Many years ago one Hindu priest told me, those worshipping Laxmi ji (goddess of wealth) before without satisfying Ganesh Ji (god of goodness) may not get good wealth. We need to follow established a procedure to get the desired result. Without understanding utility of Form DIR – 10, its use may not give the desired result. Here, we will have a discussion.
Tag Archives: Registrar of Companies
Compliance way or Confine way! The Government made it clear. Directors who were on a long-term picnic after removal of names of their “shell companies” are now offered sleepless nights. I appreciate.
Ministry of Corporate Affairs issued two important lists in this regard –
- List Of Directors Associated With Struck Off Companies U/S 248
- List Of Disqualified Directors U/S 164 (2)(A)
The National Company Law Tribunal (Amendment) Rules, 2017 notified on 6th July 2017 which came into force in same date inserted Rule 87A the National Company Law Tribunal Rules, 2016. In this post, we will discuss newly inserted rules with brief background.
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.
This is not possible every time for a member to be present in a General Meeting. Members are very much concerned for well being of the company, its management, profit and growth. Corporate law does not permit members to participate members to interfere in day to day management. A member at most may seek certain information or participate in general meetings of the company. Participation in a meeting need a presence; a personal presence of a member. Even in a virtual presence, a member needs to spare time for the purpose.
Further, it may also be possible that member is a corporate sole like President of India or Governor of an Indian State who may not be present himself but through representative. President of India and Governor of an Indian State may appoint a person as his representative for a meeting of the company [Section 112(1)]. Where a member is a body corporate, it may also appoint a person as representative [Section 113(1)]
A representative of President or Governor shall be deemed to be a member of such a company and shall be entitled to exercise the same rights and powers, including the right to vote by proxy and postal ballot, as the President or, as the case may be, the Governor could exercise as a member of the company. [Section 112(2)]
A representative of body corporate shall be entitled to exercise the same rights and powers, including the right to vote by proxy and by postal ballot, on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the company. [Section 113(2)]
Major difference among representative under Section 112(2) and 113(3) is that representative of President or Governor shall be deemed to be a member but representative of body corporate is a mere representative who may exercise powers as a member. This difference arises from drafting and may not have much practical impact.
Major similarity among representative under Section 112(2) and 113(3) is that both representatives may vote by proxy and postal ballot.
So now, for the purpose of this post, we may treat all members as individual as corporate sole and body corporate also being represented by individuals exercise same powers in the general meeting.
Where a member may not present, member may appoint a proxy under Section 105 of the Companies Act, 2013 t attend and vote in the meeting. Similar provision was there in earlier Acts also.
A proxy may vote even if member present personally in the meeting until members expressly revoke proxy or vote himself which implicitly revoke the proxy. [Tata Iron & Steel Co. Ltd., In Re., AIR 1928 Bom. 80].
The instrument appointing a proxy shall be in writing and be signed by the appointer or his attorney. Where appointer is a body corporate, it shall be sealed of body corporate and signed by an officer of attorney. [Section 105(6)] The appointment of proxy shall be in the Form MGT – 11. [Rule 19(3)]
Limitation of Proxy:
Proxy is an agent for the purpose of voting on poll in a general meeting and cannot speak or vote otherwise. [Section 105(1)] What is use of such agent, if the voice of the member could not reach and heard in General Meeting? This limit right of the members to certain manner.
This limited right to appoint is not available to all classes of members. A member of a company not having a share capital shall not be entitled to appoint proxy unless articles provide so. Central Government may also specify companies whose members shall not be entitle to appoint a proxy. [Proviso to Section 105(1)]
How can a member ensure to coup with such limitation where he could not be represented through proxy? How can a member ensure his voice in general meeting?
The companies Act, 2013 does not give the answer to abovementioned questions. This does not render a member helpless. The Power of Attorney Act, 1882 come to rescue a member in this situation.
A Power of Attorney includes any instrument empowering a specified person to act for and in the name of the person executing it. [Section 1A of the Power of Attorney Act, 1882]
A ‘power-of-attorney’ means a formal instrument by which one person empowers another to represent him, or act in his stead, for certain purposes, usually in the form of a deed poll, and attested by two witnesses. The donor of the power is called the principal or constituent; the donee is called the attorney or agent. [Osborn’s Concise Law Dictionary, 7th Edn.,]
The donee of a power of attorney may execute pr do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. [Section 2 of the Power of Attorney Act, 1882]
However, an attorney may do such act only when the attorney and the donor have capacity to make contract.
Where a Power of Attorney contains the following words “… to appear and to represent me at any meeting of any joint stock company in which I am interested as a shareholder or debenture holder or preference shareholder, or as a member or otherwise and to vote there, and also to grant proxies to any other person …” These words are sufficient for attorney to exercise powers of member in a general meeting. [Tata Iron & Steel Co. Ltd., In Re., AIR 1928 Bom. 80].
A holder of General Power of Attorney shall be treated as member personally present not as a proxy. Accordingly, he will be counted for the purpose of quorum. A General Power of Attorney may include all power of members which it may exercise as members under the Companies Act 2013 and any other law for the time being in force.
However, a power of attorney executed outside India shall be treated in accordance with the law of that that country for the time being in force.
Please note: This blog invite readers to share their comments, suggestions, hardship, queries and everything in comment section. This blog post is not a professional advice but just a knowledge sharing initiative for mutual discussion.
MCA recently introduced the Companies (Filing of Documents and forms in XBRL) Rules 2015 dated 9th September 2015 for which I have yet to locate published copy in the Official Gazette. These rules shall come into force from the date of publication in Official Gazette. These rules have already discussed earlier here.
Note: AOC – 4 XBRL Version 1st October 2015 is being used for writing this post.
No doubt the Companies Act, 2013 is not a law but collection of legal puzzle. Compliance of its provisions became hell. This is not just because of poor drafting of law but poor reading of law. We student of the Companies Act, 2013 need to unlearn the Companies Act, 1956 first and finally. We need to know, learn, understand and educate ourselves that the Companies Act, 1956 is now only for reference purpose only.
In last post, we discussed puzzle of ADT – 1 here but every coin have second side also. In that post we start reading form the charging sub – section and in this post we will start reading form the compliance required by the Ministry i.e. ADT – 1 itself.