© The Institute of Chartered Accountants of India

ii

This Study Material has been prepared by the faculty of the Board of Studies (Academic). The
objective of the Study Material is to provide teaching material to the students to enable them to
obtain knowledge in the subject. In case students need any clarification or have any suggestion for
further improvement of the material contained herein, they may write to the Director of Studies.
All care has been taken to provide interpretations and discussions in a manner useful for the
students. However, the Study Material has not been specifically discussed by the Council of the
Institute or any of its committees and the views expressed herein may not be taken to necessarily
represent the views of the Council or any of its Committees.
Permission of the Institute is essential for reproduction of any portion of this material.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or
transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without prior permission, in writing, from the publisher.

Basic draft of this publication was prepared by CA. Vandana D Nagpal

Edition : April, 2023

Committee/Department : Board of Studies (Academic)

E-mail : bosnoida@[Link]

Website : [Link]

Price : ` /- (For All Modules)

ISBN No. : 978-81-19472-08-6

Published by : The Publication & CDS Directorate on behalf of

The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi 110 002 (India)
Printed by :

© The Institute of Chartered Accountants of India

 BEFORE WE BEGIN…..

The contents of the study material for Self –Paced Online Module–Set A have been designed
and developed by the Board of Studies (Academic), ICAI with an objective to synchronize the
syllabus with the International Education Standards (IESs) of IFAC (International Federation
of Accountants) to instill and enhance the necessary pre-requisites for becoming a well-
rounded, competent and globally competitive Accounting Professional.
This study material also lays emphasis on National Education Policy 2020 (NEP 2020) initiatives
like conceptual clarity rather than rote learning and new pedagogical and curriculum restructuring
based on the use of technology while teaching.
The liberalization and globalization of our economic policies need to be compatible with the global
changes and converged to bring in various important Corporate and Economic Laws which are
necessary to regulate the Corporate Sector. The dynamic nature of the economy brings in
several reforms in the prevalent Corporate Laws on day to-day basis and are being amended on
regular basis.
The Statutory Authorities who are in charge with the administration of these laws, clarify various
issues through notification, clarifications and legislative amendments from time to time.
Requirement of Professional Knowledge and Skills
After Intermediate Level and before appearing in Final Level, you are expected to not only
acquire professional knowledge but also the ability to apply such knowledge in addressing issues
and solving practical problems. The integrated process of learning through academic education
and practical training with help you to inculcate the requisite technical competence, professional
skills and professional values, ethics and attitudes necessary for achieving the desired level of
professional competence.
Significant Components of Corporate and Economic Laws
Corporate and Economic Laws is divided into two parts, namely, Part I: Corporate Laws for 70
marks and Part II: Economic Laws for 30 marks.
Part I: Corporate Laws comprise of the law and procedures under the Companies Act, 2013 and
the Securities Laws covering significant provisions of the Securities Exchange Board of India Act,
1992 read with references of SEBI (Listing Obligations and Disclosure Requirement)
Regulations, 2015, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018,
SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, SEBI
(Prohibition of Insider Trading) Regulations, 2015.

© The Institute of Chartered Accountants of India

 ii a
v
a
v
v
Part II: Economic Laws comprise of significant provisions of select economic laws namely, the
v
Foreign Exchange Management Act, 1999, the Foreign Contribution Regulation Act, 2010, and
the Insolvency and Bankruptcy Code, 2016.

In line with NEP requirements, a chapter on e-Filing has been included in the curriculum.
At the end of each chapter, questions have been included under the heading “Test Your
Knowledge” for practice purposes.
The study material contains relevant legislative amendments of Company law, Securities Laws,
and the Economic Laws made vide notifications and circulars issued upto 30 th April, 2023.
Moreover, students are advised to check the Board of Studies Knowledge Portal regularly for
further developments.
Framework of Chapters – Uniform Structure comprising of specific components
Efforts have been made to present the laws in a lucid manner. Care has been taken to present
the chapters in a logical sequence to facilitate easy understanding by the students. The Study
Material has been divided into two modules for ease of handling by students. The first module is
on Corporate Laws and second module is on Securities Laws and the Economic Laws.
Each chapter of the Study Material has been structured uniformly comprising of the following
components:

Components of About the component

each Chapter

1. Learning Learning outcomes which you need to demonstrate after learning

Outcomes each topic have been detailed in the first page of each chapter.
Demonstration of these learning outcomes would help you to
achieve the desired level of technical competence

2. Content The concepts and provisions of Corporate and Economic Laws are
explained in student-friendly manner with the aid of examples/
Illustrations/diagrams /flow charts wherever possible. Diagrams
and Flow charts would help you understand and retain the
concept/provision learnt in a better manner. Examples would help
you understand the application of concepts/provisions. These
value additions would, thus, help you develop conceptual clarity
and get a good grasp of the topic.

© The Institute of Chartered Accountants of India

 iii

v
3. Test Your The exercise questions and answers would help you to analyse the
Knowledge provisions of Corporate and Economic Laws and apply the same in
problem solving, thus, sharpening your application skills. In effect,
these questions would test your ability to analyse, interpret and
apply the concepts/provisions learnt in solving problems and
addressing issues. Multiple choice questions and small case
scenarios in the theoretical/descriptive questions have also been
given to test your conceptual understanding/ analytical ability and
interpretational skills.

We hope that these student-friendly features in the Study Material makes your learning process
more enjoyable, enriches your knowledge and sharpens your application and Interpretational
skills.

Happy Reading and Best Wishes!

© The Institute of Chartered Accountants of India

 iv a
v
a
v
v
v
SYLLABUS- SELF PACED

SET A
PAPER: CORPORATE AND ECONOMIC LAWS (100 MARKS)

PART–I: CORPORATE LAWS (70 Marks)

SECTION A: COMPANY LAW (50 Marks)

Objective:
To acquire the ability to analyse, interpret and apply the provisions of the Company Law in
practical situations.
Contents:
The Companies Act, 2013 and Rules framed thereunder in its entirety with specific reference to section
149 onwards:
(i) Appointment and Qualifications of Directors
(ii) Appointment and Remuneration of Managerial Personnel
(iii) Meetings of Board and its Powers
(iv) Inspection, Inquiry and Investigation
(v) Compromises, Arrangements and Amalgamations
(vi) Prevention of Oppression and Mismanagement
(vii) Winding Up
(viii) Miscellaneous Provisions
(ix) Adjudication, Special Courts, National Company Law Tribunal
(x) e-Filing

© The Institute of Chartered Accountants of India

 v

v
SECTION B: SECURITIES LAWS (20 Marks)
Objective:
To acquire the ability to analyse the significant provisions of the SEBI Act.
Contents:
Overview of the Securities Exchange Board of India Act, 1992, and references of following Regulations:
(i) SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015
(ii) SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
(iii) SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011
(iv) SEBI (Prohibition of Insider Trading) Regulations, 2015

PART II: ECONOMIC LAWS (30 MARKS)

Objective:
To acquire the ability to analyse the significant provisions of select Economic Laws.
Contents:
1. The Foreign Exchange Management Act, 1999 and significant Rules and
Regulations: Introduction, Broad structure of FEMA, Definition, Regulation and
Management of Foreign Exchange, Contraventions and Penalties in brief, Miscellaneous
Provisions.
2. The Foreign Contribution Regulation Act, 2010 and its Regulation: Definitions,
Regulation of Foreign Contribution and Miscellaneous Provisions.
3. The Insolvency and Bankruptcy Code, 2016 and significant Rules and Regulations:
Significant concepts covered uptill section 33 of the Code.
Note: If new legislations are enacted in place of the existing legislations, the syllabus would
include the corresponding provisions of such new legislations with effect from a date notified by
the Institute.
The specific inclusions / exclusions in the various topics covered in the syllabus will be affected
every year by way of study guidelines, if any.

© The Institute of Chartered Accountants of India

 vi a
v
a
v
v
v CONTENTS
PART I: CORPORATE LAWS

SECTION A: COMPANY LAW

MODULE – 1
Chapter 1: Appointment and Qualifications of Directors
Chapter 2: Appointment and remuneration of Managerial Personnel
Chapter 3: Meetings of Board and its powers
Chapter 4: Inspection, inquiry and Investigation
Chapter 5: Compromises, Arrangements and Amalgamations
Chapter 6: Prevention of Oppression and Mismanagement
Chapter 7: Winding Up
Chapter 8: Miscellaneous Provisions
Chapter 9: Compounding of offences, Adjudication, Special Courts, National Company Law
Tribunal and Appellate Tribunal
Chapter 10: e-Filing

SECTION B: SECURITIES LAWS

MODULE – 2
Chapter 1: The Securities Exchange Board of India Act, 1992 and SEBI (Listing Obligations and
Disclosure Requirement) Regulations, 2015, SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018, SEBI (Substantial Acquisition of Shares and Takeover)
Regulations, 2011, SEBI (Prohibition of Insider Trading) Regulations, 2015.

PART II: ECONOMIC LAWS

Chapter 1: The Foreign Exchange Management Act, 1999

Chapter 2: The Foreign Contribution Regulation Act, 2010
Chapter 3: The Insolvency and Bankruptcy Code, 2016

© The Institute of Chartered Accountants of India

 vii

v
DETAILED CONTENTS: MODULE-1

PART I: CORPORATE LAWS

SECTION A: COMPANY LAW

Page No.
CHAPTER-1: APPOINTMENT AND QUALIFICATION OF DIRECTORS
1. Introduction ..........................................................................................................1.2
2. Company to have Board of Directors .....................................................................1.3
3. Appointment of Directors .......................................................................................1.6
4. Director Identification Number (DIN) .................................................................... 1.12
5. Right of persons other than retiring directors to stand for
directorship ......................................................................................................... 1.19
6. Appointment of Directors elected by Small shareholders ...................................... 1.21
7. Appointment of additional director, alternate director, a director to fill casual
vacancy and nominee director ............................................................................. 1.23
8. Appointment of directors to be voted individually ................................................. 1.28
9. Option to adopt principle of proportional representation for
appointment of directors...................................................................................... 1.30
10. Disqualifications for appointment of director ....................................................... 1.31
11. Maximum number of directorship ......................................................................... 1.33
12. Independent Directors ......................................................................................... 1.35
13. Manner of selection of independent directors and maintenance of
data bank of independent directors ..................................................................... 1.43
14. Duties of Directors .............................................................................................. 1.47
15. Vacation of office of director ............................................................................... 1.49
16. Resignation of Director ....................................................................................... 1.50
17. Removal of Directors .......................................................................................... 1.51

© The Institute of Chartered Accountants of India

 viii a
v
a
v
18. v Register of Directors and Key Managerial Personnel and their shareholding ........ 1.54
v
19. Members’ right to inspect .................................................................................... 1.56
20. Punishment......................................................................................................... 1.57
Test Your Knowledge .......................................................................................... 1.58

CHAPTER-2: APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

1. Introduction ..........................................................................................................2.2
2. Appointment of Managing Director, Whole Time Director or Manager .....................2.4
3. Appointment of Key Managerial Personnel ............................................................2.9
4. Functions of Company Secretary ......................................................................... 2.13
5. Company to Fix Limit with Regard to Remuneration ............................................. 2.14
6. Overall maximum managerial remuneration and managerial remuneration in
case of absence or inadequacy of profits ............................................................. 2.15
7. Recovery of managerial remuneration in certain cases ........................................ 2.29
8 Calculation of profits ........................................................................................... 2.29
9. Forms of, and procedure in relation to, certain applications ................................. 2.31
10. Compensation for loss of office of managing or whole-time
director or manager ............................................................................................ 2.32
11. Secretarial Audit for bigger companies ................................................................ 2.34
12. Part II, Part III and Part IV of Schedule V ............................................................ 2.36
Test Your Knowledge .......................................................................................... 2.40

CHAPTER-3: MEETINGS OF BOARD AND ITS POWERS

1. Introduction ..........................................................................................................3.2
2. Meetings of Board .................................................................................................3.2
3. Quorum for meetings of Board ............................................................................ 3.12
4. Passing of resolution by circulation ..................................................................... 3.15
5. Audit Committee, Vigil Mechanism and Punishment ............................................. 3.17
6. Nomination and Remuneration Committee and Stakeholders
Relationship Committee and punishment ............................................................. 3.23

© The Institute of Chartered Accountants of India

 ix

v
7. Powers of Board ................................................................................................. 3.27
8. Restrictions on powers of Board .......................................................................... 3.31
9. Company to contribute to bona fide and charitable funds, etc. ............................ 3.35
10. Prohibitions and restrictions regarding political contributions ............................... 3.36
11. Power of Board and other persons to make contributions to National
Defence Fund, etc. ............................................................................................. 3.39
12. Disclosure of interest by director……………………………………………………… .... 3.39
13. Defects in appointment of directors not to invalidate actions taken ....................... 3.42
14. Loan to directors, etc. ......................................................................................... 3.44
15. Loan and Investment by Company ....................................................................... 3.47
16. Investments of company to be held in its own name ............................................ 3.53
17. Related Party Transactions ................................................................................. 3.55
18. Register of contracts or arrangements in which directors are interested ............... 3.64
19. Contract of employment with managing or whole- time directors .......................... 3.66
20. Payment to director for loss of office, etc., in connection with transfer of
undertaking, property or shares ........................................................................... 3.67
21. Restriction on non-cash transactions involving directors ...................................... 3.69
22. Contracts by One Person Company ..................................................................... 3.71
Test Your Knowledge .......................................................................................... 3.72

CHAPTER-4: INSPECTION, INQUIRY AND INVESTIGATION

1. Introduction ..........................................................................................................4.2
2. Power to call for information, inspect books and conduct inquiries .........................4.3
3. Conduct of inspection and inquiry..........................................................................4.7
4. Report on inspection made....................................................................................4.8
5. Search and seizure ...............................................................................................4.9
6. Investigation into affairs of company ................................................................... 4.11
7. Establishment of Serious Fraud Investigation Office ............................................ 4.13
8. Investigation into affairs of Company by Serious Fraud Investigation Office ......... 4.14
9. Investigation into company’s affairs in other cases .............................................. 4.19

© The Institute of Chartered Accountants of India

 x a
v
a
v
10. v Security for payment of costs and expenses of investigation ................................ 4.20
v
11. Firm, body corporate or association not to be appointed as inspector .................. 4.21
12. Investigation of ownership of company ................................................................ 4.21
13. Procedure, powers, etc., of inspectors ................................................................. 4.22
14. Protection of employees during investigation ....................................................... 4.25
15. Power of inspector .............................................................................................. 4.27
16. Powers of tribunal ............................................................................................... 4.29
17. Inspector’s report ................................................................................................ 4.31
18. Actions to be taken in pursuance of inspector’s report ........................................ 4.31
19. Expenses of investigation ................................................................................... 4.33
20. Voluntary Winding up of Company, etc., not to stop
Investigation Proceedings ................................................................................... 4.34
21. Legal Advisers and bankers not to disclose certain information ............................ 4.34
22. Investigation etc. of foreign companies ................................................................ 4.35
23. Penalty for furnishing false statement, mutilation, destruction of documents ........ 4.35
Test Your Knowledge .......................................................................................... 4.36

CHAPTER-5: COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS

1. Introduction ..........................................................................................................5.2
2. Power to Compromise or Make Arrangements with Creditors and Members ...........5.6
3. Power of Tribunal to enforce compromise or arrangement ................................... 5.13
4. Merger and Amalgamation of Companies ............................................................ 5.15
5. Power to Acquire Shares of Shareholders Dissenting from Scheme or
Contract Approved by Majority ............................................................................ 5.20
6. Purchase of Minority Shareholding ...................................................................... 5.23
7. Power of Central Government to Provide for Amalgamation of Companies in
Public Interest ................................................................................................... 5.26
8. Registration of offer of Schemes involving transfer of shares .............................. 5.29
9. Preservation of Books and Papers of Amalgamated Companies .......................... 5.30

© The Institute of Chartered Accountants of India

 xi

v
10. Liability of Officers in Respect of Offences Committed Prior to Merger,
Amalgamation, etc. ............................................................................................ 5.30
11. Fast track mode of merger or amalgamation of certain companies ...................... 5.30
12. Merger or Amalgamation of Company with foreign company ............................... 5.35
Test Your Knowledge .......................................................................................... 5.37

CHAPTER-6: PREVENTION OF OPPRESSION AND MISMANAGEMENT

1. Introduction ..........................................................................................................6.2
2. Application to Tribunal for Relief in Cases of Oppression, etc. ..............................6.5
3. Right to apply under section 241 ...........................................................................6.9
4. Powers of Tribunal ............................................................................................. 6.11
5. Consequences of termination or modification of certain agreements ................... 6.14
6. Class action ....................................................................................................... 6.15
7. Application of certain provisions to proceedings under
section 241 or section 245 .................................................................................. 6.19
Test Your Knowledge .......................................................................................... 6.20

CHAPTER-7: WINDING UP
1. Introduction ..........................................................................................................7.2
2. Modes of Winding Up ...........................................................................................7.2
3. Circumstances in Which Company May be Wound Up by Tribunal ........................7.2
4. Petition for Winding up .........................................................................................7.4
5. Powers of Tribunal ...............................................................................................7.6
6. Directions for Filing Statement of Affairs ..............................................................7.7
7. Company Liquidators and their appointments .......................................................7.8
8. Removal and Replacement of Liquidator ..............................................................7.9
9. Intimation to Company Liquidator, Provisional Liquidator and Registrar ............. 7.10
10. Effect of Winding up order ................................................................................. 7.13
11. Stay of Suits, etc., on Winding up Order ............................................................ 7.13
12. Jurisdiction of Tribunal ...................................................................................... 7.14

© The Institute of Chartered Accountants of India

 xii a
v
a
v
13. v Submission of Report by Company Liquidator .................................................... 7.14
v
14. Directions of Tribunal on Report of Company Liquidator .................................... 7.15
15. Custody of Company's Properties ...................................................................... 7.16
16. Promoters, Directors, etc., to cooperate with Company Liquidator ...................... 7.17
17. Settlement of List of Contributories and Application of Assets ............................ 7.18
18. Obligations of Directors and Managers .............................................................. 7.19
19. Advisory Committee .......................................................................................... 7.19
20. Submission of Periodical Reports to Tribunal ..................................................... 7.20
21. Powers and Duties of Company Liquidator ........................................................ 7.21
22. Provision for Professional Assistance to Company Liquidator ............................ 7.24
23. Exercise and Control of Company Liquidator's Powers ...................................... 7.24
24. Books to be kept by Company Liquidator ........................................................... 7.25
25. Audit of Company Liquidator's Accounts ............................................................ 7.26
26. Payment of Debts by Contributory and Extent of Set-off .................................... 7.27
27. Power of Tribunal to Make Calls ........................................................................ 7.27
28. Adjustment of Rights of Contributories .............................................................. 7.28
29. Power to Order Costs ........................................................................................ 7.28
30. Power to Summon Persons Suspected of Having Property of Company, etc. ....... 7.28
31. Power to Order Examination of Promoters, Directors, etc. ................................. 7.29
32. Arrest of Person Trying to Leave India or Abscond ............................................ 7.31
33. Dissolution of Company by Tribunal .................................................................. 7.32
34. Appeals from Orders Made Before Commencement of Act ................................. 7.33
35. Debts of all Descriptions to be Admitted to Proof ............................................... 7.33
36. Overriding Preferential Payments ...................................................................... 7.34
37. Preferential Payments ....................................................................................... 7.36
38. Fraudulent Preference ...................................................................................... 7.38
39. Transfers Not in Good Faith to be Void .............................................................. 7.39
40. Certain Transfers to be Void ............................................................................. 7.40

© The Institute of Chartered Accountants of India

 xiii

v
41. Liabilities and Rights of Certain Persons Fraudulently Preferred ........................ 7.40
42. Effect of Floating Charge .................................................................................. 7.41
43. Disclaimer of Onerous Property ......................................................................... 7.41
44. Transfers, etc., after Commencement of Winding Up to be Void ......................... 7.44
45. Certain Attachments, Executions, etc., in Winding Up by Tribunal to be Void ...... 7.44
46. Offences by Officers of Companies in Liquidation .............................................. 7.45
47. Statement that Company is in Liquidation .......................................................... 7.47
48. Books and Papers of Company to be Evidence .................................................. 7.48
49. Inspection of Books and Papers by Creditors and Contributories ....................... 7.48
50. Disposal of Books and Papers of Company ....................................................... 7.48
51. Company Liquidation Dividend and Undistributed Assets Account ...................... 7.49
52. Liquidator to Make Returns, etc. ........................................................................ 7.52
53. Meetings to Ascertain Wishes of Creditors or Contributories .............................. 7.52
54. Court, Tribunal or Person, etc., Before Whom Affidavit May be Sworn ............... 7.53
55. Powers of Tribunal to Declare Dissolution of Company Void .............................. 7.53
56. Commencement of Winding Up by Tribunal ....................................................... 7.54
57. Exclusion of Certain Time in Computing Period of Limitation .............................. 7.54
Test Your Knowledge ......................................................................................... 7.55

CHAPTER 8: MISCELLANEOUS PROVISIONS

1. Introduction ................................................................................................................ 8.2
2. Registered Valuer ...................................................................................................... 8.2
3. Removal of Names of Companies from the Register of Companies ........................... 8.13
4. Government Companies ........................................................................................... 8.19
5. Nidhis ...................................................................................................................... 8.21
6. Miscellaneous Provisions ......................................................................................... 8.31
Test Your Knowledge ............................................................................................... 8.36

© The Institute of Chartered Accountants of India

 xiv a
v
a
v
v
CHAPTER 9: ADJUDICATION, SPECIAL COURTS, NATIONAL COMPANY LAW TRIBUNAL &
v
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
1. Introduction ................................................................................................................ 9.2
2. NCLT and NCLAT ...................................................................................................... 9.3
3. Special Court ........................................................................................................... 9.12
4. Offences to be non-cognizable ................................................................................. 9.15
5. Compounding of certain offences .............................................................................. 9.16
6. Mediation and Conciliation Panel .............................................................................. 9.19
7. Serious Fraud Investigation Office ............................................................................ 9.20
8. Power of Central Government to Appoint Company Prosecutors ............................... 9.21
9. Appeal against Acquittal ........................................................................................... 9.21
10. Compensation for Accusation without Reasonable Cause ......................................... 9.21
11. Application of fines ................................................................................................... 9.21
12. Factors for determining level of punishment .............................................................. 9.21
13. Lesser penalties for One Person Companies or small companies .............................. 9.22
14. Adjudication of penalties .......................................................................................... 9.22
15. Penalty for repeated default ...................................................................................... 9.26
Test Your Knowledge ............................................................................................... 9.27

CHAPTER 10 : e-FILING
1. Introduction .............................................................................................................. 10.2
2. Provisions Relating to Filing of Applications, Documents, Inspection, etc.,
in Electronic Form .................................................................................................... 10.4
3. Electronic form to be exclusive, alternative or in addition to physical form ................ 10.30
4. Provision of Value-Added Services Through Electronic Form .................................. 10.31
5. Application of Provisions of Information Technology Act, 2000 ................................ 10.31
6. Fee for Filing etc. ................................................................................................... 10.31
7. MCA21 Version 3.0 ................................................................................................ 10.44
8. Case Studies relating to Ethics .............................................................................................. 10.45
Test Your Knowledge ............................................................................................. 10.58

© The Institute of Chartered Accountants of India