Company law 2012-

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Company law 2012-

  1. 1. Company LawDr. V. K. JainM.Com., M.Phil., LL.M. Ph.D. (Tax), FCSPractising Company Secretary
  2. 2. Companies Act 1956 Why Study Company Law?– Most popular form of business organisation.Why……….?– It provides an organisational framework– It is a means to an end– It offers several advantages over other forms of businessorganisations– A company is a person in Income-tax– More than 60% of income-tax revenue comes from corporateassesses.CAPS Dr. V. K. Jain 2
  3. 3. How many companies are there in India?There has been tremendous growth of companies in the nineties dueto the new economic policy of liberalisation, the new scheme oftaxation of partnership firms, the expanding capital market etc.As a result the number of companies increased manifold from about1.25 lacs in 1980 to around 9 lacs by January 2012.Mumbai ROC has around 2,40,000 companies while Delhi ROC hasaround 2,25,000.There are around 10,000 listed companies.
  4. 4.  1850 The first Companies Act was passed in India in the year1850. Thereafter the Companies Act, 1866 was enacted,followed by the Companies Act 1913 which was replaced bythe present Companies Act, 1956. The Companies Act 1956 has been amended several times. TheCompanies (Amendment) Act, 1999, 2000 & 2002 has drasticallyamended the Companies Act, 1956, to respond to the changedeconomic environment and liberalisation and globalisationpolicies of the Government. A new Companies Act is in the offing and the new company lawbill has already been presented before the Parliament.
  5. 5. Ministry of Corporate Affairs In 2004 a new Ministry of Company Affairs (renamed Ministryof Corporate Affairs since 9th May 2007) was created for thefirst time under the charge of an independent Minister. MCA-21 – This is the biggest e- governance initiative taken bythe Ministry of Corporate Affairs in 2006. All manual filing ofreturns and documents have been abolished and e-filing hasbeen introduced.
  6. 6. Meaning of a CompanyCAPS Dr. V. K. Jain 6MEANING OF A COMPANYSeparate Legal Entity Transferable SharesLimited Liability Separate PropertyPerpetual Succession Common SealREGISTERED OR INCORPORATED UNDER THE COMPANIESACT WHERE BY IT AQUIRES CERTAIN ATTRIBUTESFOR SOME COMMON PURPOSE VIZ. BUSINESS,CHARITY, RESEARCH ETC.A COMPANY IS AN ASSOCIATION OF PERSONS
  7. 7. Non-corporate form of business enterprises- Sole proprietorship Joint Hindu Family (HUF) PartnershipCorporate Form of business enterprises – Co-operative organisation – Can be converted intoa Producer company. Company Limited Liability Partnership (LLP)
  8. 8.  By a company is meant an association of many personswho contribute money or money’s worth to a common stock andemploy it in some trade or business, andwho share the profit and loss (as the case may be) arising therefrom. The common stock so contributed is denoted in money and is thecapital of the company. The persons who contribute it, or to whom it belongs, aremembers. The proportion of capital to which each member is entitled is hisshare. The shares are always transferable although the right to transferis often more or less restricted. (Lord Justice Lindley)
  9. 9.  On the basis of itscharacteristics, a companycan be defined as“ an incorporated association,which is an artificial personcreated by law, having aseparate entity, with aperpetual succession and acommon seal ”. (Haney)
  10. 10. Characteristic Features of a Company 1 Separate Legal entity– Solomon v Solomon & Co. Ltd Limited liability of members Perpetual SuccessionDr. V. K. Jain 10
  11. 11. Characteristic Features of a Company 2 Separation of ownership from management Transferable sharesDr. V. K. Jain 11
  12. 12. Characteristic Features of a Company 3 Separate Property Common Seal Capacity to sue and being suedDr. V. K. Jain 12
  13. 13. Lifting the Corporate Veil Fictional veil between the company & its members Lifting the veil means disregarding the corporate entity andpaying regard to the realities behind the legal form When the notion of legal entity is used to defeat publicconvenience, justify wrong, protect fraud or defend crime, thelaw will disregard the separate legal entity and look behindthe real persons who are in control of the company.Dr. V. K. Jain 13
  14. 14. Under Statutory Provisions1. Reduction of membership below the statutory minimum (sec. 45)2. Misrepresentations in prospectus (sec.62 & 63)3. Failure to return application money (sec. 69)4. Misdescription of name (sec. 147)5. Piercing the veil in holding and subsidiary company relationships6. Company under investigation7. Fraud during winding up8. For ultra vires Act9. For violations of the provisions of other statuesDr. V. K. Jain 14
  15. 15. Under judicial decisions1. Lifting corporate veil in tax matters2. Lifting corporate veil where company is used for evasion of personal andstatutory obligation3. Lifting corporate veil for determination of the enemy character of the company4. Lifting corporate veil in associated companies5. Lifting corporate veil where company is used to avoid welfare legislation6. Lifting corporate veil where body corporate is used to commit fraud or improperconduct7. Lifting corporate veil for determining technical competence of the companyDr. V. K. Jain 15
  16. 16. Difference BetweenCompany & Body CorporateDr. V. K. Jain 16
  17. 17.  Body Corporate or corporation is wider than theterm company It has three distinct attributes: Separate legal personality Perpetual succession Common sealDr. V. K. Jain 17
  18. 18. Body corporate does not includea corporation solea co-operative society Includes foreign company, PFI, N.Bank, AOPdeclared as a Body Corporate by CentralGovernment. e.g ONGCCorporation formed under Act of Parliament or StateLegislature.Dr. V. K. Jain 18
  19. 19. Is a Company a property of theshareholders? No. The company is not the property of its shareholders. Allthe property in the name of the company is its separateproperty which is controlled, managed and disposed of bythe company in its own name. Thus the company is theowner of its assets and capital. Moreover, the company being a separate legal person, itcannot be construed as property of the shareholders.Dr. V. K. Jain 19
  20. 20. Second Session
  21. 21. Kinds of Companies 1A. The Companies not covered by the Companies Act, 1956B. The Companies covered by the Companies Act, 1956Companies not covered by the Companies Act Statutory companies Chartered CompaniesCAPS Dr. V. K. Jain 21
  22. 22. Kinds of Companies 2Companies covered by the Companies Act– Private Company - Sec 3 (1) (iii)– Public Company - Sec 3(1)(iv)These companies may be:1.Companies with liability limited by shares2.Companies with liability limited by guarantee iii)3.Companies with unlimited liabilities (UnlimitedCompanies)Dr. V. K. Jain 22
  23. 23. Kinds of Companies 3On the basis of nature, form and functions.I. Companies not for profitii. Government. companiesiii. Foreign companiesiv. Holding and subsidiary companiesv. Producer companyCAPS Dr. V. K. Jain 23
  24. 24. Kinds of Companies 4CAPS Dr. V. K. Jain 24Public PrivateCovered by theCompanies ActStatutory ChartedNot covered by theCompanies ActOther Companies – On the basis of nature form & functions1.Companies not for profit2.Government Companies3.Foreign Companies4.Holding & Subsidiary CompaniesThese companies may be:1. Companies limited by shares2. Companies limited by guarantee3. Unlimited Companies
  25. 25. Private CompaniesMinimum2Maximum 501. Number ofMembersRestricted2. Transfer ofSharesNo public Offerfor Shares orDebentures3. Invitationfor PublicSubscriptionNot allowed frompersons other thanits members,directors or theirrelatives4. Invitation orAcceptance ofDepositsA PRIVATE COMPANYMeans a Company which has a minimum paid-upCapital of Rs. 1.00 lacAND
  26. 26. Private Companies Advantages and Privileges of Private Companiesi) Formationii) Businessiii) Meetingsiv) Board of Directorsv) Share issuevi) MiscellaneousCAPS Dr. V. K. Jain 26
  27. 27. Public CompaniesCAPS Dr. V. K. Jain 27
  28. 28. Distinction of a Private Company and aPublic Limited Company Number of Members Minimum paid up capital Number of Directors / Retirement Transfer of Shares Public Subscription / Deposits Commencement of business Allotment of Shares Statutory Meeting Managerial Remuneration Audit committee Quorum and interested directorsDr. V. K. Jain 28
  29. 29. Other Companies Government company [Sec 617] Foreign Companies [Sec 591] Holding and subsidiary Companies [Sec. 4] Companies not for profit (or Association not for profit) [Sec25] Investment company Producer companyCAPS Dr. V. K. Jain 29
  30. 30. Government company [Sec 617] A Government company is a company in which notless than 51% of the paid up share capital is held.1. by the Central Government , or2. by one or more State Government, or3. partly by Central Government and partly by StateGovernment.
  31. 31. Foreign Companies [Sec 591] A foreign company is a company, which is incorporated outside India buthas a place of business in India. It is place of incorporation, which determines the foreign character of acompany. Thus, a company incorporated outside India but having a placeof business in India would be regarded a foreign company even though allthe members might be Indian citizens. The Companies Act lays down certain special provisions applicable toforeign companies. A foreign company if it ceases to carry on business in India,may be wound up as an unregistered company.
  32. 32. Holding and subsidiary Companies [Sec. 4] Which holds more than half of the nominal value of the equity sharecapital of another company (subsidiary company) For example, if Hcompany hold 51% of the nominal value of the equity capital of Scompany, then H company is said to be a holding company and Scompany is a subsidiary company. or, Which controls the composition of the board of directors of anothercompany (subsidiary company). The company which is so controlled bythe holding company is known as Subsidiary Company. Control involvesthe power to appoint all or majority of the board of directors without theconsent of some other person. A company shall be deemed to be a subsidiary company of another if it isa subsidiary of a third company which itself is a subsidiary of thecontrolling company.
  33. 33. Examples of Holding and Subsidiary Steel Authority of India (SAIL) – Holding company- Bhilai Steel Plant – Subsidiary company- Rourkela Steel Plant – Subsidiary company- Bokaro Steel Plant – Subsidiary company Coal India Ltd.- WCL – Subsidiary company- BCCL – Subsidiary company- SCCL – Subsidiary company
  34. 34. Companies not for profit (or Association not forprofit) [Sec 25] It is formed to promote commerce, art, science, religion, charity or anyother useful object. It prohibits payment of any dividend to its members and applies itsprofits or other income in promoting its objects. It obtains a license from the Central Government to be registered as alimited company without being required to use the word "limited" orprivate limited to their names. (e.g., Institute of Company Secretariesof India, was originally an association not for profit. Now it is astatutory body).
  35. 35. Investment company Sec 372 (10) of the Companies Act, 1956 defines aninvestment company as a "a company whoseprincipal business is the acquisition of shares, stocks,debentures or other securities".
  36. 36. Producer company A producer company is a company which is incorporated undersection 581C of the Companies Act and is engaged in any activityconnected with any primary produce. such as produce of farmers arising from agriculture, forestry, forestproducts, floriculture, etc. and produce of person engaged inhandloom handicraft and other cottage industries. The name shall include the words “Producer Company Ltd.” as thelast words.
  37. 37. Illegal Association [Sec 11]No company, association or partnership consisting of more than 10persons for the purpose of carrying on the business of banking andmore than 20 persons for the purpose of carrying on any otherbusiness can be formed unless it is registered under the CompaniesAct or is formed in pursuance of some other Indian LawExceptionsAssociations ‘not for profit-making’Joint Hindu FamilyCAPS Dr. V. K. Jain 37
  38. 38.  An association or partnership is an illegal association if all thefollowing conditions are satisfied :– The number of persons carrying on business exceeds 20 (10 persons incase of banking business).– It is formed for the purpose of earning profits.– It is not registered under the Companies Act or formed under anyother Indian law (e.g. Cooperative Societies Act ,Trust Act).– It is not a Joint Hindu Family (i.e., an HUF is not an illegal associationeven if he number of members exceed 20 or 10, as the case may be). Effects of an illegal association
  39. 39. Conversion of CompaniesConversion of private company into a public company– Conversion by default [Sec. 43]– Conversion by operation of law– Conversion by choice [Sec. 44]Conversion of a public company into a Private company– Defunct CompanyDr. V. K. Jain 39
  40. 40. Administration of Companies Act - ICAPS Dr. V. K. Jain 40Registrar of CompaniesRegional DirectorCentral Government( Ministry of Corporate Affairs)
  41. 41. Jurisdiction of CourtsDr. V. K. Jain 41National Company Law TribunalNational Company LawAppellate TribunalSupreme CourtThe jurisdiction of company law board and High Court is sought to be replaced
  42. 42. 3. Documents for Incorporation 1Following documents are to be submitted electronically asscanned attachment to E-Form No. 1. After submission, a SRN(Service request number) will be generated by the system– MEMORANDUM OF ASSOCIATION duly signed by the minimumnumber of subscribers, stamped and witnessed– ARTICLES OF ASSOCIATION, which should be similarly signed, stampedand witnessedCAPS Dr. V. K. Jain 42
  43. 43. Documents for Incorporation 2– A STATUTORY DECLARATION stating that all the provisions ofCompanies Act,1956 with regard to registration have beencomplied with.Section 33(2). The declaration should be in FORMNO. 1 on a non-judicial stamp paper of appropriate value. DigitalSignature of the applicant in Form No. 1 on the last page– The PARTICULARS OF DIRECTORS, etc. in FORM NO. 32. This Form32 can be filed either at the time of registration of a company orwithin 30 days of incorporation.• Digital Signature of Applicant and Practicing CS, CA, CWACAPS Dr. V. K. Jain 43
  44. 44. Documents for Incorporation 3– NOTICE OF REGISTERED ADDRESS of the company in FORM NO. 18 This Formcan be filed either at the time of registration of a company or within 30 daysof incorporation.• Digital Signature of Applicant and Practicing CS, CA, CWA– POWER OF ATTORNEY signed by all the subscribers, authorising one or morepersons to act as their representative(s) to make amendments and/oralterations in memorandum and articles of association and other forms andpapers filed before ROC, for incorporation and also to collect the certificateof incorporationCAPS Dr. V. K. Jain 44
  45. 45. Documents for Incorporation 4 Under the new MCA-E Governance System the soft copy of all theabove documents is to be filed electronically through the MCAwebsite.The registration fees is paid through challanin the authorised Bank or through credit card.CAPS Dr. V. K. Jain 45
  46. 46. Form 1: Applicationand declaration forincorporation ofCompanyCAPS Dr. V. K. Jain 46
  47. 47. Form 18:Notice of situationor change ofsituation ofregistered officeCAPS Dr. V. K. Jain 47
  48. 48. Form 32:Particulars relatingto DirectorsCAPS Dr. V. K. Jain 48
  49. 49. In the case of a public company having sharecapital, in addition to the above, written consentof all those persons who have agreed to act asdirectors is required to be givenCERTIFICATE OF INCORPORATION:After scrutinizing the documents and on beingsatisfied that they are in order, the R.O.C. issuesthe certificate of incorporation.By post at the company’s registered officeCAPS Dr. V. K. Jain 49
  50. 50. The certificate of incorporation is conclusive as to allthe requirements of the Act with respect toregistration and matters precedent and incidentalthereto having been duly complied withCAPS Dr. V. K. Jain 50
  51. 51. Certificate of IncorporateCAPS Dr. V. K. Jain 51
  52. 52. 4. Company Documents4.1 Memorandum of Association4.2 Articles of Association4.3 ProspectusCAPS Dr. V. K. Jain 52
  53. 53. 4.1. Contents of MemorandumThe basic conditions, as per section 13 are as follows :- Name Clause Situation Clause (Domicile clause or Registered office clause) The objects clause of the memorandum of association of a company is split up asfollows:– main objects of the company– objects incidental or ancillary to the attainment of main object &– any other objects Liability Clause The Capital Clause Subscription ClauseCAPS Dr. V. K. Jain 53
  54. 54. 4.2. Doctrine of Ultra ViresThe word ‘ultra’ means beyond and the word ‘vires’ means thepowers. Ultra vires, therefore, means beyond the powers. Anyact beyond the objects stated in the memorandum is ultra viresthe company and thus void.Effects of ultra vires transactions:- Ultra vires contracts are void ab initio- Injunction:- Personal liability of DirectorCAPS Dr. V. K. Jain 54
  55. 55. 4.2. Articles of AssociationWhat you should know :4.1 Meaning of Articles and its relationship with memorandum4.2 Contents of Articles of Association4.3 Alteration of Articles4.4 Binding effects of Articles4.5 Doctrine of constructive notice4.6 Doctrine of Indoor ManagementCAPS Dr. V. K. Jain 55
  56. 56. 56What you should know :5.1 Prospectus: What it is and why it is issued?5.2 Various methods of raising of share capital5.3 What are the statutory requirements for the issue ofprospectus?5.4 Contents of prospectus5.5 Statement in lieu of prospectus5.6 Shelf prospectus5.7 Information memorandum (book building)5.8 Is there any liability f or mis-statement in prospectus?.5.9 What is the requirement to be satisfied for listing ofshares with SEBI?4.3. Prospectus
  57. 57. 57What it is and why it is issued?Means any document, described or issued as aprospectus and includes any notice, circularadvertisement or other document inviting deposits fromthe public or inviting offers from the public for thesubscription or purchase of any shares, or debenturesof, a body corporate.Prospectus  Invitation to offerApplication for shares  OfferAllotment of shares  Acceptance of the offer,resulting in a binding contract.
  58. 58. 58ISSUESPublic Rights PreferentialInitial Public Offering(IPO)Further Public Offering(FPO)Fresh Issue Offer for Sale Fresh Issue Offeror Sale
  59. 59. 5. Allotment of Shares Allotment may be defined to mean theappropriation by the Board of Directors of thecompany out of the previously unappropriatedcapital of the company of a certain number ofshares to persons who have madeapplications for shares. Allotment results in a binding contract ,since itamounts to acceptance of offer
  60. 60. Allotment to be valid : should be made by proper authority, namely, the board ofdirectors or a committee authorised by the Board. should be against application in writing, should not be in contravention of any other law and must be made within a very reasonable time andcommunicated to the applicant.
  61. 61. Restrictions on Allotment Besides, an allotment to be valid must comply with theprovisions of -section 60 ( registration of prospectus on or beforethe date of its publication ),section 69 ( application money to be not less than5% of the nominal amount of the share, moneys tobe kept deposited in separate bank account,minimum subscription ),section 70 ( Statement in lieu of prospectus to befiled at least three days before the allotment)
  62. 62. Restrictions on allotment (cont.) section 73 ( listing of shares on one or morerecognised stock exchange (s) and refund ofthe moneys in case listing is refused, refundof over-subscription within 78 days of theclosing of the issue). Minimum subscription of 90% is to bereceived in case of public / right issue.
  63. 63. Effect of irregular Allotment. Sec 60 default- Fine upto 50,000. Sec 69/70 default- allotment voidable Sec 73 default- allotment Void. RETURN AS TO ALLOTMENT.
  64. 64. 6. Buy back of Shares What is buy back ?It is the offer of the company to the shareholders topurchase their sharesWhy buy back ?-To Improve shareholder value- As a defence mechanism- Management signalling.
  65. 65. A. Pre- conditions for buy- back. Authorised by the Articles. Upto 25% of the total paid-up capital and free reserves.(networth) Debt-net worth ratio is not more than 2:1 after buy-back. Shares for buy-back are fully paid up. If the buy-back is for more than 10% of the paid-up capital, aspecial resolution through postal ballot has to be passed. Forless than 10%, board resolution will do.
  66. 66. B. Restrictions for buy-back No buy back - through any subsidiary. -through any investment company. -if default subsists in int.payments etc… -non complaince of sec. 159,207,and 211.
  67. 67. C. Sources of funds for buy-back [section77A(1) Buy-back may be out-of• (I) its free reserves• (ii) the securities premium account• (iii) the proceeds of any shares/securities Capital Redemption Reserves Account : If buy-back isout of free reserves a sum equal to nominal value ofshares so purchased shall be transferred to capitalredemption reserves account Section 77AA
  68. 68. D. Procedure of buy-back of shares• Before buy-back1. The buy-back is authorised by its Articles2. A special resolution is passed inGeneral Meeting authorising the buy-back3. Details of buy back in notice of the meeting.4 Declaration of solvency : to be filed in SEBI/ROC5. Buy back to be completed within 12 months ofpassing special resolution.
  69. 69. E. Procedure after the buy back.1 Verification and payment.2 Extinguishment of securities3. Public adv. of completion of buy-back. (Applicable to a listedcompany).4. Return of buy-back. to ROC, SEBI within 30 days of suchcompletion5. Register of BUY-back.6. Cooling period. Prohibition of new issue of shares within24 months of buy-back (except bonus, conversions)7. Penalty for default
  70. 70. 7. Calls on Shares. A call may be defined as a demand by the company for payment ofpart of the issue price of shares or debentures which has not beenpaid.A call to be valid must be made by the directors duly appointed andduly qualified; against a resolutions passed at the meeting of theBoard of directorsBesides, it must be made on uniform basis and bonafide in the interestof the company.-Notice of call must specify the exact amount and the time ofpayment.
  71. 71. 8. Forfeiture of Shares. A company’s articles usually contain a provision to forfeit sharesof a member who fails to pay his calls due. Forfeiture to be validmust bein accordance with the articles andagainst a proper notice,directors must pass a resolution forfeiting the shares bonafide in theinterest of the company. A forfeiture has the effect of termination of membership. However, aperson whose shares have been forfeited continues to remain liableas a past member in case liquidation takes place within one yearforfeiture.
  72. 72. 9. Surrender of Shares A company may accept surrender of shares as analternative to forfeiture where its articles so permit. However, surrender of shares shall be valid only wheretheir forfeiture is otherwise justified. In any other circumstances, surrender of shares cannotbe accepted without sanction of the court since it wouldamount to reduction of capital.
  73. 73. 10. Nomination of Shares/ debentures(Sec109A) The nomination should be made in prescribed from No.2B. The form should be signed by all holders and should bedated. It should be signed by two witnesses. Nominee may either register his nameor directly transfer the securities.
  74. 74. 11. Transfer of Shares (Sections 108 to112) 1 Right to transfer shares2. Procedure of transfer of shares3. When can company refuse transfer of shares4. Forged transfer and blank transfer5.Transmission of shares6. Transfer of shares under the depositories system
  75. 75. 12. Membership 1. Definition of a member2. Member v. Shareholder3. Modes of acquiring membership4. Who may become a member?5. Termination of membership6. Rights of a member7. Liabilities and duties of a member8. Variation of the rights of a member
  76. 76. 13. Management of a Company1. WHO MANAGE THE COMPANY ? One of the important features of a company is that there is separation ofownership from management. The shareholders do not directly manage. Instead, they elect somepersons from among themselves as their representative to act onbehalf of the company. Such persons are known as directors. The power to manage however is not entrusted to any single directorbut to all the directors, collectively called the Board of Directors.
  77. 77. 14. Company meetingsA. Shareholders Meetings Statutory Meeting. Annual General Meeting. Extra Ordinary General Meeting. Meetings of a class of Members.B. Directors Meetings I) Meetings of the Board of Directors. ii) Meetings of the Committee of Board of Directors.C. Creditors Meetings I) Debentures holders Meeting. ii) Other Creditors Meeting.
  78. 78. 15. Statutory Registers / Books to bemaintained by a company 49(7) Register of investments - where investments of the company in shares orsecurities are not held in its own name. 58A Register of Deposits (Read with rule 6 of the Companies (Acceptance ofDeposits) Rules, 1975. 136 Copy of every instrument creating any charge requiring Registration. #143(1) Register of charges. #150(1) Register of members. #151(1) Index of Members, where their number is more than fifty. #152(1) Register of Debenture holders. #152(2) Index of Debenture holders where their number is more than fifty. 157-158 Foreign Register of members and debenture holders. # To be open for public inspection.
  79. 79.  #159-160 Copies of Annual Return. 193-196 Minutes Books of Proceedings of General Meetings and of meetingsof the Board of Directors of Committees of the Board. 209(1) Books of account and Cost Records 301 Register of contracts, Companies and Firms in which the Directors of theCompany are interested. 302 (6) All contracts entered into by the Company for the appointment of aManager or Managing Director. #303(1) Register of directors, manager and secretary. 307 Register of shareholding or debenture holdings of Directors and Manager. 370(IC) Register of loans made and guarantees given or securities providedto Companies under the same management. 372(6) Register of all investments made by the Company in the shares ofany other body corporate or bodies corporate
  80. 80. Filing of Returns with the Registrar ofCompanies Periodical Returns: There are three importantperiodical returns. These are:– Annual Return under section 159 or 160– Balance Sheet and Profit and Loss Account, undersection 220; and– Compliance Certificate under section 383A.
  81. 81. Filing of Returns with the Registrar ofCompanies Returns on occurrence of certain events: These include:– Return as to allotment in e-form no. 2 (sec. 75)– Return of directors in e-form no. 32 (sec. 303)– Return as to Alteration of Memorandum, which requires confirmationof CLB in e-form no. 21.– Return as to Alteration of Share Capital in e-form no. 5 (sec. 94)– Return of Charges in e-form no. 8 and 17 (sec. 125 and 127)– Return of Resolutions and Agreements in e-form no. 23 (sec. 192)– Return of Foreign Companies in e-form no. 44 / 49 (sec. 592 / 593)
  82. 82. Annual Return [sec.159 to 162] Every company having a share capital shall file with the Registrar of companiesan annual return within 60 days from the date of holding of the Annual GeneralMeeting. Contents: Name and registered office address Capital structure of the company Directors/ Secretary Information (Past and Present) Details of shares/debentures held at date of AGM Details of shares transfers since last date of AGM Indebtedness of the company Equity share capital breakup
  83. 83. Books of Account Section 209 of the Companies Act requires every companyto maintain proper books of account with respect to receipts and payments, sales and purchases, assets and liabilities, Cost accounting records if applicable. Books of account to be kept at the Registered office.
  84. 84. What do you mean by Proper Booksof Accounts? Books which give true and fair view of the state of affairs of the company The books of account explain the transactions; & The books of account are kept on accrual basis and according to thedouble-entry system of accounting. The accounts are prepared as per accounting standards.
  85. 85. Authentication of AccountsEvery B/S and P&L a/c is required to besigned, on behalf of the Board of directors, byits manager or secretary, if any, and by notless than two directors of a company one ofwhom must be the managing director wherethere is one.
  86. 86. Board’s Report At the Annual General Meeting one of the matters to beconsidered is the report of the Board of Directors. Section 217(1) requires that a report of Board of Directorsshould be attached to the balance sheet laid before theAGM. While drafting the Directors’ report the provisions ofCompanies (Disclosure of Particulars in the Report of Boardof Directors) Rules, 1988 and Companies (Particulars ofEmployees) Rules, 1975 should be complied with.

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