

Admission to membership and transfer of members' interest

Distribution of profits

38. Effect of alteration in memorandum or articles

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope of the section

Effect of alteration in Memorandum or Articles made after the date of membership

Alteration increasing members' liability to contribute capital

Increasing liability by implication

Copies of Articles to be given by company if required and paid for

Alteration of Articles restricting foreign interests

39. Copies of memorandum and articles, etc., to be given to members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1969 (Act 17 of 1969)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope and object of the section

Copies of Memorandum and Articles to be given if required and paid for

Obligations of the company

Resolution under Section 192

Balance-sheet

Minute book

Account books

Reconstruction of company—Court's duty

Jurisdiction at registered office

Penalty

Compoundable offence

40. Alteration of memorandum or articles, etc., to be noted in every copy

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1969 (Act 17 of 1969)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Alteration of Memorandum or of Articles to be noted in every copy

Wilful default

Penalty

Compoundable offence

41. Definition of "member"

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Depositories Act, 1996 (Act 22 of 1996)

Scope of the section

Ways of becoming a member

'Member' and 'shareholder'

"Contributory" and "Member"

Agreement to become member—"Agrees in writing"

Membership by transmission

Membership by transfer

Joint members

HUF as member

Trade Union as a member

Firm as member—Department's views

Test of membership

Subscriber as member

A member is he whose name is on the register

Rights of a member

Shareholder's interest in the property of the company

Liabilities and duties of members

Minor as member

Clarification I

Clarification II

Clarification III

Society as member—Department's clarification

Shares belonging to society held in names of trustees simpliciter—Department's clarification

Shares to be held in the name of trustees—Department's clarification

Shares in the name of 'public office'—Department's clarification

Government companies—President or Governor as member—Department's circular

Termination or cessation of membership

Expulsion of member

Sachar Committee views

Department's views

42. Membership of holding company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Object of the section

Membership of holding company

Subsidiary cannot be a member

Legal representatives

Nominee

'Shares' mean 'interest' where there is no share capital

43. Consequences of default in complying with conditions constituting a company a private company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Exemptions in favour of private companies

Disabilities of private companies

Consequences of non-compliance with the provisions of Section 3 (1) (iii), regarding the restrictions imposed on private companies

Petition before the Company Law Board

43-A. Private company to become public company in certain cases

Legislative history—The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Private company deemed to be public company under Section 43-A

Deemed Public Company—Applicability of other provisions of the Companies Act on deemed conversion by virtue of the section—Clarification 1

Deposits accepted by private limited company from its shareholders—Whether would attract Acceptance of Deposits Rules on becoming public company

Major shareholding with parent company outside India—Whether the section operates to make Indian private company a public company

Quorum for General Meeting of deemed public company

Effect of deemed conversion on Managing Director's appointment, remuneration, etc

Managerial remuneration of deemed public companies—Policy regarding

Application of second proviso to Clause (b) of sub-section (1)

Private limited company becoming public limited company by virtue of sub-section (1-A)—Applicability of Sections 198, 269, 317 and 370

Turnover criteria brought in by sub-section (1-A)—What it contemplates

Concept of "public interest" on the basis of which turnover is made a factor for converting private company into public company in terms of sub-section (1-A)

Interpretation of "relevant period" defined in Explanation (a)—Date of applicability of the sub-section to private companies

Gross amount received on sale of cinema tickets including entertainment tax—Whether would come within the purview of definition of "turnover" given in Explanation (b)

Applicability of sub-section (1-A) to Government companies incorporated as private limited companies—Proposal for granting exemption

Private companies becoming public companies by virtue of sub-section (1-A)—Criteria

Increase in the ceiling of average annual turnover criterion from Rs. 10 crores to Rs. 25 crores

New criteria for conversion based on invitation and acceptance of deposits from public introduced by the Companies (Amendment) Act, 1989—Effective date

Formalities to be complied with on deemed conversion under sub-section (2)

Intimation given to Registrar under sub-section (2)—Whether the same, may be treated as document on which filing fee is to be paid

Reconversion of deemed public company into private company on raising limit of Rs. 5 crores to Rs. 10 crores

Reconversion into private company in the event of shareholding getting reduced to less than 25 per cent. of paid-up share capital and average annual turnover falling below Rs. 1 crore

Whether two separate application fees—One under sub-section (4) of the section and the other under Section 31 (1)—Required for reversion to status of private company

Applicability of sub-section (6) on companies falling under sub-sections (1-A) and (1-B)

Intimation regarding change in membership of shareholding company under sub-section (7)

Clarifications regarding Section 43-A (2-A)

Departmental Circular Regarding new provisions of Section 43-A (2-A) of the Companies Act, 1956

Court proceedings to continue under the altered name of the company

Filing of statement in lieu of prospectus

Section 43-A and right of renunciation under Section 81

Appointment of Managing Director in a Section 43-A company

Directors' personal liability for private company's overdue taxes

Section 43-A company—Additional issue of shares

Re-conversion of Section 43-A company into public company

Annual submission of certificates by private companies

Penalty for default

44. Prospectus or statement in lieu of prospectus to be filed by private company on ceasing to be private company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965, (Act 31 of 1965)

The Companies (Amendment) Act, 2000, (Act 53 of 2000)

Scope of the section

Conversion of private company into public company

Conversion of public company into private company

Penalty for default

Compoundable offence

45. Members severally liable for debts where business carried on with fewer than seven, or in the case of a private company, two members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Effect of number of members falling below the minimum

Consequence of reduction of number of members below the required legal minimum

Carrying on business with less than the legal minimum of members

Penalty of unlimited liability

Number of members

Remedy

Personal liability where the membership falls below the minimum

Decree against the company

Position of deemed public companies—Department's clarification

46. Form of contracts

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Manner in which company may contract

Preliminary and provisional contracts

Acquisition of shares before incorporation

Income-tax on income accruing prior to incorporation

Authority

Liability of the company in case of forgery

Limited company can stand guarantee

Termination of contract

47. Bills of exchange and promissory notes

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Bills of Exchange and Promissory Notes

Mode of authenticating negotiable instruments on behalf of the company

Duty of third party

Criminal liability

48. Execution of deeds

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Execution of deeds

Proceedings by the company

Use of common seal dispensed with in England

Position in India

Presumption of validity

49. Investments of company to be held in its own name

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Depositories Act, 1996 (Act 22 of 1996)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Investments of company to be held in its own name

Exceptions

Registers

Power of Company Law Board to order inspection

Petition before the Company Law Board

Penalty

Compoundable offence

50. Power for company to have official seal for use outside India

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Official seal

Power of company to have official seal for use abroad

Seal necessary for appointing authority

51. Service of documents on company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Depositories Act, 1996 (Act 22 of 1996)

Scope of the section

Service of documents on the company

Oral notice

Postal service

Registered office

Service of notice to the company through its Directors and officers

Service under C.P.C

Will fax be deemed to be proper service

Notice to agent

Foreign company

52. Service of documents on Registrar

Corresponding provision

Legislative history

Scope of the section

Service of documents on Registrar

Authorisation for making corrections in defective documents filed with the Registrar of Companies—Department's circular

Filing of documents with the Registrar of Companies

Government's decision

53. Service of documents on members by company

Corresponding provisions

Legislative history—The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope of the section

Service of documents on members of company

Service to joint-holders

Death and insolvency

Notice of General Meetings

Newspaper advertisements

Service by post when deemed to be effective

Obligations not discharged by failure of communication

Jurisdiction for complaint against default

Provisions of General Clauses Act, 1897

Provisions of Negotiable Instruments Act, 1881

Issue of refund orders, allotment letters/certificates and letters of offer by registered post

Department's circular I

Department's circular II

54. Authentication of documents and proceedings

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1969 (Act 17 of 1969)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Implied authority

Authentication of documents

Agent's signature

Part III

55. Dating of prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope and object of the section

Prospectus

Conditions precedent to the issue of a prospectus

Dating of the prospectus

Meaning of "issuing to the public"

Prospectus when false ?

Remedies of allottees

Director's liability

Administration by SEBI

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

55-A. Powers of Securities and Exchange Board of India

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Suggestions

Recommendations of Parliamentary Standing Committee

Select Committee's recommendation

Powers to decide applications submitted to the Central Government

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Applicability of the section

Powers of SEBI

Administration by SEBI

Administration under other sections

Whole administration not delegated

Companies under SEBI ambit

Regulation of public listed companies

Powers of SEBI to inspect books of account, etc. and to file complaints

Powers not transferred

Filing of criminal complaint

Cognizance by Court

56. Matters to be stated and reports to be set out in prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Capital Issues (Control) Act, 1947

Scope of the section

Applicability of the section

Prospectus—Meaning of

Prospectus—Binding nature of

Injunction to safeguard prospectus against adverse criticism

"Issue" of prospectus to the public

Prospectus—"Offer to the public"

Share-hawking and written offers of shares—English Act, 1929

"Offer for sale", when deemed to be a prospectus

Abridged prospectus

Subscription

Cost and expenditure of issue of prospectus

Expression "five years" refers to "five financial years" ending 3 months before issue of prospectus—Department's clarification

Prospectus not to be misleading

Prospectus must be prepared with utmost candour and honesty—Misstatement or concealment of material facts—"Golden rule as to framing of prospectus"

Misrepresentation in prospectus

What may amount to misrepresentation ?

Prospectus not complying with the requirements—Omission of material particulars

Remedy of aggrieved shareholder

Remedy of aggrieved person

Limitation

Claim for damages

False statement in prospectus—Remedy of purchaser of shares in open market

Issue of prospectus when not necessary ?

Department's view

Prospectus published as a newspaper advertisement

Advertisement of prospectus—Department's view

Announcement regarding the proposed issue of capital

Newspaper advertisement

Statements in a circular contrary to the terms of sanction by Controller of Capital Issues

Unsound practices disclosed in prospectuses

Shares reserved for subscription on firm allotment basis to be excluded in arriving at the number of shares offered to the public for subscription

Clause 24 (1) in Part II of Schedule II to Companies Act, 1956—Interpretation of

Non-inclusion of accountants' report in prospectus by company which acquired estate as going concern—Whether gives rise to default under the section ?

Application forms not to be issued without abridged prospectus

Forwarding forms of application for shares without enclosing copies of prospectuses—Whether contravenes sub-section (3) ?

Application form—Department's Press Note, dated 9-1-1992

Printing of two application forms forming part of abridged prospectus—Department's Press Note, dated 10-4-1992

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Compliance of SEBI guidelines

Requirements as to application forms under SEBI Guidelines, 2000—Obligations of Lead Merchant Banker

Application by NRIs—Declaration of nationality and residentship of applicants

Instructions to investors

Distribution of application forms

Fixation of date stamp alongwith a continuous serial number on the application form by the bankers to an issue

Requirements of Section 56 not applicable to circulars or notices inviting existing members or debenture-holders to subscribe for shares or debentures

Invalidity of certain conditions as to waiver or notice

Issue of forms of application for shares or debentures of a company

Exemption from liability in certain cases

Directors' defences against contravention of the section

Section does not affect other remedies

Penalty for default

Compoundable offence

57. Expert to be unconnected with formation or management of company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Expert to be unconnected with formation or management of company

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Compoundable offence

58. Expert’s consent to issue of prospectus containing statement by him

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Expert's consent to issue of prospectus containing statement by him

Report of expert

Expert's consent and authorisation

Statement

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Compoundable offence

58-A. Deposits not to be invited without issuing an advertisement

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1977 (Act 46 of 1977)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Sachar Committee Recommendations

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Object of the section

Section 58-A and Rules

Constitutional validity of Section 58-A and the Deposit Rules

Rule 3-A of Companies (Acceptance of Deposits) Rules, 1975—Not ultra vires Section 58-A

Provision is prospective—Condition to deposit 10% not arbitrary

Central Government may make Rules

Meaning of the word 'public' occurring in Section 58-A—Department's view

Advertisement

Department's clarification I

Department's clarification II

Department's clarification on advertisement referred to in Section 58-B

Need for advertisement in case of renewal of existing deposits—Department's view

Advertisement rules

Announcement altering the terms and conditions of deposits—Department's view

Deposit

Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 explained

Whether deposits received in joint names of Director and non-Director/shareholder and non-shareholder fall within the purview of the rule ?

Whether private company, which accepts deposits only from its Directors and shareholders, is required to comply with Rules 3 ?

Whether amounts raised by issue of unsecured bonds or Debentures which have an option to convert them into shares are exempt from the purview of deposits as defined in the rule ?

Whether amount of surplus in the profit and loss account forms part of "free reserve" as defined in the rules ?

Whether capital redemption reserve is to be treated as "free reserve" ?

Whether subsidy received under Central Government Out-right Grant or Subsidy Schemes, 1971 ?—A "Free Reserve" under Rule 2 (d) of acceptance of deposits rules ?

Whether retention of balance payment of deposit amounts to renewal ?

Ceiling on rate of interest on deposit—Payment of interest on compound interest—Whether contravenes the rules ?

Whether the management charges could be paid in addition to the brokerage and would not be subject to the limits ?

Whether amount of unprovided depreciation from aggregate of paid-up share capital and free reserves are to be deducted for determining limits up to which deposits can be accepted ?

Whether shares premium account to be treated as part of company's paid-up share capital or free reserves ?

Determination of paid-up share capital for the purposes of reckoning limits under sub-rule (2) ?

Requirement of depositing or investing 10 per cent. of deposits maturing during the year ending on 31st March next following

Announcement about alterations in terms and conditions of deposits—Whether amounts to invitation of deposits—Whether in conformity with Section 58-A (2) read with Rule 4 (2) ?

Requirement of delivering Registrar a copy of advertisement for registration

Provision for reduction in rate of interest payable on deposits—Not to be applicable in the event of conversion of deposit into secured debentures

Submission of return of deposits with the Registrar

Treatment of repayment of loans secured by mortgage of assets—Earlier excluded from definition of deposits but are included now.

When deposits are in excess of prescribed limit ?

Applicability of exemption to deposits from HUF, trusts and firms in which Directors are interested

Exemption of promoters' deposits—Department's view

Deduction of unprovided depreciation from paid-up capital and free reserves

Amount standing to the credit of premium account and capital redemption reserve

Surplus in the profit and loss account to be treated as forming part of "free reserve"

Amount raised by issue of bonds or debentures under Rule 2 (b) (x)—Whether deposit ?

Unsecured debentures with option for conversion—Whether deposit ?

Unsecured bonds or debentures, later secured by mortgage

Claim for interest on amount forwarded towards fixed deposit—Initially accepted but later returned

Reduced rate of interest on premature repayment of deposit

Payment of compound interest

Ceiling on rate of interest on deposits

Increase in rate of interest on deposit is prospective

Interest on public deposit reduced by one per cent

Renew

'Renewal' of deposits—Effect

Transitional provisions

Return of deposits wrongfully accepted

Penalty

Penalty for violation of the rules

Invitation of deposit without advertisement—Authority competent to take action

Exempted companies

Exceptions under Section 58-A and under the Rules

Public deposits—Exemption

All classes of financial companies specified to which provisions of the section are not applicable

Whether promoter's contribution can be excluded from definition of 'deposits'

Exemption to small scale industrial units

Small Scale Units exempted—Revised limits for exemption to small-scale industrial units

Department's circular

Applicability and exemption—Non-banking financial companies

Renewal or acceptance of deposits or loans

Renewal of deposits

Period for acceptance and renewal of deposits

Receipt for deposits and loans

Register of deposits and loans

General provisions regarding payment of deposits/loans

Public deposits—Repayment—Applicability of Section 58-A (9), in the case of a relief undertaking declared by a local Act or Central Act

Central Government's power to decide questions

Return of deposits to be filed with the Registrar

Extention of time or exemption

Exemption of non-banking companies for acceptance of deposits through commercial paper

Extension of time to repay deposits

Clarification regarding application to Company Law Board under Section 58-A (9)—Default in repayment of deposits

Rules for repayment of company deposits made stringent—The Companies (Amendment) Act, 1988

Applicability of Section 58-A (9) of Companies Act, 1956, in the case of a relief undertaking declared by a local Act or Central Act

Power of Company Law Board to order re-payment of deposits by NBFCs' covered under Reserve Bank of India Act

Non-payment of matured deposits—Remedies available to investors

Investors grievances relating to Deposits, Mutual Funds, Collective Investment Scheme, companies in liquidation and other investor complaints

Implementation of decisions of Company Law Board

Remedies available to investors in case of non-payment of matured deposits

Dealing with complaints relating to Deposits, Mutual Funds, Collective Investment Scheme, etc

Penalty under Section 58-A of the Companies Act, 1956

Penalty under the Rules

Compoundable offence

Cognizable offence

Complaint by Registrar

Continuing offence

Nomination facility

Complaints, prosecution and penalties for default

Prosecution of officers singly

Violation of Reserve Bank of India Act

Violation of Section 58-A (6) and Rules 3-A and 4-A of Deposit Rules

Delayed application by depositor

Approval of repayment plan

Powers of the Company Law Board for rescheduling, or directing repayment of deposits

Rescheduling repayment of deposits under Section 45-QA of the Reserve Bank of India Act

Hardship cases

No jurisdiction to decide directorship

No order for repayment in absence of proof

Enforcement of orders

Approval of repayment scheme

Liability of officer signing the deposit receipts

Time-barred complaints

Authorities competent to take action

Complicated questions as to repayment

Dismissal and restoration of application

Remedy under writ jurisdiction for refund of deposits

Moratorium to relief undertakings—Department's circular

Moratorium under Sick Industrial Companies (Special Provisions) Act (SICA)

Jurisdiction

Remedy before Consumer Forum set-up under Consumer Protection Act, 1986

58-AA. Small depositors

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Suggestions

Government's views

Select Committee's recommendations

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Company's obligations

Jurisdiction and powers of the Company Law Board

Prohibition against acceptance of fresh deposits as a consequence of default

Small depositors

Applicability of Section 58-A

Advertisements for inviting deposits and application form

Applicability to private companies

Appropriation of bank loans

Period for filing complaint

Cognizable offence

Penalty for default

Non-compoundable offence

58AAA. Default in acceptance or refund of deposits to be cognizable

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Government's views

Select Committee's recommendations

Scope of the section

Cognizance under Section 621

Cognizance on complaint

Criminal liability

Companies in Jammu and Kashmir

Offence not compoundable

58-B. Provisions relating to prospectus to apply to advertisement

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

Scope of the section

Clarifications regarding the scope of Section 58-B—Department's view

Provisions concerning issue of prospectus apply to advertisements for inviting deposits or loans

Advertisements for deposits

Advertisement rules

Private companies

Acceptance of deposits by incorporated bodies

59. Penalty and interpretation

Corresponding provisions

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Expert

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty for default

Compoundable offences

60. Registration of prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Object of the section

Scope of the section

Signing of prospectus

Names of original/alternate Directors disclosed in prospectus—Whether all such Directors should sign prospectus

Registration of prospectus

Registration of the prospectus is a condition precedent to its issue

Filing of prospectus

Revision of prospectus

Scrutiny of prospectus

Prospectus to be made public

Time limit of 90 days

Formalities to be observed for registration of prospectus

Material contracts

Inspection of copies of contracts

Public issue or private placement

Refusal of the Registrar to register

Prospectus to state on the face of it that a copy of it has been filed for registration with the Registrar

Advance approval of the prospectus in draft stage before it is actually delivered to the Registrar for registration

Alterations, deletions or additions made in prospectus at the instance of the Registrar of Companies when filing

New Capital Issues—Supply of copies of prospectus issued by companies to Reserve Bank of India

It is sufficient compliance if either the original Directors or the alternate Directors sign the prospectus

In view of prospectus being vetted by SEBI/concerned Stock Exchange, it is not necessary for Registrar of Companies to make elaborate scrutiny of prospectus

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Sub-section (5)

Penalty

Compoundable offence

60-A. Shelf prospectus

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Report of Working Group on Companies Act

The Companies Bill, 1997

Scope of the section

Applicability of the section

Meaning of shelf prospectus

Who can issue ?

Financing

Further filing of prospectus not required

Information memorandum

Validity period of shelf prospectus

Filing with the Registrar of Companies

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines, 2000

60-B. Information memorandum

"Book Building" and "Information Memorandum"

Scope of the section

Information Memorandum

Red-herring prospectus

Mis-statements

Circulation and filing of red-herring prospectus

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines for Book Building

61. Terms of contract mentioned in prospectus or statement in lieu of prospectus, not to be varied

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Shifting of the registered office to a place other than stated in the prospectus

Penalty

Jurisdiction

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines, 2000—Monitoring of issue proceeds

Requirement of Monitoring Agency

62. Civil liability for mis-statements in prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope of the section

Untrue statement and civil liability

Promoters

Promoters—Their fiduciary relation

Promoter's duty to disclosure

Principles governing position of Directors and promoters

Remedies for breach of duty

Personal liability of promoters

When promotion begins and ends ?

Promoters' agreement for joint-venture

Liability of promoters for mis-statements or omissions in prospectus issued by them

Remuneration of promoter

Preliminary and provisional contracts by promoters

Liability for mis-statements in prospectus

Intending purchasers of shares are entitled to true disclosures in the prospectus

Liability for omissions and concealments

Liability for false statement

Limitation on issue of capital

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

63. Criminal liability for mis-statements in prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Materiality of untrue statements

Jurisdiction

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints—Department's Circular

Disclaimer clause under Section 63—SEBI Guidelines, 2000

Penalty

Compoundable offence

64. Document containing offer of shares or debentures for sale to be deemed prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Object of the section

Deemed prospectus

Prospectus by implication

Offer for sale

Allotment of shares or debentures in a company with a view that those shares or debentures may be offered for sale to the public

Terms of prospectus may be part of contract between company and subscribers for shares or debentures

Situs of shares

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

65. Interpretation of provisions relating to prospectuses

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Untrue and misleading statements

Interpretation of "included"

Statements included in the prospectus

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

66. Newspaper advertisements of prospectus

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Newspaper advertisement—Contents

Proforma prescribed by department

Advertisement of prospectus and format of advertisement

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines, 2000

67. Construction of references to offering shares or debentures to the public, etc

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Offer to the public

Rights issue

Public issue

Placings

Private placement of equity shares through brokers etc.

'Issue as a domestic concern'

Letter of offer with right of renunciation

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Guidelines specified by SEBI under sub-section (3-A)

68. Penalty for fraudulently inducing persons to invest money

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Reckless

Criminal breach of trust—Ingredients of

Intention of accused

Nature of statement, promise or forecast

Onus of proof

Opportunity of hearing

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Department's circulars and clarifications

Penalty for fraudulent inducement

Compoundable offence

68-A. Personation for acquisition, etc., of shares

Legislative history—The Companies (Amendment) Act, 1965 (Act 31 of 1965)

Scope of the section

Personation for acquisition, etc. of shares

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Offences to be investigated by Delhi Police Establishment

Notification SO 3803, dated 8-11-1979

Notification No. SO 503, dated 13-2-1996

Penalty for default

Compoundable offence

68-B. Initial offer of securities to be in dematerialised form in certain cases

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Objective

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines, 2000

Agreements with depositories

Option to subscribe—Disclosure in offer document

69. Prohibition of allotment unless minimum subscription received

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Allotment

Allotment how effected ?

Conditions precedent to allotment of shares

Allotment of Shares—Department's view

Share capital—Propriety of issue of shares as donation

Minimum subscription

Amount payable on each share at the time the applicant makes his offer to go in for the company's shares

Moneys received from applicants for shares to be deposited and kept deposited in a scheduled bank

Any condition to waive compliance with the requirements of Section 101 void

Excepting sub-section (3), Section 69 does not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription

Public issues—Call-up of issue price—Ceiling on amount to be called-up with application—Department's view

Effect of not receiving minimum subscription

Minimum subscription in public/rights issues—Department's view

Stamp duty and allotment

Payment by shareholder for the shares he purchases

Over-subscription and principles of allotment

Minimum allotment of capital in case of over-subscription—Department's view

Standard denominations for corporate securities

Method of allotment of shares in case of over-subscription of public offers of capital

Clarification regarding 20 shareholders for every Rs. 1 lakh of the amount of 'offer for sale' not underwritten by public financial institutions and/or State developmental or investment agencies

Public announcement about the scheme of allotment—Information regarding the number of shareholders for every Rs. 1 lakh of share capital issued/offered for sale

Requirement of application money to be kept in separate bank account

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty for default

Compoundable offence

Prosecution under the Indian Penal Code for non-refund of subscription money

70. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Statement in lieu of prospectus

Filing of statement in lieu of prospectus

Liability for mis-statements in a statement in lieu of prospectus

Untrue statement

Allotment before filing of "statement", whether illegal and void or merely voidable : English and Indian law contrasted

Compliance with Section 70 whether exonerates company from compliance with Section 149 (1)

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Company cannot issue fully paid shares as donation—Departmental clarifications

Share Capital—Propriety of issue of shares as donation—Departmental clarifications

Minimum/Maximum period during which subscription list in respect of an issue of capital to public should be kept open—Departmental clarifications

Penalty for default

Compoundable offence

71. Effect of irregular allotment

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope and applicability of the section

Irregular allotments

Consequence of irregular allotment

Ratification by the company of irregular allotment

Lapse of application on undue delay in allotment

Minimum subscription when not necessary ?

How can irregular allotment be avoided ?

Cases where the applicant cannot avoid allotment

Withdrawal of application money

Allotment in contravention of law

Cancellation of allotment

Compensation by Directors

Measure of damages

Estoppel of Director

Improper motive

No allotment without application

Irregular allotment in contravention of Section 69 or 70

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

72. Applications for, and allotment of, shares and debentures

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of section

Minimum application size for subscription

Subscription list

Minimum/maximum period during which subscription list in respect of an issue of capital to public should be kept open—Department's view

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Issue opening date—Minimum and maximum duration of subscription lists

Period of subscription

Public issues

Rights issues

Allotment and agreement to allot

Validity of allotment

Communication of allotment

Allotment in favour of minor

Penalty

73. Allotment of shares and debentures to be dealt in on stock exchange

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Applicability of the section

Allotment of shares and debentures to be dealt in on Stock Exchange

"Permission has not been granted"—Meaning of

Conditional permission

Refusal of listing by single Stock Exchange

Subscription money to be released to company only on compliance

Utilisation of application moneys and interest thereon

Refund of money

Refund of excess money

Refund of application money

Complaint under the Companies Act for default in refund

Prosecution under the Indian Penal Code on failure to refund subscription money

Public issue of share capital—Refund of application monies against issue—To be promptly attended to—Department's view

Despatch of allotment letters/certificates and refund orders to the applicants in public issue of share capital

Guidelines for expeditious processing of applications from the public for public issue of capital and despatch of refund orders

Delay in allotment orders/share certificates and refund orders of public issues of capital

Allotment of shares of public issue to be listed—Issue of refund orders under Section 73 (2)/(2-A)

Compulsory registration of share certificates, debenture certificates, dividend warrants and refund order under Post Office Rules

Stockinvest Scheme—Introduction of a new instrument called stockinvest

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Continuing offence

Compoundable offence

74. Manner of reckoning fifth, eighth and tenth days in Sections 72 and 73

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Scope of the section

Public holiday

Manner in which the fifth, eighth, and tenth days in Sections 72 and 73, are to be reckoned

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

75. Return as to allotments

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Object of the section

Scope of the section

Applicability of the section

Allotment

Payment in cash or in kind

Department's clarification I

Department's clarification II

Allotment for consideration other than cash

Relief to allottee from liability—Department's instructions

Return as to allotments

Whether Registrar has power to refuse to take return of allotment on record ?

Whether fully paid-up shares can be issued by way of donation ?

Whether holders of coupons for fractional shares can be regarded as allottes?

Whether fractional shares can be allotted ?

Whether the word "Court" occurring in Section 75 (1) (c) (ii) should be read harmoniously with Section 79 in which "Court" has been replaced with "Company Law Board" ?

Extension of time for filing return

Non-filing of return of allotment—Department's clarification

Return of allotment and stamp duty

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

76. Power to pay certain commissions and prohibition of payment of all other commissions, discounts, etc

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Premium, commissions and discounts

Power to pay certain kinds of commission and discount

Statement in annual list and summary, as to commission and discounts

"Underwriting" and "Placing of shares"

Underwriting

Sub-underwriting

Placing of shares

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

77. Restrictions on purchase by company, or loans by company for purchase, of its own or its holding company’s shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Object of the section

Scope of the section

Reduction of share capital—Restrictions on purchase by company, or loans by company for purchase, of its own shares

Buy-back of shares

Buy-back of debentures

Bequest of shares to a company

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

77-A. Power of company to purchase its own securities

Legislative history

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Report of the Working Group on the Companies Act, 1956

Scope of the section

Section 77-A vis-a-vis Sections 100 to 104 and Section 391

Objects of Section 77-A vis-a-vis powers of Company Law Board under Section 42

What is buy-back ?

Authority by written or informal resolution

Funding of buy-back

Capital redemption reserve

Effect of buy-back on ceiling of investments by FIIs

Tax implications—Stamp duty

Sanction of scheme

Register of securities bought-back

Return relating to buy-back

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty for default

Compoundable offence

77-AA. Transfer of certain sums to capital redemption reserve account

Legislative history—The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

77-B. Prohibition for buy-back in certain circumstances

Legislative history—The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

SEBI Regulations

Non-compliance with provisions of Sections 159, 207 and 211

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

78. Application of premiums received on issue of securities

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Applicability of the section

Premium

Issue of shares at premium

Nature of Securities Premium Account

Department's circular

Application of Securities Premium Account

Reduction of capital requires Court approval

Issue of shares at premium under earlier Acts

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Writ petition for directions to SEBI

Penalty for default

Compoundable offence

79. Power to issue shares at a discount

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Applicability of the section

Power of company to issue shares at discount

Rate of discount

Discount issued in violation of the section

Forfeiture of fully paid-up shares

Sale of forfeited shares resulting in loss to company—Effect of transaction

Issue of sweat equity shares

Convertible debentures

Capital control regulations

Issue of shares at discount to banking companies

Petition before Company Law Board

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty the default

Compoundable offence

79-A. Issue of sweat equity shares

Legislative history—The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Sweat equity shares

Essential features of sweat equity shares

Conditions for issue of sweat equity

Issue of sweat equity at discount

Issue of sweat equity for consideration other than cash

Intellectual property rights

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Guidelines and Regulation of SEBI

Treatment under Income Tax Act

Stock option

Sweat equity shares

Amendments made by Finance Act, 2000

80. Power to issue redeemable preference shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Equity Shares

Deferred or founder's shares

Preference shares

Issue of redeemable preference shares

Status of preference shareholder

Conversion of preference shares into loan

Bonus shares—Capitalization of profits

Investment by non-resident Indians

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

80-A. Redemption of irredeemable preference shares, etc

Legislative history—The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Redemption of preference shares

Redemption of irredeemable preference shares

Conditions for redemption of preference shares

No reduction

Conditional approval of redemption

Remedy to shareholders

Notice of redemption

Extension of time for redemption

Prohibition on dividend in case of default

Petition before the Company Law Board

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

Compoundable offence

81. Further issue of capital

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1963 (Act 53 of 1963)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Object of the section

Applicability of section

Further allotment out of unsubscribed portion of capital—Department's view

Counting of period of one year under Section 81 (1)

Further issue of shares

Whether offer, containing an offer of shares to a select group, can be deemed to be a prospectus

Increase of subscribed share capital—Pre-emptive rights of equity shareholders

Redeemable preference shares

Responsibility of Directors

Equity share-holders have pre-emptive right to issue of new shares

Passing of resolution under—Sub-section (1-A)

Scope of companies' power

Intereference by Court

"Declines to accept the shares"—Meaning of

Declaratory suits

Injunction by Court

Restoring original percentage of minority shareholding

Vesting of bonus shares

Liability under Consumer Protection Act

Private Company

Propriety of inclusion of a provision similar to Section 81 in the Articles of a private company—Department's view

Section 81 (4) applies to private companies—Legal opinion

Conversion of loan into shares is prospective in effect

Institutions specified by Central Government for the purposes of Clause (b) of the proviso to Section 81 (3) (b)

Conversion of loan into shares under sub-section (4)—Whether prospective in effect ?

Whether sub-section (4) applies to private companies

New guidelines for stipulation of convertibility clause and appointment of nominee Directors—Effective from March 1984

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Appeal against Government's order

Penalty for default

Compoundable offence

Part IV

82. Nature of shares or debentures

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Meaning of Capital

Kinds of Capital

Authorised or nominal capital

Issued capital

Subscribed capital

Paid-up capital

Called-up capital

Uncalled capital

Share

Debenture

Pre-conditions

Allotment of shares

"Transfer" and "transmission" of share

Nature of shares and their transfer

Transfer of shares—Auction sale of shares by Court

Effect of death of member on rights shares

Other interests

Situs of shares

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

83. Numbering of shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Depositories Act, 1996 (Act 22 of 1996) and Depositories Related Laws (Amendment) Act, 1997 (Act 8 of 1997)

Scope of the section

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

84. Certificate of shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Depositories Act, 1996 (Act 22 of 1996)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Certificate of shares or stock

Certificate facilitates dealings in shares

Certificate, not a negotiable instrument

Estoppel as to payment on shares

"Certification"

Meaning of

Effect of

"Certification" and "Share Certificate" : Distinguished

Common seal

Certificate sealed and signed fraudulently by Secretary and one Director without authority of the Board—Forgery—Company not estopped—Enquiry into "Indoor" Management

Signature on share certificates

Affixing of signature by means of machine on share certificates—Departments' clarification

Liability of Directors

Duplicate certificate

Transfer of wrongfully issued duplicates

Central Government Rules

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

85. Two kinds of share capital

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Preference and equity shares capital

Equity share capital

Preference share capital

Participating preference shares

Preference shares preferential as regards the distribution of dividends only (under the old Act)

Preference shares preferential both as regards profits and capital

Cumulative preference shares

Preferential dividend and income-tax

Regulation of dividends on non-participating preference shares

Share register

86. New issues of share capital to be only of two kinds

Legislative history—The Companies Bill, 1997

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Applicability of the section

Meaning of 'shares with differential rights'

Companies (Issue of Share Capital with Differential Voting Rights) Rules, 2001

Companies not eligible to issue shares with differential rights

Financial norms to be fulfilled

Procedural requirements

87. Voting rights

Legislative history

Scope of the section

Voting rights

Voting rights in proportion to payment

Dividends on preference shares

Private company

Voting rights in case of banking companies

Injunction on voting rights

88. Prohibition of issue of shares with disproportionate rights

[Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13.12.2000]

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Prohibition

Abeyance of dividend rights till shares become fully paid-up

Department's clarification I

Department's clarification II

Clarification regarding import of Sections 88 and 93—Department's view

Private company exempted

Penalty

Compoundable offence

89. Termination of disproportionately excessive voting rights in existing companies

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Termination of disproportionately excessive voting rights in existing companies

Power of exemption

Scheme of the section

Exemption of private company

Penalty

Compoundable offence

90. Savings

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

Scope of the section

Prohibition of issue of shares with disproportionate rights

Private company

91. Calls on shares of same class to be made on uniform basis

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Calls on shares of same class to be on uniform basis

Duty of Directors in regard to calls

Requisites of a valid call

Notice of call

Time and place of payment of calls

Remedies of shareholder for invalid calls

Burden of proof as to payment of call

Interest on call money

Effect of transfer and forfeiture

Effect of death on calls

Advance payment of calls

Compoundable offence

92. Power of company to accept unpaid share capital, although not called-up

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Power of company to arrange for different amounts being paid on shares

Power under Articles

Voting rights

Interest

• Subject index

93. Payment of dividend in proportion to amount paid up

94. Power of limited company to alter its share capital

94-A. Share capital to stand increased where an order is made under Section 81 (4)

95. Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc.

96. Effect of conversion of shares into stock

97. Notice of increase of share capital or of members

98. Power of unlimited company to provide for reserve share capital on re-registration

99. Reserve liability of limited company

Reduction of share capital

100. Special resolution for reduction of share capital

101. Application to Tribunal for confirming order, objections by creditors, and settlement of list of objecting creditors

102. Order confirming reduction and powers of Tribunal on making such order

103. Registration of order and minute of reduction

104. Liability of members in respect of reduced shares

105. Penalty for concealing name of creditor, etc.

Variation of shareholders’ rights

106. Alteration of rights of holders of special classes of shares

107. Rights of dissentient shareholders

Transfer of shares and debentures

108. Transfer not to be registered except on production of instrument of transfer

108-A. Restriction on acquisition of certain shares

108-B. Restriction on transfer of shares

108-C. Restriction on the transfer of shares of foreign companies

108-D. Power of Central Government to direct companies not to give effect to the transfer

108-E. Time within which refusal to be communicated

108-F. Nothing in Sections 108-A to 108-D to apply to Government companies, etc.

108-G. Applicability of the provisions of Sections 108-A to 108-F

108-H. Construction of certain expressions used in Sections 108-A to 108-G

108-I. Penalty for acquisition or transfer of share in contravention of Sections 108-A to 108-D

109. Transfer by legal representative

109-A. Nomination of shares

109-B. Transmission of shares

110. Application for transfer

111. Power to refuse registration and appeal against refusal

111-A. Rectification of register on transfer

112. Certification of transfers

Issue of certificate of shares, etc.

113. Limitation of time for issue of certificates

Share warrants

114. Issue and effect of share warrants to bearer

115. Share warrants and entries in register of members

Penalty for personation of shareholder

116. Penalty for personation of shareholder

Special provisions as to debentures

117. Debentures with voting rights not to be issued hereafter

117-A. Debenture trust deed

117-B. Appointment of debenture-trustees and duties of debenture-trustees

117-C. Liability of company to create security and debenture redemption reserve

118. Right to obtain copies of and inspect trust deed

119. Liability of trustees for debenture-holders

120. Perpetual debentures

121. Power to re-issue redeemed debentures in certain cases

122. Specific performance of contract to subscribe for debentures

123. Payments of certain debts out of assets subject to floating charge in priority to claims under the charge

Part V

Registration of charges

124. "Charge" to include mortgage in this Part

125. Certain charges to be void against liquidator or creditors unless registered

126. Date of notice of charge

127. Registration of charges on properties acquired subject to charge

128. Particulars in case of series of debentures entitling holders pari passu

129. Particulars in case of commission, etc., on debentures

130. Register of charges to be kept by Registrar

131. Index to register of charges

132. Certificate of registration

133. Endorsement of certificate of registration on debenture or certificate of debenture stock

134. Duty of company as regards registration and right of interested party

135. Provisions of Part to apply to modification of charges

136. Copy of instrument creating charge to be kept by company at registered office

137. Entry in register of charges of appointment of receiver or manager

138. Company to report satisfaction and procedure thereafter

139. Power of Registrar to make entries of satisfaction and release in absence of intimation from company

140. Copy of memorandum of satisfaction to be furnished to company

141. Rectification by Central Government of register of charges.

142. Penalties

143. Company’s register of charges

144. Right to inspect copies of instruments creating charges and company’s register of charges

145. Application of Part to charges requiring registration under it but not under previous law

part vi

management and administration

chapter i

general provisions

Registered office and name

146. Registered office of company

147. Publication of name by company

148. Publication of authorised as well as subscribed and paid-up capital

Restrictions on commencement of business

149. Restrictions on commencement of business

Registers of members and debenture holders

150. Register of members

151. Index of members

152. Register and index of debenture-holders

152-A. Register and index of beneficial owners to be of debenture holder

153. Trusts not to be entered on register

153-A. Appointment of public trustee

153-B. Declaration as to shares and debentures held in trust

154. Power to close register of members or debenture-holders

155. [* * *]

156. [* * *]

Foreign registers of members or debenture holders

157. Power for company to keep foreign register of members or debenture holders

158. Provisions as to foreign registers

Annual returns

159. Annual return to be made by company having a share capital

160. Annual return to be made by company not having a share capital

161. Further provisions regarding annual return and certificate to be annexed thereto

162. Penalty and interpretation

General provisions regarding registers and returns

163. Place of keeping, and inspection of registers and returns

164. Registers, etc., to be evidence

Meetings and Proceedings

165. Statutory meeting and statutory report of company

166. Annual general meeting

167. Power of Central Government to call annual general meeting

168. Penalty for default in complying with Section 166 or 167

169. Calling of extraordinary general meeting on requisition

170. Sections 171 to 186 to apply to meetings

171. Length of notice for calling meeting

172. Contents and manner of service of notice and persons on whom it is to be served

173. Explanatory statement to be annexed to notice

174. Quorum for meeting

175. Chairman of meeting

176. Proxies

177. Voting to be by show of hands in first instance

178. Chairman’s declaration of result of voting by show of hands to be conclusive

179. Demand for poll

180. Time of taking poll

181. Restriction on exercise of voting right of members who have not paid calls, etc.

182. Restrictions on exercise of voting right in other cases to be void

183. Right of member to use his votes differently

184. Scrutineers at poll

185. Manner of taking poll and result thereof

186. Power of Tribunal to order meeting to be called

187. Representation of corporations at meetings of companies and of creditors

187-A. Representation of the President and Governors in meetings of companies of which they are members

187-B. Exercise of voting rights in respect of shares held in trust

187-C. Declaration by persons not holding beneficial interest in any share

187-D. Investigation of beneficial ownership of shares in certain cases

188. Circulation of members’ resolutions

189. Ordinary and special resolutions

190. Resolutions requiring special notice

191. Resolutions passed at adjourned meetings

192. Registration of certain resolutions and agreements

192-A. Passing of resolutions by postal ballot

193. Minutes of proceedings of general meetings and of Board and other meetings

194. Minutes to be evidence

195. Presumptions to be drawn where minutes duly drawn and signed

196. Inspection of minute books of general meetings

197. Publication of reports of proceedings of general meetings

197-A. Company not to appoint or employ certain different categories of managerial personnel at the same time

Managerial remuneration, etc.

198. Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

199. Calculation of commission, etc., in certain cases

200. Prohibition of tax-free payments

201. Avoidance of provisions relieving liability of officers and auditors of company

Prevention of management by undesirable persons

202. Undischarged insolvent not to manage companies

203. Power to restrain fraudulent persons from managing companies

Restriction on appointment of firms and bodies corporate to offices

204. Restriction on appointment of firm or body corporate to office or place of profit under a company

204-A. [* * *]

Dividends and manner and time of payment thereof

205. Dividend to be paid only out of profits

205-A. Unpaid dividend to be transferred to special dividend account

205-B. Payment of unpaid or unclaimed dividend

205-C. Establishment of Investor Education and Protection Fund

206. Dividend not to be paid except to registered shareholders or to their order or to their bankers

206-A. Right to dividend, rights shares, and bonus shares to be held in abeyance pending registration of transfer of shares

207. Penalty for failure to distribute dividends within thirty days

Payments of interest out of capital

208. Power of company to pay interest out of capital in certain cases

Accounts

209. Books of account to be kept by company

209-A. Inspection of books of account, etc., of companies

210. Annual accounts and balance sheet

210-A. Constitution of National Advisory Committee on Accounting Standards

211. Form and contents of balance sheet and profit and loss account

212. Balance sheet of holding company to include certain particulars as to its subsidiaries

213. Financial year of holding company and subsidiary

214. Rights of holding company’s representative and members

215. Authentication of balance sheet and profit and loss account

216. Profit and loss account to be annexed and auditors’ report to be attached to balance sheet

217. Board’s report

218. Penalty for improper issue, circulation or publication of balance sheet or profit and loss account

219. Right of member to copies of balance sheet and auditors’ report

220. Three copies of balance sheet, etc., to be filed with Registrar

221. Duty of officer to make disclosure of payments, etc.

222. Construction of references to documents annexed to accounts

223. Certain companies to publish statement in the Form in Table F in Schedule I

Audit

224. Appointment and remuneration of auditors

224-A. Auditor not to be appointed except with the approval of the company by special resolution in certain cases

225. Provisions as to resolutions for appointing or removing auditors

226. Qualifications and disqualifications of auditors

227. Powers and duties of auditors

228. Audit of accounts of branch office of company

229. Signature of audit report, etc.

230. Reading and inspection of auditor’s report

231. Right of auditor to attend general meeting

232. Penalty for non-compliance with Sections 225 to 231

233. Penalty for non-compliance by auditor with Sections 227 and 229

233-A. Power of Central Government to direct special audit in certain cases

233-B. Audit of cost accounts in certain cases

Power of Registrar to call for information, etc.

234. Power of Registrar to call for information or explanation

234-A. Seizure of documents by Registrar

Investigation

235. Investigation of the affairs of a company

236. Application by members to be supported by evidence and power to call for security

237. Investigation of company’s affairs in other cases

238. Firm, body corporate or association not to be appointed as inspector

239. Power of inspectors to carry investigation into affairs of related companies

240. Production of documents and evidence

240-A. Seizure of documents by inspector

241. Inspectors’ report

242. Prosecution

243. Application for winding up of company or an order under Section 397 or 398

244. Proceedings for recovery of damages or property

245. Expenses of investigation

246. Inspectors’ report to be evidence

247. Investigation of ownership of company

248 . [* * *]

249. [* * *]

250. Imposition of restrictions upon shares and debentures and prohibition of transfer of shares or debentures in certain cases

250-A. Voluntary winding-up of company, etc., not to stop investigation proceedings

251. Saving for legal advisers and bankers

chapter Ii

directors

Constitution of Board of Directors

252. Minimum number of directors

253. Only individuals to be directors

254. Subscribers of memorandum deemed to be directors

255. Appointment of directors and proportion of those who are to retire by rotation

256. Ascertainment of directors retiring by rotation and filling of vacancies

257. Right of persons other than retiring directors to stand for directorship

258. Right of company to increase or reduce the number of directors

259. Increase in number of directors to require Government sanction

260. Additional directors

261. [* * *]

262. Filling of casual vacancies among directors

263. Appointment of directors to be voted on individually

263-A. Sections 177, 255, 256 and 263 not to apply in relation to companies not carrying business for profit, etc.

264. Consent of candidate for directorship to be filed with the company and consent to act as director to be filed with the Registrar

265. Option to company to adopt proportional representation for the appointment of directors

266. Restrictions on appointment or advertisement of director

Managing directors, etc.

267. Certain persons not to be appointed managing directors

268. Amendment of provision relating to managing, whole-time or non-rotational directors to require Government approval

269. Appointment of managing or whole-time director or manager to require Government approval only in certain cases

Share qualification

270. Time within which share qualification is to be obtained and maximum amount thereof

271. [* * *]

272. Penalty

273. Saving

Subject Index

93. Payment of dividend in proportion to amount paid-up

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Clarification regarding Sections 88 and 93—Department's view

94. Power of limited company to alter its share capital

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Alteration of share capital

Power of a company limited by shares to alter its share capital—Increase, consolidation and division

Increase of capital in case of a company limited by guarantee and having a share capital

Effect of provisions in Articles on power to increase capital vis-a-vis statutory provisions

Power of a company to alter its share capital—Department's view

Consolidation of share capital

Consolidation of shares

Conversion of shares into stock and vice versa

Sub-division of shares

Cancellation of unissued shares

Registration fees on cancellation followed by increase—Departmental clarification

Text of circular

Registration fee is capital expenditure

Intimation to Registrar

94-A. Share capital to stand increased where an order is made under Section 81 (4)

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

Scope of the section

Share capital stands increased, on an order under Section 81 (4)

Delegation of powers to the Company Law Board

Filing of return

Government Policy Guidelines

95. Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc.

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Notice to Registrar of Companies

Recording by Registrar

Penalty

Compoundable offence

96. Effect of conversion of shares into stock

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Conversion

Stock

Meaning of

Transferability

Register of members, entry in

Annual return

No numbering

Shares and Stocks—Differentiation

Effect of forgery

97. Notice of increase of share capital or of members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

"Increase in share capital"—Meaning of

Increase of authorised share capital due to amalgamation—Applicability of Section 97

Board may ratify shareholders' action

Filing of notice with the Registrar

Penalty for default

Compoundable offence

Continuing offence

Prescribed form

Prescribed fees

Fixed rates of additional fees for delay in filing documents

98. Power of unlimited company to provide for reserve share capital on re-registration

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Power of unlimited company to provide for reserve share capital on reorganisation

Procedure

99. Reserve liability of limited company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Reserve liability of limited company—Reserve share capital

100. Special resolution for reduction of share capital

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Maintenance of share capital

Reduction of share capital

Pari passu or all-round reduction

Power of reduction of capital

Principles applicable to reduction of capital

Redemption of preference shares

Reduction in capital without the consent of the Court

Authorisation of reduction of capital in the Articles necessary

Procedure for reduction of capital

Buy back of shares—Jurisdiction of Court under Section 77-A

Forfeiture and surrender of shares

Power of Court

When does the reduction become effective ?

Government company

101. Application to Tribunal for confirming order, objections by creditors, and settlement of list of objecting creditors

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Requirements for reduction

"Diminution of liability," etc.—Creditors affected

Application to the Court to be by petition

Application to Court when not required ?

Necessary contents of the petition to the Court

Objections by creditors, and settlement of list of objecting creditors

Advertisement of the petition and the list of creditors, and notices to creditors

Claim for mesne profits—Whether a debt ?

Power to dispense with the consent of creditor on security being given for his debt

Court's power

Court's power to order rectification

Reduction of capital in arrangements and amalgamations

Petition

Notice to the Registrar of Companies

Publication of notice

Government company

102. Order confirming reduction and powers of Tribunal on making such order

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Order confirming reduction

Publication of reasons for reduction

Addition to name of company of the words "and reduced"—Order of the Court confirming reduction; and powers of the Court on the making of such order

Consequences of failure to make the addition

Government company

Penalty

Compoundable offence

103. Registration of order and minute of reduction

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Registration of order and minute of reduction

Minute to form part of the Memorandum

Registrar's certificate conclusive

Effect of registered minute

Government company

Penalty

Compoundable offence

104. Liability of members in respect of reduced shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Liability of member in respect of reduced shares

Government company

105. Penalty for concealing name of creditor, etc.

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Nature of offence

Penalty for concealment of name of creditor

Compoundable offence

106. Alteration of rights of holders of special classes of shares

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

Scope of the section

Class rights

Variation of shareholders' rights

Under the English law

Under the Indian law

Procedure for variation of class rights

Variation of dividend rights under statutory authorisation—Department's views

Consequential effect of variation of class rights on other classes of shares

Overriding effect of Section 80-A as inserted by Amendment Act, 1988

Penalty

Compoundable offence

107. Rights of dissentient shareholders

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Remedy of the dissentient shareholders

Power of the Court

Limitation

Filing

Penalty

Compoundable offence

108. Transfer not to be registered except on production of instrument of transfer

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 1966 (Act 39 of 1966)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Depositories Act, 1996 (Act 22 of 1996)

Scope of the section

Applicability of the section

Distinction between issue of new shares and transfer of shares already issued

A member's right to transfer his shares

Mode of transfer of shares

Instrument of transfer

Signature on transfer form

Effect of mere agreement to transfer

Agreement amongst joint-venturers as to transfer of shares

Financial institutions approved by Central Government for the purposes of the section

Guidelines for good or bad delivery of documents

Recommendations of working group on transfer of shares—Acceptance by Government—Follow-up for their implementation

Clarification regarding requirement of producing of instrument of transfer—Department's view

Production of estate duty clearance certificate—Whether to be insisted upon where heirs apply for transfer of shares held by deceased

Prescribed authority for endorsing forms of transfer of shares in pursuance of Section 108 (1-A)

Transfer not to be registered, unless instrument of transfer is produced

Lodging of the certificate of shares

Share Transfer Form (Form 7-B) for endorsement—Department's circular

Delay in registration of transfer

Closure of register of members

Fixing a 'record date' without closing register of members—Department's clarification

Transfer below market lot

Creation of trust for disposal of odd lot shares—Department's circular

Bulk lodgement of instrument(s) of transfer of shares/debentures—Department's circular

Effect of transfer until registration

Transfer when complete ?

Transmission of shares

Comparison between transfer and transmission

Transfer relates back to the date of execution

Mortgage of shares by blank transfer

Restrictions on blank transfers of shares—Procedure clarified by Department—Department's clarification

System of blank transfers of shares—Intention behind its prohibition

Transfer without the authority of the owner

Transferor's responsibility with regard to transfer of shares by him "Lodging the Certificate"—"Certification"—"Balance Ticket"

Transfer of shares-cum-dividend and transfer ex-dividend

Transfer of shares at price by valuation

Specific performance of contract for sale of shares

Signature of transferor and witnesses

Indication of occupation of transferee-company not necessary

Transfer of shares held in trust

Transmission to real successors

Stamp duty on transfer of shares

"Duly stamped"

Stamp duty by whom payable

Denomination of share transfer stamps

Securities under depository mode not liable to stamp duty—Under SEBI Press Release

Liability of valuer for negligence

Whether transferee/transferor to be given opportunity of hearing

Director's powers to refuse transfers

Refusal to transfer shares on frivolous grounds such as non-tallying of attested signature

Department's circular I

Department's circular II

Whether share transfer deeds on which words 'one thousand nine hundred and seventy' are printed can be deemed to be good delivery if word 'seventy' is cut and in its place 'eighty' is written

Transfer deeds in name of minor must be signed by natural guardian

Transfer deed signed by guardian on behalf of minor for listed schemes

Whether execution of transfer deeds is necessary for effecting change in order of names of joint-shareholders

Whether it is obligatory to disclose address of transferor-shareholder while returning documents under objection for non-tally of transferor's signature

Inordinate delay in registering transfers, endorsing calls, sub-dividing and consolidating share certificates and returning defective documents

Review and simplification of existing procedure in matter of registration and transfer of share—Suggestion regarding non-charging of transfer fee, etc

Transfer fees

Prohibition on transfer of shares of companies having dual registers, one in India and one in UK under the Foreign Exchange Regulation Act

Abolition of standard denomination for equity shares

Nomination facility for shareholders

Registration not to be effected if instrument is received after period stipulated in sub-section (1-B)

Applications for extension of time for registering transfer of shares under sub-section (1-D)—Whether should be supported by specific reasons indicating hardship

Notification delegating powers to Regional Directors by Central Government—Rescission of

Defective transfer deed

Forged transfer

Consequence of certification

Transfer in violation of the Articles of Association

Payment of transfer fee prescribed by the Articles

Effect of a forged transfer of shares

Joint shareholding—Department’s views

Disinvestment by Government

Company's lien over shares

Forfeiture of shares by company

Power of forfeiture strictly construed

Compliance with statutory provisions necessary

Setting aside of forfeiture for want of notice

Jurisdiction for challenging forfeiture

Surrender of shares

Pledge of shares

Distinction between lien, surrender and forfeiture

Power of Central Government to extend time

Extension of time for registering transfer to be supported by reasons—Department's clarification

Simplifications of procedure—Department's instruction

Application in Form 7-C

Application fee payable by individuals for transfer of shares

Delegation of powers to the Company Law Board

Delegation of powers to the Registrars of Companies

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Government company

Penalty

Compoundable offence

108-A. Restriction on acquisition of certain shares

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

Sachar Committee Recommendations

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Applicability of the section

Approval necessary

'Group'

'Bodies corporate under the same management'

Government's approval

Acquisition without prior permission

Department's clarifications

Time-limit for conveying approval

Penalty for default

Compoundable offence

108-B. Restriction on transfer of shares

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Applicability of the section

Dominant undertaking

Powers of the Central Government

Considerations for transfer

Companies under the same management

Time-limit for sanction by the Government

Who can file complaint ?

Relevant rules and prescribed form

Penalty

Compoundable offence

108-C. Restriction on the transfer of shares of foreign companies

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Foreign company

Refusal of approval

Time-limit for decision by the Government

Relevant rules and prescribed form

Penalty

Compoundable offence

108-D. Power of Central Government to direct companies not to give effect to the transfer

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Controlling interest

Powers of the Central Government

Directions to be complied

Voting rights prohibited

Re-transfer and refund

Order should be passed after affording opportunity of hearing and on sufficient material

Penalty

Compoundable offence

108-E. Time within which refusal to be communicated

Legislative history—The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

108-F. Nothing in Sections 108-A to 108-D to apply to Government companies, etc.

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

108-G. Applicability of the provisions of Sections 108-A to 108-F

Legislative history—The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Amendment) Act, 1977 (Act 46 of 1977)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Opportunity of hearing to the applicant

108-H. Construction of certain expressions used in Sections 108-A to 108-G

Legislative history—The Companies (Amendment) Act, 1977 (Act 46 of 1997)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

Scope of the section

Meaning of Expressions

108-I. Penalty for acquisition or transfer of share in contravention of Sections 108-A to 108-D

Legislative history—The Companies (Amendment) Act, 1977 (Act 46 of 1977)

The MRTP (Amendment) Act, 1984 (Act 30 of 1984)

The MRTP (Amendment) Act, 1991 (Act 58 of 1991)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Penalties

Compoundable offences

109. Transfer by legal representative

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Rights of the estate of a deceased-member to new shares

Rights of executors and legal representatives

Transfer of shares by legal representative

Transmission of shares

Death of personal representative

Transfer and transmission—Distinction

Shares of lunatic and bankrupt persons

Discretion of the Board of Directors

Administration by the Securities and Exchange Board of India (SEBI)

Power of SEBI to inspect books of account, etc. and to file complaints

109-A. Nomination of shares

Legislative history—The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Nomination facility

Right of nomination

More than one nominee

Rights of nominee

Status of the nominee

Minor nominee

Nomination for partly paid shares

Articles of Association need not provide for nomination facility

Cancellation and variation of nomination

Signatures on nomination form

Recording nominee's name

Nomination facility for shareholders

109-B. Transmission of shares

Legislative history—The Companies (Amendment) Act, 1999 (Act 21 of 1999)

Scope of the section

Object of the section

Option of nominee

Transmission in paperless mode/dematerialised form

110. Application for transfer

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Application for registration of transfer

Splitting of joint-holding of shares

Transfer deed

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty

111. Power to refuse registration and appeal against refusal

Corresponding provisions

Legislative history—The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Sachar Committee Recommendations

The Depositories Act, 1996 (Act 22 of 1996)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Grounds on which listed companies could refuse to register a transfer of shares under the Securities Contract Regulation Act, 1956 (now deleted)

Contract to transfer

Transfer in respect of pledged shares

Shareholdings and transfer of shares of banking companies

Reserve Bank of India circulars

Circular, dated 13-1-1970

Circular, dated 23-5-1991

Circular, dated 16-4-1994

Registration of transfers—Power of company to refuse registration

Transferee's right on transfer

Refusal to register transfer on the ground of restrictions contained in the Articles of Association

Signature not tallying with the specimen signature

Department's circular

Irregularities of form

Refusal on frivolous and untenable grounds

Department's circular I

Department's circular II

Consequences of invalid refusal to register a transfer

Transmission of shares and debentures

Transfer and transmission distinguished

Succession certificate necessary in case of transmission

Genuineness of consideration

Irregularities of minor nature

Transfer to non-resident Indians

Shares in minor's name

Irrelevant or inadequate reasons for refusal

Rejection of transfer is not restrictive or an unfair trade practice

Effect of failure to communicate refusal within two months

Unnecessary delay

Interim relief

Appeals

Limitation and condonation of delay

Rectification of register of members

Transfer of shares in case of joint-holding

Transfer of shares in case of trust

Dispute between public sector corporations

Interest on delayed refund of bonds

Court sale cannot abrogate provisions in Articles

Aggrieved person

'Any person having become a member'—Interpretation of

Allotment beyond authorised capital

Allotment without written application

Cancellation of allotment

Restrictions on transfer

Sufficient cause

Appeal against orders of the Central Government (now Company Law Board)

Special Court not subordinate to High Court

Transmission under unprobated Will

Share transfer—Refusal by company

Disposal of appeals received under the section—Criteria for deciding cases

Appeal against refusal or failure to register

Penalty

Compoundable offence

111-A. Rectification of register on transfer

Legislative history

The Depositories Act, 1996 (Act 22 of 1996)

The Depositories Related Laws (Amendment) Act, 1997 (Act 8 of 1997)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Applicability of Section 111-A

Applicability of the provisions of Section 111 to Section 111-A

Time-limit for appeal

Power of the Company Law Board

Civil Court remedy

Intervention of Civil Court order

Rectification of register of members

Inter-depository transfer of beneficial ownership of securities

Sufficient cause

SEBI Takeover Regulations

"May" is to be taken as "shall"

Failure to exercise option

Refusal to accept splitting-up of joint-holding

Transfers in violation of law

Contravention of any other law

Who can apply ?

Rectification of register of members—Matter in dispute before Criminal Court

Petition before Company Law Board

Condonation of delay

Fraudulent transactions and appropriate remedy

Transfer of shares where consideration not paid

Company compellable to register transfer where Section 111-A (3) not applicable

Petition signed by second joint-holder only

Transfer of shares of banking company

Writ remedy

Right of appeal

112. Certification of transfers

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Principle of certification

Scope of the section

Certification of transfer

Consequences of a forged transfer

Effect of certification

Liability of a company

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

113. Limitation of time for issue of certificates

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 ( Act 31 of 1988)

The Depositories Act, 1996 (Act 22 of 1996)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2000 (Act 11 of 2003)

Scope of the section

Applicability of the section to letters of allotment

Share certificate

Share certificates—Clarification regarding signature by means of machine thereon.—Department's view

Right of member to certificate

Limitation of time for issue of certificate

Issue of refund orders, allotment letters/certificates, and letters of offer by registered post.—Department's circular

Extension of time

Person aggrieved

Remedy against default

Company Law Board has no power to punish for default

Company Law Board has no power to compensate investor for delay in issuing certificates under Sections 113

Jurisdiction for complaint

Quashing of complaint

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Petition before the Company Law Board

Relevant rules and forms

Penalty

Compoundable offence

114. Issue and effect of share warrants to bearer

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Warant—Meaning of

Share-warrants to bearer

Effect of a share warrant

Rights of bearer share warrant holder

Reconversion of warrants into shares

Who can issue?

Free transfer

Stamp duty on share warrants

Issue of share warrants outside India

SEBI Guidelines

Delegation of powers to the Company Law Board

115. Share warrants and entries in register of members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Member

Deemed member

Position of the bearer of share warrant

Entries to be made in the register of the company upon the issue of share warrants

Registration of name of bearer of share warrant

Share warrant and share certificate—Distinguished

Failure to exercise right of option of converting warrants into shares

Annual returns

Compoundable offence

116. Penalty for personation of shareholder

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Personation

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Penalty for personation of shareholder

Compoundable offence

117. Debentures with voting rights not to be issued hereafter

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Debentures not to be issued with voting rights

Contents of debenture

Kinds of debenture

Secured

Unsecured

Bearer

Registered

Redeemable

Perpetual

Redeemable and irredeemable debentures

Nature of debenture and the question of priority

Convertible debentures.

Blank debentures

Debenture stock

Debenture and debenture stock

Remedies of debenture-holders

Interest on call money

Debenture holder is not a consumer

Interest on debentures

Stamp duty

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

SEBI Guidelines

Prescribed rules

Compoundable offence

117-A. Debenture trust deed

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Purpose and nature of trust deed

Advantages of trust deed

Contents of trust deed

Time period for execution of trust deed

Inspection and copies of trust deeds

SEBI Guidelines

Substantive law

Penalty for default

Compoundable offence

117-B. Appointment of debenture-trustees and duties of debenture-trustees

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Issue of prospectus and appointment of debenture-trustees

Who is debenture trustee ?

Who can be appointed as trustee ?

Consent to act as debenture trustee

Functions of debenture-trustees

Duties of debenture-trustees under the SEBI (Debenture Trustees) Regulations, 1993

Duty of debenture-trustee to furnish information to SEBI

Petition before Company Law Board

117-C. Liability of company to create security and debenture redemption reserve

Legislative history—The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Notes on Clause 161 of the Companies Bill, 1993

Notes on Clause 105 of the Companies Bill, 1997

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Creation and utilisation of debenture redemption reserve

Claim for redemption of debentures from Investor Education and Protection Fund

Failure to redeem

Clarifications regarding Debenture Redemption Reserve (DRR)

Penalty for default

Compoundable offence

118. Right to obtain copies of and inspect trust deed

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Inspection

Foreign companies

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

Remedy for refusal

Petition before the Company Law Board

Penalty

Compoundable offence

119. Liability of trustees for debenture-holders

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Liabilities of trustees for debenture-holders

Debenture trustees—Right to carry on business of the company

Trust in favour of debenture-holders

Book debts of a company may be charged

Court may grant relief from liability

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

120. Perpetual debentures

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Conditions regulating the issue of debentures

Irregular issue of debentures

Debentures may be issued at a discount

Issue of debentures by public companies where the consideration for the securities exceeds rupees twenty-five lakhs

Irredeemable debentures

Clog on equity of redemption

Redemption of debentures

Effect of death of debenture-holder

Conditions regulating the transfer of debentures

Remedies available to debenture holders

Winding-up

Power to modify terms

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

121. Power to re-issue redeemed debentures in certain cases

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Power to re-issue redeemed debentures in certain cases

Re-issue of debentures

Rights of re-issued debenture-holder

Nominees

Redeemed

Stamp duty

Balance-sheet

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

122. Specific performance of contract to subscribe for debentures

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Specific performance of contract to subscribe for debentures

Administration by the Securities and Exchange Board of India (SEBI)

Powers of SEBI to inspect books of account, etc. and to file complaints

123. Payments of certain debts out of assets subject to floating charge in priority to claims under the charge

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Object of the section

Scope of the section

Payment of certain debts out of assets subject to floating charge in priority to claims under the charge

Preferential payments

Indemnity

Priority only against floating charge

Appointment of receiver

Appointment of receiver by Court

Status of a receiver appointed by the Court

Receiver not occupier

Receiver is an officer of the Court

Legal effects of appointment of a receiver

Appointment of receiver supersedes company's powers

Appointment of receiver by the debenture-holder out of Court

Legal status of receiver appointed out of Court

Effect of appointment of receiver upon Directors

Receiver's report on conduct of the Directors

Receiver's costs and remuneration

Recoupment

Part V

124. "Charge" to include mortgage in this Part

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Meaning of "charge"

Fixed and floating charge

Power to create charges and mortgages

Crystallisation of floating charge

Effect of crystallisation of floating charge

Dealings with properties under floating charge

Further charges

Floating charge on issue of debentures

Secured creditor and burden of proof

Holding/subsidiary relationship

Non-banking Financial companies—Requirement of consent of first charge-holder—RBI Press release

Form

Filing of charge

125. Certain charges to be void against liquidator or creditors unless registered

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Scope of the section

Applicability of Section 125

Registration of certain mortgages and charges

Effect of non-registration

Solution to certain problems arising out of registration/modification of charges provided—Department's view

Whether Registrar can register a charge which is pledged on movable property ?

Effect of non-registration, charge created by a Liquidator not registrable

Effect of delayed registration

Late payment of fee for registration of charges

Delay in registration of charges

Department's circular I

Department's circular II

Department's circular III

Extension of time to file particulars of charge

Central Government cannot condone delay under Section 637-B

Necessity of formal instrument of charge

Doctrine of revivor

"Debentures", definition of—"Issue" essential

Registration of debentures under Section 17 of the Indian Registration Act, 1908

Registration of pledge of movable property not compulsory but permissible—Department's circular

Charge over book debts

Charge on calls

Charges on ship

Charges on goodwill, patents, etc

Charge on properties situated abroad

Negotiable instrument

SEBI Guidelines

Stamp duty on instrument of charge

Penalty

Compoundable offence

126. Date of notice of charge

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Foreign companies

Notice of mortgages and charges

No constructive notice of contents of charge

127. Registration of charges on properties acquired subject to charge

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Registration of charges on properties acquired subject to charge

Effect of non-registration

Property acquired on dissolution of partnership firms

Penalty

Compoundable offence

128. Particulars in case of series of debentures entitling holders pari passu

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Particulars in case of series of debentures entitling holders pari passu

Series of debentures

Protection to debenture-holders

Debentures ranking pari passu

Incorporated company cannot be mortgaged or charged

Charge by foreign company on immovable property in India

Guarantor

Proviso

129. Particulars in case of commission, etc., on debentures

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Particulars in case of commission, allowance or discount, having been paid or made by the company

Effect of non-filing

Prescribed form

130. Register of charges to be kept by Registrar

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

Scope of the section

Register of charges

Registered charge to be entered in the register

Particulars

Validity of entry in the register

Delay in filing

Delay in fling Form No. 13—Department's view

131. Index to register of charges

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Prescribed Form

132. Certificate of registration

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Certificate of registration

Evidentiary value of certificate

Validity of the registration

Mis-statement by charge-holder

Instant registration

Relevant rule

133. Endorsement of certificate of registration on debenture or certificate of debenture stock

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Endorsement of certificate of registration on debentures or certificate of debenture stock

Penalty

Compoundable offence

134. Duty of company as regards registration and right of interested party

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Duty of company and right of interested persons, as regards registration

Who should effect registration ?—Department's circular

Penalty

135. Provisions of Part to apply to modification of charges

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Modification of charge

Whether transfer or assignment of rights by charge-holder amounts to modification?—Department's views

Registration of modification of charges as a result of change in law—Department's view

Variation in rate of interest arising out of increase in bank rate—Department's view

Other cases of change of rate of interest—Department's view

Procedure for registration

Prescribed fee and additional fee

Fixed rate of additional fee for belated filing of documents

Condonation of delay under Section 141

Prescribed rules and forms

136. Copy of instrument creating charge to be kept by company at registered office

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Copy of instrument creating mortgage or charge must be kept by the company at its registered office

137. Entry in register of charges of appointment of receiver or manager

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Receiver and Manager

Receiver

Receivership

Effect of appointment of Receiver

Borrowing powers of a Receiver

Receiver's appointment subject to security given by him

Registration of appointment of Receiver

Applicability of Sections 137 and 421 of the Act

Companies in liquidation—Appointment of Receivers—Applicability of Sections 137 and 421 of the Companies Act, 1956—Indefinite continuance of Liquidator and Receiver simultaneously—Department's view

Form and procedure

Penalty

Compoundable offence

138. Company to report satisfaction and procedure thereafter

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

Scope of the section

Charge-holder's right to be heard before entry of satisfaction

Supporting letter of satisfaction from the charge-holder

Notice of satisfaction

Reckoning of period of 30 days within which satisfaction is to be reported to Registrar—Department's view

Satisfaction of charge to be filed with the Registrar of Companies within 30 days from the date of satisfaction/payment of charge revising earlier clarification to the effect that period of 30 days to be counted from "date of issue of bank's letter"—Department's view

Notice by Registrar

Notice to the charge-holder.—Department's view

Entry by Registrar

Form and procedure

Procedure of filing of Form No. 17 with the Registrar of Companies.—Original loan merged in secured loan of higher amount—Which form is required to be filed ?

Department's circular I

Department's circular II

Penalty for default

Compoundable offence

Condonation of delay

139. Power of Registrar to make entries of satisfaction and release in absence of intimation from company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

Scope of the section

Power of Registrar to make entries of satisfaction and release in absence of intimation from company

140. Copy of memorandum of satisfaction to be furnished to company

Corresponding provisions

Scope of the section

Copy of Memorandum of satisfaction to be furnished to the company

Rectification

141. Rectification by Central Government of register of charges.

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1974 (Act 41 of 1974)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Rectification of register of charges

Exercise of power of rectification of register of charges

Registration of satisfaction of mortgages and charges

Rectification in liquidation

Jurisdiction exercisable in case of omission, mistake and mis-statement but not validity of the charge

Existing rights not to be prejudiced

Locus standi of unsecured creditor

Direction in case of default or delay in filing particulars of charge

Acceptance of documents on record not to be accepted by Registrar after expiry of stipulated period unless Court's sanction is obtained

Application to the Company Law Board for condonation of delay where charge-holder waives claim—Department's clarification

Additional penal fee not to be levied unless the Company Law Board so orders in the order of extension—Department's view

Registrar not to accept documents filed out of time without the Company Law Board's order—Department's view

Delay in filing Form No. 13—Department's clarification

Condonation of delay by the Central Government

Prescribed forms

Petition before the Company Law Board

142. Penalties

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Persons liable

Penalties for non-compliance with the provisions regarding registration

Compoundable offence

143. Company’s register of charges

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Company's registrar of charges

Contents of the register of charges

Time

Penalty

Compoundable offence

144. Right to inspect copies of instruments creating charges and company’s register of charges

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies Amendment Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

The Companies (Second Amendment) Act, 2002 (Act 11 of 2003)

Scope of the section

Right to inspect copies of instruments creating mortgages and charges and right to inspect company's register of mortgages

What can be inspected ?

Time for inspection

Fee

Penalty for refusal to grant inspection

Compoundable offence

Petition before the Company Law Board

145. Application of Part to charges requiring registration under it but not under previous law

Scope of the section

Application of Part V to charges requiring registration under it but not under previous company law

part vi

chapter i

146. Registered office of company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Registered office of company

Importance of registered office

Service of documents must be affected at the registered office

Intimation to Registrar

Shifting of registered office

Change of registered office—From when effective ?

Registered office at Managing Director's residence—Departmental clarification

"Local limits" to mean both the local body limits and the postal limits—Department's view

Default

Penalty

Compounding of fine

147. Publication of name by company

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Publication of name by limited company

Expression "person"—Construction of—Person liable to be sued—C.P.C., Order XXX, Rule 10

Place of business

Bills of Exchange, Cheques and other Negotiable Instruments

Exemption to Section 25 companies

Provision in Articles on mode and manner of keeping seal and seal to be metallic—Department's clarification

Publication of name by company in the local language—Department's view

Manner in which a company's seal should be kept

Publication of company's name in notices

Whether share certificate is an official publication within the meaning of sub-section (1) (c) ?

Penalty for non-publication of name

Compounding of fine

148. Publication of authorised as well as subscribed and paid-up capital

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Publication of subscribed and paid-up capital necessary when the authorised capital is published

Clarification regarding requirement of specifying authorised capital of the company on its share certificate—Department's view

Penalty for default

Compounding of fine

149. Restrictions on commencement of business

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1960 (Act 65 of 1960)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 1988 (Act 31 of 1988)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Object and scope of the section

Applicability of the section

Restrictions on the commencement of business

Company's right to commence business—Certificate of commencement

Public companies

Special resolution required

Criterion to decide whether new activity is germane to the original business—Department's view

Ordinary resolution and permission of Central Government

Certificate of commencement

Certificate of commencement conclusive evidence that the company can commence business

Private company

Certificate of commencement of business—Applicability to private companies converted into public company—Department's view

Government company

Compliance of the provisions of Section 149 and Section 165 by public companies registered under Part IX of the Act—Department's view

Contracts made by the company before the day on which it can commence business deemed to be provisional

Contracts made before and after incorporation

Prohibition against allotment

Penalty for default

Compoundable offence

Form and Procedure

150. Register of members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Depositories Act, 1996 (Act 22 of 1996) and the Depositories Related Laws (Amendment) Act, 1997 (Act 8 of 1997)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Register of members

Duty to keep register up-to-date

Register of beneficial owners

Entry in the register of members in the case of a firm

Entry in case of joint-holders

Whether particulars, including occupation, of each joint-shareholder are to be recorded in register ?—Department's view

Entry in case of minors

Authentication of particulars

Prima facie evidence

Rectification of register

Position in England

Inspection of register

Penalty

Compounding of fine

151. Index of members

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Index of members of company

Penalty

Compoundable offence

152. Register and index of debenture-holders

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Depositories Act, 1996 (Act 22 of 1996) and the Depositories Related Laws (Amendment) Act, 1997 (Act 8 of 1997)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Register of debenture-holders

Index

Penalty for default

Compoundable offence

152-A. Register and index of beneficial owners to be of debenture holder

Legislative history—The Depositories Act, 1996 (Act 22 of 1996)

Scope of the section

153. Trusts not to be entered on register

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 1963 (Act 53 of 1963)

The Depositories Act, 1996 (Act 22 of 1997)

Scope of the section

Object of the section

Trusts and equitable interests

Trust not to be entered on the register

Notice of trust

Admission of trusts as members—Department's view

Situations in which notice must or may be taken

Liabilities of nominees and beneficial owner

Shares held on behalf of Hindu undivided family

Company's lien or charge on its share

Section 187-C (4) strikes at Section 153 qua trusts of shares

Penalty

153-A. Appointment of public trustee

Legislative history—The Companies (Amendment) Act, 1963 (Act 53 of 1963)

Appointment of public trustee

Relevant rules

153-B. Declaration as to shares and debentures held in trust

Legislative history—The Companies (Amendment) Act, 1963 (Act 53 of 1963)

The Companies (Amendment) Act, 1965 (Act 31 of 1965)

The Companies (Amendment) Act, 1996 (Act 5 of 1997)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Object of the section

Applicability of the section

Declaration as to shares and debentures held in trust

Declaration should be by all the trustees—Department's view

Whether the declaration should be in respect of preference shares as well

Exemption

Where shares are held in more than one company, the limits should be applied separately in relation to each such company—Department's view

Whether expression "trust money invested in shares or debentures of company", occurring in sub-section (4), as it stood before the Amendment Act, 1965, also covers shares obtained as gift or on allotment of bonus shares

Exercise of voting rights in respect of shares held in trust

Penalty

Compounding of offence

Form and Procedure

154. Power to close register of members or debenture-holders

Corresponding provisions

Legislative history—The Companies Act, 1956 (Act 1 of 1956)

The Companies (Amendment) Act, 2000 (Act 53 of 2000)

Scope of the section

Power to close register

Notice of closure of transfer books or share transfer books of a company—Need for strict compliance with the provisions of Section 154—Department's view

Uniform dates of closure

Advertisement in newspaper

Amendment to Clause 16 of the listing agreement

Penalty for default

Compoundable offence

155. Power of Court to rectify register of members

[Omitted by the Companies (Amendment) Act, 1988, Section 21, w.e.f. 31-5-1991.]

Repeal of Section 155

Corresponding provisions

Scope of the section

Maintainability of composite petition

Application for rectification

Necessary parties

Civil suit for rectification of register

Entry or omission of name without sufficient case

Power of Court to rectify the register after the Companies (Amendment) Act, 1988

156. Notice to Registrar of rectification of register

[Omitted by the Companies (Amendment) Act, 1988, Section 21, w.e.f. 31-5-1991]

Repeal of Section 156

Corresponding provisions

Jurisdiction of the Court