Category Archives: Truth of Our Time

Time and Truth are 3- dimensional, we need to see all dimensions. Presenting another dimension with NO disagreement from other.

contract or agreement


In company law, there is interchangeable use of term contract and agreement. Though, they does not refer to same things. There is another term arrangement which also relevant in this context but not relevant to present post, here.

Agreement is an action of being agree. A contract is more than that.

“All contracts are agreements but all agreements are not contract.”

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Which Bank for your company?


Most young entrepreneur has this question in mind – which is suitable bank for my company or firm.

Most banks are here to do business and have physical and online services. Mindset of banker may affect business of their clients. They all have their target clients – you must be one of target client. A software company may not have good business relation with regional rural banks. Likewise a personal banking branch may not serve as good as corporate banking branch.

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Emeritus Chairman vs Chairman


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.

 

Limited vs Private Limited Company


 

I receive a question on Quora which may interest readers of this Blog. The question is –

What is the difference between limited company & private limited company?

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Limited in Limited Company??


I receive a question on Quora which may interest readers of this Blog. The question is –

What is limited in private limited company? I understand limited means limited liability but can someone explain with a detailed example about how this liability turns out to be limited. Please use numerical in the example. Lets consider 4 owners, each one has 25% stake in the company & the total investment is say 1 lac INR.”

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Company Incorporation version 2017.1 Form – INC – 32


Procedural aspect of company incorporation is constantly changing since implementation of the Companies Act, 2013. This registration service is most used and critical service provided by Ministry of Corporate Affairs. Government of India aims to get good rank in World Bank’s ease of doing business ranking. Now, a company may be incorporated with single simple form.

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Company Name with India


I receive a question on Quora which may interest readers of this Blog. The question is –

What is the procedure for inclusion of word ‘INDIA’ in the name of company?

My reply is as under –

Law related name of a company is governed with Section 4 of the Companies Act 2013 read with Rule 8. Under present law, there restriction related to inclusion of word “India” has been removed with effect from 1st April 2014.

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DBA Names in India


I receive a question on Quora which may interest readers of this Blog. The question is –

Doing Business As (DBA) name for a Private Limited company in India?

Typically in US, we can have a company registered name as JP Morgan Chase Limited and they have a DBA as Chase which is very business friendly name. Can I have similar DBA name for a Private Limited Company in India?

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AishMGhrana: 2016 in review


This blog always believe in ethical compliance of law, governance and responsibility. The blog has responsibility to its readers and writers. The blog regularly put here its annual reports for public information.

This blog now has secured https protocol to make reading experience more secured.

The blog was adjudged as one of the best blogs in India by Indianbloggers.org in category “law” in 2013 and continue hold this position. Indian Blog critics IndianTopBlogs.com listed this blog among best blogs on Corporate Affairs for year 2013 – 14, 2014 – 15, and 2016.

Most readers are resident of India and others are from 168 (against 148 last year) territories worldwide. Other than India; United States, United Kingdom, Malaysia, Pakistan and Singapore are important territories with more than 1,000 yearly views.

Most of our readers landed here on the blog from Search engines. Few others were referred by Social Media and friends. This year readers using mobile phone increased sharply to about 1700 in numbers.

Blog is participant of Accelerated mobile Pages (AMP) program of Google to ensure less mobile data consumption while loading.

The blog got about 3.6 lakh page views by 2.4 lakhs unique visitors this year against 4.1 lakh views by 2.7 lakh unique visitors last year. During the year, the blog posted 92 blog posts against 150 and 228 posts in 2015 and 2014 respectively. Blog now host total 571 blog posts and completed 12 lakh pageviews. The blog is thankful for testimonials sent by readers.

On readers demand – Index of Companies Law Posts is placed on home page.

Now 692 committed readers (against 545 last year) subscribed the blog over their email to get instant updates. You may also join mail subscription. 109 fellow blogger – readers read the blog on wordpress reader. About 600 person got blog updates through whatsapp. Blog has 5,274 amazing fans and committed readers.

This blog request all its users to share posts among their friends through social media buttons given after each post. Mobile phone users may share blog to whatsapp also.

I am thankful to WordPress which provided me all kind of support of excellent software which are easy to learn and use.

Transfer of Shares related to Unpaid Dividend


Ministry of Corporate Affairs recently issued Indian companies, the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. These rules published in Official Gazette on 5th September 2016 and came into force on 7th September 2016.  In this post, we will discuss transfer of shares related to unpaid dividend to the Investor Education and Protection Fund Authority.

UPDATE – provisions in this post are redundant from 28th February 2017 due to amendment in relevant Rules. Please click here to know new provisions.

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A friend in competition


This was a New Year eve party of company secretaries. Our parties are not usually more about fun but about professional gathering and slightly boring for most. Most of us pretend to be serious professional not in formal professional gathering but in such deemed to be fun filled parties.

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Cost auditor appointment query


According to Section 148 (3) of CA 2013 and Cost audit Rules 2014, cost auditor shall be appointed by the Board.

According to Section 148(3) of CA2013 and Audit and Auditor Rules, 2014 Remuneration shall be determined by the Members (in general meeting).

Now, according to Contract Act, 1872 (or in common law) this contract of appointment of cost auditor completes at General Meeting only that too on passing on resolution.

Query 1 – should we call it as “approval/ratification of remuneration or cost auditor” or “appointment of cost auditor” in general meeting? Unlikely but interesting situation will be where in members in general meeting does not ratify remuneration or modify the remuneration.

First case, no contract and second case counter offer. Further interesting, shall cost auditor bound to accept modified remuneration or not?

Minister Arjun Ram Meghwal


Despite my long standing habit of seeing governments and political leaders, irrespective of party they belong, critically; one political leader, I appreciate is Arjun Ram Meghwal. I know much less about the person, but the information in popular public domain is impressive.

He is a person, who use his cycle (push – bike) to his place of work, Parliament of India at his age of 61. Recently, we husband – wife took inspirations from him to use cycle to place of work though we may not agree with many of his political thoughts.

He belongs to traditional Weaver family (a depressed caste and class in India) of Kismidesar village in Bikaner. He is a “victim” of traditional child marriage system, married at age of 13. He was born on 7th December 1954.

After marriage, he did graduation in Arts, Law and masters thereafter. After marriage, study is quite a hardship for all women or men alike.

He started career as telephone operator, considered as low profile career option and front line of corruption for years till opening of sector for marker competition. He won the elections for the post of general secretary of Telephone Traffic Association.

Thereafter, he passed the examination for Rajasthan State Administrative Service in his second attempt. This is again a good achievement for a child married dalit telephone operator.

But, story not end here, he got promoted (awarded) Indian Administrative Service (IAS). Promotion to PCS (State Administrative Services) to IAS, need hard work, experience, public respect and sometime political connections.

He won the election for Lok Sabha (lower house of Indian  Parliament) in 2009 and 2014.

Now, he is Minister of State for Ministry of Finance and Ministry of Corporate Affairs and will report to his senior in these ministries Sh. Arun Jaitly.

Start Down India, Stand up MCA21


What is MCA21 (or MCA@! as some company secretaries writing it in private chat)? Today, one article published in a newspaper link here, tried to explain this most trusted mission mode project by Government of India which became most taunted Mast Mood Project by Corporate of India.

The Story starts unfolding when one corporate contractor took over from another. In a public event, an officer of a company claimed to took over the bullock cart.

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PROPOSED AMENDMENT: ASSOCIATE COMPANY


Government recently introduced the Companies (Amendment) Bill, 2016 to the Companies Act, 2013 proposes thirteen amendments in Section 2 related to definitions. Definition clauses always need contextual reading. Now, we will discuss these amendments in definitions.

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Redefining role of Professional Bodies


A policy document, copy of which is available, say that Ministry of Corporate Affairs is planning to reorganise role of three corporate bodies namely; Institute of Chartered Accountants of India (ICSI), Institute of Company Secretaries of India (ICSI) and Institute of Cost Accountants of India (ICAI). After introduction of National Financial Regulatory Authority (NFRA) under the Companies Act, 2013, there was long-standing speculation about the role of these three professional bodies. This policy document, which is in nascent stage, say all policies and standard making powers shall vast in either in the National Financial Regulatory Authority (NFRA) or some other body with broader mandate. Regulatory role of these three bodies is also under public discussion after concerns raised by parliamentarians and top foreign investors.

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Reflection of Political Brotherhood in Law


When followers of two major Indian Political parties are using abusive language for mothers and others of opponent, their “leaders united” is working for their brotherhood causes silently, continuously and legally. One of the most popular narrative from both political side on social media claims, media do not show “their” truth. Here, we will discuss one aspect of this year’s budget unreported in conventional media.

We have discussed two year earlier here on 31st March 2014 Foreign Donation to political parties.

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Letter to FM regarding Presumptive Income Scheme


Dear Finance Minister,

Regarding – Presumptive Income Scheme – Income from Profession

In present Budget 2016 – 17, you rightly made a proposal for a presumptive Income Scheme by introduction of Section 44ADA in the Income Tax Act, 1962. This proposal is based on recommendations of “Income Tax Simplification Committee” constituted by Central Government under the chairmanship of Justice R. V. Easwar, Former Judge of the Delhi High Court and Former President of the Income Tax Appellate Tribunal.

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Presumptive taxation scheme for persons having income from profession


The simplified presumptive taxation scheme is extended to persons earning professional income. According to government, this scheme will help to rationalize the presumptive taxation scheme and to reduce the compliance burden of the small tax payers having income from profession and to facilitate the ease of doing business.

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POLITICAL SURRENDER OF THE COMPANIES LAW COMMITTEE


On 1st February 2016, Ministry of Corporate Affairs uploaded the report of Companies Law Committee on its website here. In 7th post on this report, we will discuss political surrender and failure to deliberate up to its mandate by the committee. Indian Investors need immediate public discussion and required to make their suggestion to government for better disclosures based regime in political contributions by companies.

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