Companies Act3

7/27/2019 Companies Act3

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COMPANIES ACT,1956ANDCOMPANIES BILL,2012(BILL NO. 121-C OF 2O11)

-... A Comparative

By Team Manupatra

-December 2012


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- THE HISTORY- TOPICAL COMPARATIVE

-December 2012


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-December 2012

... THE HISTORY


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December 2012

2008 BillIntroduced in LokSabha on 23.10.08To replace theCompanies Act,1956 Lapsed due todissolution ofParliament

2009 Bill2008 bill modifiedRe-introduced in2009 on 3.8.09

Bill referred toStandingCommittee forreview

Report tabled inLok Sabha onAugust 31, 2010

2011 BillIntroduced in LokSabha onDecember 14, 2011

Was shelved for takingup the same in wintersession of Parliamenton December 22, 2011

2011 Bill Passed by LokSabha onDecember 18,

2012 as theCompanies Bill2012


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THE ACT OF 1956 & THE ACT ASPROPOSED TO BE....

Details

Companies Act, 1956

Companies Bill, 2012

Parts/ Chapter

13

29

Sections

658

470

Schedules

15

7

No. of clauses inSection 2(Definitions)

67

95


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-December 2012

... TOPICALCOMPARATIVE


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DEFINITIONS

Details


New Definitions asintroduced

(Clause 2)

Some of the new definitions as introduced are of AccountingStandards, Auditing Standards, Associate Company, ChiefExecutive Officer, Chief Financial Officer, Control, Deposit,Employee Stock Option, Financial Statement, GlobalDepository Receipt, Indian Depository Receipt, IndependentDirector, Interested Director, Key Managerial Personnel,Promoter, One Person Company, Small Company, Turnover,Voting Right etc..

Details

Companies Act, 1956 vis--vis Companies Bill, 2012

Definitions Modified/ otherimportant terms

Incase of Private Limited Company [Section 3 & Cl. 2(68) Maximum number of members proposed to be increasedfrom 50 to 200 Private company which is a subsidiary of a public companyshall be deemed to be a public company.

Key Managerial Person (KMP) Cl. 2(51) states that KMPincludes the Chief Executive Officer or the managingdirector or the manager; the company secretary; the ChiefFinancial Officer if the Board of Directors appoints him; andsuch other officer as may be prescribed;


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DEFINITIONSDetails



Scope of the term officer who is in default enlarged The term wasdefined in Section 5 of the Act. Its scope has now been enlarged. Itnow states includes as under:

(i) whole-time director; (ii) key managerial personnel; (iii) where thereis no key managerial personnel, such director or directors as specifiedby the Board in this behalf and who has or have given his or theirconsent in writing to the Board to such specification, or all thedirectors, if no director is so specified; (iv) any person who, under theimmediate authority of the Board or any key managerial personnel, ischarged with any responsibility including maintenance, filing ordistribution of accounts or records, authorises, actively participatesin, knowingly permits, or knowingly fails to take active steps to

prevent, any default; (v) any person in accordance with whose advice,directions or instructions the Board of Directors of the company isaccustomed to act, other than a person who gives advice to the Boardin a professional capacity; (vi) every director, in respect of acontravention of any of the provisions of this Act, who is aware ofsuch contravention by virtue of the receipt by him of any proceedingsof the Board or participation in such proceedings without objecting tothe same, or where such contravention had taken place with hisconsent or connivance; (vii) in respect of the issue or transfer of anyshares of a company, the share transfer agents, registrars andmerchant bankers to the issue or transfer.


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DEFINITIONSDetails



Definition of the term Subsidiary Company modified The term isdefined in Section 4 of the Act. Its scope has now been modified tomean a Company in which the holding Company

(i) Controls the composition of the Board of Directors; or (ii) Exercisesor controls more than one half of the total share capital (instead ofequity share capital as prescribed under the 1956 Act) either at itsown or together with one or more of its subsidiary companies.

Provided that such class or classes of holding companies as may beprescribed shall not have layers of subsidiaries beyond such numbersas may be prescribed.


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NEW CONCEPTS/ TERMS

Details


Concept of OnePerson Company(OPC) Cl. 2(62)

It means a Company which has only one person as a

member;

Concept of SmallCompanies Cl. 2(85)

means a company, other than a public company with paid-upshare capital not exceeding fifty lakh rupees or such amount asmay be prescribed, not to be more than five crore rupees; orturnover of which as per its last profit and loss account does notexceed two crore rupees or such higher amount as may be

prescribed which shall not be more than twenty crore rupees.This will include a holding company or a subsidiary company; acompany formed with charitable objects; or a company or bodycorporate governed by any special Act;

Term Promoterdefined Cl. 2(69)

(i) Promoter is one who has been named as such in a prospectusor is identified by the company in the annual return, or (ii) whohas control over the affairs of the company, directly or indirectlywhether as a shareholder, director or otherwise; or (iii) inaccordance with whose advice, directions or instructions the

Board of Directors is accustomed to act. Provided that nothing insub-clause (c) shall apply to a person who is acting merely in aprofessional capacity.


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NEW CONCEPTS/ TERMSDetails


Directors

Duties of the directors towards a company prescribed (not providedin the Companies Act, 1956). Maximum there can be15 directors. This number can go up on thepassing of special resolution. In certain prescribed companies atleast one woman director shouldbe appointed Every company to have one resident director, i.e. a director who hasstayed in India for minimum 182 days in the previous calendar year. Every company belonging to such class or description of companiesas may be prescribed shall have Managing Director (MD) or ChiefExecutive Director (CEO) or Manager and in their absence, a Whole timeDirector (WTD) TD and a Company Secretary. Individual not to be the Chairman of the company as well as the MDor CEO of the company at the same time (AoA can provide for this); Every whole time KMP to be appointed by a resolution at BOD

meeting; A WTKMP not to hold office in more than one company at the sametime. Any vacancy in the office of any KMP to be filled up by the BODwithin 6 months. Provisions relating to separation of office of Chairman andManaging Director (MD) modified to allow, in certain cases, a class ofcompanies having multiple business and separate divisional MDs toappoint same person as Chairman as well as MD


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NEW CONCEPTS/ TERMS

Details


Concept ofIndependentDirectors Cl. 149(5)

All listed companies shall have at least one-third of the Board asindependent directors. Such other class or classes of public companies as may beprescribed by the Central Government shall also be required toappoint independent directors. The independent director has been clearly defined in the Bill. Nominee director nominated by any financial institution, or inpursuance of any agreement, or appointed by any government torepresent its shareholding shall not be deemed to be anindependent director. An independent director shall not be entitled to anyremuneration other than sitting fee, reimbursement of expenses

for participation in the Board and other meetings and profitrelated commission as may be approved by the members. An Independent director shall not be entitled to any stockoption.Only an independent director can be appointed as alternatedirector to an independent director. [clause 161(2)].


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Duties of Directors Cl. 166

To act in accordance with the articles of the company. To act in good faith in order to promote the objects of the companyfor the benefit of its members as a whole, and in the best interests ofthe company, its employees, the shareholders, the community and forthe protection of environment. To exercise his duties with due and reasonable care, skill anddiligence and shall exercise independent judgment. Not to involve in a situation in which he may have a direct orindirect interest that conflicts, or possibly may conflict, with theinterest of the company. Not to achieve or attempt to achieve any undue gain or advantageeither to himself or to his relatives, partners, or associates and if suchdirector is found guilty of making any undue gain, he shall be liableto pay an amount equal to that gain to the company. Not to assign his office and any assignment so made shall be void.

Resignation ofDirector [Cl. 168]

A Director may resign from his office by giving a notice in writingand the Board shall, on receipt of such notice take note of the sameand the company shall intimate the Registrar and place suchresignation in the subsequent general meeting of the company. Thedirector shall also forward copy of resignation with reasons toRegistrar. The clause further provides for the date on which thenotice of resignation shall take effect. The director shall be liable forthe offences occurred during his tenure.


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NEW CONCEPTS/ TERMS

Details


Cross Border Mergers

The Bill provides for Cross Border Mergers which means that aforeign Company may with due prior approval of the ReserveBank of India, merge or amalgamate in to a Company registeredunder this Act or vice-versa. Payment of consideration to the shareholders of the mergedCompany in cash, or in Depository Receipts (DRs) or partly bycash and DRs.

Account Books/ Audit/Auditors

Company can maintain Books of Account in electronic mode The Bill provides for conduct of internal audit of prescribed

class or classes of companies. 5 Year Tenure for Auditors:

- Audit firm or an individual including an LLP to be appointedfor 5 yrs, i.e. to hold office upto the date of the sixth AGM.

- Appointment of auditors for five years shall be subject toratification by members at every Annual General Meeting.

Uniform FinancialYear

Company or body corporate to adopt uniform financial year i.e.1st April to 31st March every year except in certain exceptionalcases.

Existing Companies not adopting 1st April to 31st March asfinancial year for the purposes of Companies Act to alignthemselves with this within two years of commencement of theCompanies Act, 2012.


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Serious FraudInvestigating Office(SFIO)

[Cl. 211]

This is a new clause and seeks to provide that the CentralGovernment shall constitute Serious Fraud Investigation Office(SFIO). The SFIO will be headed by a director and will consist ofexperts from various disciplines. The Central Government shall also appoint a Director in theSFIO not below the rank of Joint Secretary and may also appointsuch experts and other officers as it considers necessary forefficient discharge of functions.

Corporate SocialResponsibility

[Cl. 135]

Every company having specified net worth or turnover or netprofit during any FY shall constitute the Corporate SocialResponsibility Committee of the Board. The composition of thecommittee shall be included in the Board's Report. The Board shall disclose the content of policy in its report andplace on website, if any of the Company. The Board shall endeavour to ensure that atleast two per cent

of average net profits of the Company made during threeimmediately preceding financial years shall be spent on suchpolicy every year. If the company fails to spend such amount theBoard shall give in its report the reasons for not spending.


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NEW CONCEPTS/ TERMS

Details


E-governance

Maintenance and allowing inspection of documents bycompanies in electronic form being allowed for the first time

AuditorsAccountability/ NFRA

Rotation of auditors and audit firms being provided for. Stricter and more accountable role for auditor being retained.Provisions relating to prohibiting auditor from performing non-audit services revised to ensure independence and accountabilityof auditor. Subject to the maximum prescribed number of companies, themembers of a company may resolve that the auditor or audit

firm of such company shall not become auditor in companiesbeyond the number as may be specified in such resolution. National Advisory Committee on Accounting and AuditingStandards (NACAAS) proposed to be renamed as NationalFinancial Reporting Authority (NFRA) with a mandate to ensuremonitoring and compliance of accounting and auditing standardsand to oversee quality of service of professionals associated withcompliance. Authority to consider the International Financial ReportingStandards and other internationally accepted accounting andauditing policies and standards.

Contd...


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NEW CONCEPTS/ TERMS

Details


contd.

The Authority is also proposed to be empowered with quasijudicial powers to ensure independent oversight overprofessionals. Cost Audit: Cost records to be mandated for companies engagedin production of such goods or rendering of such services as maybe prescribed. The concept of "cost auditing standards" beingmandated. Secretariat Audit: Prescribed class of companies would need toattach with the Board's Report, a Secretarial Audit Report givenby a company secretary in practice.


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ManagerialRemuneration

Provisions relating to limits on remuneration provided in theexisting Act (11% of net profits) included. For companies with no profits or inadequate profitsremuneration shall be payable in accordance with new Scheduleof Remuneration annexed to the Bill and in case a company isnot able to comply with such Schedule, approval of CentralGovernment would be necessary. Individual limits for remuneration enhanced in the Bill vis-a-vis the existing limits. Concept of payment of periodic fees which shall include sittingfees to directors being included in the Bill. Independent Directors (IDs) not to get stock option: IDs not toget stock option but may get payment of fees and profit linkedcommission subject to limits specified in the Bill/rules. Central Government may prescribe amount of fees under the

rules.

Mediation andConciliation Panel

It is proposed to create and maintain as "Mediation andConciliation Panel" for facilitating mediation and conciliationbetween parties during any proceeding under the proposedLegislation before the Central Government or Tribunal.


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Protection forMinorityShareholders

Exit option to shareholders in case of dissent to change inobject for which public issue was made. Specific disclosure regarding effect of merger on creditors, keymanagerial personnel, promoters and non-promoter shareholdersis being provided. The Tribunal is being empowered to providefor exit offer to dissenting shareholders in case of compromise orarrangement. The Board may have a director representing small shareholderswho may be elected in such manner as may be prescribed byrules.

Investor Protection

Acceptance of deposits from public subject to a more stringentregime. Central Government to have power to prescribe class or classesof companies which shall not be permitted to allow use ofproxies. The Bill also to have provisions to provide that a personshall have proxies for such number of members /such shares asmay be prescribed. Provisions for Class Action Suits revised to provide minimumnumber of persons who may apply for such suits. Safeguardsagainst misuse of these provisions also being included.


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NEW CONCEPTS/ TERMS

Details


Insider Trading

[Cl. 195]

This is a new clause and seeks to prohibit directors or keymanagerial person of the company to deal in securities of acompany, or counsel, procure or communicate, directly orindirectly, about any non-public price-sensitive information toany person. This clause further provided for penal provision in case ofcontravention.

Investor Protection

Acceptance of deposits from public subject to a more stringentregime.

Central Government to have power to prescribe class or classesof companies which shall not be permitted to allow use ofproxies. The Bill also to have provisions to provide that a personshall have proxies for such number of members /such shares asmay be prescribed. Provisions for Class Action Suits revised to provide minimumnumber of persons who may apply for such suits. Safeguardsagainst misuse of these provisions also being included.


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HOLDING COMPANY AND SUBSIDIARYDetails

Companies Act, 1956


Meaning/Restrictions inregard to Subsidiary

No restriction

Class or classes of holdingCompanies as may beprescribed shall not havelayers of subsidiariesbeyond such numbers asmay be prescribed [Cl.2(87)]


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SHARES - TRANSFER[S. 111 OF THE 1956 ACT AND CL. 58 OF THE BILL]

Details

Companies Act, 1956


Transfer of Shares Public Company

Securities or other interest ofany member freely transferable.

[sub-sections (1) and (2) ofsection 111]

Freely transferable,however there needs to be

a contract/agreement withregard to the transfer ofsecurities which can bemade enforceable as acontract. [Cl. 58]

SECURITIES BUY-BACKDetails

Companies Act, 1956


Restriction furtheroffer of Buy-back

Where buyback is by Board (10per cent of the total paid upequity capital and freereserves), no further offer ofbuyback is permissible withinone year from the date of lastoffer of buyback. [S. 77A]

No offer of buy-back shallbe made within

a period of one yearreckoned from the date ofthe closure of thepreceding offer of

buy-back, if any. [Cl. 68]


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ACCEPTANCE OF DEPOSITS BY COMPANIES

Details

Companies Act, 1956


[Cl. 73]

Eligibility foracceptance frompublic andshareholders

Public Companies arepermitted to accept depositsfrom public and shareholdersin accordance to Companies(Acceptance of Deposit)Rules.

[Section 58A)

No Company except BankingCompany and such otherCompany as may be specifiedin this behalf shall invite,accept or renew depositsfrom the subject tofulfillment of certainconditions. A Company may,subject to the passing of aresolution in general meetingand prescribed rules accept

deposits from its members onsuch terms and conditions asmay be agreed upon betweenthe Company and itsmembers, subject to theconditions prescribed:


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ACCEPTANCE OF DEPOSITS BY COMPANIESDetails

Companies Act, 1956


Eligibility foracceptancefrom public andshareholders

-

contd.

The conditions are:

- statement showing the financialposition of the company, the creditrating obtained, the total number of

depositors and the amount duetowards deposits in respect of anyprevious deposits accepted by thecompany

- depositing such sum which shallnot be less than 15 per cent of theamount of its deposits maturingduring a FY and the FY nextfollowing, and kept in a separatebank account in a scheduled bankto be called as deposit repaymentreserve account;


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ACCEPTANCE OF DEPOSITS BY COMPANIES

Details

Companies Act,1956


Eligibility foracceptancefrom publicandshareholders

-

contd.

- providing deposit insurance in themanner and extent prescribed

- certifying that the Company has notdefaulted in the repayment of depositsor payment of interest

- providing security, if any for the duerepayment of the amount of deposit orthe interest thereon including thecreation of such charge on the propertyor assets of the company. However,where a Company does not secure thedeposits or secures such depositspartially, then, the deposits shall betermed as 'unsecured deposits' and

shall be so quoted in every circular,form, advertisement or in anydocument related to invitation oracceptance of deposits.


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ACCEPTANCE OF DEPOSITS

Details

Companies Act,1956


Eligibility foracceptance frompublic andshareholders

-

contd.

The deposit repayment reserve accountreferred to in clause (c) of sub-section (2) shall

not be used by the company for any purposeother than repayment of deposits.

No Company except Banking Company andsuch other Company as may be specified inthis behalf shall invite, accept or renewdeposits from the public except in the mannerprovided.

A Company may, subject to the passing of aresolution in general meeting and prescribed

rules accept deposits from its members onsuch terms and conditions as may be agreedupon between the Company and its members,subject to the conditions prescribed:


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DIVIDEND DECLARATION & PAYMENTDetails

Companies Act, 1956

[Section 205]


Declaration ofDividend -Transfer ofReserves

No dividend to be declared or paidby a Company for any FY out of theprofits of the Company for that yeararrived at after providing fordepreciation except after thetransfer to the reserves of theCompany of such percentage of itsprofits for that year, not exceedingten per cent.

A voluntary transfer by Company to bemade, as considered appropriate beforedeclaration of any dividend. [Cl. 123]

Declaration in theevent ofinadequate profits

Dividend to be declared inaccordance to Companies(Declaration of dividend out ofReserves) Rules, 1975 with a

maximum rate prescribed as 10 percent

Dividend to be declared out of theaccumulated profits transferred to reservesin accordance to applicable rules

Declaration ofinterim dividend Any restrictions

No restrictions

Interim declaration may be declared out ofthe surplus in P&L Account as well asprofits of the FY in which dividend issought to be declared. Failure incompliance will bar the Company todeclare dividend during the period of noncompliance


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BOOKS OF ACCOUNTDetails

Companies Act, 1956

Companies Bill, 2012 [Cl. 129]

Consolidated

Statements

No Provisions

The financial statement shall be laid inthe AGM of that FY. In case ofsubsidiary companies, the companyshall prepare a consolidated financialstatement of the Company and allsubsidiaries and lay before the AGM.

The Central Government shall havethe power to exempt a class or classesof companies from any of therequirement of this section. The clausealso provide the penalty wherecompany contravenes the provision ofthis section.

For the purpose of above, "subsidiary"shall include 'associate company' and'joint venture'


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LOAN AND INVESTMENT BY COMPANY

Details

Companies Act, 1956


Exemptions

[Section 372A]

Any loan made, any guarantee given orany security provided or any investmentmade by -

Banking company, or an insurancecompany, or a housing finance company inthe ordinary course of its business, or acompany established with the object offinancing industrial enterprises, or ofproviding infrastructural facilities;

Company whose principal business is theacquisition of shares, stock, debentures orother securities;

A private company, unless it is asubsidiary of a public company;

To investment made in shares allotted inpursuance of clause (a) of sub-section (1) ofsection 81;

To any loan made by a holding company to

its wholly owned subsidiary;

To any guarantee given or any securityprovided by a holding company in respectof loan made to its wholly ownedsubsidiary; or

To acquisition by a holding company, byway of subscription, purchases orotherwise, the securities of its whollyowned subsidiary.

[Cl. 186]

- Loan made, guarantee given orsecurity provided by a bankingcompany or an insurancecompany or a housing financeCompany in the ordinary courseof its business or a companyengaged in the business offinancing of companies or ofproviding infrastructural


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facilities;

- To any acquisition (i) made by anon-banking financial companywhose principal business isacquisition of securities.

- Exemption to NBFC shall be inrespect of its investment andlending activities;

- Acquisition made by a companywhose principal business is theacquisition of securities;

- Acquisition of shares allotted inpursuance to further issue ofcapital


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RELATED PARTY TRANSACTIONSDetails

Companies Act, 1956


Provisions/ scope thereof

[Section 297]

A company is debarred from enteringinto:

- Contracts relating to sale, purchase orsupply of any goods or materials andservices;

-Contracts relating to underwritingsubscriptions of shares, debentures of acompany.

Contracts cover the following specifiedpersons:-- Director/Relative of Directorof a Company; Firm where suchDirector/Relative is a partner; Anyother partner of such firm as above;Private company where such Director isDirector or member

Such transactions are subject to priorapproval by resolution passed by theBoard of Directors in a Board Meeting.In case of paid up capital of Companyexceeds one crore, prior approval of the

Regional Director is required.

[Cl. 188]

A Company is debarred fromentering into:

-Contracts relating to: sale,purchase or supply of any goodsor materials; buying/selling/disposing otherwise any

property; leasing of anyproperty; availing/ rendering ofany services; appointment ofany agents for purchase or saleof goods, materials, services orproperty; such related party'sappointment to any office orplace of profit in the company,its subsidiary or associatecompany; underwriting


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subscription of any securities/derivatives of the company.

Contracts cover specifiedpersons under Section 2 clause76 of the Bill defining the termRelated Party.


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RELATED PARTY TRANSACTIONS CONTD.

Details

Companies Act, 1956


Exemptions are provided in thecase of:

1.Purchase/ Sale of goods andmaterials:

(a) for cash at current Marketprice

(b) Also services, the cost ofwhich does not exceed Rs. 5000in any year during tenure ofContract

2.Transactions by Banking /Insurance Companies in theordinary course of Business.

Such transactions aresubject to prior approvalby resolution passed bythe Board of Directors ina Board Meeting. In casethe paid up capital of theCompany/transactionexceeds prescribed limit,

prior approval of theshareholders is required.

Exemptions are providedin the case of transactionsin ordinary course ofbusiness, other than thosewhich are not an armslength basis


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COMPROMISES, ARRANGEMENTS ANDAMALGAMATIONSDetails

Companies Act, 1956


How this can beapproved

To be approved by Majorityrepresenting 3/4th in value ofthe creditors or members orclass thereof present and votingor by proxy.

Approval of High Court (NCLT)

Voting by Postal Ballotadded

Approval of High Court

(NCLT)

[Clause 230]

About the ValuationReport

Valuation report not to be givento shareholders/ creditorsalongwith notice conveningmeeting

It now needs to be given

Objections againstthe purpose

Objection can be made by anyshareholder or creditor. Suchobjection can be madeirrespective of theirshareholding/ debt outstanding

Objection to be made onlyby: persons holding more

than 10% shareholding; or having outstanding debtof more than 5% of totaloutstanding debt as perthe last audited balancesheet


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COMPROMISE, ARRANGEMENT ANDAMALGAMATION

Details

Companies Act, 1956


Buy back ofSecurities

The scheme can includeany buyback of securities

It can form part of it as perthe provisions of buyback.

On the Takeoveroffer

Scheme cannot include aTake over offer

As per the mannerprescribed. In the case oflisted Companies such offerhas to be as per SEBIRegulations

Transfer ListedCompany withUnlisted Company

No specific requirement toserve notice on Income tax

department and otherregulatory body

Notice needs to be served onIT department, RBI, SEBI,the Stock Exchanges, CCI,Sectoral regulators/authorities


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COMPROMISE, ARRANGEMENT ANDAMALGAMATIONDetails

Companies Act, 1956


Merger IndianCompanies withForeign Company

No

Yes, with prior approval ofRBI

Takeover offer

Scheme cannot include aTake over offer

It may include in a prescribed

manner . In the case of listedCompanies such offer has tobe as per SEBI Regulations

Offer to sell(MinorityShareholders toMajorityshareholder)

No

May sell at the price

determined in accordance toapplicable rules


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COMPROMISE, ARRANGEMENT ANDAMALGAMATION

Details

Companies Act,1956


Purchase Minorityshareholding byMajorityshareholder

No specific provision

Acquirer and/ or PAC or person/group of persons holding 90 percent or more of the issued equitycapital of the Company by virtue ofamalgamation, share exchange,

conversion of securities or for anyother reasons, can purchase theremaining equity shares of theCompany from minorityshareholders at a price determinedby registered valuerMinority shareholders may alsooffer to the majority shareholdersto purchase their equityshareholding in the Company atthe price determined by registeredvaluer.


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LOAN TO DIRECTORS

Details

Companies Act,1956 [S. 295]


[Cl. 185]

Provisions

Provisions areapplication only toPublic Companiessubject to the followingexceptions: - BankingCompanies; Holdings tosubsidiary Company ;Private Company; Prior approval of theCG is mandatory before

any Public Companydirectly/indirectlymakes loan, givesguarantee or providessecurity to its Directorsor other specifiedpersons.

Provisions are applicable only to bothPublic and Private Companies subjectto the following exceptions: Managing or whole-time conditions of

service extended by company director,as part of to all its employees or infurtherance to any scheme approved bya special resolution of its members. Company which in the ordinary courseof business provides loans ,givesguarantees or securities for the duerepayment subject to the condition thatrate of interest is not less than thebank rate declared by the Reserve Bankof India.


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REGISTERED VALUERDetails

Companies Act, 1956


[New Provision Cl.247]

Provision relating toRegistered Valuer

No provisions prescribed

Where valuation is to bemade under the Act, inrespect of any property,stocks, shares,debentures, ,securities orgoodwill or other assets ornet worth of a Companyor its liabilities, such

valuation shall be done bya registered valuer.


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REMOVAL OF NAMES OF COMPANIESFROM THE REGISTER OF COMPANIESDetails

Companies Act,1956


Grounds

[Section 560]

A Company may bestruck off by ROC ifit has reasonablecause to believe thata Company is notcarrying on businessor operations

[Cl. 248]

Reasons for Strike off:

subscribers to the memorandumhave not paid the subscriptionmoney with 180 days from the dateof incorporation Company has failed to commenceits business within one year of itsincorporation

Company is not carrying on anybusiness or operation for twoimmediately preceding financialyear and has within such periodapplied for status of a dormantCompany


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WINDING-UP

Details

Companies Act,1956 [Ss. 433 &434]


Grounds

By Specialresolution If Company isunable to pay itsdebt. Business notcommenced withinone year of itsincorporation orsuspends its

business for thewhole year Minimum numberof member goesbelow than asprescribed i.e. 2 and7 incase of Pvt. andPublic limitedCompany

[Cl. 271]

Requirement of minimumnumber of member removed Following additional groundsadded:i.Management of companyaffairs in fraudulent mannerii.Formation of Company forfraudulent and unlawfulpurposeiii. Persons involved/ concernedin the formation of Companyguilty of fraud, misfeasance ormisconduct in connection

therewith.


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Documents

Companies Act3