Bloomsbury’s Companies Act, 2013 ¬– As amended by the Companies (Amendment) Act, 2017

TABLE OF CONTENTS THE COMPANIES ACT, 2013

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CHAPTER I PRELIMINARY

Short title, extent, commencement and application . . . . . . . . . . . . . . . . . 1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

CHAPTER II INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO

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Formation of company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 3A. Members severally liable in certain cases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4. Memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 5.

Articles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 6.

Act to override memorandum, articles, etc.. . . . . . . . . . . . . . . . . . . . . . . 26 7.

Incorporation of company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 8.

Formation of companies with charitable objects, etc.. . . . . . . . . . . . . . . 30 9.

Effect of registration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 10.

Effect of memorandum and articles.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 11.

Commencement of business, etc. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . 33 12.

Registered office of company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 13.

Alteration of memorandum.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.

Alteration of articles.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.

Alteration of memorandum or articles to be noted in every copy.. . . . 40 16.

Rectification of name of company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 17.

Copies of memorandum, articles, etc., to be given to members.. . . . . . 41 18.

Conversion of companies already registered.. . . . . . . . . . . . . . . . . . . . . 42 19.

Subsidiary company not to hold shares in its holding company.. . . . . 42 20.

Service of documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 21.

Authentication of documents, proceedings and contracts. . . . . . . . . . . 44 22.

Execution of bills of exchange, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

CHAPTER III PROSPECTUS AND ALLOTMENT OF SECURITIES PART I.—Public offer 23.

Public offer and private placement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 24.

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and transfer of securities, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Document containing offer of securities for sale to be deemed prospectus.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Matters to be stated in prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Variation in terms of contract or objects in prospectus . . . . . . . . . . . . . 52 Offer of sale of shares by certain members of company.. . . . . . . . . . . . 52 Public offer of securities to be in dematerialised form. . . . . . . . . . . . . . 53 Advertisement of prospectus.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Shelf prospectus.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Red herring prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Issue of application forms for securities. . . . . . . . . . . . . . . . . . . . . . . . . . 55 Criminal liability for mis-statements in prospectus.. . . . . . . . . . . . . . . . 55 Civil liability for mis-statements in prospectus. . . . . . . . . . . . . . . . . . . . 56 Punishment for fraudulently inducing persons to invest money. . . . . 57 Action by affected persons.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Punishment for personation for acquisition, etc., of securities.. . . . . . . 58 Allotment of securities by company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Securities to be dealt with in stock exchanges. . . . . . . . . . . . . . . . . . . . . 59 Global depository receipt.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

PART II.—Private placement 42.

Issue of shares on private placement basis.. . . . . . . . . . . . . . . . . . . . . . . 60

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CHAPTER IV SHARE CAPITAL AND DEBENTURES

Kinds of share capital.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Nature of shares or debentures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Numbering of shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Certificate of shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Voting rights.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Variation of shareholders’ rights.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Calls on shares of same class to be made on uniform basis. . . . . . . . . . 69 Company to accept unpaid share capital, although not called up.. . . . 70 Payment of dividend in proportion to amount paid-up.. . . . . . . . . . . . 70 Application of premiums received on issue of shares.. . . . . . . . . . . . . . 70 Prohibition on issue of shares at discount.. . . . . . . . . . . . . . . . . . . . . . . . 71 Issue of sweat equity shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Issue and redemption of preference shares.. . . . . . . . . . . . . . . . . . . . . . . 72 Transfer and transmission of securities.. . . . . . . . . . . . . . . . . . . . . . . . . . 74 Punishment for personation of shareholder.. . . . . . . . . . . . . . . . . . . . . . 77 Refusal of registration and appeal against refusal.. . . . . . . . . . . . . . . . . 77

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Rectification of register of members.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Publication of authorised, subscribed and paid-up capital. . . . . . . . . . 79 Power of limited company to alter its share capital.. . . . . . . . . . . . . . . . 79 Further issue of share capital.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Issue of bonus shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Notice to be given to Registrar for alteration of share capital. . . . . . . . 84 Unlimited company to provide for reserve share capital on conversion into limited company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Reduction of share capital.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Restrictions on purchase by company or giving of loans by it for purchase of its shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Power of company to purchase its own securities.. . . . . . . . . . . . . . . . . 89 Transfer of certain sums to capital redemption reserve account.. . . . . 93 Prohibition for buy-back in certain circumstances.. . . . . . . . . . . . . . . . . 93 Debentures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Power to nominate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

CHAPTER V ACCEPTANCE OF DEPOSITS BY COMPANIES

Prohibition on acceptance of deposits from public. . . . . . . . . . . . . . . . . 97 Repayment of deposits, etc., accepted before commencement of this Act.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Damages for fraud.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Acceptance of deposits from public by certain companies.. . . . . . . . . 101 Punishment for contravention of section 73 or section 76.. . . . . . . . . . 101

CHAPTER VI REGISTRATION OF CHARGES

Duty to register charges, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Application for registration of charge. . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Section 77 to apply in certain matters.. . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Date of notice of charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Register of charges to be kept by Registrar.. . . . . . . . . . . . . . . . . . . . . . 105 Company to report satisfaction of charge.. . . . . . . . . . . . . . . . . . . . . . . 105 Power of Registrar to make entries of satisfaction and release in absence of intimation from company.. . . . . . . . . . . . . . . . . . . . . . . . . 107 Intimation of appointment of receiver or manager.. . . . . . . . . . . . . . . 107 Company’s register of charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Punishment for contravention.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Rectification by Central Government in register of charges.. . . . . . . . 108 vii

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CHAPTER VII MANAGEMENT AND ADMINISTRATION

Register of members, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Declaration in respect of beneficial interest in any share. . . . . . . . . . . 111 Register of significant beneficial owners in a company.. . . . . . . . . . . . 113 Power to close register of members or debenture holders or other security holders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Annual return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Return to be filed with Registrar in case promoters’ stake changes. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Place of keeping and inspection of registers, returns, etc.. . . . . . . . . . 118 Registers, etc., to be evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Annual general meeting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Power of Tribunal to call annual general meeting.. . . . . . . . . . . . . . . . 121 Power of Tribunal to call meetings of members, etc. . . . . . . . . . . . . . . 121 Punishment for default in complying with provisions of sections 96 to 98.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Calling of extraordinary general meeting.. . . . . . . . . . . . . . . . . . . . . . . 122 Notice of meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Statement to be annexed to notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Quorum for meetings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Chairman of meetings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Proxies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Restriction on voting rights.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Voting by show of hands.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Voting through electronic means.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Demand for poll.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Postal ballot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Circulation of members’ resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Representation of President and Governors in meetings.. . . . . . . . . . 134 Representation of corporations at meeting of companies and of creditors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Ordinary and special resolutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Resolutions requiring special notice.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Resolutions passed at adjourned meeting.. . . . . . . . . . . . . . . . . . . . . . . 136 Resolutions and agreements to be filed.. . . . . . . . . . . . . . . . . . . . . . . . . 137 Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Inspection of minute-books of general meeting.. . . . . . . . . . . . . . . . . . 142 Maintenance and inspection of documents in electronic form.. . . . . . 142

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Report on annual general meeting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Applicability of this Chapter to One Person Company.. . . . . . . . . . . . 143

CHAPTER VIII DECLARATION AND PAYMENT OF DIVIDEND

Declaration of dividend.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Unpaid Dividend Account.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Investor Education and Protection Fund.. . . . . . . . . . . . . . . . . . . . . . . . 149 Right to dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares.. . . . . . . . . . . . 152 Punishment for failure to distribute dividends. . . . . . . . . . . . . . . . . . . 152

CHAPTER IX ACCOUNTS OF COMPANIES

Books of account, etc., to be kept by company.. . . . . . . . . . . . . . . . . . . 154 Financial statement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Re-opening of accounts on court’s or Tribunal’s orders.. . . . . . . . . . . 158 Voluntary revision of financial statements or Board’s report.. . . . . . . 159 Constitution of National Financial Reporting Authority. . . . . . . . . . . 160 Central Government to prescribe accounting standards.. . . . . . . . . . . 163 Financial statement, Board’s report, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 164 Corporate Social Responsibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Right of member to copies of audited financial statement.. . . . . . . . . 170 Copy of financial statement to be filed with Registrar. . . . . . . . . . . . . 172 Internal audit.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

CHAPTER X AUDIT AND AUDITORS

Appointment of auditors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Removal, resignation of auditor and giving of special notice. . . . . . . 180 Eligibility, qualifications and disqualifications of auditors. . . . . . . . . 183 Remuneration of auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Powers and duties of auditors and auditing standards. . . . . . . . . . . . 185 Auditor not to render certain services.. . . . . . . . . . . . . . . . . . . . . . . . . . 191 Auditor to sign audit reports, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Auditors to attend general meeting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Punishment for contravention.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Central Government to specify audit of items of cost in respect of certain companies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

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CHAPTER XI APPOINTMENT AND QUALIFICATIONS OF DIRECTORS

Company to have Board of Directors.. . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Manner of selection of independent directors and maintenance of databank of independent directors.. . . . . . . . . . . . . . . 201 Appointment of director elected by small shareholders.. . . . . . . . . . . 202 Appointment of directors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Application for allotment of Director Identification Number. . . . . . . 205 Allotment of Director Identification Number.. . . . . . . . . . . . . . . . . . . . 206 Prohibition to obtain more than one Director Identification Number.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Director to intimate Director Identification Number.. . . . . . . . . . . . . . 206 Company to inform Director Identification Number to Registrar.. . . 206 Obligation to indicate Director Identification Number.. . . . . . . . . . . . 207 Punishment for contravention.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Right of persons other than retiring directors to stand for directorship . . 207 Appointment of additional director, alternate director and nominee director.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Appointment of directors to be voted individually.. . . . . . . . . . . . . . . 211 Option to adopt principle of proportional representation for appointment of directors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Disqualifications for appointment of director.. . . . . . . . . . . . . . . . . . . . 212 Number of directorships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Duties of directors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Vacation of office of director.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Resignation of director.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Removal of directors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Register of directors and key managerial personnel and their shareholding.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Members’ right to inspect.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Punishment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221

CHAPTER XII MEETINGS OF BOARD AND ITS POWERS

Meetings of Board.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Quorum for meetings of Board.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Passing of resolution by circulation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Defects in appointment of directors not to invalidate actions taken.. . . . 226 Audit Committee.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Nomination and Remuneration Committee and Stakeholders Relationship Committee.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

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Powers of Board.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Restrictions on powers of Board.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Company to contribute to bona fide and charitable funds, etc. . . . . . 235 Prohibitions and restrictions regarding political contributions.. . . . . 235 Power of Board and other persons to make contributions to national defence fund, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 Disclosure of interest by director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 Loans to directors, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 Loan and investment by company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Investments of company to be held in its own name.. . . . . . . . . . . . . . 248 Related party transactions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Register of contracts or arrangements in which directors are interested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Contract of employment with managing or whole-time directors. . . 254 Payment to director for loss of office, etc., in connection with transfer of undertaking, property or shares. . . . . . . . . . . . . . . . . . . . . . 254 Restriction on non-cash transactions involving directors.. . . . . . . . . . 256 Contract by One Person Company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Prohibition on forward dealings in securities of company by director or key managerial personnel. [Omitted] . . . . . . . . . . . . . . . . . 257 Prohibition on insider trading of securities. [Omitted, see footnote 1 on sec 194 above]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

CHAPTER XIII APPOINTMENT AND REMUNERATION OF MANAGERIALÂ PERSONNEL

Appointment of managing director, whole-time director or manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. . . . . . . . . . 261 Calculation of profits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Recovery of remuneration in certain cases. . . . . . . . . . . . . . . . . . . . . . . 267 Central Government or company to fix limit with regard to remuneration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 Forms of, and procedure in relation to, certain applications. . . . . . . . 268 Compensation for loss of office of managing or whole-time director or manager.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Appointment of key managerial personnel.. . . . . . . . . . . . . . . . . . . . . . 270 Secretarial audit for bigger companies.. . . . . . . . . . . . . . . . . . . . . . . . . . 272 Functions of company secretary.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273

xi

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206.

207.

208.

209.

210.

211.

212.

213.

214.

215.

216.

217.

218.

219.

220.

221.

222.

223.

224.

225.

226.

227.

228.

229.

CHAPTER XIV INSPECTION, INQUIRY AND INVESTIGATION

Power to call for information, inspect books and conduct inquiries. . . . 274 Conduct of inspection and inquiry.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 Report on inspection made. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 Search and seizure.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Investigation into affairs of company.. . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Establishment of Serious Fraud Investigation Office.. . . . . . . . . . . . . . 278 Investigation into affairs of Company by Serious Fraud Investigation Office.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Investigation into company’s affairs in other cases.. . . . . . . . . . . . . . . 282 Security for payment of costs and expenses of investigation.. . . . . . . 284 Firm, body corporate or association not to be appointed as inspector.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284 Investigation of ownership of company. . . . . . . . . . . . . . . . . . . . . . . . . 284 Procedure, powers, etc., of inspectors. . . . . . . . . . . . . . . . . . . . . . . . . . . 285 Protection of employees during investigation. . . . . . . . . . . . . . . . . . . . 288 Power of inspector to conduct investigation into affairs of related companies, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 Seizure of documents by inspector.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 Freezing of assets of company on inquiry and investigation.. . . . . . . 291 Imposition of restrictions upon securities.. . . . . . . . . . . . . . . . . . . . . . . 292 Inspector’s report.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 Actions to be taken in pursuance of inspector’s report.. . . . . . . . . . . . 293 Expenses of investigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Voluntary winding up of company, etc., not to stop investigation proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Legal advisers and bankers not to disclose certain information. . . . . 296 Investigation, etc., of foreign companies.. . . . . . . . . . . . . . . . . . . . . . . . 296 Penalty for furnishing false statement, mutilation, destruction of documents.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296

CHAPTER XV COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS

230.

231.

232.

233.

234.

235. xii

Power to compromise or make arrangements with creditors and members.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 Power of Tribunal to enforce compromise or arrangement.. . . . . . . . 302 Merger and amalgamation of companies. . . . . . . . . . . . . . . . . . . . . . . . 303 Merger or amalgamation of certain companies. . . . . . . . . . . . . . . . . . . 307 Merger or amalgamation of company with foreign company.. . . . . . 310 Power to acquire shares of shareholders dissenting from

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237.

238.

239.

240.

scheme or contract approved by majority.. . . . . . . . . . . . . . . . . . . . . . . 310 Purchase of minority shareholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 Power of Central Government to provide for amalgamation of companies in public interest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Registration of offer of schemes involving transfer of shares.. . . . . . . 315 Preservation of books and papers of amalgamated companies.. . . . . 316 Liability of officers in respect of offences committed prior to merger, amalgamation, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317

CHAPTER XVI PREVENTION OF OPPRESSION AND MISMANAGEMENT

241.

242.

243.

244.

245.

246.

247.

Application to Tribunal for relief in cases of oppression, etc.. . . . . . . 318 Powers of Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Consequence of termination or modification of certain agreements.. . . 321 Right to apply under section 241.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Class action.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Application of certain provisions to proceedings under section 241 or section 245.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326

CHAPTER XVII REGISTERED VALUERS

Valuation by registered valuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

CHAPTER XVIII REMOVAL OF NAMES OF COMPANIES FROM THE REGISTER OF COMPANIES

248.

249.

250.

251.

252.

253.

254.

255.

Power of Registrar to remove name of company from register of companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Restrictions on making application under section 248 in certain situations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 Effect of company notified as dissolved. . . . . . . . . . . . . . . . . . . . . . . . . 331 Fraudulent application for removal of name. . . . . . . . . . . . . . . . . . . . . 332 Appeal to Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332

CHAPTER XIX REVIVAL AND REHABILITATION OF SICK COMPANIES [OMITTED]

Determination of sickness. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Application for revival and rehabilitation. [Omitted] . . . . . . . . . . . . . 334 Exclusion of certain time in computing period of limitation. [Omitted]. . 334 xiii

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256.

257.

258.

259.

260.

261.

262.

263.

264.

265.

266.

267.

268.

269.

270.

Appointment of interim administrator. [Omitted]. . . . . . . . . . . . . . . . 334 Committee of creditors. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Order of Tribunal. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Appointment of administrator. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . 334 Powers and duties of company administrator. [Omitted]. . . . . . . . . . 334 Scheme of revival and rehabilitation. [Omitted]. . . . . . . . . . . . . . . . . . 334 Sanction of scheme. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Scheme to be binding. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Implementation of scheme. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Winding up of company on report of company administrator. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Power of Tribunal to assess damages against delinquent directors, etc. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Punishment for certain offences. [Omitted]. . . . . . . . . . . . . . . . . . . . . . 334 Bar of jurisdiction. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 Rehabilitation and Insolvency Fund. [Omitted] . . . . . . . . . . . . . . . . . . 334

CHAPTER XX WINDING UP

Winding up by Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344

PART I.—Winding up by the Tribunal 271. Circumstances in which company may be wound up by Tribunal.. . 344 272. Petition for winding up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 273. Powers of Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 274. Directions for filing statement of affairs. . . . . . . . . . . . . . . . . . . . . . . . . 349 275. Company Liquidators and their appointments. . . . . . . . . . . . . . . . . . . 349 276. Removal and replacement of liquidator. . . . . . . . . . . . . . . . . . . . . . . . . 351 277. Intimation to Company Liquidator, provisional liquidator and Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 278. Effect of winding up order.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 279. Stay of suits, etc., on winding up order.. . . . . . . . . . . . . . . . . . . . . . . . . 353 280. Jurisdiction of Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 281. Submission of report by Company Liquidator.. . . . . . . . . . . . . . . . . . . 354 282. Directions of Tribunal on report of Company Liquidator. . . . . . . . . . 355 283. Custody of company’s properties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 284. Promoters, directors, etc., to cooperate with Company Liquidator.. . 357 285. Settlement of list of contributories and application of assets.. . . . . . . 357 286. Obligations of directors and managers. . . . . . . . . . . . . . . . . . . . . . . . . . 358 287. Advisory committee.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 288. Submission of periodical reports to Tribunal.. . . . . . . . . . . . . . . . . . . . 359 xiv

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290.

291.

292.

293.

294.

295.

296.

297.

298.

299.

300.

301.

302.

303.

Power of Tribunal on application for stay of winding up.

[Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 Powers and duties of Company Liquidator. . . . . . . . . . . . . . . . . . . . . . 360 Provision for professional assistance to Company Liquidator.. . . . . . 362 Exercise and control of Company Liquidator’s powers. . . . . . . . . . . . 362 Books to be kept by Company Liquidator.. . . . . . . . . . . . . . . . . . . . . . . 363 Audit of Company Liquidator’s accounts.. . . . . . . . . . . . . . . . . . . . . . . 363 Payment of debts by contributory and extent of set-off. . . . . . . . . . . . 364 Power of Tribunal to make calls.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 Adjustment of rights of contributories.. . . . . . . . . . . . . . . . . . . . . . . . . . 365 Power to order costs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 Power to summon persons suspected of having property of company, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 Power to order examination of promoters, directors, etc.. . . . . . . . . . 367 Arrest of person trying to leave India or abscond.. . . . . . . . . . . . . . . . 368 Dissolution of company by Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . 368 Appeals from orders made before commencement of Act.. . . . . . . . . 369

PART II.—Voluntary winding up [Omitted] 304. Circumstances in which company may be wound up voluntarily. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 305. Declaration of solvency in case of proposal to wind up voluntarily. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 306. Meeting of creditors. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 307. Publication of resolution to wind up voluntarily. [Omitted]. . . . . . . . 369 308. Commencement of voluntary winding up. [Omitted]. . . . . . . . . . . . . 369 309. Effect of voluntary winding up. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . 369 310. Appointment of Company Liquidator. [Omitted]. . . . . . . . . . . . . . . . . 369 311. Power to remove and fill vacancy of Company Liquidator.

[Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 312. Notice of appointment of Company Liquidator to be given to Registrar. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 313. Cesser of Board’s powers on appointment of Company Liquidator. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 314. Powers and duties of Company Liquidator in voluntary winding up. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 315. Appointment of committees. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . 370 316. Company Liquidator to submit report on progress of winding up. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 317. Report of Company Liquidator to Tribunal for examination of persons. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 318. Final meeting and dissolution of company. [Omitted]. . . . . . . . . . . . . 370 xv

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319.

320.

321.

322.

323.

Power of Company Liquidator to accept shares, etc., as consideration for sale of property of company. [Omitted] . . . . . . . . . 370 Distribution of property of company. [Omitted]. . . . . . . . . . . . . . . . . . 370 Arrangement when binding on company and creditors. [Omitted]. . . . 370 Power to apply to Tribunal to have questions determined, etc. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Costs of voluntary winding up. [Omitted]. . . . . . . . . . . . . . . . . . . . . . . 370

PART III.—Provisions applicable to every mode of winding up 324. Debts of all descriptions to be admitted to proof.. . . . . . . . . . . . . . . . . 377 325. Application of insolvency rules in winding up of insolvent companies. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 326. Overriding preferential payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 327. Preferential payments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 328. Fraudulent preference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 329. Transfers not in good faith to be void. . . . . . . . . . . . . . . . . . . . . . . . . . . 385 330. Certain transfers to be void.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 331. Liabilities and rights of certain persons fraudulently preferred. . . . . 385 332. Effect of floating charge.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 333. Disclaimer of onerous property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 334. Transfers, etc., after commencement of winding up to be void.. . . . . 389 335. Certain attachments, executions, etc., in winding up by Tribunal to be void. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 336. Offences by officers of companies in liquidation.. . . . . . . . . . . . . . . . . 389 337. Penalty for frauds by officers.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392 338. Liability where proper accounts not kept.. . . . . . . . . . . . . . . . . . . . . . . 392 339. Liability for fraudulent conduct of business.. . . . . . . . . . . . . . . . . . . . . 393 340. Power of Tribunal to assess damages against delinquent directors, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394 341. Liability under sections 339 and 340 to extend to partners or directors in firms or companies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 342. Prosecution of delinquent officers and members of company.. . . . . . 395 343. Company Liquidator to exercise certain powers subject to sanction.. . . 397 344. Statement that company is in liquidation.. . . . . . . . . . . . . . . . . . . . . . . 398 345. Books and papers of company to be evidence. . . . . . . . . . . . . . . . . . . . 398 346. Inspection of books and papers by creditors and contributories.. . . . 399 347. Disposal of books and papers of company.. . . . . . . . . . . . . . . . . . . . . . 399 348. Information as to pending liquidations.. . . . . . . . . . . . . . . . . . . . . . . . . 400 349. Official Liquidator to make payments into public account of India.. 401 350. Company Liquidator to deposit monies into scheduled bank.. . . . . . 402 351. Liquidator not to deposit monies into private banking account.. . . . 402 352. Company Liquidation Dividend and Undistributed Assets Account.. . 402 xvi

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353.

354.

355.

356.

357.

358.

Liquidator to make returns, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 Meetings to ascertain wishes of creditors or contributories.. . . . . . . . 405 Court, tribunal or person, etc., before whom affidavit may be sworn.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 Powers of Tribunal to declare dissolution of company void.. . . . . . . 406 Commencement of winding up by Tribunal.. . . . . . . . . . . . . . . . . . . . . 406 Exclusion of certain time in computing period of limitation.. . . . . . . 406

PART IV.—Official Liquidators 359. Appointment of Official Liquidator.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 360. Powers and functions of Official Liquidator.. . . . . . . . . . . . . . . . . . . . . 407 361. Summary procedure for liquidation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 362. Sale of assets and recovery of debts due to company.. . . . . . . . . . . . . 408 363. Settlement of claims of creditors by Official Liquidator.. . . . . . . . . . . 409 364. Appeal by creditor.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 365. Order of dissolution of company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409

CHAPTER XXI COMPANIES AUTHORISED TO REGISTER UNDER THIS ACT Part I.— Companies Authorised to Register under this Act 366. Companies capable of being registered.. . . . . . . . . . . . . . . . . . . . . . . . . 410 367. Certificate of registration of existing companies. . . . . . . . . . . . . . . . . . 411 368. Vesting of property on registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 369. Saving of existing liabilities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 370. Continuation of pending legal proceedings. . . . . . . . . . . . . . . . . . . . . . 412 371. Effect of registration under this Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 372. Power of Court to stay or restrain proceedings. . . . . . . . . . . . . . . . . . . 414 373. Suits stayed on winding up order.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 374. Obligations of companies registering under this Part.. . . . . . . . . . . . . 415 PART II.—Winding up of unregistered companies 375. Winding up of unregistered companies. . . . . . . . . . . . . . . . . . . . . . . . . 415 376. Power to wind up foreign companies, although dissolved. . . . . . . . . 417 377. Provisions of Chapter cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 378. Saving and construction of enactments conferring power to wind up partnership firm, association or company, etc., in certain cases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418

379.

380.

CHAPTER XXII COMPANIES INCORPORATED OUTSIDE INDIA

Application of Act to foreign companies.. . . . . . . . . . . . . . . . . . . . . . . . 419 Documents, etc., to be delivered to Registrar by foreign companies.. 419 xvii

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381.

382.

383.

384.

Accounts of foreign company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Display of name, etc., of foreign company. . . . . . . . . . . . . . . . . . . . . . . 421 Service on foreign company.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 Debentures, annual return, registration of charges, books of account and their inspection.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 385. Fee for registration of documents.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 386. Interpretation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 387. Dating of prospectus and particulars to be contained therein.. . . . . . 424 388. Provisions as to expert’s consent and allotment.. . . . . . . . . . . . . . . . . . 425 389. Registration of prospectus.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 390. Offer of Indian Depository Receipts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 391. Application of sections 34 to 36 and Chapter XX.. . . . . . . . . . . . . . . . . 426 392. Punishment for contravention.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 393. Company’s failure to comply with provisions of this Chapter not to affect validity of contracts, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 427

394.

395.

396.

397.

398.

399.

400.

401.

402.

403.

404.

CHAPTER XXIII GOVERNMENT COMPANIES

Annual reports on Government companies. . . . . . . . . . . . . . . . . . . . . . 428 Annual reports where one or more State Governments are members of companies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428

CHAPTER XXIV REGISTRATION OFFICES AND FEES

Registration offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 Admissibility of certain documents as evidence. . . . . . . . . . . . . . . . . . 430 Provisions relating to filing of applications, documents, inspection, etc., in electronic form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431 Inspection, production and evidence of documents kept by Registrar. . 432 Electronic form to be exclusive, alternative or in addition to physical form.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Provision of value added services through electronic form.. . . . . . . . 433 Application of provisions of Information Technology Act, 2000.. . . . 433 Fee for filing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 Fees, etc., to be credited into public account.. . . . . . . . . . . . . . . . . . . . . 435

CHAPTER XXV COMPANIES TO FURNISH INFORMATION OR STATISTICS

405.

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Power of Central Government to direct companies to furnish information or statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436

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406.

CHAPTER XXVI NIDHIS

Provision relating to Nidhis and its application, etc.. . . . . . . . . . . . . . 437

CHAPTER XXVII NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL

407.

408.

409.

410.

411.

412.

413.

414.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 Constitution of National Company Law Tribunal.. . . . . . . . . . . . . . . . 439 Qualification of President and Members of Tribunal. . . . . . . . . . . . . . 439 Constitution of Appellate Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 Qualifications of chairperson and Members of Appellate Tribunal. . 441 Selection of Members of Tribunal and Appellate Tribunal.. . . . . . . . . 442 Term of office of President, chairperson and other Members. . . . . . . 442 Salary, allowances and other terms and conditions of service of Members.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 415. Acting President and Chairperson of Tribunal or Appellate Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 416. Resignation of Members.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 417. Removal of Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 417A. Qualifications, terms and conditions of service of Chairperson and Member. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 418. Staff of Tribunal and Appellate Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . 446 419. Benches of Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446 420. Orders of Tribunal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 421. Appeal from orders of Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 422. Expeditious disposal by Tribunal and Appellate Tribunal.. . . . . . . . . 448 423. Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 424. Procedure before Tribunal and Appellate Tribunal.. . . . . . . . . . . . . . . 449 425. Power to punish for contempt.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 426. Delegation of powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 427. President, Members, officers, etc., to be public servants.. . . . . . . . . . . 451 428. Protection of action taken in good faith.. . . . . . . . . . . . . . . . . . . . . . . . . 451 429. Power to seek assistance of Chief Metropolitan Magistrate, etc. . . . . 451 430. Civil court not to have jurisdiction.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 431. Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 432. Right to legal representation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 433. Limitation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453 434. Transfer of certain pending proceedings.. . . . . . . . . . . . . . . . . . . . . . . . 453

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435.

436.

437.

438.

439.

440.

441.

442.

443.

444.

445.

446.

446A. 446B.

447.

448.

449.

450.

451.

452.

453.

454.

455.

456.

457.

458.

459.

460.

461.

462.

463.

464.

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CHAPTER XXVIII SPECIAL COURTS

Establishment of Special Courts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 Offences triable by Special Courts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 Appeal and revision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 Application of Code to proceedings before Special Court.. . . . . . . . . 458 Offences to be non-cognizable.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 Transitional provisions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 Compounding of certain offences.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 Mediation and Conciliation Panel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 Power of Central Government to appoint company prosecutors. . . . 463 Appeal against acquittal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 Compensation for accusation without reasonable cause. . . . . . . . . . . 463 Application of fines.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 Factors for determining level of punishment.. . . . . . . . . . . . . . . . . . . . 464 Lesser penalties for One Person Companies or small companies.. . . 464

CHAPTER XXIX MISCELLANEOUS

Punishment for fraud.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 Punishment for false statement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Punishment for false evidence.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Punishment where no specific penalty or punishment is provided. . 466 Punishment in case of repeated default.. . . . . . . . . . . . . . . . . . . . . . . . . 467 Punishment for wrongful withholding of property.. . . . . . . . . . . . . . . 467 Punishment for improper use of “Limited” or “Private Limited”.. . . 467 Adjudication of penalties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 Dormant company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Protection of action taken in good faith.. . . . . . . . . . . . . . . . . . . . . . . . . 470 Non-disclosure of information in certain cases. . . . . . . . . . . . . . . . . . . 470 Delegation by Central Government of its powers and functions. . . . 470 Powers of Central Government or Tribunal to accord approval, etc., subject to conditions and to prescribe fees on applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Condonation of delay in certain cases.. . . . . . . . . . . . . . . . . . . . . . . . . . 472 Annual report by Central Government.. . . . . . . . . . . . . . . . . . . . . . . . . 472 Power to exempt class or classes of companies from provisions of this Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472 Power of court to grant relief in certain cases.. . . . . . . . . . . . . . . . . . . . 473 Prohibition of association or partnership of persons exceeding certain number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474

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465.

466.

467.

468.

469.

470.

Repeal of certain enactments and savings.. . . . . . . . . . . . . . . . . . . . . . . 474 Dissolution of Company Law Board and consequential provisions.. 477 Power of Central Government to amend Schedules. . . . . . . . . . . . . . . 478 Powers of Central Government to make rules relating to winding up.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479 Power of Central Government to make rules.. . . . . . . . . . . . . . . . . . . . 480 Power to remove difficulties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481

SCHEDULE I MEMORANDUM OF ASSOCIATION OF A COMPANY

Table – A Memorandum of association of a company limited by shares. . S-I.1 Table – B Memorandum of association of a company limited by guarantee and not having a share capital . . . . . . . . . . . . . . . . . . . S-I.2 Table – C Memorandum of association of a company limited by guarantee and having a share capital. . . . . . . . . . . . . . . . . . . . . . . S-I.4 Table – D Memorandum of association of an unlimited company and not having share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.6 Table – E Memorandum of association of an unlimited company and having share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.7 Table – F Articles of association of acompany limited by shares . . . . . . . . S-I.8 Table – G Articles of association of a company limited by guarantee and having a share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.30 Table – H Articles of association of a company limited by guarantee and not having share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.30 Table – I Articles of association of an unlimited company and having a share capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.36 Table – J Articles of association of an unlimited company and not having share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-I.36

SCHEDULE II USEFUL LIVES TO COMPUTE DEPRECIATION

Part ‘A’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-II.1 Part ‘B’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-II.4 Part ‘C’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-II.4

SCHEDULE III FINANCIAL STATEMENTS FOR COMPANIES Division I Financial Statements for a company whose Financial Statements are required to comply with the Companies (Accounting Standards) Rules, 2006. . . . . . . . . . . . . . . . . . . . . . S-III.1

General Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-III.1 Part I — Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-III.2 xxi

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Part II – Statement of Profit and Loss . . . . . . . . . . . . . . . . . . S-III.17 General instructions for preparation of statement of profit and loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-III.19 General instructions for the preparation of consolidated financial statements . . . . . . . . . . . . . . . . . . . . . S-III.23 Division II Financial Statements for a company whose financial statements are drawn up in compliance of the Companies (Indian Accounting Standards) Rules, 2015.. . . S-III.25

Part I – Balance sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II - Statement of profit and loss . . . . . . . . . . . . . . . . . . .

General instructions for preparation of statement of profit and loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III - General instructions for the preparation of consolidated financial statements . . . . . . . . . . . . . . . . . . . . .

I. II. III. IV. V. VI. VII. VIII.

SCHEDULE IV CODE FOR INDEPENDENT DIRECTORS

S-III.27 S-III.42 S-III.44 S-III.46

Guidelines of professional conduct: . . . . . . . . . . . . . . . . . . . . . . . . . .

Role and functions:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duties :. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manner of appointment:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Re-appointment:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resignation or removal:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Separate meetings:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Evaluation mechanism:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S-IV.1 S-IV.1 S-IV.2 S-IV.3 S-IV.3 S-IV.3 S-IV.4 S-IV.4

SCHEDULE V CONDITIONS TO BE FULFILLED FOR THE APPOINTMENT OFA MANAGING OR WHOLE-TIME DIRECTOR OR A MANAGER WITHOUT THE APPROVAL OF THE CENTRAL GOVERNMENT Part I Appointments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-V.1 Part II Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-V.3 Part III Provisions applicable to parts i and ii of this schedule. . . . . . . . . . S-V.11 Part IV Power to Exempt any Class of Companies. . . . . . . . . . . . . . . . . . . . S-V.11

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SCHEDULE VI Projects included under “infrastructural projects” or “infrastructural facilities”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-VI.1

SCHEDULE VII Activities which may be included by companies in their Corporate Social Responsibility Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-VII.1

Annexure Part IXA of Companies Act, 1956: Producer Companies. . . . . . . . Annexure-1.1

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