Prepared By – Ravi Vustela

MAY
2017
LAW LAST MINUTE REVISION NOTES
 Law Revision Notes

Nature of Company

As per Section 2(20) “Company” means a company incorporated under this Act or under
any previous company law.
Characteristics of a company

Corporate Personality Once a Company Is incorporated it is distinct

from the persons incorporated it.


Members are different from the company

Salomon Vs Salomon Co Ltd

Lee Vs Lee air farming ltd

Limited Liability The liability of the members is limited to

Nominal Value of shares held /guarantee

given by them
Please NOTE it is the liability of the members which
is limited but Not the Company

Perpetual Succession Members may come and members may go

but the company goes on forever


Exists even if all the members die

Common Seal(optional Now) Signature of the company

Authorises the documents

Capacity to sue and be sued A Company Once incorporated can be sued

by outsiders and it can sue outsiders to

protect its rights

Outsiders cannot sue members in their
individual Capacities

Separate property Can have own property

Transferability of Shares(Section 44) Freely transferable

Restrictions in private company

Artificial Person Recognized in the eyes of law

Run by natural persons
As Soon As A Company is incorporated a NEW
artificial person was born in the eyes of law

Citizen or Not?. The company, though a legal person, is not a

In simple a Company is NOT a citizen under the Citizenship Act, 1955 or the
Citizen Constitution of India

Company has Nationality and Though it is not a citizen but it has

Residence Nationality and residence

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 Law Revision Notes

Lifting of corporate veil


To prevent illegal or improper activities Horne Vs Gilford motors company ltd

To protect revenue of the government Sir Dinshaw Maneckjee Petit

To determine the enemy character of the Diamler company ltd Vs Continental tyre

company and rubber company ltd


To prevent violation of welfare laws Workman employed in associated rubber

industries ltd bhavnagar Vs The

associated rubber industries Ltd.

To determine the technical competence New Horizons India Ltd

of the company Progressive aluminium Ltd Vs ROC

How to form(incorporate) a Company?

The Companies Act, 2013 provides for the kinds of companies that can be promoted and
registered under the Act. The three basic types of companies which may be registered under
the Act are:
(a) Private Companies;
(b) Public Companies; and
(c) One Person Company (to be formed as Private Limited)

As Per Section 3 of the Act a company can be formed for any lawful purpose by—
  
Seven or more persons, where the company to be formed is to be a public company;
 
Two or more persons, where the company to be formed is to be a private company
Or

One person, where the company to be formed is to be One Person Company that is to say, a
private company
By subscribing their names or his name to a memorandum and complying with
the requirements of this Act in respect of registration

Procedure for Incorporation of a company

Step1: Apply for DSC of Directors

Step2: Apply for DIN for minimum of 2 directors [refer Section 152(3)][can be applied in SPICE]

Step3: Register a DSC to the DIN on MCAs Website

Step4: eformINC-1 for companies name approval

SIX names can be chosen in the ORDER of preference.

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 Law Revision Notes

Step5: Incorporation eformINC-7 [in case of OPC eformINC-32(SPICE)]

Spice can be used to incorporate Private companies and public companies
Attachments: IF THE SUBSCRIBERS are 7 or less(if subscribers are more 7+ Only INC7 )

a.MOA Schedule I can be adopted (should be signed by all subscribers) in

b.AOA the presence of at least one witness.(witness will also sign)

c. FormINC-8 for Declaration by practicing professional CA/CS/CMA/advocate

d. Form INC-9 Affidavit Declaration by the subscriber and 1st directors

e. PAN of all promoters and directors+ Form No. DIR-12

f. Residence proof of all promoters and directors

g. In case of OPC Nominee consent form INC 3

Step6: Form INC22 for Notice of situation of registered office

Step7: Appointment of directors of the company

.step8: Apply for TAN/PAN


The company shall maintain and preserve at its registered office copies of all
 
incorporation documents and information as originally filed till its dissolution.

Where the subscriber to the memorandum is a body corporate, the memorandum and
articles of association shall be signed by director, officer or employee of the body
corporate duly authorized in this behalf by a resolution of the board of directors of the
body corporate and where the subscriber is a Limited Liability Partnership, it shall be

signed by a partner of the Limited Liability Partnership, duly
authorized by a resolution approved by all the partners of the Limited
Liability Partnership:
However in either case, the person so authorized shall not, at the same time, be a subscriber
to the memorandum and articles of Association

The Certificate of Incorporation shall be issued by the Registrar in Form No.

INC-11.

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 Law Revision Notes

Classification of companies

PUBLIC COMPANY PRIVATE

OPC
COMPANY
sec 2(71) sec 2(62)
sec 2(68)

7 or more persons can

form a public company
2 or more persons can
Only one person
form a private company
as member
a private company which subject to a limit of
Should convert either as
is subsidiary of public maximum 200 members public/private company if
company shall be paid up share capital is
except in the case of one
increased beyond
treated as public person company 50,00,000/- rupees or

company even if such its average annual

turnover during the
private company relevant period exceeds
Right to transfer its shares
has obtained the status 2 crore rupees
is restricted
of a private company in Cannot go for public
its articles issue of securities

Section 2(85) Small Company’

Small company means a company, other than a public company,—
(i) Having a paid-up share capital of which does not exceed 50 lakh rupees and
(ii) Turnover of which as per its last profit and loss account does not exceed2 crore
rupees Following companies cannot be a small company even if it is having Turn over &
paidup capital below the above specified limits
  A holding company or a subsidiary company
  A company registered under section 8; or
 
A company or body corporate governed by any special Act

On the basis of control

Section 2(46) Holding company
Holding company in relation to one or more other companies, means a company of which
such companies are subsidiary companies.

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 Law Revision Notes

Section 2(87) Subsidiary Company

“Subsidiary company” or “subsidiary”, in relation to any other company (that is to say
the holding company), means a company in which the holding company—
 
Controls the composition of the Board of Directors; or

Exercises or controls more than one-half of the total share capital either at its

own or together with one or more of its subsidiary companies

Section 2(6) Associate Company

Associate company”, in relation to another company, means a company in which that other
company has at least 20%. of total share capital and includes a joint venture company.

On the basis of liability

Section 2(21) Company limited by guarantee
“company limited by guarantee” means a company having the liability of its members
limited by the memorandum to such amount as the members may respectively undertake to
contribute to the assets of the company in the event of its being wound up;

Section 2(22) Company limited by shares

Company limited by shares means a company having the liability of its members limited by
the memorandum to the amount, if any, unpaid on the shares respectively held by them.

Section 2(92) Unlimited company

“Unlimited company” means a company not having any limit on the liability of its members
Other Companies
Section 2(42) Foreign company
Foreign company means any company or body corporate incorporated outside India which—
Has a place of business in India whether by itself or through an agent, physically or through
electronic mode; and conducts any business activity in India in any other manner.

Section 2 (45) Government company

Government company: ” means any company in which not less than 51% of the paid-up
share capital is held by-
 
Central Government, or
  Any State Government or Governments, or

Partly by the Central Government and partly by one or more State Governments,
And the section includes a company which is a subsidiary company of such a Govt

company

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 Law Revision Notes

Non Profit Company Section 8


Has in its objects the promotion of commerce, art, science, sports, education,
research, social welfare, religion, charity, protection of environment or any
 
such other object
  Intends to apply its profits, if any, or other income in promoting its objects; and
  Intends to prohibit the payment of any dividend to its members,
 
The Central Government will issue licence in Form No. INC-16

Dormant company.(Section 455)

Where a company is formed and registered under this Act for a future project or to hold an
asset or intellectual property and has no significant accounting transaction, such a
company or an inactive company may make an application to the ROC in Form No. MSC-1
for obtaining the status of a dormant company.

Nidhi Company [Section 406]

A company which has been incorporated as a Nidhi with the object of cultivating the
habit of thrift and savings amongst its members, receiving deposits from, and lending to,
its members only, for their mutual benefit, and which complies with such rules as are
prescribed by the Central Government for regulation of such class of companies.

Illegal association 464

No association or partnership consisting of more than 50 persons shall be formed for the
purpose of carrying on any business that has for its object the acquisition of gain by the
association or partnership or by the individual members thereof, unless it is registered as
a company under this Act or is formed under any other law for the time being in force:
Exceptions:
  
Company
  
Registered under any other Act
  
Service motive (non profit)
  
Single HUF
 
Partnership formed by professionals.

Memorandum and articles of association

2(56) Memorandum
Memorandum means the memorandum of association of a company as originally framed or
as altered from time to time in pursuance of any previous company law or of this Act.

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 Law Revision Notes

Contents of MOA

Name clause Word Limited / Private Limited / OPC have to be added

Section 4(1)(a) Name must not be identical, undesirable, projecting
NOT APPLICABLE FOR connection to the Government, against Names &
SEC 8 COMPANY and Emblems Act & RULE 8
Government company 
Clearly engraved outside every place of business and
printed on all letter head, bills, vouchers along with RO
– address

If name is written wrong then the officer signing the
document is personally liable
Situation clause State of the RO
Section 4(1)(b) Example:-In the State Of Andhra Pradesh
(NO need of complete address Just state name enough)

Objects Clause Not illegal

Section 4(1)(c) Main objects, Incidental objects & Other objects

Liability Clause Liability of the members whether limited or unlimited

Section 4(1)(d)

Capital Clause Authorised share capital

Section 4(1)(e) Total number of shares

Nominal value of shares

The number of shares each subscriber to the
memorandum intends to take, indicated opposite his
name

Subscription Clause At least 2 (or) 7 as the case may be.

It cannot be altered at any Minor cannot sign as subscriber

time Each subscriber agrees to take at least on share

First members of the company

Nomination clause Only for OPC

A company can adopt Model memorandum and articles given in schedule I of the act. For
MOA Table A, Table B , Table C , Table D , Table E

For AOA Table F, Table G ,Table H , Table I , Table K
Tables Depending upon the type of company proposing to be incorporated

Articles can be amended by passing special resolution section 14

Every special resolution should be filed with ROC within 30 days

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 Law Revision Notes

Alteration of memorandum

Name clause change  Pass special resolution


Fresh Certificate of Approval of CG required
Incorporation in Form  To delete the word private approval of CG is not
No. INC-25 required in case of conversion of private company to
public
Change in Registered office
Change within Change outside Change outside Change of state
local limits local limits local limits and
change in
jurisdiction of
ROC
*Pass BR *Pass SR *pass SR *Pass SR
*File INC-22 *File INC-22 *Approval of RD *Approval of central
with ROC within with ROC is required in government is required
15 days of such within 15 days FORM INC23 in FORM INC23
change of such *file approval *file approval with ROC
*NO amendment change+MGT14 with ROC within INC28
required in MOA within 30 days 30 days of *Inc22+MGT14
*Creditors *NO confirmation *Requires amendment
consent NOT amendment *Inc22+MGT14 in articles
required required in *Requires *Creditors consent
section 12 MOA amendment in required
*Creditors articles section 13
consent NOT *Creditors
required consent required
section 12 section 13

The shifting of registered office shall not be allowed if any inquiry,

inspection or investigation has been initiated against the company or any

prosecution is pending against the company under the Act.

On completion of such inquiry, inspection or investigation as a
consequence of which no prosecution is envisaged or no prosecution is
pending, shifting of registered office shall be allowed
Change in object *Pass SR
*File MGT-14 within 30 days to ROC
*ROC will certify the same

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 Law Revision Notes

Change in liability *Pass SR

*File MGT-14 within 30 days to ROC
*ROC will certify the same
Change in capital *alteration of capital clause to be authorised by the Articles of
clause Association [section 61];
*Ordinary Resolution
*If by division or consolidation in capital the voting % gets
affected then a confirmation from Tribunal is mandatory.
*Notify the alterations made and a copy of Resolutions passé
shall be filed with Registrar within 30 days.
*Registrar shall record the notice and make alterations
required.

Prospectus and allotment of securities

As per section 2(70) of the Companies Act, 2013 defines a prospectus as “any document described or issued as
a prospectus and includes

 
 A red herring prospectus referred to in section 32 or
  
Shelf prospectus referred to in section 31 or

  
Any notice,
  
Circular,

  
Advertisement or
 
Other document

Inviting offers from the public for the subscription or purchase of any securities of a body corporate.”

When prospectus is not required

  
Right issue
  
Bonus issue
  
Private placement
 
Conversion of loan into debt
Shelf prospectus

A shelf prospectus is a prospectus. Hence it must comply with the provisions
 
of prospectus
  Shelf prospectus is issued by companies subject to SEBI regulations
 st 
Maximum validity 1 year from date of opening of 1 offer
  During the period of 1 year as many offers can be given(no limit)
 
Information memorandum means its a document containing information

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 Law Revision Notes

Company

Public private

Private Right issue Private Right issue

Public
placement Bonus issue placement Bonus issue

No need of No need of No need of No need of

Prospectus prospectus prospectus prospectus prospectus
(offer letter) (offer letter) (offer letter) (offer letter)

Red herring prospectus Section 32

"Red herring prospectus" means a prospectus which does not include complete
particulars of the quantum or price of the securities included therein. In simple terms a
red herring prospectus contains most of the information pertaining to the company’s
operations and prospects, but does not include key details of the issue such as its price
and the number of shares offered. A red herring prospectus shall carry the same
obligations as are applicable to a prospectus and any variation between the red herring
prospectus and a prospectus shall be highlighted as variations in the prospectus.

As per section 2(1) “abridged prospectus” means a memorandum containing such salient
features of a prospectus as may be specified by the Securities and Exchange Board by
making regulations in this behalf.

Shorter version of general prospectus (summary) abridged prospectus

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Underwriting commission
As per Rule 13 section 40(6)


The payment of such commission shall be authorized in the company’s articles
 
of association

The commission may be paid out of proceeds of the issue or the profit of the
 
company or both;
 
The rate of commission paid or agreed to be paid shall not exceed,
In case of AOA rate or below rate which ever is lower
Shares 5 % of issue or AOA rate
Debentures 2.5 % of issue or AOA rate

There shall not be paid commission to any underwriter on securities which are not offered
to the public for subscription
Under writing commission can be paid in KIND

Share capital

Types of share capital

Equity share capital, means all share capital which is not preference share capital;
Preference share capital, means that part of the issued share capital of the company which
carries or would carry a preferential right with respect to—
 
 Payment of dividend,
 
Repayment of capital of a winding up or
Equity shares with differential rights section 43 read with Rule 4

Nature of shares or debentures.

The shares or debentures or other interest of any member in a company shall
be movable property transferable in the manner provided by the articles of the
company. Section 44
Numbering of shares
Every share in a company having a share capital shall be distinguished by its
distinctive number Section 44

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Application of premiums received on issue of Shares

Usage of securities premium
 
 To issue bonus shares
  
To write off the preliminary expenses
  
To write off the commission paid or discount allowed on, any issue of shares or debentures
  
To pay Premium payable on the redemption of preference shares or of any debentures.
 
Buyback

Buyback section 68

Authority Quantum
Board 10% of (paid up EQUITY + FR)
Members in GM by way of Special 25% of (Paid up CAPITAL+FR)
resolution
In Case of equity share capital it should be read construed as 25% Total paid up equity


Where a company purchases its own shares out of free reserves or securities
premium account, a sum equal to the nominal value of the shares so purchased
shall be transferred to the capital redemption reserve account and details of such
 
transfer shall be disclosed in the balance sheet.

The capital redemption reserve account may be applied by the company, in paying
up unissued shares of the company to be issued to members of the company as

fully paid bonus shares. Section 69
Prohibition for buy-back in certain circumstances. Section 70
No company shall directly or indirectly purchase its own shares or other specified securities
(a) Through any subsidiary company including its own subsidiary companies;
(b) Through any investment company or group of investment companies; or
(c) If a default, is made by the company, in the repayment of deposits accepted either before or
after the commencement of this Act, interest payment thereon, redemption of debentures or
preference shares or payment of dividend to any shareholder, or repayment of any term loan
or interest payable thereon to any financial institution or banking company:
 
Buy-back is not prohibited, if the default is remedied and a period of three years has
lapsed after such default ceased to subsist.
No company shall, directly or indirectly, purchase its own shares or other specified
securities in case such company has not complied with the provisions of sections 92,
123, 127 and section 129.

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 Law Revision Notes

Debentures sec 71

DEBENTURES
As Per Section 2(30) of Companies Act 2013 “debenture” includes debenture stock, bonds
or any other instrument of a company evidencing a debt, whether constituting a charge on
the assets of the company or not.

Salient features OF DEBENTURES

The debentures can be issued in the same manner as shares in a company. But
unlike shares Section 53(Prohibition on issue of shares at discount), debentures can
be issued at a discount. The Companies Act, 2013 places no restriction in this.
Debentures can be issued by any type of company- one person company, small
company, private company public company or listed company.
Debentures cannot have voting rights Section 71(2).
A company shall pay interest and redeem the debentures in accordance with the
terms and conditions of their issue. Interest payable on them is a debt and can
be paid out of capital. There is no ceiling, minimum or maximum, for the rate of
interest payable on debentures
Any company can issue secured or unsecured debentures
A debenture is usually in the form of a certificate(like share certificate)issued under
the common seal of a company if any(common seal optional now)
After the commencement of the Companies Act, 2013, now a company cannot issue
perpetual or irredeemable debentures
Maximum term of secured debentures is 10 years from the date of issue
Appointment of debenture trustees
As per section 71(5) No company shall issue a prospectus or make an offer or invitation to
the public or to its members exceeding 500 for the subscription of its debentures, unless
the company has, before such issue or offer, appointed one or more debenture trustees and
the conditions governing the appointment of such trustees shall be such as may be
prescribed. [Rule 18 (2) read with Rule 18(6)]
A person shall not be appointed as a debenture trustee, if he-
  Beneficially holds shares in the company.

Is a promoter, director or key managerial personnel or any other officer or
 
an employee of the company or its holding, subsidiary or associate company.

Is beneficially entitled to moneys which are to be paid by the company

otherwise than as remuneration payable to the debenture trustee.

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
Is indebted to the company, or its subsidiary or its holding or associate company or a

subsidiary of such holding company.

Has furnished any guarantee in respect of the principal debts secured by
 
the debentures or interest thereon.

Has any pecuniary relationship with the company amounting to two per cent.
or more of its gross turnover or total income or fifty lakh rupees or such higher
amount as may be prescribed, whichever is lower, during the two immediately

preceding financial years or during the current financial year.
 
Is relative of any promoter or any person who is in the employment of the company
as a director or key managerial personnel.
Company shall create Debenture Redemption Reserve (DRR) in accordance with following conditions
Debentures issued by For Public Placed For Private Placed
All India Financial No DRR is required No DRR is required
Institutions (AIFIs) regulated
by Reserve Bank of India and
Banking Companies
Financial Institutions (FIs) DRR will be 25% of the value No DRR is required
within the meaning of of debentures issued
section 2(72) of the
Companies Act
NBFCs registered with the DRR will be 25% of the value No DRR is required
RBI of debentures issued
other companies including DRR will be 25% of the value 25% DRR is required
manufacturing and of debentures issued
infrastructure companies(for
listed)
for unlisted companies unlisted cannot go Public 25% DRR is required
specified above
Debenture Redemption Reserve

The company shall create DRR equivalent to at least 50% ofthe amount raised from the
 debenture issue before debenture redemption commences.

Every company required to create DRR shall on or before the 30th day of April in each
year, invest or deposit, as the case may be, a sum not be less than 15% of the amount of its

debentures maturing during the year ending on 31" March of the next year
Failure to redeem or pay interest - NCLT may impose 18% P.a penal interest & repayment
immediately otherwise penalty [up to Rs 5 lacs] & Imprisonment 3 years
Remedies available Proceed on security, Apply to NCLT, Apply to court for winding up

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Deposits [Sections 73-76A]

Applicability:-
Rule 1(3) of Deposits chapter says. These rules shall apply to a company other than –
  A banking company
  A NBFC registered with the Reserve Bank of India
 
A housing finance company and
 
A company specified by the CG under the section 73 of the Act.
Section 73(1) read with rule 1(3) of Companies (Acceptance of Deposits) Rules 2014

What is Deposit?
As Per Section 2(31) of the Act read with Rule 2(1)(c) of Companies (Acceptance of
Deposits) Rules, 2014 “deposit” includes any receipt of money by way of deposit or loan or
in any other form by a company, but does not include

Who is an Eligible Company [Rule 2(1)(e)]

“Eligible company” means a public company referred in Section 76 having a Net worth of
not less than 100 crore rupees or a turnover of not less than 500 crore rupees and which
has obtained the prior consent of the company in general meeting by means of a special
resolution and also filed the said resolution with the Registrar of Companies and where
applicable, with the Reserve Bank of India before making any invitation to the Public for
acceptance of Deposits

Who is depositor?
As Per Rule 2(1)(d) ‘Depositor’ means-
(i) Any member of the company who has made a deposit with the company in
accordance with section 73(2) of the Act, or
(ii) Any person who has made a deposit with a public company in accordance with Sec 76

 
Period – Not less than 6 months & not more than 36 months
  Interest rate should not exceed rate prescribed for NBFCs
  Premature surrender of deposits: Reduce 1% interest from the rate applicable
 
Return of Deposits: Every year 30th June

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LIMITS up to which companies can accept deposits Rule 3(3), 3(4), 3(5)
Read With Sections 73 and 76

The Quantum of deposits

Type of company Members Public

Eligible Company Upto 10% of aggregate of the Upto 25% of aggregate of the
paid up share capital, free paid up share capital, free
reserves and securities reserves and securities
premium account premium account
Company referred in Upto 35% of aggregate of the
Section 73(2) paid up share capital, free Prohibited
reserves and
securities premium account
Govt Company Upto 35 % of aggregate of
Eligible under section 76 - the paid up share capital,
free reserves and securities
premium account
Penal rate of interest.- Rule 17
Every company shall pay a penal rate of interest of 18%. per annum for the overdue period
of deposits, whether secured or unsecured, matured and claimed but remaining unpaid.

Section 447 Punishment for fraud

fraud involving
fraud
public interest

fine not less than the fine not less than the
amount involved but amount involved but
which may extend to which may extend to
3 x amount of fraud: 3 x amount of fraud:

imprisonment shall not

Imprisonment shall NOT
be less than six months
be less than 3 years but
but which may extend to which may extend to ten
ten years years

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Charges [Sections 77-87]

What is a Charge?
A charge is a right created by any person including a company (artificial person) referred
to as “the borrower” on its assets and properties, present and future, in favour of a financial
institution or a bank, referred to as “the lender”, which has agreed to extend financial
assistance.
As Per Section 2(16) of the Companies Act, 2013 defines charges so as to mean an interest
or lien created on the property or assets of a company or any of its undertakings or both
as security and includes a mortgage.
Kinds of Charges
A charge on the property of the company as security for debts may be of the
following kinds, namely:
Fixed or specific
charge Floating charge.

Fixed or Specific Charge

A charge is called fixed or specific when it is created to cover assets which are ascertained
and definite or are capable of being ascertained and defined, at the time of creating the
charge e.g., land, building, or plant and machinery. A fixed charge, therefore, is a security
in terms of certain specific property, and the company gives up its right to dispose off that
property until the charge is satisfied.
Floating Charge
A floating charge, as a type of security, is peculiar to companies as borrowers. A floating
charge is not attached to any definite property but covers property of a fluctuating type e.g.,
stock-in-trade and is thus necessarily equitable.
Crystallisation of Floating Charge
A floating charge attaches to the company’s property generally remains dormant till it
crystallizes or becomes fixed. The company has a right to carry on its business with the
help of assets over which a floating charge has been created till the happening of some
event which determines this right.
A floating charge crystallises and the security becomes fixed in the following cases:
  When the company goes into liquidation
  When the company ceases to carry on its business

When the creditors or the debenture holders take steps to enforce their security e.g.
 
by appointing receiver to take possession of the property charged
 
On the happening of the event specified in the deed.

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When Charge should be registered?

Charges to be registered under section 77

1.Charges created within/outside india

2.Charge on its property or assests or undertakings

3.Whether tangible or otherwise,and situated in/outside India

Shall be registered in FORM CHG-1(for other than debentures) CHG9 for

debentures within 30 days of its creation( Registrar can register upto 300
days) Section 77

Company failing to register under section 77 (beyond 300+) may seek

extenstion from CG in form CHG-8 Section 87

File order of the CG with ROC in form INC-28

Once charge is registered – any person dealing with such property is deemed to have been
given notice Section 80
Punishment for contravention of this Chapter charges

Punishment for Fine Imprisonment BOTH

Company and Not less than - -
1,00,000/-
May extend to
10,00,000/-
Every Officer in Not less than 25,000/- May extend to 
default May extend to 6 months
1,00,000/- Or Or

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 Law Revision Notes

General meetings

Register of members

Every company shall keep and maintain the following registers


Register of members indicating separately for each class of equity and preference
 
shares held by each member residing in or outside India; [Form No. MGT-1]
  Register of debenture-holders Form No. MGT-2] and
  Register of any other security holders. [Form No. MGT-2]
 
If number of members exceed 50 index of members should be maintained.

Annual Return Section 92 Form NO MGT-7

Every company shall file with the Registrar a copy of the annual return, within 60days from
the date on which the AGM is held or where NO AGM is held in any year within 60 days
from the date on which the AGM should have been held together with the statement
specifying the reasons for not holding the AGM
Who will sign the annual return?


Annual return will be signed by a director and the company secretary, or
 
where there is no company secretary, by a PCS

In case of One Person Company and small company, the annual return shall be
signed by the company secretary, or where there is no company secretary, by

the director of the company.

AGM Sec 96
Every company Other than OPC shall in each year hold an AGM.
 
AGM is to be held in each calendar year

First Annual General Meeting:

In case of the first annual general meeting, it shall be held within a period of
nine months 3 national holidays

from the date of closing of the first financial year of the company.

Holding of subsequent AGM: 26th jan 15th aug 2nd oct

  Gap between two AGMs shouldn’t exceed 15Months

  AGM is to be held within 6 months of close of financial year (by 30th sep)
 
ROC can extend upto 3 more months. However ROC Cannot extend for first AGM

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Proper Authority to call AGM

  BOD has power to call for a GM.
  An individual director Or secretary has no power to call a GM.
 time and place of AGM:
Date,

Every annual general meeting shall be called during business hours, that is,

between 9 a.m. and 6 p.m. on any day that is not a National Holiday at Registered
office of company
G Section 100
  Board of Directors

Board of director upon receipt of request from members holding at least 1/10th of

voting power (Within 21 days give notice, within 45 days conduct meeting)
 
If called by requisitionists on any day except national holiday(amendment)
th
MCA NOTIFICATION 5 June 2015 Very Very Very Important DATE
For Private companies Incase MOA,AOA contains any specific provisions they will
prevail over the sections 101,102,103,104,105,106,107,109 In simple MOA or
AOA of Pvt company > Above sections

Length of Notice for calling GM: Section 101

  A General Meeting can be called by giving at least 21 clear days notice in writing.
  For Section 8 Companies, the length of Notice is 14 Days
  
In case of post an additional two days should be added Section 20

For any shorter notice, approval of members shall be obtained in writing or in
 
electronic mode for a GM from members who are entitled to vote on such meeting
95% approval shall be obtained.

To whom notice shall be sent?

Notice of every meeting should be given to every member, director auditors of the
company, Secretarial auditor and Debenture trustees if any.(SS-2 issued by ICSI)

Notice shall specify the

  Day,
  Date,
 
Time, and

full address of the venue of the Meeting including route map and prominent land
 
mark for easy location
  Nature of the meeting
 
Business to be transacted at the meeting

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 
Resolution for each item of special business supported by explanatory statement
  Resolution for items of ordinary business which pertain to ADDA
 
Details relating to e-voting

Quorum for General Meeting: Section 103

Based on Number of Members in the company as on the date of Meeting.
For Public
Upto 1,000 5 members personally present
More than 1,000 but upto 5,000 15 members personally present
Exceeds 5,000 30 members personally present

For Private
2 members personally present or Quorum fixed in Articles which ever is higher
If tribunal calls for AGM/EGM even a single person/Proxy can form QUORUM sec 97 & 98

Lack of quorum:
The meeting shall stand adjourned to the same day in the next week at the same time and
place, or to such other date and such other time and place as the Board may determine.
Provided In case of an adjourned meeting or of a change of day, time or place of meeting
under above, the company shall give not less than three days notice to the members either
individually or by publishing an advertisement in the newspapers (one in English and
one in vernacular language) which is in circulation at the place where the registered
office of the company is situated. Refer regulation (49) of Table F. in Schedule I

Proxy: Section 105 Form MGT 11

A member of a company can appoint a person as his proxy to attend and vote in
the meeting instead of himself. (proxy is agent of member)
 
A proxy can vote only on a Poll
  A Proxy can demand a poll
  A proxy cannot vote on a show of hands
  
A proxy has no right to speak at the meeting
  A proxy is not counted for the purpose of quorum
  Proxy form must be deposited at least 48 hours before meeting.
 nd st 
Appointment of 2 proxy will result in automatic revocation of 1 appointed proxy
  In case of section 8 company only member can be appointed as an PROXY
 
A person can be a proxy of maximum 50 members

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Section 112 & 113


Representative of the President of India, Governor of a State or if Company is a
member, then a representative can be appointed. The Representative shall have same
 
powers as that of a Member.

In simple the proxy appointed under section 112 &113 is deemed to be a Member.

He has all rights as a member

Section 106. Restriction on voting rights

A member can be restrained from voting in GM only on TWO grounds
1. He didn’t Paid his call money on shares when company called for
2. He owes debt to the company and he didn’t paid even it was matured(in capacity OTHER
than as shareholder)
On above two grounds company can exercise lien on his shares

Section 107. Voting by show of hands

One Person One Vote Irrespective of his shareholding

Section 109. Demand for poll.

In the case a company having a share capital, by the members present in person or by
proxy, where allowed, and having not less than one-tenth of the total voting power or
holding shares on which an aggregate sum of not less than five lakh rupees and
In the case of any other company, by any member or members present in person or by
proxy, where allowed, and having not less than one-tenth of the total voting power.
  Once Poll is demanded the results on show of hands gets NULLIFIED
 
Polling Paper in Form No.MGT-12 and report of scrutinizer in Form No.MGT-13.

Section 108 E-voting

Applicability
  Listed companies
  Companies having members 1000 or more

E-voting shall remain open for not less than three days and shall close at 5.00 p.m.

on the date preceding the date of the general meeting

Section 110 Passing of Resolution by Postal Ballot: Rule 22

Applicability
  Listed companies
 
Every Other company having members Beyond 200.

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