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.”
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.
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.
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?
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.”
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.
Ministry of Corporate Affairs recently on 29th December 2016 came out with and notified the Companies (Incorporation) 5th Amendment Rules, 2016. These amendments came into force on 1st January 2017.
Posted in Chapter II - CA2013, Companies Act 2013
Tagged Ease of Doing Business, Form INC – 32, SPICe
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?
Posted in Chapter II - CA2013, Companies Act 2013, Truth of Our Time
Tagged Companies Name, DBA Name, Doing Business As
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Government of India delegates its powers time to time to subordinate offices for better implementation of law. Section 458 of the Companies Act, 2016 confers power of such power of delegation in relation to the provision under the Act to the Government of India. Government of India issued notification S.O. 4090(E) dated 19th December 2016 regarding delegation of powers to Regional Directors, which came into effect from that date.
I receive a question on Quora which may interest readers of this Blog. The question is –
My Reply –
Ministry of Corporate Affairs notified the Companies (Transfer of Pending Proceedings) Rules, 2016 on 7th December 2016. These Rules shall come into effect on 15th December 2016. In this post, we will discuss these rules.
This is 13th Removal of difficulty for the Companies Act, 2013. Central Government on 7th December 2016 notified the Companies (Removal of Difficulty) fourth Order, 2016 which shall come into effect from 15th December 2016.
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.
Posted in Chapter I - CA2013, Chapter II - CA2013, Chapter IV - CA2013, Chapter VI - CA2013, Chapter VII – CA2013, Chapter XIV - CA2013, Chapter XIX -CA2013, Chapter XV - CA2013, Chapter XVIII - CA2013, Chapter XX - CA2013, Chapter XXI - CA2013, Chapter XXIX - CA2013, Chapter XXVII - CA2013, Companies Act 2013
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 earlier post here and here, we discussed transfer of amounts of unpaid and unclaimed dividends etc to the Investor Education and Protection Fund Authority Fund and transfer of shares in respect of which dividend is remain unpaid and unclaimed for continuous seven years. In this post, we will refund of such amount and shares related to unpaid dividend transferred 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.
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.
Posted in Truth of Our Time
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 amount of unpaid dividend to the Investor Education and Protection Fund Authority.
At peak time of dividend declaration, Ministry of Corporate Affairs gifted 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 reporting of unpaid dividend to the Investor Education and Protection Fund Authority.
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