Tag Archives: Companies Act 2013

DEPOSITS (Companies Act 2013)

Posted on October 18, 2013 | 50 comments

After the commencement of present Act of 2013, or more correctly, on issue of Notification by Government of India making Section 73 effective; no company shall invite, accept or renew deposits from the public except in a manner provided under Chapter V of the Act. The chapter V has total four Sections i.e. Section 73 to 76 (both inclusive).

This prohibition does not apply to a banking company, a non – banking financial company as well as any other class of company as specified by the Central government. The Central government may specify any company after consultation with the Reserve Bank of India.

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

Tagged Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Deposit, Deposit from members, deposits from public, Fraud, India, Legal Reforms, Ministry of corporate affairs, National Company Law Tribunal, Reforms

DEBENTURE (Companies Act 2013)

Posted on October 15, 2013 | 40 comments

A bond from the Dutch East India Company, dating from 7 November 1623, for the amount of 2,400 florins. (Photo credit: Wikipedia)

Debenture is most important instrument to raise capital for a company. A company use debenture to raise debt capital. Popularly, debenture issued by public sector companies with government approval is called bonds.

Section 2 (30) of the Companies Act, 2013 define inclusively debenture as “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.

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

Tagged Bond, Companies Act 2013, Companies Bill 2012, convertible debenture, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Debenture, Debenture Stock, Debenture Trust, Debenture Trust Deed, Debenture Trustee, Debentures, Fully Convertible Debenture, India, Legal Reforms, Ministry of corporate affairs, Non – Convertible Debenture, Partly Convertible Debenture, Reforms, Secured Debenture, Shares and Securities, Unsecured Debenture

PURCHASE OF OWN SHARES AND BUYBACK

Posted on October 11, 2013 | 28 comments

Purchase of own shares by a company is possible but for legal restrictions.

Restriction on purchase by company or giving loan for purchase of its shares (Section 67):

A company limited by shares or a company limited by guarantee and having share capital shall have no power to by its own shares unless the consequent reduction of share capital is effected under the provision of this Act.

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

Tagged buy – back, Buy – back of securities, buy – back of shares, Capital Redemption Reserve Account, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Debentures, employees’ stock option, India, Legal Reforms, Ministry of corporate affairs, Other Securities, Prohibition for buy –back, purchase of own securities, Reduction of share capital, Reforms, Share Capital, Shares, Shares and Securities

MAJOR CAUTIONS UNDER PUBLIC OFFER (COMPANIES ACT, 2013)

Posted on September 20, 2013 | 2 comments

In recent posts, we discussed provisions of Chapter III of the Companies Act, 2013. This is time to discuss major penal provisions in this chapter.

CRIMINAL LIABILITY FOR MIS-STATEMENT IN PROSPECTUS (SECTION 34):

Where a prospectus, issued, circulated or distributed:

a) includes any statement which is untrue or misleading in form or context in which it is included; or

b) where any inclusion or omission of any matter is likely to mislead;

Every person who authorises the issue of such prospectus shall be liable under section 447 i.e. fraud.

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

Tagged Abridge Prospectus, Advertisement of Prospectus, Allotment of Securities, Application Form, Board of Directors, Bonus Issue, Business, Companies Act, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Debentures, Deemed Prospectus, Dematerialise securities, Dematerialise Shares, Depositories, ESOPS, Fraud, Further Public Offer, GDR, Global Depository Receipt, India, Information in Prospectus, Information Memorandum, Initial Public Offer, IPO, Issue of Securities, Issue of Securities by Company, Issue of Securities by Private Company, Issue of Securities By Public Company, Legal liability, Legal Reforms, Listed Companies, Listing, Listing of Securities, Ministry of corporate affairs, Offer for Sale, Offer for Sale of Securities to the Public by an existing Shareholder, Offer Letter, Offer of Securities for Sale, Other Securities, Preferential Allotment, Private Placement, Private Placement Offer Letter, Prospectus, Public Issue, Public Offer, Red Herring Prospectus, Reforms, Registration of Prospectus, Reports with Prospectus, Return of Allotment, right issue, SEBI, Securities, Securities and Exchange Board o India, Securities and Exchange Board of India, Security (finance), Shares, Shares and Securities, Shelf Prospectus, Statement of Compliance, Statement of Expert, Stock exchange, Sweat Equity

Effective Provisions of Companies Act, 2013 as on 12th September 2013

Posted on September 13, 2013 | 19 comments

On 30^th August 2013 (Bhadrapada 8, 1935 Saka), Ministry of Law and Justice issued a notification regarding the Companies Act, 2013 immediately after it received assent of President of India. Only section 1 of the Act of 2013 came into effect from that day. Section 1 as usual deals with short title, Extent, commencement and application.

Earlier Act of 1956 was applicable to whole of India with some modification related to Indian State of Nagaland, but not applicable Indian state of Sikkim. Act of 2013 is applicable to whole of India including Sikkim and without any exception to any state. Sub – section 4 of Section 1 of Act of 2013 lists out some exception regarding particular classes of companies. However, Act of 2013 is not made effective to Sikkim as on 12^th September 2013.

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

Tagged Appellate Tribunal, Central Government, Companies Act, Companies Act 1956, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Affairs Ministry, Corporate Governance, Corporate Law, General Meeting, India, Indian Depository Receipt, Legal Reforms, Ministry of corporate affairs, National Company Law Tribunal, Public Offer, Reforms, Sikkim, the Registration of Companies (Sikkim) Act

VARIANTS OF PROSPECTUS (Companies Act, 2013)

Posted on September 13, 2013 | 6 comments

In our last blog post Prospectus (Companies Act 2013) , we discussed provisions related to prospectus. We will continue our study in this post.

ADVERTISEMENT OF PROSPECTUS (SECTION 30):

When a company issue an advertisement of prospectus, the advertisement shall specify contents of its memorandum; the objects, the liability of members, amount of share capital, name of signatories, and number of shares subscribed for by these signatories and its capital structure.

SHELF PROSPECTUS (SECTION 31):

Any class of company may file a shelf prospectus with the Registrar of Companies at the stage of first offer of securities.

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6 Comments

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

Tagged Abridge Prospectus, Advertisement of Prospectus, Application Form, Companies Act 2013, Companies Bill 2012, CorpGov, CorpLaw, Corporate Governance, Corporate Law, India, Information Memorandum, Legal Reforms, Ministry of corporate affairs, Prospectus, Public Issue, Public Offer, Red Herring Prospectus, Reforms, Registrar of Companies, Securities, Securities and Exchange Board of India, Shares, Shares and Securities, Shelf Prospectus

NAME AND CLASS OF THE COMPANY

Posted on August 30, 2013 | 1 comment

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

After reading my posts on Formation of a Company and Alteration of Memorandum and Articles, few readers suggested that I should cover provisions related to names in one place. I will discuss these provisions here along with provisions related to conversion of company from one class to another.

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

Tagged Articles, Change in Name, Companies Act 2013, Companies Bill 2012, Conversion of Registered Companies, CorpLaw, Corporate Law, Incorporation, Incorporation & Registration, India, Legal Reforms, Memorandum, Ministry of corporate affairs, Name of Company, Rectification of Name, Reforms

Quotes from Companies Bill debate in Rajya Sabha

Posted on August 14, 2013 | 2 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

For every new law, legislative intent, which show it in debates taken place in Parliament, become important. These debates offer a guide while drafting subordinate legislation. There are many questions about future rules and regulations. I, here, compiled some important quotes from this debates from Rajya Sabha.[i][ii][iii]

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Posted in Companies Act 2013, CorpGov, CSR, Governance and Responsibility, Truth of Our Time

Tagged Auditor, Chartered Accountants, class-action suits, Companies Act 2013, Companies Bill 2012, CorpLaw, Corporate Law, Corporate Social Responsibility, CSR, Director, Ganguly Committee, Independent Director, India, Legal Reforms, Ministry of corporate affairs, Rajya Sabha, Reforms

KEY MANAGERIAL PERSONNEL

Posted on April 5, 2013 | 30 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

In any jurisdiction, Quality of Corporate Governance and compliance of ethics depends upon quality of people taking charge of the affairs. The companies Bill 2012 have some inbuilt elements of corporate governance in it. First time Concept of Key Managerial Personnel is being introduced in India. Which seems different with “officer who is in default” as that concept is still in this Bill.

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30 Comments

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

Tagged Board of Directors, Chief Executive director, Chief Financial Officer, Companies Act 2013, Companies Bill 2012, Company Secretary, CorpGov, CorpLaw, Corporate Governance, Corporate Law, India, Key Legal Reforms, Key managerial personnel, Manager, Managing Director, Ministry of corporate affairs, Officer, officer who is in default, Profession, Reforms, Related Party Transaction, Whole – time Director

AUDITOR AND AUDITOR’S REPORT: DUTIES, POWER, PENALTIES.

Posted on March 8, 2013 | 12 comments

(UPDATE: on 30^th August 2013: Companies Bill, 2012became the Companies Act, 2013 (Act 18 of 2013). )

In my last blog post auditor under companies Act, 2013: from appointment to removal, I discussed auditor his appointment, remuneration resignation and removal along with other incidental matters. In this post I will discuss power, duties and penalties related to auditors and audit report.

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12 Comments

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

Tagged Accounting, Accounting Standard, Accounts and Audit, Audit, Audit Report, Auditor, Branch Audit, CA, Chartered Accountant, Companies Act 2013, Companies Bill 2012, Comptroller and Audit General of India, CorpGov, CorpLaw, Corporate Governance, Corporate Law, General Meeting, Government Companies, ICAI, India, Institute of Chartered Accountants of India, Legal Reforms, Ministry of corporate affairs, Profession, Reforms, Statutory Audit

NATIONAL FINANCIAL REPORTING AUTHORITY

Posted on February 15, 2013 | 6 comments

(UPDATE: on 30^th August 2013: Companies Bill became the Companies Act, 2013 (Act 18 of 2013). Post updated accordingly)

One of the foremost step for improving corporate governance since birth of concept of corporate governance is improving quality of accounting and auditing of companies. Audit Committee is one of these measures, which has been taken to improve standard of financial reporting. But concerns related to quality of financial reporting are not new. We can trace these concerns in earlier legislation, all earlier versions of the Companies Act in general and the Chartered Accountants Act, 1949. Without going deep in these laws, we simply say; what was otherwise need to enact such Act to regulate a profession of accounting and auditing, standardizing whole process of accounting and auditing.

The National Financial Reporting Authority is a quasi – judicial body to regulate matters related to accounting and auditing. With increasing demand of non – financial reporting, I may safely predict, a National Business Reporting Authority to regulate standards of all kind of reporting, financial as well as non – financial, from companies in near future.

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6 Comments

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

Tagged Accounting Standards, Accounts, Accounts and Audit, Appellate Authority, Auditor, CA, Chartered Accountants, Companies Act 2013, Company Bill 2013, CorpGov, Corporate Governance, Corporate Law, ICAI, India, Institute of Chartered Accountants of India, National Financial Reporting Authority, NFRA, Profession, Reforms

Tag Archives: Companies Act 2013

DEPOSITS (Companies Act 2013)

DEBENTURE (Companies Act 2013)

MAJOR CAUTIONS UNDER PUBLIC OFFER (COMPANIES ACT, 2013)

Effective Provisions of Companies Act, 2013 as on 12th September 2013

VARIANTS OF PROSPECTUS (Companies Act, 2013)

NAME AND CLASS OF THE COMPANY

AUDITOR AND AUDITOR’S REPORT: DUTIES, POWER, PENALTIES.

NATIONAL FINANCIAL REPORTING AUTHORITY

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