AishMGhrana | LAW GOVERNANCE RESPONSIBILITY | Page 36

MERGER OR AMALGAMATION

Posted on December 24, 2013 | 5 comments

We will discuss merger and amalgamation in this post

MERGER AND AMALGAMATION (SECTION 232):

The Tribunal, Merger, amalgamation or demerger is proposed in the application of compromise and arrangement under Section 230 (i) of the company, or (ii) of the creditors, or (iii) of the members of the company (iv) of the liquidator of company under liquidation, may order the meeting (A) Creditors or class of creditors, or (B) of the members or class of members, (x) to be called, (y) held and (z) conducted in the manner directed by the Tribunal.

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Posted in Chapter XV - CA2013, Companies Act 2013, Governance and Responsibility

Tagged Amalgamation, Arrangement, Companies Act 2013, Companies Bill 2012, Compromise, CorpGov, CorpLaw, Corporate Governance, Corporate Law, cross border merger, cross country merger, India, Legal Reforms, Merger, Ministry of corporate affairs, Reforms, Tribunal

COMPROMISE AND ARRANGEMENT

Posted on December 20, 2013 | 4 comments

In this and next few post, we will discuss legal principles contained in Chapter XV of the Act.

POWER TO COMPROMISE AND ARRANGEMENT (SECTION 230):

A compromise or arrangement may be –

(a) between a company and its creditors or any class of them; or

(b) between a company and its members or any class of them.

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Posted in Chapter XV - CA2013, Companies Act 2013

Tagged Arrangement, Companies Act 2013, Companies Bill 2012, Compromise, CorpGov, CorpLaw, Corporate Governance, Corporate Law, India, Legal Reforms, Ministry of corporate affairs, Reforms, Tribunal

INSPECTOR’S REPORT AND THEREAFTER

Posted on December 17, 2013 | Leave a comment

Consequence of any investigation is report. The Report is just a milestone. We will discuss the journey ahead in this post.

Inspector’s Report (Section 223):

In inspector shall submit all interim reports, if any, and final report to the Central Government.

Every report shall be in writing or printed as per direction of the Central Government.

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Posted in Chapter XIV - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Bankers, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Criminal Prosecution, Disgorgement, Expenses of Investigation, Explanation, False Statement, Fraud, India, Information, Inquiries, Inspection, Inspection Report, Inspector, Investigation, Investigation Report, Legal Advisors, Legal Reforms, Ministry of corporate affairs, Recovery, Reforms, Registrar, Tribunal, Wind up

PROCEDURE RELATED TO INQUIRY AND INVESTIGATIONS

Posted on December 13, 2013 | 2 comments

We are going to deal corporate frauds, genre of crime committed by most educated, polished, professional, greedy white colour criminals. You may find these people to come out on technical or procedural grounds even after committed in all black and whites.

HUMAN INSPECTOR (SECTION 215):

No firm, body corporate or other association shall be appointed as an inspector.

This leaves only human being to be appointed as inspector.

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Posted in Chapter XIV - CA2013, Companies Act 2013

Tagged Code of Civil Procedure 1908, Code of Criminal Procedure 1973, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Custody of Books and Papers, Examination on Oath, Explanation, Fraud, Freezing of Assets, India, Information, Inquiries, Inspection, Inspection Report, Inspector, Investigation, Investigation Report, Legal Reforms, Ministry of corporate affairs, Power of Inspector, Protection of Employee, Reforms, Registrar, Seizure of Documents, Tribunal

SERIOUS FRAUD INVESTIGATION OFFICE AND INSPECTORS

Posted on December 10, 2013 | 5 comments

Presently, the Serious Fraud Investigation Office (SFIO) is an organisation working under Ministry of Corporate Affairs. The office was established by the Government of India Resolution dated 2003 to investigate corporate frauds. The “About us” page of its website as on date read as under:

“The SFIO is a multi-disciplinary organization under Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white-collar crimes/frauds. The SFIO will normally take up for investigation only such cases, which are characterized by:

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Posted in Chapter XIV - CA2013, Companies Act 2013

Tagged Civil Court, Code of Civil Procedure, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Explanation, Fraud, India, Information, Inquiries, Inspection, Inspection Report, Inspector, Investigation, Investigation Report, Legal Reforms, Ministry of corporate affairs, Reforms, Registrar, Serious Fraud investigation Office, SFIO, Tribunal

INSPECTION, INQUIRY, INVESTIGATION

Posted on December 6, 2013 | 3 comments

We will discuss one important but neglected aspect of inspection, inquiry and investigation in this blog post.

POWER TO CALL FOR INFORMATION, INSPECTION AND INQUIRIES (SECTION 206):

This is a long but very powerful section as it appear from its section – heading.

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Posted in Chapter XIV - CA2013, Companies Act 2013

Tagged Civil Court, Code of Civil Procedure, Companies Act 2013, Companies Bill 2012, Control, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Explanation, Foreign Company, Fraud, India, Influence, Information, Inquiries, Inspection, Inspection Report, Inspector, Investigation, Investigation Report, Legal Reforms, Ministry of corporate affairs, Ownership, Reforms, Registrar, Search, Search and Seizure, Seizure, Tribunal

ISSUES RELATED TO MANAGERIAL REMUNERATION

Posted on December 3, 2013 | 3 comments

We have much earlier discussed “Appointment of Managing Director and Manager” and “Managerial Remuneration in case of inadequate profit”. I understand, Section 197 read with Schedule V is a code for managerial remuneration. Now, we will discuss other relevant provision for managerial remuneration.

CALCULATION OF PROFIT (SECTION 198):

In computing the net profit of a company in any financial year credit shall be given for:

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Posted in Chapter XIII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Directors Remuneration, Inadequate Profit, India, Legal Reforms, Loss of Office, Manager, Managerial Remuneration, Managing Director, Ministry of corporate affairs, Profit and Loss, Recovery of Remuneration, Reforms, Remuneration, Schedule V, Whole – time Director

CONTRACTS INVOLVING DIRECTORS

Posted on November 29, 2013 | 10 comments

Contracts in which directors are involved are one of major corporate governance issue. Many corporate failures may be attributed to contracts related to directors under some intention which are not in consistency with fiduciary duties of directors. We have already discussed contract in which directors are interested and related party transaction in this earlier post.

REGISTER OF CONTRACTS OR ARRANGEMENTS IN WHICH DIRECTORS ARE INTERESTED (SECTION 189):

Every director or key managerial personnel shell within a period of thirty days of his appointment disclose to the company particulars relating to his concern or interest in other companies or organisation.

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Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Companies Act 2013, Companies Bill 2012, Contract in which directors are interested, CorpGov, CorpLaw, Corporate Governance, Corporate Law, India, insider trading, Legal Reforms, Ministry of corporate affairs, Reforms, register of contracts in which directors are interested, Related Party, Related Party Transaction

LOAN AND INVESTMENT

Posted on November 26, 2013 | 18 comments

LOAN TO DIRECTORS, ETC. (SECTION 185):

No company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person.

This provision shall not apply to –

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Posted in Chapter XII - CA2013, Companies Act 2013

Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Directors, India, Investment, Key managerial personnel, Legal Reforms, Loan, Loan to Directors, Ministry of corporate affairs, Reforms, Subsidiary Company

CHALLENGES FOR COMPANY SECRETARY AS GOVERNANCE PROFESSIONAL

Posted on November 24, 2013 | Leave a comment

“Company Secretary” has started a long journey form clerk to manager, general manager, decision maker, key managerial personnel to its full avatar of governance professional.

Depending upon knowledge, experience and expertise, all members of same profession may not be on same glorified height. Some may still be a clerk and some other may be on top of ladder. This all may depend upon our risk appetite of individual and his willingness to accept challenges. This will also depend upon the challenges offered to the professional.

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Posted in Company Secretary, CorpGov, Governance and Responsibility, Truth of Our Time

Tagged Corporate Governance

DIRECTOR IDENTIFICATION AND REGISTER OF DIRECTOR

Posted on November 22, 2013 | 11 comments

English: Sir Ratan Tata, founder of Sir Ratan ...

English: Sir Ratan Tata, founder of Sir Ratan Tata Trust (Photo credit: Wikipedia)

Director identification Number is a prerequisite for appointment as director in a company in India. Same time Register of Directors and Key Managerial personnel serve the purpose of Record of interests of these persons in company and otherwise.

DIRECTOR IDENTIFICATION NUMBER (SECTIONS 153 – 159)

Every individual intending to be appointed as director of a company shall make an application for allotment for Director Identification Number (DIN) to the Central government. (Section 153)

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Posted in Chapter XI - CA2013, Companies Act 2013

Tagged Companies Act 2013, Companies Bill 2012, Copy of Register, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Director, Director Identification Number, India, Inspection of Register, Inspection of Register of Director and Key Managerial Personnel, Legal Reforms, Ministry of corporate affairs, Reforms, Register of Director, Register of Key Managerial Personnel

BOOKS OF ACCOUNTS

Posted on November 19, 2013 | 15 comments

The Financial Statements of a company is most important document until recent past, when non – financial reporting started to gain its momentum. This is a reporting of growth in business in monetary units.

BOOK OF ACCOUNTS (SECTION 128):

Every company shall prepare and keep at its registered office books of accounts and other relevant books and papers and financial statement for every financial year. These books must give a true and fair view of the state of affairs of the company and its branch offices. These books must explain the transactions effected both at the registered office and its branches. These books shall be kept on actual basis and double entry system of accounting.

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Posted in Chapter IX - CA2013, Companies Act 2013, Governance and Responsibility

Tagged Accounting Standards, Adjourned Annual General Meeting, Annual Filing, Annual General Meeting, Audit Report, Auditors, Balance Sheet, Books of Accounts, Branch Office, Chief Financial Officer, Companies Act 2013, Companies Bill 2012, Consolidated Financial Statements, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Directors, Financial Statements, India, Inspection of Books, Legal Reforms, Managing Director, Members, Ministry of corporate affairs, Notes to Accounts, Profit and Loss Accounts, Provisional Annual filing, Re – casting of Financial Statement, Reforms, Registered Office, Voluntary revision of Financial Statements

DIVIDEND (Companies Act, 2013)

Posted on November 15, 2013 | 17 comments

Dividend is a payment made by a company to its shareholders out of distributable profit.

DECLARATION OF DIVIDEND (SECTION 123):

A company shall declare dividend and pay it, only out of profit of the company for the financial year or out of undistributed profit of any previous financial year or out of both.

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Posted in Chapter VIII - CA2013, Companies Act 2013

Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Dividend, Dividend Account, IEPF, India, Interim Dividend, Investor Education and Protection Fund, Legal Reforms, Ministry of corporate affairs, Reforms, Unpaid Dividend

RESOLUTION, MINUTES AND REPORT

Posted on November 12, 2013 | 28 comments

Recently we have discussed “General Meetings”, “Preparing General Meetings” and “Proxies, Voting and Polling”. The provision contains here also applicable to all company meetings unless context restrict them to General Meeting.

RESOLUTION (SECTIONS 114):

The Companies Act, 2013 does not define resolution. Resolution is a formal statement of a decision or expression of opinion put before or adopted by an assembly. This may be ordinary resolution or special resolution.

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged AGM, Annual General Meeting, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, EGM, Electronic Voting, Extra Ordinary General Meeting, General Meeting, General Meeting by Tribunal, General Meeting on Requisition, India, Legal Reforms, Meeting by Board, Ministry of corporate affairs, One Person Meeting, Poll, Postal Ballot, Proxy, Reforms, Representative, Voting

PROXIES, VOTES AND POLLING

Posted on November 8, 2013 | 17 comments

Recently we have discussed “General Meetings” and “Preparing General Meetings”. In this post we will discuss things during meetings like Proxies, voting, poll and related matters.

Proxies are one of the beauties of corporate legislations. Proxies have their important in corporate decision making through voting and polls.

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged AGM, Annual General Meeting, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, EGM, Electronic Voting, Extra Ordinary General Meeting, General Meeting, General Meeting by Tribunal, General Meeting on Requisition, India, Legal Reforms, Meeting by Board, Ministry of corporate affairs, One Person Meeting, Poll, Postal Ballot, Proxy, Reforms, Representative, Voting

PREPARING GENERAL MEETING

Posted on November 5, 2013 | 15 comments

In last post “General Meetings”, we discussed what may be possible dates for general meeting and the place where it may be held. How we manage the event is depend upon our own choice. But there are some other legal formalities to comply with. These may be –

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged AGM, Annual General Meeting, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, EGM, Extra Ordinary General Meeting, General Meeting, General Meeting by Tribunal, General Meeting on Requisition, India, Legal Reforms, Meeting by Board, Ministry of corporate affairs, One Person Meeting, Proxy, Reforms

GENERAL MEETINGS

Posted on November 1, 2013 | 30 comments

A company may have many kinds of meetings; general meetings are one among them. In very simple terms, a meeting of general body may be called general meeting. General meeting comprises of all general members of an organisation that is company in our case.

A general meeting may be Annual General Meeting (AGM) or Extra – ordinary General Meeting (EGM).

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged AGM, Annual General Meeting, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, EGM, Extra Ordinary General Meeting, Financial Year, General Meeting, General Meeting by Tribunal, General Meeting on Requisition, India, Legal Reforms, Meeting by Board, Ministry of corporate affairs, One Person Meeting, Proxy, Reforms, Year

REGISTERS AND ANNUAL RETURN

Posted on October 29, 2013 | 14 comments

In last post, we discussed about register of members, register of debenture – holders and register of other security holders. Now, we will discuss, some other provisions related to these registers and also about annual return.

PLACE OF KEEPING AND INSPECTION OF REGISTERS AND RETURNS (SECTION 94):

The registers required to be kept and maintained by a company under section 88 and copies of the annual return filed under section 92 shall be kept at the registered office of the company.

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Posted in Chapter VII – CA2013, Governance and Responsibility

Tagged Annual Return, Closing of Register, Companies Act 2013, Companies Bill 2012, Company Secretary, Company Secretary in Practice, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Debenture – holders, Foreign Register, Index of members, India, Legal Reforms, Member, Ministry of corporate affairs, Reforms, Register of Debenture – holders, Register of Members, Register of other security holders, Register Office, Return of Promoters’ Stake

MEMBERS AND DEBENTURES – HOLDERS

Posted on October 25, 2013 | 13 comments

Clause 55 of Section 2 says that member in relation to a company means –

(a) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration shall be entered as member in its register of member;

(b) every other person who agrees in writing to become a member of the company and whose name is entered in the register of the company; and

(c) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository.

On the other hand, a holder of a debentures is called a debentures – holder.

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Posted in Chapter VI - CA2013, Companies Act 2013, Governance and Responsibility

Tagged Beneficial Interest, Beneficial Owner, Closing of Register, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Debenture – holders, Depository, Foreign Register, Index of members, India, Legal Reforms, Member, Ministry of corporate affairs, Nomination, Reforms, Register of Debenture – holders, Register of Members, Register of other security holders, Wholly Owned Subsidiary

CHARGES

Posted on October 22, 2013 | 15 comments

A Charge under the Companies Act, 2013 means an interest or lien created on the property and assets of the company or any of its undertakings or both as security and includes mortgage.

REGISTRATION OF CHARGES (SECTION 77):

Every company creating a charge shall register the particulars of charge signed by the company and its charge – holder together with the instruments creating such charge with the Registrar within thirty days of its creation.

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Posted in Chapter VI - CA2013, Companies Act 2013, Governance and Responsibility

Tagged Charge, Charge – holder, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Creation of Charge, India, Inspection of Register of charges, Legal Reforms, Manager, Ministry of corporate affairs, Modification, Receiver, Rectification of charges, Reforms, Register of Charge, Registration of Charge, Satisfaction of Charge