Company Law 2013 has ushered a new era for Indian Corporate world. In keeping up with the times and technology Company Law 2013 has brought about revolutionary changes in practice and procedure. New provisions have been added; old and mundane have been relegated to archives. New authorities and investigation offices have been set up. Companies Act 2013 generally sets up mood for lean and slim; quick and transparent procedures. This book aims to help you build your basics as to the fundamental requirements of law related to companies. It will ingrain in you that companies are separate and distinct legal entity from its promotors, creditors and shareholders. This book will gradually manoeuvre you into finer aspects of company law
Additional Info
  • Publisher: Laxmi Publications
  • Language: English
  • ISBN : 978-93-86202-00-0
  • Chapter 1

    Preface

    This document contains preface. 

  • Chapter 2

    Table of Contents

    This document contains table of contents.

  • Chapter 3

    Chapter 1 - Outline of Indian Governance Structure and Function Price 0.11  |  0.11 Rewards Points

    India is one of the oldest civilisations with multi-layer, multi- cultural diverse layers. Indian economy opened up with 1991 economic reforms. In its two decades plus journey, India has emerged as one of the most attractive global investment destinations. India is one of the fastest growing economies in the world; many factors contribute to its spectacular growth.

  • Chapter 4

    Chapter 2 - Introduction to Company Law Price 0.11  |  0.11 Rewards Points

    Etymogically, the word “Company” has its origin in Latin. Company is made up of two Latin words Com meaning with or together and Panis meaning bread. So traditionally, the word Company meant coming together to have meals. In common parlance, the word Company denotes having like- minded people together to attain common objective. However, the meaning of the word Company took different meaning as a business vehicle during post Industrial Revolution. After Industrial Revolution, machines started replacing men. A person realized that and there was more production and he has more markets to cater to.

  • Chapter 5

    Chapter 3 - Types of Companies Price 0.11  |  0.11 Rewards Points

    Companies can be classified on following basis:
    A. On the Basis of Enforceability • One Person Company • Small Company

  • Chapter 6

    Chapter 4 - One Person Company OPC Price 0.11  |  0.11 Rewards Points

    Dr. J.J. Irani committee mooted the concept of One Person Company in 2005 and it achieved its final shape under the New Companies Act 2013. OPC is essentially a type of private company and provides all the functionality of a private limited company. OPC like other companies has separate and distinct legal identity, capable of raising bank loans, credits and has limited liability. OPC is an answer to ailments of sole-proprietorship. However, OPC is a legal fiction. As the formation of a private company requires at least two members, OPC requires only one person and one other person is nominated.

  • Chapter 7

    Chapter 5 - Meaning and Purpose of Memorandum of Association Price 0.11  |  0.11 Rewards Points

    Memorandum of Association of a company is a key document. It is essentially a Charter or Constitution of a company. It contains the fundamental conditions upon which alone the company can be incorporated. It defines as well as confines the powers of the company. It states what the company can do, what are its powers and at the same time sets out the limit outside which the company cannot function. As it is a public
    document, it is subject to public scrutiny by paying a small fee.

  • Chapter 8

    Chapter 6 - Articles of Association Price 0.11  |  0.11 Rewards Points

    Articles of Association is a very important document for functioning of a company. If Memorandum of Association is charter or constitution of a company, then Articles of Association of a company is its bye-laws or guidlines. It’s only on the basis of these guidelines that company performs its day-to-day obligations and asserts its rights. AoA contains the basic regulations for the management of the company, covering matters such as the issue and allotment of shares, the calls on shares, the rules relating to the transfer of shares, the procedures to be followed at general meetings and the regulations relating to members voting, the appointment, removal and powers of directors, the payment of dividends and the capitalisation of profits.

  • Chapter 9

    Chapter 7 - Prospectus and Allotment of Securities Price 0.11  |  0.11 Rewards Points

    Once the company is incorporated and after the receipt of certificate of incorporation, if the promoter of a public limited company wishes to issue shares to the public, he will issue a document called prospectus. In common parlance, prospectus refers to an information booklet or offers document on the basis of which an investor invests in the securities of an issuer company. It is a sacred document. This is the only window
    through which a prospective investor can peep into a company and come to know how the proceeds of issue will be utilised. Thus, the law emphasises that this document has to contain all the material facts which will assist an investor to judge whether s/he wants to subscribe to that issue or not.

  • Chapter 10

    Chapter 8 - Procedure for Registration of a Company under MCA-21 or Incorporation of Company Price 0.11  |  0.11 Rewards Points

    The companies that are incorporated in India can be either a Private Limited Company or a Public Limited Company. A company is incorporated by registering the same with the Registrar of Companies (RoC) having jurisdiction. Typically, each state in India has an RoC and one would approach the RoC of the State in which the registered office of the company is proposed to be located. RoC issues a certificate called the
    ‘Certificate of Incorporation’ containing the date and the registration/incorporation number of the company registered. Such a certificate is a conclusive evidence of the company having been validly formed and registered in India.

  • Chapter 11

    Chapter 9 - Share Capital of Company Price 0.11  |  0.11 Rewards Points

    Chapter IV (s. 43 to s.72) NCA 2013 deals with Share Capital and Debentures. The relevant rules are The Companies (Share and Debentures) Rules, 2014. The very nature of company requires that every company limited by shares must have a share capital. This leads us to question what is a Share Capital? Share Capital of a company in simplest term means the amount invested in the company for it to carry out its operations. This share capital can be altered. It can be increased or reduced subject to certain conditions. However, different types of shares with variable rights and obligations can be issued by a company, thus a company’s share capital may be divided into small shares of different classes.

  • Chapter 12

    Chapter 10 - Debentures Price 0.11  |  0.11 Rewards Points

    In Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India it was held that ‘Debenture’ as understood in the capital market is a debt security issued by a company called the issuer which offers to pay interest in lieu of the money borrowed for a certain period. In essence, it represents a loan taken by the issuer who pays an agreed rate of interest during the lifetime of the instrument and repays
    the principal normally, unless otherwise agreed, on maturity. Unlike other fixed income instruments such as fixed deposits, bank deposits etc., they can be transferred from one party to another

  • Chapter 13

    Chapter 11 - Acceptance of Deposits Price 0.11  |  0.11 Rewards Points

    Chapter V (S.73 to 76) read with the Companies (Acceptance of Deposits) Rules, 2014 deals with provisions related to deposits. Public and Private companies have to comply with these provisions. Deposits are important and interesting way of raising capital. It is preferred mode by companies as they do not loose grip over management of companies which otherwise they would loose if they raise money through venture capital or loans. The amounts to be raised through deposits is limited to 25% of the aggregate of the paid-up capital and free reserves. It is an attractive preposition for public also as company deposits give them opportunity to earn 2 – 5% more than fixed deposits with banks.

  • Chapter 14

    Chapter 12 - Securing of Debts Charges Creation Modification and Satisfaction of Charges Price 0.11  |  0.11 Rewards Points

    Companies require capital for their function; more often than not this capital is secured by borrowing from banks or Financial Institutions. These lenders offer capital as loan which is secured by some sort of surety given by company. The usual method for companies is to put charges upon its assets and secure loans. This brings us to what is charge? A charge is a security given for securing loans or debentures by way of mortgage on the assets of the company. Charge is broad category and includes every mode of creating the security on the assets of the company. It was held in the case of Dublin City Distillery Co. v Deherty, 1914 AC823 that charge includes, mortgage, lien, and an equitable charge whether created by an instrument in writing or by way of deposit of title deeds.

  • Chapter 15

    Chapter 13 - Meetings Corporate Decision-Making Price 0.11  |  0.11 Rewards Points

    Company, as you know, is an artificial legal person having separate and distinct identity with perpetual succession and common seal. This artificial legal person needs to take decision as to how to run and control the company and consequently how to utilise company’s resources.

  • Chapter 16

    Chapter 14 - Dividend Price 0.11  |  0.11 Rewards Points

    Chapter VIII(S.123 to 128) of NCA 2013 deals with dividend. s. 2(35) defines dividend to include any interim dividend. In common parlance, “dividend” means the profit of a company, which is passed on to shareholders instead of being ploughed back into the business. Dividend is a sort of reward for shareholder. In case of s.8 companies, their is prohibition on distributing the dividends. These companies have to apply
    the profits in promoting the objects of the company. This was held in the case of Esso Petroleum Ltd. v. Ministry of Defence [1990] Ch 163 that, “In ordinary language today among people having some understanding of business a “dividend” refers to a payment-out of a part of the profits for a period in respect of a share in a company.”

  • Chapter 17

    Chapter 15 - Accounts of Companies Price 0.11  |  0.11 Rewards Points

    Chapter IX of NCA 2013 deals with accounts of companies. NCA 2013 has brought fundamental changes in how to keep and maintain the accounts of companies. It has aligned financial year with tax laws and for the first time defined the term ‘financial statement’.

  • Chapter 18

    Chapter 16 - Audit and Auditors Price 0.11  |  0.11 Rewards Points

    According to R.A. Irish in his book “Practical Auditing”, “An audit may be said to be a skilled examination of such books, accounts and vouchers as will enable the Auditor to verify the Balance Sheet. The main objectives of any audit are (a) To certify to the correctness of the financial position as shown in the Balance Sheet, and the accompanying revenue statements.
     

  • Chapter 19

    Chapter 17 - Appointment And Qualifications of Directors Price 0.11  |  0.11 Rewards Points

    Company is an artificial legal person but it is not a living person. It needs natural persona to fulfil its objects prescribed under MoA. It achieves its objects through Board of Directors (collectively) or through Directors (when acting individually). NCA 2013 has made several significant changes in the governance of company.

  • Chapter 20

    Chapter 18 - Appointment and Remuneration of Key Managerial Personnel Price 0.11  |  0.11 Rewards Points

    Chapter XIII of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 deal with the legal and procedural aspects of appointment of Key Managerial Personnel (KMP).

  • Chapter 21

    Chapter 19 - Inspection Inquiry and Investigation Price 0.11  |  0.11 Rewards Points

    Chapter XIV contains Sections 206 to 229 of the Companies Act 2013, that deals with the provisions relating to Inspection, Inquiry and Investigation of the affairs of company. The relevant rules are Companies (Inspection, Inquiry and Investigation) Rules 2014. These are important provisions to empower the shareholders.

  • Chapter 22

    Chapter 20 - Registers Returns and Minutes Price 0.11  |  0.11 Rewards Points

    S. 88 of the NCA 2013 mandates that every company to maintain following registers –
    (a) register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India.
     

  • Chapter 23

    Chapter 21 - Compromise Arrangement and Mergers Price 0.11  |  0.11 Rewards Points

    Chapter XV (Section 230 to 240) of NCA 2013 (the Act) deals with the provisions of ‘Compromises, Arrangements and Amalga-mations’. It covers mergers-de-mergers, fast track mergers, cross border mergers, amalga-mations, compromise or arrangements.

  • Chapter 24

    Chapter 22 - Prevention of Oppression and Mismanagement Price 0.11  |  0.11 Rewards Points

    The hallmark of democracy is the functionality of company. That is to say law of majority applies. However, there are certain situations which demand that the rights of minority are protected. This is called prevention of oppression of minority shareholders. Further, in cases of mismanagement of affairs of the company have to be prevented for larger interest of company and its shareholders. Chapter XVI (s. 241 to 246) of NCA 2013 deals with Prevention of Oppression and Mismanagement. The whole concept of prevention of oppression and mismanagement is based upon the law settled
    in the case of Foss v/s Harbottle (1843)67 ER 189.

  • Chapter 25

    Chapter 23 - Class Action Suits s245 Price 0.11  |  0.11 Rewards Points

    One of the highlights of the Companies Act 2013 is introduction of “Class Action Suits”. Class action as the name suggests is action brought by class/group people aggrieved by common issue or person. In Class Action Suit, they sue the aggravator through a common suit instead of suing individually. S. 245 of the NCA 2013 deals with this concept of Class Action. This section comes under ‘Chapter XVI – Prevention of Oppression and Mismanagement’. However, it is to be noted that class actions are not the same as petitions against oppression/ mismanagement.

  • Chapter 26

    Chapter 24 - Revival and Rehabilitation of Sick Companies Price 0.11  |  0.11 Rewards Points

    NCA 2013 has brought key changes in the simplification of the procedure for rehabilitation and winding up of sick companies. For the first time an initiative has been taken for creditors and lenders of the company to have their opinion accounted for in the revival and rehabilitation process. In CA 1956, creditors and lenders were left out in lurch and all proceedings were marred by procedural delays. Apart from Scheduled banks and public financial institutions creditors were virtually voiceless. Under NCA 2013, Chapter XIX (Section 253-269) and the rules made there under provides for time-bound rehabilitation or liquidation process. Winding up is resorted only when the revival is not feasible.

  • Chapter 27

    Chapter 1 - Key Highlights of Companies Act 2013 Price 0.11  |  0.11 Rewards Points

    Highlights of the Companies Act 2013 ? NCA 2013 has 470 sections and seven schedules and is divided into 29 chapters. This legislation is more based on rules made under the Act. ? NCA 2013 introduces new concepts like- One Person Company, Class Action Suits, Mandatory Corporate Social Responsibility.
     

  • Chapter 28

    Index

    This document contains index.

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