Every company must be a business organization. Being business organization, a company has business activities. In the Companies Act, 2013 “principal business activities” is a major reporting requirement. According to Section 92(1)(a), every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding its principal business activities. Section 185 as amended has reference to principal business activities as a major condition for a loan to directors and related concerns.
Category Archives: Chapter VII – CA2013
In India, most companies have designation of Chairman but there is no legally recognised office of chairman of company under the Companies Act, 2013. In Indian law, chairman or chairperson is not legal position but a momentary position in meetings.
Chairman under the company law is person appointed/elected as chairman of the Meeting of Board of Directors or meetings of members (general meetings). To avoid time to appoint/select/elect chairman in each such meeting, usually board of directors names a person as its chairman once. Chairman of the Board of Directors may act as chairman of the company (means chairman of its general meetings). However, this position usually treated as permanent designation for a person.
Section 104 of the Companies Act, 2013, talk about chairman of meetings. In some later sections term chairperson is also used in same meaning.
Indian Secretarial Standards bring some legal definition for the position of chairman.
For Indian Secretarial Standards SS – 1 dealing with meetings of Board of Directors, Chairman means the Chairman of the Board or its Committee, as the case may be, or the chairman appointed or elected for a meeting.
For Indian Secretarial Standards SS – 2 dealing with general meetings, Chairman means Chairman of the Board or the Chairman appointed or elected for a Meeting.
These definitions given in Indian Secretarial Standards give some legal backing for permanently appointed chairman of the board.
Chairman Emeritus is more ceremonial position. Chairman Emeritus is an honorary position usually given to people who have retired from the position. It is just a respect to person named so. Chairman Emeritus is like a head of family who lost all powers to younger generation but have high regards at least in society (if not in the family). More often than not, Chairman Emeritus conducts meetings just by presence and all legal responsibilities rest on named chairman.
Basic responsibility of chairman is to conduct a meeting and certify as correct the proceeding when noted down as minutes of meeting. Thus, legally chairman is higher and actual position.
In listed companies, Chairman is preferably a non – executive position and sometime independent directors need to be elected as chairman. Chairman of most committees of Board should legally be an independent director. In private companies and closely held companies managing director act as chairman. In family owned head of family acts as chairman.
This post was earlier written as Quora answer here.
A notification issued by Ministry of Corporate Affairs notified section 255 of the Insolvency and Bankruptcy Code, 2016. By virtue of notification of Section 255 of Insolvency and Bankruptcy Code, 2016; the Companies Act, 2013, stands amended in accordance with Schedule XI of the IBC2016 with effect from 15th November 2016. We shall have a short discussion here.
Ministry of Corporate Affairs notified on 23rd September 2016 the Companies (Management and Administration) Amendment Rules, 2016 amending the Companies (Management and Administration) Rules, 2013 with effect from that date.
Yesterday late evening, I posted here about press release issued by Ministry of Corporate Affairs. Soon thereafter, two files uploaded on Official Gazette website with two notifications in each. In earlier post here today, we discussed establishment and jurisdiction of various NCLT benches.
In this post, we will have a bird’s eye view on Sections notified on 1st June 2016 related to NCLT.
We live in a changing world; corporate world changing fast and Indian Corporate Law fastest. A draft of the Companies (Management and Administration) third Amendment Rules, 2015 dated 16th November 2015, which is pending for publication in Official Gazette of India amend the version of form MGT -7 once again. Though these amendment rules are not available in official gazette, new version of form MGT – 7 is made available on the MCA21 portal for filing.
Companies Act, 2013 uses city 3 times (without taking subordinate legislations into account):
- In section 12(5)(a) with reference to registered office;
- In Section 27(1) for advertisement in news paper in the city of registered office;
- In Section 96(2) for place of Annual General Meeting in city of registered office.
The Companies Act, 1956 also used this term in similar reference.