The document summarizes key aspects of the Companies Act 2013 related to directors, board committees, and independent directors. Some key changes include requiring at least one woman director, limiting the number of directorships a person can hold, establishing mandatory board committees for audit, nomination and remuneration, and corporate social responsibility, and increasing the minimum number of independent directors for listed companies to one-third of the total directors. The duties and liabilities of directors and independent directors are also outlined.
The document summarizes provisions related to meetings under the Companies Act, including:
- Types of meetings like statutory meetings, annual general meetings, extraordinary general meetings, and meetings of creditors/debenture holders.
- Requirements for statutory meetings like approving a statutory report within 3-6 months of commencement of business.
- Requirements for annual general meetings like holding the first AGM within 18 months of incorporation and subsequent AGMs within 4 months of financial year end.
- Provisions for extraordinary general meetings, including who can call them and notice requirements.
- Other meeting provisions around quorum, voting, proxies, and maintenance of minutes.
This document discusses several legal doctrines related to companies:
1. The doctrine of constructive notice holds that any outsider dealing with a company is presumed to have read and understood the company's memorandum and articles of association, which are public documents.
2. The doctrine of indoor management protects outsiders by presuming the internal affairs and actions of the company's directors are valid, rather than requiring outsiders to investigate compliance.
3. The rule of constructive notice is criticized for being unrealistic and harsh on outsiders, leading courts to develop exceptions like indoor management that balance protecting the company and outsiders.
The document discusses the concept of lifting the corporate veil, where the separate legal identity of a corporation is ignored by the courts. It can occur where a corporation is a sham, is being used for fraudulent purposes, or to determine the true parties responsible. Grounds for lifting the veil include fraud, determining a company's actual character, or protecting public policy. Indian judicial cases are cited where the veil was lifted, such as where a private company engaged in sham transactions before nationalization. The conclusion states that while a company has a separate legal identity, the courts may lift the veil to reveal the real parties when a company's veil is misused.
Presentation on companies act 2013... (2)kamal ega
The document discusses key aspects of company law in India. It provides definitions of a company and its characteristics like corporate personality and limited liability. It traces the history of company law in India and summarizes the key aspects of the Companies Act of 2013 like increased transparency, recognition of new business structures like One Person Companies, and mandatory requirements for women directors and auditing rotation.
The document discusses various aspects of winding up a company in India. It defines winding up as the process by which a company is dissolved and its assets realized to pay debts. There are three main types of winding up: compulsory by tribunal, members' voluntary, and creditors' voluntary. The tribunal can order compulsory winding up for reasons like inability to pay debts or acting against public interest. Voluntary winding up involves shareholder or creditor resolutions. Winding up has consequences like stay of legal proceedings and responsibility of directors to submit company records to the tribunal or liquidator.
The document discusses the Doctrine of Indoor Management, also known as Turquand's Rule. This doctrine protects third parties who transact with a company in good faith. It states that outsiders are not required to investigate a company's internal management processes and will not be affected by irregularities they were not aware of.
The doctrine originated from the 1856 case Royal British Bank v. Turquand, where the court held that a bank was entitled to assume proper authorization had been given for a loan, even if internal processes were not actually followed. The Companies Act also protects valid acts by directors despite defects in their appointments. There are some exceptions, such as when the outsider knows of irregularities or a
The document discusses the concept of corporate veil, which separates a company from its members as a separate legal entity. While a company cannot act on its own and needs members to function, the corporate veil can be lifted in certain circumstances defined by statute or courts. These include misrepresentation to investors, fraudulent conduct, tax evasion, and when considering a company's public interest, sham status, or avoiding legal obligations. The corporate veil protects members from a company's liabilities but is pierced in cases of wrongdoing.
The document summarizes provisions related to meetings under the Companies Act, including:
- Types of meetings like statutory meetings, annual general meetings, extraordinary general meetings, and meetings of creditors/debenture holders.
- Requirements for statutory meetings like approving a statutory report within 3-6 months of commencement of business.
- Requirements for annual general meetings like holding the first AGM within 18 months of incorporation and subsequent AGMs within 4 months of financial year end.
- Provisions for extraordinary general meetings, including who can call them and notice requirements.
- Other meeting provisions around quorum, voting, proxies, and maintenance of minutes.
This document discusses several legal doctrines related to companies:
1. The doctrine of constructive notice holds that any outsider dealing with a company is presumed to have read and understood the company's memorandum and articles of association, which are public documents.
2. The doctrine of indoor management protects outsiders by presuming the internal affairs and actions of the company's directors are valid, rather than requiring outsiders to investigate compliance.
3. The rule of constructive notice is criticized for being unrealistic and harsh on outsiders, leading courts to develop exceptions like indoor management that balance protecting the company and outsiders.
The document discusses the concept of lifting the corporate veil, where the separate legal identity of a corporation is ignored by the courts. It can occur where a corporation is a sham, is being used for fraudulent purposes, or to determine the true parties responsible. Grounds for lifting the veil include fraud, determining a company's actual character, or protecting public policy. Indian judicial cases are cited where the veil was lifted, such as where a private company engaged in sham transactions before nationalization. The conclusion states that while a company has a separate legal identity, the courts may lift the veil to reveal the real parties when a company's veil is misused.
Presentation on companies act 2013... (2)kamal ega
The document discusses key aspects of company law in India. It provides definitions of a company and its characteristics like corporate personality and limited liability. It traces the history of company law in India and summarizes the key aspects of the Companies Act of 2013 like increased transparency, recognition of new business structures like One Person Companies, and mandatory requirements for women directors and auditing rotation.
The document discusses various aspects of winding up a company in India. It defines winding up as the process by which a company is dissolved and its assets realized to pay debts. There are three main types of winding up: compulsory by tribunal, members' voluntary, and creditors' voluntary. The tribunal can order compulsory winding up for reasons like inability to pay debts or acting against public interest. Voluntary winding up involves shareholder or creditor resolutions. Winding up has consequences like stay of legal proceedings and responsibility of directors to submit company records to the tribunal or liquidator.
The document discusses the Doctrine of Indoor Management, also known as Turquand's Rule. This doctrine protects third parties who transact with a company in good faith. It states that outsiders are not required to investigate a company's internal management processes and will not be affected by irregularities they were not aware of.
The doctrine originated from the 1856 case Royal British Bank v. Turquand, where the court held that a bank was entitled to assume proper authorization had been given for a loan, even if internal processes were not actually followed. The Companies Act also protects valid acts by directors despite defects in their appointments. There are some exceptions, such as when the outsider knows of irregularities or a
The document discusses the concept of corporate veil, which separates a company from its members as a separate legal entity. While a company cannot act on its own and needs members to function, the corporate veil can be lifted in certain circumstances defined by statute or courts. These include misrepresentation to investors, fraudulent conduct, tax evasion, and when considering a company's public interest, sham status, or avoiding legal obligations. The corporate veil protects members from a company's liabilities but is pierced in cases of wrongdoing.
There are three ways a company director can be removed:
1. By shareholders through an ordinary resolution with proper notice and opportunity for the director to be heard.
2. By the central government on recommendation from the high court if the director is found unfit for office based on grounds like oppression or mismanagement.
3. By the Company Law Board/Tribunal through reconstituting the board if oppression or mismanagement of shareholders is found upon application from shareholders. Removed directors may be barred from managerial roles for 5 years without court approval.
The document discusses the doctrine of ultra vires under the Indian Companies Act of 1956. It defines ultra vires as an act beyond the powers specified in a company's memorandum of association. An ultra vires act is void and cannot be ratified. The doctrine originated with statutory companies being required to specify their objectives in a memorandum of association. A key case established that contracts outside these objectives were invalid. Exceptions allow shareholders to ratify intra vires acts done irregularly or amend the memorandum to allow previously ultra vires acts. The position in India remains unchanged from the original rulings, unlike modifications made in England.
The document discusses the doctrine of ultra vires in company law. It explains that [1] the doctrine originated to limit companies to activities stated in their memorandum and protect investors and creditors, as companies could now have limited liability; [2] an ultra vires act is beyond a company's powers while an illegal act can still be intra vires; and [3] the 1875 Ashbury Railway case established that unauthorized acts are void and cannot be ratified, firmly establishing the doctrine of ultra vires.
This document summarizes a presentation on the key aspects of the Companies Act, 2013. It outlines the major changes introduced in the new Act compared to the previous Companies Act of 1956. Some notable changes include a reduction in the number of sections from 658 to 470, the introduction of new types of companies like One Person Companies and Small Companies, increased requirements for director appointments and responsibilities, more stringent compliance requirements, and an increased scope for investor protection.
This document provides an overview of the demerger process under Indian law. It begins with definitions of a demerger and discusses the key tax considerations from the 2019 Union Budget. It then explains the different types of demergers and compares the demerger provisions under the Companies Act and Income Tax Act. The remainder of the document outlines the regulatory requirements and process for undertaking a demerger according to the Companies Act, SEBI regulations, and important documentation needed.
Appointment of directors powers, duties and liabilitiesmcomgirl
Directors are appointed by a company's board of directors or shareholders to oversee the company's strategic objectives and monitor its progress. A director is responsible for determining company policies, appointing senior management, and accounting for the company's activities to shareholders. The Companies Act 2013 increased the maximum number of directors allowed from 12 to 15 and removed the requirement for central government approval. It also increased requirements for women directors and independent directors. Directors have statutory, general, and CSR duties and can be held criminally liable for offenses committed during their tenure.
Promoters are individuals who conceive of and organize the formation of a new company. They take on important preliminary responsibilities like drafting founding documents, recruiting initial shareholders and directors, and facilitating the legal registration of the company. Promoters occupy a fiduciary role and are therefore prohibited from making secret profits or failing to disclose material facts about transactions between themselves and the company.
This document provides an in-depth description of an Annual General Meeting (AGM) under Indian law. It defines an AGM as a yearly meeting of members in an organization to vote on matters like electing directors and informing members of company activities. It outlines legal requirements like providing notice to members at least 21 days before the AGM and holding the first AGM within nine months of incorporation and subsequent AGMs within six months of the financial year end. It also details agenda items, quorum requirements, exemptions and penalties for non-compliance with AGM rules.
Study on Prospectus according to companies act 1956 and different case studies which would help you understand the provisions well. It's important to look at companies act 2013 for amendments made, so that much more clarity can be obtained.
The document discusses the different kinds of companies under the Companies Act 2013 in India. It outlines 9 main types of companies:
1) One Person Company, Private Company, Public Company, Dormant Company, Small Company, Banking Company, Unlimited Company, and Charitable Company.
2) It also discusses other company types like Government Company, Foreign Company, Holding/Subsidiary Company, Investment Company, Public Financial Institution, Producer Company, Illegal Company, and Unregistered Company.
3) The key differences between these types relate to ownership structure (one person, private, public), operations (dormant, banking), size (small), liability (unlimited), and registration status (illegal
The document summarizes key provisions around the appointment, eligibility, duties, and reporting responsibilities of auditors according to the Companies Act 2013 in India. It discusses requirements for appointing auditors such as obtaining prior consent, filing notices, and auditor rotation. It also outlines auditor qualifications and disqualifications, powers to access company information, services auditors cannot provide, requirements for audit reports, and auditors' attendance at shareholder meetings.
A director leads or supervises an area of a company and, with other directors, determines company policy. To be a director, one must be an individual and may not be a body corporate. Directors have qualifications like holding company shares and duties like acting loyally and avoiding conflicts. They have powers like borrowing money and recommending dividends. Directors must meet regularly, maintain quorum, and participate in meetings.
The document summarizes the key aspects of a Memorandum of Association (MOA), which is one of the primary documents required for the incorporation of a company. It outlines the typical contents of an MOA, including the name, registered office, objectives, liability, capital, and subscription clauses. It also discusses how an MOA establishes the limitations and powers of the company. The MOA defines the relationship between the company and outsiders and acts as the foundation for the company's structure. Alterations to an MOA require special resolutions by shareholders and approvals by regulatory authorities depending on the clause being altered.
The document discusses the roles and responsibilities of company directors under Indian law. It defines a director and outlines their legal position as agents of the company. There are different types of directors such as executive, outside, and independent directors. All directors must obtain a Director Identification Number. Directors can be appointed through various means and removed by shareholders, government, or courts. Their duties include attending meetings, not contracting without board consent, disclosing property transfers, and acting with good faith and without negligence.
This document discusses the winding up process for companies in India. It defines winding up as the process of dissolving a company by closing down its business, selling off assets, paying creditors, and distributing any remaining assets to members. There are three main types of winding up: compulsory (by court order), voluntary by members, and voluntary by creditors. The key differences between member and creditor voluntary winding up relate to control, meetings, liquidator appointment, and powers of the liquidator. Relevant sections of Indian law governing winding up are also cited.
Related Party Transaction as per Companies Act and SEBI(LODR)CS Bhuwan Taragi
This PPT is on Related Party Transaction as per companies Act, 2013 and SEBI(LODR) 2015. you will company know who are related parties and what are approval required for related parties transactions.
You can visit my you tube channel "CS Bhuwan Taragi- The Law Talks " for more clearity on this topic.
The document discusses key concepts around partnerships under Indian law, including:
1. The essential elements of a partnership include an association of two or more persons, an agreement to carry on business together, and a sharing of profits.
2. The rights and duties of partners are outlined, with rights including participation in management, inspection of books, and sharing of profits, and duties including acting for the common advantage and not claiming remuneration.
3. Dissolution of a partnership can occur through compulsory, agreement-based, or court-ordered means, and winding up is the process of settling partnership affairs after dissolution.
This document summarizes various ways that companies can be classified under Indian law. It discusses classification by mode of incorporation such as royal chartered, statutory, and registered companies. It also covers classification based on liability of members into companies limited by shares, companies limited by guarantee, and unlimited companies. Additionally, it discusses classification as public or private companies and one person companies. It provides examples of holding companies and their subsidiaries. Finally, it defines government companies and foreign companies under Indian law.
The document discusses articles of association (AOA), which contain the internal rules and regulations of a company for the benefit of shareholders. AOA must be registered for certain types of companies and usually deal with matters like shareholder rights, board meetings, and resolutions. AOA can be altered by special resolution but cannot contradict the memorandum of association or companies act. The doctrine of indoor management protects outsiders dealing with companies by assuming they have constructive notice of AOA contents, with some exceptions. AOA are subordinate to the memorandum of association and govern internal company relations.
This document discusses key changes to the Companies Act introduced in 2013 relating to auditors, directors, and financial reporting. Some key points include:
- Auditor tenure is increased to 6 years from 5 years and mandatory rotation of auditors is introduced for listed companies every 10 years.
- Restrictions are placed on non-audit services provided by auditors to clients.
- A minimum of one woman director is required for certain prescribed classes of companies.
- The maximum number of directorships an individual can hold is increased to 20 companies from 15.
- Consolidated financial statements are now mandatory for companies with subsidiaries/associates. Significant influence is redefined.
- Restate
The document summarizes key aspects of the Companies Bill 2012 in India. It discusses the history of the bill and changes from previous versions. Some of the major changes covered include increasing the maximum number of members in a private company, introducing the concept of a One Person Company, mandating at least one woman director on boards, and increasing the limit of directors from 12 to 15. It also covers changes related to corporate governance, auditing standards, CSR requirements, and serious fraud investigations.
There are three ways a company director can be removed:
1. By shareholders through an ordinary resolution with proper notice and opportunity for the director to be heard.
2. By the central government on recommendation from the high court if the director is found unfit for office based on grounds like oppression or mismanagement.
3. By the Company Law Board/Tribunal through reconstituting the board if oppression or mismanagement of shareholders is found upon application from shareholders. Removed directors may be barred from managerial roles for 5 years without court approval.
The document discusses the doctrine of ultra vires under the Indian Companies Act of 1956. It defines ultra vires as an act beyond the powers specified in a company's memorandum of association. An ultra vires act is void and cannot be ratified. The doctrine originated with statutory companies being required to specify their objectives in a memorandum of association. A key case established that contracts outside these objectives were invalid. Exceptions allow shareholders to ratify intra vires acts done irregularly or amend the memorandum to allow previously ultra vires acts. The position in India remains unchanged from the original rulings, unlike modifications made in England.
The document discusses the doctrine of ultra vires in company law. It explains that [1] the doctrine originated to limit companies to activities stated in their memorandum and protect investors and creditors, as companies could now have limited liability; [2] an ultra vires act is beyond a company's powers while an illegal act can still be intra vires; and [3] the 1875 Ashbury Railway case established that unauthorized acts are void and cannot be ratified, firmly establishing the doctrine of ultra vires.
This document summarizes a presentation on the key aspects of the Companies Act, 2013. It outlines the major changes introduced in the new Act compared to the previous Companies Act of 1956. Some notable changes include a reduction in the number of sections from 658 to 470, the introduction of new types of companies like One Person Companies and Small Companies, increased requirements for director appointments and responsibilities, more stringent compliance requirements, and an increased scope for investor protection.
This document provides an overview of the demerger process under Indian law. It begins with definitions of a demerger and discusses the key tax considerations from the 2019 Union Budget. It then explains the different types of demergers and compares the demerger provisions under the Companies Act and Income Tax Act. The remainder of the document outlines the regulatory requirements and process for undertaking a demerger according to the Companies Act, SEBI regulations, and important documentation needed.
Appointment of directors powers, duties and liabilitiesmcomgirl
Directors are appointed by a company's board of directors or shareholders to oversee the company's strategic objectives and monitor its progress. A director is responsible for determining company policies, appointing senior management, and accounting for the company's activities to shareholders. The Companies Act 2013 increased the maximum number of directors allowed from 12 to 15 and removed the requirement for central government approval. It also increased requirements for women directors and independent directors. Directors have statutory, general, and CSR duties and can be held criminally liable for offenses committed during their tenure.
Promoters are individuals who conceive of and organize the formation of a new company. They take on important preliminary responsibilities like drafting founding documents, recruiting initial shareholders and directors, and facilitating the legal registration of the company. Promoters occupy a fiduciary role and are therefore prohibited from making secret profits or failing to disclose material facts about transactions between themselves and the company.
This document provides an in-depth description of an Annual General Meeting (AGM) under Indian law. It defines an AGM as a yearly meeting of members in an organization to vote on matters like electing directors and informing members of company activities. It outlines legal requirements like providing notice to members at least 21 days before the AGM and holding the first AGM within nine months of incorporation and subsequent AGMs within six months of the financial year end. It also details agenda items, quorum requirements, exemptions and penalties for non-compliance with AGM rules.
Study on Prospectus according to companies act 1956 and different case studies which would help you understand the provisions well. It's important to look at companies act 2013 for amendments made, so that much more clarity can be obtained.
The document discusses the different kinds of companies under the Companies Act 2013 in India. It outlines 9 main types of companies:
1) One Person Company, Private Company, Public Company, Dormant Company, Small Company, Banking Company, Unlimited Company, and Charitable Company.
2) It also discusses other company types like Government Company, Foreign Company, Holding/Subsidiary Company, Investment Company, Public Financial Institution, Producer Company, Illegal Company, and Unregistered Company.
3) The key differences between these types relate to ownership structure (one person, private, public), operations (dormant, banking), size (small), liability (unlimited), and registration status (illegal
The document summarizes key provisions around the appointment, eligibility, duties, and reporting responsibilities of auditors according to the Companies Act 2013 in India. It discusses requirements for appointing auditors such as obtaining prior consent, filing notices, and auditor rotation. It also outlines auditor qualifications and disqualifications, powers to access company information, services auditors cannot provide, requirements for audit reports, and auditors' attendance at shareholder meetings.
A director leads or supervises an area of a company and, with other directors, determines company policy. To be a director, one must be an individual and may not be a body corporate. Directors have qualifications like holding company shares and duties like acting loyally and avoiding conflicts. They have powers like borrowing money and recommending dividends. Directors must meet regularly, maintain quorum, and participate in meetings.
The document summarizes the key aspects of a Memorandum of Association (MOA), which is one of the primary documents required for the incorporation of a company. It outlines the typical contents of an MOA, including the name, registered office, objectives, liability, capital, and subscription clauses. It also discusses how an MOA establishes the limitations and powers of the company. The MOA defines the relationship between the company and outsiders and acts as the foundation for the company's structure. Alterations to an MOA require special resolutions by shareholders and approvals by regulatory authorities depending on the clause being altered.
The document discusses the roles and responsibilities of company directors under Indian law. It defines a director and outlines their legal position as agents of the company. There are different types of directors such as executive, outside, and independent directors. All directors must obtain a Director Identification Number. Directors can be appointed through various means and removed by shareholders, government, or courts. Their duties include attending meetings, not contracting without board consent, disclosing property transfers, and acting with good faith and without negligence.
This document discusses the winding up process for companies in India. It defines winding up as the process of dissolving a company by closing down its business, selling off assets, paying creditors, and distributing any remaining assets to members. There are three main types of winding up: compulsory (by court order), voluntary by members, and voluntary by creditors. The key differences between member and creditor voluntary winding up relate to control, meetings, liquidator appointment, and powers of the liquidator. Relevant sections of Indian law governing winding up are also cited.
Related Party Transaction as per Companies Act and SEBI(LODR)CS Bhuwan Taragi
This PPT is on Related Party Transaction as per companies Act, 2013 and SEBI(LODR) 2015. you will company know who are related parties and what are approval required for related parties transactions.
You can visit my you tube channel "CS Bhuwan Taragi- The Law Talks " for more clearity on this topic.
The document discusses key concepts around partnerships under Indian law, including:
1. The essential elements of a partnership include an association of two or more persons, an agreement to carry on business together, and a sharing of profits.
2. The rights and duties of partners are outlined, with rights including participation in management, inspection of books, and sharing of profits, and duties including acting for the common advantage and not claiming remuneration.
3. Dissolution of a partnership can occur through compulsory, agreement-based, or court-ordered means, and winding up is the process of settling partnership affairs after dissolution.
This document summarizes various ways that companies can be classified under Indian law. It discusses classification by mode of incorporation such as royal chartered, statutory, and registered companies. It also covers classification based on liability of members into companies limited by shares, companies limited by guarantee, and unlimited companies. Additionally, it discusses classification as public or private companies and one person companies. It provides examples of holding companies and their subsidiaries. Finally, it defines government companies and foreign companies under Indian law.
The document discusses articles of association (AOA), which contain the internal rules and regulations of a company for the benefit of shareholders. AOA must be registered for certain types of companies and usually deal with matters like shareholder rights, board meetings, and resolutions. AOA can be altered by special resolution but cannot contradict the memorandum of association or companies act. The doctrine of indoor management protects outsiders dealing with companies by assuming they have constructive notice of AOA contents, with some exceptions. AOA are subordinate to the memorandum of association and govern internal company relations.
This document discusses key changes to the Companies Act introduced in 2013 relating to auditors, directors, and financial reporting. Some key points include:
- Auditor tenure is increased to 6 years from 5 years and mandatory rotation of auditors is introduced for listed companies every 10 years.
- Restrictions are placed on non-audit services provided by auditors to clients.
- A minimum of one woman director is required for certain prescribed classes of companies.
- The maximum number of directorships an individual can hold is increased to 20 companies from 15.
- Consolidated financial statements are now mandatory for companies with subsidiaries/associates. Significant influence is redefined.
- Restate
The document summarizes key aspects of the Companies Bill 2012 in India. It discusses the history of the bill and changes from previous versions. Some of the major changes covered include increasing the maximum number of members in a private company, introducing the concept of a One Person Company, mandating at least one woman director on boards, and increasing the limit of directors from 12 to 15. It also covers changes related to corporate governance, auditing standards, CSR requirements, and serious fraud investigations.
The LLP is an alternative choice for those who are sole proprietorship. But now there are more choice to select. Let us examined what are the difference between the LLP & company
The document provides details about the key provisions related to books of accounts and financial statements as per the Companies Act, 2013. It summarizes the timeline of introduction and implementation of the Companies Act 2013. It describes the requirements for maintenance of books of accounts, preparation of financial statements, audit, rotation of auditors and their appointment under the new act. It also discusses the provisions related to corporate social responsibility (CSR) and internal audit as mandated by the Companies Act 2013.
The document provides details about the key provisions related to books of accounts and financial statements as per the Companies Act, 2013. It summarizes the timeline of implementation of the Act, sections and chapters covered, requirements for preparation of financial statements, books to be maintained, appointment of auditors, their eligibility, disqualifications and rotation of auditors. It also discusses the provisions related to corporate social responsibility, internal audit and the role of the National Financial Reporting Authority.
This document discusses corporate governance requirements for listed companies in India. It explains that boards must have at least 50% non-executive directors, including a minimum number of independent directors based on whether the chairman is executive or non-executive. Independent directors cannot have any material pecuniary relationships with the company and must meet other independence criteria. It also outlines requirements regarding board meetings, committee membership limits for directors, compliance reporting, replacing independent directors who resign, and having a code of conduct for board members and senior management.
This document discusses corporate governance requirements for listed companies in India. It explains that boards must have at least 50% non-executive directors, including a minimum number of independent directors based on whether the chairman is executive or non-executive. Independent directors cannot have any material pecuniary relationships with the company and must meet other independence criteria. It also outlines requirements regarding board meetings, committee membership limits for directors, compliance reporting, replacing independent directors who resign, and having a code of conduct for board members and senior management.
The document discusses key changes introduced by the Companies Act 2013 that create opportunities for consultants, including:
1) Introduction of concepts like one person company, corporate social responsibility, class action suits, secretarial audit, and key managerial personnel that increase compliance requirements.
2) Tighter regulations around related party transactions, independent directors, financial statements, and insider trading that require greater advisory services.
3) Stiffer penalties for non-compliance that are expected to lead to more litigation, creating roles for consultants in managing risks and disputes.
The document provides an overview of key changes introduced in the Companies Act 2013 as compared to the previous Companies Act 1956. Some of the major changes highlighted include:
1. The Act has been reorganized into 29 chapters compared to 13 parts under the previous act. The number of sections has been reduced from 658 to 470.
2. New concepts such as one person companies, registered valuers, and national company law tribunal have been introduced.
3. Requirements around incorporation such as minimum and maximum number of members for private companies, and commencement of business have been modified.
4. Key managerial personnel has been defined to include whole-time director, CEO, company secretary and C
Listed entities amendments clauses 35 b , 49 of the equity listing agreementProglobalcorp India
The document summarizes key amendments to Clauses 35B and 49 of the Listing Agreement regarding corporate governance requirements for listed companies in India. Some highlights include:
- Listed companies must provide e-voting facilities to shareholders for resolutions at general meetings.
- Clause 49 provisions relate to board composition and responsibilities, audit committees, related party transactions, and other disclosures.
- Independent directors are subject to stricter criteria and term limits, and boards must conduct performance evaluations.
- Material related party transactions require audit committee and shareholder approvals.
- Extensive disclosures are required regarding directors, board meetings, remuneration, financial statements, and compliance with governance norms.
The document provides an overview of key changes introduced in the Companies Act 2013 compared to the Companies Act 1956. Some of the major changes include the introduction of one person companies, increased limit of members in a private company, mandatory rotation of auditors, constitution of audit committee for listed companies, increased role and responsibilities of independent directors, requirements around corporate social responsibility for large companies, and establishment of the National Company Law Tribunal to replace High Courts for certain functions.
The document provides information about accounting for managers, including:
1. It outlines a session plan for an accounting course covering topics like basic accounting concepts, the double entry system, preparing financial statements, and a class test.
2. It discusses different types of business entities like sole proprietorships, partnerships, limited liability partnerships, private and public companies, and one person companies.
3. It provides evaluation criteria for the course, which will be based entirely on an online test.
Presentation on Independent Director as per Companies Act 2013Vishal Dhona, ACS
Presentation is made for understanding what is independent director? what are its roles?
Also by means of this you can understand what are the various provisions applicable to independent director.
Copy of financial staements duly authenticated as per section 134 (including ...rahulkadam274458
The Directors' Report summarizes the financial performance and operations of Abby Lighting & Switchgear Ltd. for the financial year 2018-19. It states that the company achieved a turnover of Rs. 3,405.10 lakhs and a net profit of Rs. 775.82 lakhs. The company added new products and machinery to increase efficiency and production. However, no dividend is recommended for the financial year. The report provides details on material changes, orders passed, subsidiaries, auditors, directors, deposits, conservation of energy, and risk management.
The document summarizes new requirements for directors and key managerial personnel under the Indian Companies Act of 2013. It states that every company must have a minimum of 1-3 directors depending on the type of company, and the maximum number of directors is 15 without shareholder approval. It introduces requirements for women directors, resident directors, and independent directors. It also outlines duties, restrictions, and penalties for directors regarding conflicts of interest, loans to directors, and disclosure of interests. Key managerial personnel are also defined and restrictions on their roles are presented.
Decoding the legal framework for entrepreneursParth Jain
This presentation attempts to inform startups and entrepreneurs about some basic legal contracts and the initiatives undertaken by the Government of India under the Startup India Action Plan.
This document provides a summary of a project report on conducting a competitor analysis to reduce the cost of capital for Trident Group through an analysis of competitors. It includes an acknowledgement, table of contents, and introduction discussing the importance of competitor analysis. It also provides definitions of key terms learned during the project related to corporate financing processes and types of loans. The document appears to be laying the groundwork for an upcoming analysis and recommendations regarding Trident Group's competitors in the textile and paper industries.
𝐔𝐧𝐯𝐞𝐢𝐥 𝐭𝐡𝐞 𝐅𝐮𝐭𝐮𝐫𝐞 𝐨𝐟 𝐄𝐧𝐞𝐫𝐠𝐲 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐰𝐢𝐭𝐡 𝐍𝐄𝐖𝐍𝐓𝐈𝐃𝐄’𝐬 𝐋𝐚𝐭𝐞𝐬𝐭 𝐎𝐟𝐟𝐞𝐫𝐢𝐧𝐠𝐬
Explore the details in our newly released product manual, which showcases NEWNTIDE's advanced heat pump technologies. Delve into our energy-efficient and eco-friendly solutions tailored for diverse global markets.
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...my Pandit
Explore the fascinating world of the Gemini Zodiac Sign. Discover the unique personality traits, key dates, and horoscope insights of Gemini individuals. Learn how their sociable, communicative nature and boundless curiosity make them the dynamic explorers of the zodiac. Dive into the duality of the Gemini sign and understand their intellectual and adventurous spirit.
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2. Companies Act 2013
Copyright
This Presentation is the
property of
Pooja Gupta and no part of
it can be copied,
reproduced or distributed
in any manner
2
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
3. Companies Act 2013
Directors
Corporate Governance and
CSR
Board Composition
Independent Directors
Duties of Directors
Relatives
Key Managerial Personnel (KMP)
Corporate Social Responsibility
Board Committees
SFIO
3
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
4. Companies Act 2013
Details
Companies Act, 1956
Companies Act, 2013
Parts/ Chapter
13
29
Sections
658
470*
Schedules
15
7
No. of Clauses in Section 2
(Definitions)
67
95
*
98 Sections notified effective from 12-September-2013
• GOI decided to enforce the provisions of the Act in phases
• The provisions which require statutory or regulatory consultation or functioning of new
bodies or prescription of relevant rules and forms will be brought in force after
preparatory action is completed
4
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
5. Companies Act 2013
Directors
Each company will need to have minimum 1 (one) director who stayed in India for
at least 182 days in the previous calendar year
Prescribed class of companies to have at least 1 (one) woman director on the
board.
Existing companies will be given a one-year transition period to comply with this
requirement
Listed company may have 1 (one) director elected by small shareholders ~ holding
shares of nominal value not > INR 20,000 or such sum as may be prescribed.
Earlier, a public company either with (a) paid-up capital of 5 crore or more, or (b)
1,000 or more small shareholders, may have a director elected by the small
shareholders
5
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
6. Companies Act 2013
Maximum
Number of
Directorship
Limits on maximum number of directors in a company increased
from 12 to 15. It can further be increased by passing a special
resolution. No approval from Central Government required
A person will be able to become a director in 20 companies.
However, out of this, not more than 10 companies can be public
companies.
Shareholders may specify lesser number of companies in which a
director of the company may act as a director.
Transition period to comply with the limit on directorship – 1 year
from the commencement of 2013 Act
6
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
7. Companies Act 2013
Duties of Director
A director of the company will:
i.
act in accordance with the articles of the company
ii.
act in good faith to promote the objects of the company
iii. exercise his duties with due and reasonable care, skill and diligence and independent
judgement
iv. not get involved in a situation in which he may have a direct or with the interest of the
company
v.
avoid any undue gain or advantage either to himself or to his relatives, partners, or
associates (if found guilty, he may be required to pay an amount equal to such gain back
to the company)
vi. not to assign his office, such assignment being void
7
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
8. Companies Act 2013
Meetings of BOD
First meeting of the BOD must be held within 30 days of its incorporation
• Minimum 4 meetings of the BOD to be held each year
• Gap between 2 consecutive meetings not exceeding 120 days
• CG may be notification provide different requirement or modify the requirement for specific class of
companies
Participation in board meeting through prescribed video conferencing (VC) or
other audio visual means recognized.
CG may provide a list of businesses where meeting by means VC will not be
recognized
At least 7 days notice for board meeting shall be given
Shorter notice to transact urgent business, if at least 1 ID is present at such
meeting.
Decision taken at such meeting in absence of an ID is final only on ratification
thereof by at least one ID
8
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
9. Companies Act 2013
Loans to Directors
A company cannot directly or indirectly:
• Advance any loan to any director or any other person in whom the director is interested; or
• Give guarantee or provide security in connection with the loan taken by its director or such other
person
The above provision is not applicable to:
• Loan to MD/ WTD as a part of contract of services extended to all its employees or pursuant to the
scheme approved by members by special resolution
• A company which in the ordinary course of its business provides loan, guarantee or security for due
repayment of any loan and charges interest thereon not being less than bank rate declared by RBI
All the above provisions made applicable to private companies
9
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
10. Companies Act 2013
Key Managerial Personnel (KMP)
• In relation to a company, KMP means:
–
–
–
–
–
CEO or MD or Manager;
Company Secretary;
Whole time Director (WTD);
Chief Financial Officer (CFO); and
Such other officer as may be prescribed
• CFO to be whole time KMP for prescribed class of companies
• CFO made responsible and liable for penalty and/ or prosecution for
compliance with various provisions such as – maintenance of books of
accounts, preparation & filing of annual accounts, disclosure of financial
information in offer document, risk management, internal control, etc.
10
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
11. Companies Act 2013
Board Committees
Audit
Committee
Mandatory for listed companies and other prescribed classes of
companies
Minimum 3 directors with majority comprising of Independent
Directors
Chairperson and majority of directors shall be persons with ability
to read and understand financial statements
Listed companies and prescribed companies to have vigil
mechanism for directors and employees to report genuine concern
in prescribed manner
11
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
12. Companies Act 2013
Board Committees
Nomination
and
Remuneration
Committee
Mandatory for listed companies and other
prescribed classes of companies
3 or more Non-Executive directors (NED) of which
at least ½ shall be Independent Directors (IDs)
Chairperson of the company can be a member of
the committee but cannot be a chairperson of the
committee
12
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
13. Companies Act 2013
Board Committees
Nomination
and
Remuneration
Committee
The committee shall amongst other:
Identify persons who are qualified to be directors and who can
be appointed in senior management
Recommend to the BOD, policy relating to remuneration to
directors, KMP and other employees keeping in mind
appropriate performance benchmark; striking a balance
between fixed and incentive pay, etc.
Be responsible for evaluation of every director of BOD
13
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
14. Companies Act 2013
Board Committees
Stakeholders
Relationship
Committee
Mandatory where total number of shareholders, deposit
holders, debenture holders and other security holder
exceeds 1,000 at any time during the financial year (FY)
Chairperson shall be NED and such other number of
directors as determined by the BOD
To consider and resolve the grievances of the security
holders of the company
14
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
15. Companies Act 2013
Board Committees
Corporate
Social
Responsibility
Committee
(CSRC)
Mandatory where the company is required to contribute to CSR if it meets with the
net worth, turnover or net profit criteria
Minimum 3 directors of which at least 1 shall be Independent Director (ID)
This committee shall amongst other:
Formulate and recommend to BOD, a CSR policy
Recommend the amount of expenditure to be incurred on CSR activities
Monitor the CSR policy
15
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
16. Companies Act 2013
Independent Listed companies to have at least 1/3rd of its total number of
directors as IDs
Directors
(IDs)
ID is not liable to retire by rotation and is not included in total
number of directors liable to retire by rotation
ID shall be appointed for a term of 5 consecutive years and are
eligible for re-appointment subject to compliance with conditions
including performance evaluation by BOD and approval by
members through special resolution
16
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
17. Companies Act 2013
Independent Once 2 consecutive terms are completed, the ID shall be
eligible for appointment after the cooling period of 3 years,
Directors
provided he is not associated with the company during this 3
(IDs)
years period in any capacity, either directly or indirectly
ID may be selected from the data bank maintained by notified
institute or association having expertise in creation and
maintenance of such data bank
IDs is not entitled to stock options but may receive remuneration
by way of sitting fees, reimbursement of expenses for
participation in meetings, profit related commission as approved
by the members of the company
17
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
18. Companies Act 2013
Independent
Directors
(IDs)
ID and NED (not being promoter or KMP), shall be held liable only for such
acts by a company which had occurred with his knowledge, attributable
through Board processes, and with his consent or connivance or where he
had not acted diligently
Detailed code of conduct to be followed by companies and their IDS have
been included in the Act
At the 1st meeting of the Board in which he participates as a director and
thereafter the 1st meeting of the Board in every financial year or whenever
there is a change in circumstances, which may affect his status as an ID,
will have to give a declaration that he meets the criteria of independence
18
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
19. Companies Act 2013
Independent Director - Meaning
“Independent Director” in the Companies Act, 2013 contains most of the
attributes prescribed in the listing agreement. The Act however, contains
certain additional criteria:
a. An independent director should be a person of integrity and
possess relevant expertise and experience
b. ID should not have any pecuniary relationship / transactions with
the company, its promoters, its directors or its holding company, its
subsidiaries and associates, which will affect independence of the
director, either in the current FY or immediately preceding two
years.
19
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
20. Companies Act 2013
Independent Directors
c. A person cannot be appointed as ID if the person and/ or his relative is/ was a partner/
executive in statutory audit firm, internal audit firm, legal firm, and or consulting firm(s),
which have association with the company.
d. Under the Companies Act, 2013, the CG may prescribe additional qualifications for an
“independent director.”
e. The Companies Act, 2013, however, states that an ID will be a director other than the
nominee director appointed by an institution, which has invested in or lent to the
company
g. An ID should not be a Chief Executive or director, by whatever name called, of any
non- profit organisation, which receives 25% or more of its receipts from the company,
any of its promoters, directors or its holding, subsidiary or associate or that holds 2%
or more of the total voting power of the company.
20
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
21. Companies Act 2013
Independent Directors – Impact
• The SEBI may need to amend the listing agreement to bring it in line with the Companies Act,
2013. Till such time, listed companies will need to follow the requirement of the stringent.
• Considering additional criteria prescribed in the Companies Act, 2013, many listed companies
may need to revisit appointment of their independent directors.
• The Companies Act, 2013 lays down various restrictions, on the person as well as its
relatives, for being eligible to be appointed as independent director. If the government
prescribes a long list of relations, the company, the person who is or seeking to be an
independent director and the relatives of such person will have to keep track of this, to
ensure compliance on a going forward basis. For example, a company cannot appoint any
person as an independent director if that person or his relative is/ was a partner / executive in
the preceding 3 financial years in the firm of auditors of the company.
• The Companies Act, 2013 states that an independent director will not be entitled to any stock
option. The Companies Act, 2013 is not clear as to how a company will deal with stock
options granted in the past and which are outstanding at the date of its enactment. It seems
possible that a company will cancel / forfeit these stock options immediately. It may be
appropriate for the MCA to clarify this matter.
21
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
22. Companies Act 2013
Corporate Social Responsibility (CSR)
CSR has been made mandatory for companies with a Networth of INR
500 Cr. (INR 5 Billion) or more, or a turnover of INR 1000 Cr. (INR 10
Billion) or more, or a Net Profit of INR 5 Cr. (INR 50 million) or more
during each financial year
The board will ensure that company spends, in every financial year, at
least 2% of its average net profits during the immediately preceding 3
years, in pursuance of CSR policy.
22
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
23. Companies Act 2013
Corporate Social Responsibility (CSR)
The company will give preference to local area and areas around where it operates,
for spending the amount earmarked for CSR activities.
The board will approve the CSR policy and disclose its contents in the board report
and place it on the company‟s website.
If a company fails to spend such amount, the board will, in its report specify the
reasons for not spending the amount
The MCA has issued “National Voluntary Guidelines on Social, Environmental &
Economic Responsibilities of Business,” for voluntary adoption by companies. In
addition, the SEBI has mandated that the top 100 listed entities, based on their
market capitalization at the BSE and NSE, should include business responsibility
reports as part of their Annual Reports.
23
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
24. Companies Act 2013
Corporate Social Responsibility (CSR)
•
Schedule VII of the Companies Act, 2013 sets out the activities, which may be
included by companies in their CSR policies. They relate to:
• eradicating extreme hunger and poverty
• promotion of education
• promoting gender equality and empowering women
• reducing child mortality and improving maternal health
• combating HIV, AIDs, malaria and other diseases
• ensuring environmental sustainability
• employment enhancing vocational skills
• social business projects
• contribution to certain funds such as the Prime Minister‟s National Relief Fund
and
• other matters that may be prescribed.
24
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
25. Companies Act 2013
Corporate Social Responsibility (CSR) - Impact
1.
The Companies Act, 2013 does not prescribe any penal provision if a company fails
to spend amount on CSR activities. The board will need to explain reasons for noncompliance in its report
2.
The Companies Act, 2013 has set threshold of INR 5 crore net profit for applicability
of CSR requirements. In comparative terms, this seems to be on lower side vis-à-vis
net-worth and turnover thresholds of INR 500 crore and INR1,000 crore,
respectively. This may result in companies getting covered under the CSR
requirements, even when they don‟t meet net worth / turnover criteria
3.
Due to determination of average profit as per section 198, actual expenditure on
CSR activities for a company may be higher/ lower than 2% of its average profits for
the last 3 years determined in accordance with the P&L.
25
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
26. Companies Act 2013
Corporate Social Responsibility (CSR) - Impact
4.
Section 149 of the Act mandates only public companies whether listed or in other prescribed class to have
independent directors. In contrast, applicability of CSR requirements depends on net worth, turnover or
net profit criterion, irrespective of whether the company is is a public or private company. Every company
covered by CSR needs to constitute a CSR committee with at least one independent director. This implies
that even a private company will need to have an independent director if it is covered under CSR
requirements.
5.
It is not absolutely clear whether a company will need to create provisions in the financial statements
towards unspent if it fails to spend 2% of the amount of CSR activities in a particular year. The resolution
of this issue may depend of legal/ other consequences, which may follow, if a company fails to spend the
requisite amount in a particular year. For example, if a company can get away with an explanation in the
board‟s report and need not make good past shortfall in the future period, there may be no need to create
provision. However, if the company needs to incur the amount currently unspent in future periods legally, a
provision in accordance with AS 29 may be needed
26
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
27. Companies Act 2013
Corporate Social Responsibility (CSR) - Impact
6. Although the detailed rules/ clarifications will throw light on exact
requirements, the perception is that Ministry of Corporate Affairs may
follow the National Voluntary Guidelines (NVG) for disclosure and
encourage the concept of „shared value‟ where companies are
encouraged to work on common CSR projects which would result in
win-win scenario for all participants. One may look at the existing
expenditure and evaluate whether the same can qualify as eligible
CSR expenditure.
27
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
28. Companies Act 2013
Corporate Social Responsibility (CSR) - Impact
7.
Tax deductibility of CSR expenditure,. While one argument is that there is an
obligation to incur such expenses and also, from financial reporting perspective, it
will be treated as an expense, the counter argument could be that it is in the nature
of allocation of profit and therefore will not be allowed as deduction for tax purposes.
8.
As per the news report, when Sachin Pilot, the Corporate Affairs Minister, was
asked whether the companies would get any tax benefits from CSR expenditure, he
indicated that CSR expenditure is 2% of PBT and therefore a kind of benefit is
already available by way of deduction from taxable income. However, he mentioned
that he will speak to Finance Minister and see what can be done.
9.
To clear the ambiguity surrounding the deductibility of the CSR expense, industry
expects the Central Board of Direct Taxes to clarify the position on deductibility of
CSR expenditure
28
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
29. Companies Act 2013
Serious Fraud Investigation Office
• Currently, the SFIO has been set-up by the Central Government under resolution no.
45011 / 16/ 2003 – Adm-I dated 2 July 2003. Under the Companies Act, 2013, statutory
status will be conferred upon the SFIO. Till the time SFIO is established under the
Companies Act, 2013, the SFIO previously set up by the CG will be deemed to be
SFIO under the Companies Act, 2013.
• The CG may assign investigation into the affairs of a company to SFIO (i) on receipt of
a report of the registrar or inspector, (ii) on intimation of a special resolution passed by
a company that its affairs are required to be investigated, (iii) in public interest, or (iv)
on state government.
• Where any case has been assigned by the CG to SFIO for investigation, no other
investigating agency of the CG / State Govt will proceed with investigation in such
cases.
29
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
30. Companies Act 2013
Serious Fraud Investigation Office
• If authorised by CG, the SFIO will have the power to arrest in respect of certain
offences, which attract the punishment for fraud. Those offences will be cognizable and
the person accused of any such stipulated conditions.
• Investigation report of SFIO filed with special court for framing of charges will be
deemed as a report filed by the police officer
• Stringent penalties are prescribed for fraud-relate offences.
• SFIO will share any information or documents, with any investigating agency, state
government, police authority or Income-tax authorities, which may be relevant or useful
for them in respect of any offence or matter being investigated by them under any other
law.
30
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
31. Companies Act 2013
Directors – Recap..
TYPE OF COMPANY
INDEPENDENT DIRECTOR
WOMAN DIRECTOR
Private Company
1 Independent Director on Corporate
Social Responsibility (CSR) Committee
if CSR requirement is triggered
Required if paid-up share capital
> INR 100 crores (to be
appointed within 3 years) from
the commencement of the Act
1/3rd of the Board to be Independent if
the Company has:
Public Unlisted
Company
• Paid-up share capital of INR 100
crores or more; or
• Aggregate
outstanding
loans,
borrowings, debentures or deposits
exceeding INR 200 crores
• All listed companies to have 1/3rd of
the Board comprised of Independent
Director
Listed Company
• Requirement increases to half of the
Board if there is an executive
chairman [Clause 49, Listing
Agreement]
Required if paid-up share capital
> INR 100 crores (to be
appointed within 3 years) from
the commencement of the Act
SMALL
SHAREHOLDER
DIRECTOR
RESIDENT DIRECTOR
Section 151
Rule 11.5
Not applicable
Section 151
Rule 11.5
Not applicable
1 director required to be
resident in India for at
least 182 days in a
calendar year
Section 149(3)
Mandatory.
All listed companies to have a
woman director (to be appointed
within 1 year) from the
commencement of the Act
Suo motu; or
Request of 1/10th the number
of small shareholders or 500
small
shareholders
(whichever is lower)
31
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
32. Companies Act 2013
Board Committees – Recap..
TYPE OF
COMPANY
Private
Company
AUDIT COMMITTEE
NOMINATION &
REMUNERATION
COMMITTEE
Not applicable
Not applicable
Both committees required if the company has:
Public Unlisted
Company
• Paid-up share capital of INR 100 crores or more; or
• Aggregate outstanding loans, borrowings, debentures or
deposits exceeding INR 200 crores
CSR COMMITTEE
STAKEHOLDER
RELATIONSHIP
COMMITTEE
Not applicable
Independent Director
required on CSR
Committee if:
• Net worth ≥ INR 500
Crores
Applies if the company has
1000 or more security holders
• Turnover ≥ INR 1000
Crores
• Net profit ≥ INR 5 crores
Public Listed
Company
Applicable
Applies if the company has
1000 or more security holders
32
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
33. Companies Act 2013
Board Committees – Recap..
TYPE OF COMMITTEE
COMPOSITION
OTHER REQUIREMENTS
• Roles stipulated
Audit Committee [Section 177]
Nomination & Remuneration
Committee [Section 135]
CSR Committee [Section 178]
Stakeholder Relationship Committee
[Section 178]
• 3 Directors
• Majority Independent Directors
• Decisions no longer binding on the
Board
• Whistle-blower policy required,
providing direct access to the
chairman of the Audit Committee
• 3 Directors
• Majority Independent Directors
• 3 Directors
• 1 Independent Director
• Strength and composition determined
by the Board
• Chairman to be non-executive
• Purpose – to solve the grievances of
security holders
33
Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
34. Companies Act 2013
Non Executive Director (NED) and Independent Director
Non Executive Director
Non-executive directors are the custodians of the governance process. They are
not involved in the day-to-day running of business but monitor the executive
activity and contribute to the development of strategy.
Independent Director
Are directors who do not have any pecuniary relationship or transactions with the
company, its promoters, its management or its subsidiaries, which in the
judgement of the board may affect their independence of judgement.
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Presented by CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
37. Companies Act 2013
Presenter’s contact details
CA Pooja Gupta
capooja@yahoo.com
www.capoojagupta.blogspot.in
CA. Pooja Gupta – B.Com, FCA, LL.B, CS, Masters in Finance (Germany)
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Editor's Notes
whose relatives do not have any pecuniary relationship or transaction with the company or its holding, subsidiary or associate company, or their promoters or directors amounting to 2% or more of the gross turnover of the relevant entity, or INR 50 lakhs (subject to change), whichever is lower, during the current financial year or the two preceding financial years