The Companies Act, 2013V.M. & ASSOCIATES

Companies Act, 2013 whether lengthy or concise?

Particulars 2013 1956

Chapters/ Parts 29 18

Sections 470 658

Schedules 7 15

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New Concepts Key

Managerial

Personnel

Auditor Rotation

Associate Company

Private Placeme

nt

NCLT

Registered Valuer

Fast Track

Merger

Women & Independent Director

Corporate Social

Responsibility [CSR]

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New Concepts Class Action Suit

Secretarial &

Auditing Standard

s

Vigil Mechanis

m

Disgorgement of gains

Conciliation Panel & Special Courts

NFRA

Ban on Non

Audit Services

Entrenchment

Provisions

Secretarial Audit

One Person Company

Small Company

Dormant Company

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What has been dropped?2

BIFR

Small Deposito

r

Deemed Public

Company

Qualification

Shares

Statement in lieu

of prospect

us

Statutory

meetings

Special Audit

Producer Company

Sole Selling agents

Convert share into

stock

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ASSOCIATE[Section 2(6)]

Associate company in relation to another company means a company in which that another company has a *significant influence,

but which is not a subsidiary company of the company having such influence and includes a joint venture company.

*significant influence: control of atleast 20% of total share capital or of business decisions under agreement

Associate Companies to be disclosed in annual report .

RPT extended to Associate Companies.

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One Person Company[Section 2(62)] One person company is a private company formed by subscribing the

name of such one person to the MOA and complying with the act in respect of its registration, and such subscriber shall nominate a person after obtaining his/her prior consent , who shall, in the event of subscriber’s death or incapacity to the contract , become the member of that company.

OPC is not required to hold any AGM. Name of the company shall affix OPC or One Person Company. Salient Features of One Person Company:

Only One Shareholder Minimum One Director ,maximum 15 ,beyond which S.R. has to be

passed. Private Limited Perpetual succession through nomination

OPC can also be incorporated for charitable purpose. Annual return to be filed by such company has to be signed by the CS, and

where there is no CS, by the director of the company. No person shall be eligible to incorporate more than 5 OPC. At least one board meeting has to be conducted in each of half calendar

year and the gap between two such meetings is not less than 90 days. Requirement of Quorom so as to board shall not apply where there is only

one director in the OPC.

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SMALL COMPANIES Small company means a company , other than public company:

Paid up share capital of which does not exceed Rs. 50 laks or such higher amount as may be prescribed which shall not be more than Rs. 5 crore; or,

Turnover of which as per its last P&L account does not exceed Rs. 2 crore or such higher amount as may be prescribed which shall not be more than Rs. 20 crore.

It excludes: Holding or a subsidiary company Company registered under section 8,i.e., not for profit co. A company or a body corporate governed by any special act.

The annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.

At least one board meeting has to be conducted in each of half calendar year and the gap between two such meetings is not less than 90 days.

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Dormant company [Sec 455] A company not having significant accounting transaction, or an inactive

company may obtain status of a dormant company. A dormant company shall have a minimum number of three directors in

case of a public  company, two directors in case of a private company. The provisions of the Act in relation to the rotation of directors shall not

apply on dormant companies. A dormant company shall file a “Return of Dormant Company”

annually indicating financial position duly audited by a chartered accountant in practice in Form MSC-3 in along with such annual fee as provided within thirty days from the end of each financial year.

The dormant company  shall  continue  to file  the  return(s)  of allotment in the manner and within the time specified in the Act whenever the company allots any security to any person.

At least one board meeting has to be conducted in each of half calendar year and the gap between two such meetings is not less than 90 days

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EXEMPTIONS/RELAXATIONS/PRIVILEGES TO DORMANT ,SMALL AND OPC.

Financial Statement – Cash Flow Statement not required.

At least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days.

OPC Dormant company Small company

The annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company

A dormant company shall file a “Return of Dormant Company” annually indicating financial position duly audited by a chartered accountant in practice.

The annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.

An OPC shall have Minimum One Director.

OPC is further exempted from holding an AGM.

A dormant company shall have a minimum number of three directors in case of a public company, two directors in case of a private company.

A Small company shall have a minimum number of two directors.

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NCLT Central Government [CG] shall by notification constitute a tribunal known as National

Company Law Tribunal, consisting of a President and such no. of judicial and technical members as may be prescribed.

President so appointed shall be the judge of high court for atleast 5 years.

For hearing appeals against the tribunal CG shall by notification constitute an appellate tribunal known as National Company Law Appellate Tribunal consisting of a chairperson and such number of judicial and Technical members , not exceeding 11.

The president and every other member of the tribunal shall hold office for the period of 5 years, but shall be eligible for re appointment for period of next 5 years.

Under the act, on such date as notified by the CG: all matters, proceedings or cases pending before the Company Law

Board constituted under 10E(1) of the Companies Act, 1956,immediately before such date shall stand transferred to the Tribunal [NCLT]and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of this Act.

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any person aggrieved by any decision or order of the Company Law Board made before such date may file an appeal to the High Court within 60 days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order.Provided that the High Court may if it is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding 60 days.

all proceedings under the Companies Act, 1956, including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer.

any appeal preferred to the Appellate Authority for Industrial and Financial Reconstruction or any reference made or inquiry pending to or before the Board of Industrial and Financial Reconstruction or any proceeding of whatever nature pending before the Appellate Authority for Industrial and Financial Reconstruction or the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985 immediately before the commencement of this Act shall stand abated.

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Relative [Section 2(77)]

Relative: With reference to any person, means anyone who is related to another, if:They are members of HUF,They are husband and wifeOne person is related to the other in the following manner

Father(including step-father) Mother (including step-mother) Son(including step-son) Son’s Wife Daughter Daughter’s husband Brother(including step-brother) Sister(including step-sister)

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Private Placement of Securities[Sec 42]

Shareholders approval by way of a Special Resolution is required. It shall be made to not more than 200 persons in a financial year

excluding QIB and employees offered securities under ESOP. All monies payable towards subscription of securities shall be paid through

cheque or DD or other banking channels but not by cash and deposited in a separate bank account.

The value of such offer or invitation per person shall be with an investment size of not less than Rs.20,000/- of face value of the securities.

The payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities and the company shall keep the record of the Bank account from where such payments for subscriptions have been received.

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Women Director

The following class of companies shall appoint at least one woman director within 1 year from the commencement of the provisions of this Act i.e., before 31st March 2015:

every listed company; every other public company having- *paid–up share capital of rupees 100 Crore or more; or *turnover of rupees 300 Crore or more.

Note: In case of any intermittent vacancy of a woman director, shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or 3 months from the

date of such vacancy, whichever is later.

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CORPORATE SOCIAL RESPONSIBILITY [Sec 135]

Every Company with net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more, during any financial year to constitute a CSR Committee of the Board consisting of three or more directors, of which at least one director shall be an independent director would be required to spend at least 2% of average profits in the last 3 years towards CSR activities.

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CSR activitiesi. Eradicating hunger, poverty and malnutrition, promoting preventing

heath care and sanitation and making available safe drinking water. ii. Promotion of education, including special education and employment

enhancing vocation skills especially among children woman, elderly and the differently abled and livelihood enhancement projects. 

iii. Promoting gender equality and empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres, and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups. 

iv. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining of quality of soil, air and water.

v. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up of public libraries, promotion and development of traditional arts and handicrafts.

vi. Measures for the benefit of armed forces veterans, war widows and their dependents.

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vii. Training to promote rural sports, nationally recognized sports, and Paralympic sports and Olympic sports.

viii. Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

ix. Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

x. Rural development projects.

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Appointment of KMP – [Sec 203]

•Every listed company and every other public company having a paid-up share capital of Rs.10 Crore or more shall have whole-time* key managerial personnel.[KMP]

*KMP includes:Managing Director, or Chief Executive Officer, or Manager and in their absence, a Whole Time Director;Company Secretary; andChief Financial Officer

•MD/CEO not to be appointed as Chairman, unless: AOA provides otherwise; or Company does NOT carry multiple business

•KMP not to hold office in > 1 Company except in Subsidiary Company at the same time KMP can be director with permission of BOD •KMP vacancy to be filled up by BOD within 6 months at BM

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Secretarial Audit Report [Sec 204]

Every listed company and every public company having a paid-up share capital of 50 Crore rupees or more; or every public company having a turnover of 250 Crore rupees or more shall annex with its Board’s report, a secretarial audit report. The format of the Secretarial Audit Report shall be in Form MR.3.

Audit to be conducted by a Practising Company Secretary Secretarial Audit Report to form a part of Board Report. BOD to explain in full any qualification or observation or other

remarks made in the report. Secretarial standards has been mandated.

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Registered Valuer [Sec 247] A person having qualifications, experience and registered as a valuer can

act as a valuer under the provisions of the law. Following persons are eligible to act as valuer:

a Chartered Accountant, Company Secretary or Cost Accountant who is in whole-time practice, or retired member of Indian Corporate Law Service or any person holding equivalent Indian or foreign qualification as the Ministry of Corporate Affairs may recognize by an order.

Values of Registered valuer are: Pricing of pref. allotment Non cash transactions Minority buyout Share swap ratio

Followings points should keep in mind: Valuer not to be interested. Valuer to exercise due diligence. Valuation to be done as per rules. Valuer liable for damages on default.

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Incorporation of Company and Matters Incidental Thereto…..

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Memorandum (Sec. 4):

Liability of Members: Now, incase of company limited by shares the liability of its members to be limited to the amount unpaid, if any, on the shares held by them (including premium, if any) earlier it was limited to the amount unpaid on the face value of the shares.

Bifurcation of Objects: In the MOA of the company, only objects for which the company is incorporated along with matters considered necessary for its furtherance shall be mentioned without any bifurcation into main, ancillary and other objects as provided in the previous C.A.1956.

Change in name in line with change of activities: Where the company has changed its activities which are not reflected in its name, it has to change its name in line with its activities within a period of 6 months from the change of activities.

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Articles (Sec. 5):

The Articles of Association of the company may contain provisions for Entrenchment whereby specified provisions of the Articles can be altered only if conditions or procedures that are more restrictive than those applicable in case of special resolution have been met with.

Commencement of Business etc (Sec 11):

• To commence business, a public/private company needs to file the following with the Registrar of Companies:

o Declaration by a director stating that the subscribers to the memorandum have paid the value of shares agreed to be taken by them, and

o Confirmation that the company has filed a verification of its registered office with the Registrar

o Approval from regulator: In the case of a company requiring registration from sectoral regulators such as RBI, SEBI etc, approval from such regulator shall be required. 

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Registered office of company (Sec. 12):

Every Company should get its name, address of its registered office and the Corporate Identity Number (CIN) along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, bill heads, letter papers and in all its notices and other official publications.

Every Company should get its name printed on hundies, promissory notes, bills of exchange.

Where a company has changed its name or names during the last two years, it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed during the last two years.

Service of documents (Sec. 20):A document may be served on a company or its officer and

to Registrar of Companies/Members by registered post or by speed post or by courier service or by means of such electronic or other mode as may be prescribed.

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Share Capital and Debentures Prohibition on issue of shares at discount (Sec 53)

Now, the Company cannot issue shares at a discount other than as Sweat

Equity. Transfer and Transmission of Securities (Sec 56)

The time period has been reduced for the following for issue of share or any other certificates:1. In case of allotment of shares : From 3 months to 2 months2. In case of transfer and transmission : From 2 months to 1 month3. In case of allotment of debentures : From 6 months to 3 months

Restrictions on purchase by company or giving of loans by it for purchase of its shares (Sec 67) Now where the shares are allotted to employees or trust for benefit of the

employees of the Company under any scheme for purchase or subscription of its shares or shares of its holding Company, approved by Special Resolution, then disclosure is required to be made in the Board Report.

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Acceptance of Deposits….

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DEPOSITS Companies (Acceptance of Deposits) Rules, 2014 does not

apply to following: A banking company

a non-banking financial company as defined in the Reserve Bank of India Act, 1934 (2 of 1934) registered with the Reserve Bank of India.

A housing finance company registered with the National Housing Bank established under the National Housing Bank Act, 1987 (53 of 1987).

A company specified by the Central Government under the proviso to sub-section (1) of section 73 of the Act.

Companies, other than ‘eligible companies’ i.e. a public company having a net worth of not less than Rs. 100 crore or a turnover of not less than Rs. 500 crore, cannot accept deposit from public. It can do so only from its members after seeking permission of its shareholders at a general meeting. No such approval was required under the Companies Act, 1956.

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Further, a Company cannot accept deposits from persons other than its members on such terms and conditions as prescribed and approval of shareholders will be required for the acceptance of deposits.

Limits of borrowing for :-

1. “eligible companies” In respect of deposit from its members, 10%. of [paid up share

capital and free reserves ] of the Company. In respect of deposit from person other than members, 25%. of

[paid up share capital and free reserves ] of the company.

2. Any other company: (a) such deposits shall not exceed 10 % of the aggregate of [paid up share capital and free reserves ], and

(b) such deposits are repayable not earlier than 3 months from the date of such deposits or renewal thereof.

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Every company referred to in sub-section (2) of section 73 has to issue a circular to all its members including therein statement showing financial position of the company, the credit rating obtained, total no. of depositors and the amount due towards deposits by registered post with acknowledgement due or speed post or by electronic mode

Every eligible company has to issue a circular in the form of an advertisement in Form DPT-1 in an English and vernacular newspaper has to be issued...Also  a copy of the same has to be uploaded on its website.

Eligible company has to obtain rating (including its net worth, liquidity and ability to pay its deposits on due date) from recognized credit rating agencies for informing public the rating given to the company at the time of invitation to the deposits.

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Annual Return- Sec 92

The annual return is a comprehensive document and contains information about the company. In addition to information that was provided in the annual return as per Companies Act, 1956, every annual return shall contain additional information such as:

particulars of principal business of the company along with holding, subsidiary and associate companies,details about other securities issued by the company,details of its promoters, KMP, along with any changes thereof,Details of meetings of members, or a class, Board and its various committees along with the attendance,remuneration of the directors and KMP,penalties or punishment imposed on the company directors, appeals made against such penalty or punishment, etc.Details related to certification of compliances, disclosures etc.

Annual Return to provide information up to the date of closure of financial year and not up to the Annual General Meeting as required under the Companies Act, 1956

Accounts of Companies

Financial Statements- Sec 129 Where a company has one or more Subsidiaries, it shall, in addition to its

financial statements , prepare a consolidated financial statements of the company and all its subsidiaries.

Also, a separate statement containing salient features of financial statement of its subsidiary.

Preparation, Adoption and audit of financial statements shall also apply to consolidated financial statements.

The Consolidation of Financial Statements of the company shall be made in accordance with the provisions of the act and the applicable accounting standards.

Law provides for uniform financial year (April-March) for all companies. No such restrictions in the Companies Act, 1956.Further the Act does not provides for extension of Financial Year.

Financial statement Board report-Sec 134 Board’s Report, shall include following additional points:

the extract of the Annual Return ; Number of meetings of the Board; Declaration given by Independent Directors ; Company’s policy on directors’ appointment and remuneration including

criteria for determining qualifications, positive attributes, independence of a director and other matters;

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made, by the Company Secretary in practice in his secretarial audit report and by the Auditor in his report ;

Particulars of loans, guarantees or investments under section 186; Particulars of contracts or arrangements with related parties; the details about the policy developed and implemented by the

company on corporate social responsibility initiatives taken during the year;

in case of a listed company and every other public company having paid-up share capital of Rs. 25 crore or more, calculated as at the end of the preceding financial year, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors also following information must be specified:

i. the financial summary or highlights; ii. the change in the nature of business, if any; iii. the details of directors or key managerial personnel who were

appointed or have resigned during the year; iv. the names of companies which have become or ceased to be its

Subsidiaries, joint ventures or associate companies during the year; v. the details relating to deposits, covered under Chapter V of the Act

All listed companies and public companies having net worth of more than Rs. 1 crore and turnover of more than Rs. 10 crore, the financial statements may be sent by: Electronic mode to such members who have positively consented in writing for

receiving by electronic mode; and Dispatch of physical copies by registered post or by speed post or by courier

service or by leaving it at its registered office.

Internal Auditor-Sec 138The following class of companies shall be required to appoint an internal auditor or a firm of internal auditors who shall either be a Chartered Accountant or a Cost Accountant, or such other Professional as decided by board to conduct internal audit of functions and activities of the company:-•every listed company.•every unlisted public company having:•paid up share capital of fifty crore rupees or more during the preceding financial year; or•turnover of two hundred crore rupees or more during the preceding financial year; or•outstanding loans or borrowings from banks or public financial institutions exceeding Rs 100 crore or more at any point of time during the preceding financial year; oroutstanding deposits of Rs 25 crore or more at any point of time during the preceding financial year; *Internal auditor may or may not be the employee of the company*Chartered Accountant shall mean a Chartered Accountant whether engaged in practice or not

Auditor Rotation[Sec 139] Every Company shall, at the 1st annual general meeting (AGM), appoint

an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its 6th annual general meeting. And thereafter till the conclusion of every sixth meeting. This shall be subject to the ratification by members at every annual general meeting till the sixth such meeting by way of passing of an ordinary resolution. The notice to registrar about appointment of auditor shall be in form ADT-1.

No listed company or following *class of companies can appoint or reappoint:-

An individual auditor for more than one term of consecutive 5 years.

An audit firm for more than 2 terms of 5 consecutive years.

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*Class of Companiesa) all unlisted public companies having paid up share capital of

rupees ten crore or more; b) all private limited companies having paid up share capital of

rupees twenty crore or more; c) all companies having paid up share capital of below threshold

limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more.

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Table Explaining rotation in case of individual auditor

Number of consecutive years for which an individual auditor has been functioning as auditor in the same company [in the first AGM held after the commencement of provisions of section 139(2)]

Maximum number of consecutive years for which he may be appointed in the same company (including transitional period)

Aggregate period which the auditor would complete in the same company in view of column I and II

I II III

5 years (or more than 5 years)

3 years 8 years or more

4 years 3 years 7 years

3 years 3 years 6 years

2 years 3 years 5 years

1 year 4 years 5 years

Number of consecutive years for which an audit firm has been functioning as auditor in the same company [in the first AGM held after the commencement of provisions of section 139(2)]

Maximum number of consecutive years for which the firm may be appointed in the same company (including transitional period)

Aggregate period which the firm would complete in the same company in view of column I and II

I II III

10 years (or more than 10 years)

3 years 13 years or more

9 years 3 years 12 years

8 years 3 years 11 years

7 years 3 years 10 years

6 years 4 years 10 years

5 years 5 years 10 years

4 years 6 years 10 years

3 years 7 years 10 years

2 years 8 years 10 years

1 years 9 years 10 years

Independent Director [Sec-149]The Every listed company shall have at least 1/3 of the total no.

of directors as independent directors.And

*the following class or classes of companies shall have at least 2 directors as independent directors.

the Public Companies having paid up share capital of rupees

10 Crore or morethe Public Companies having turnover of one hundred crore

rupees or more;The Public Companies which have, in aggregate, outstanding

loans, debentures and deposits, exceeding rupees 50 Crore.*Note: In case of any intermittent vacancy of an independent

director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or 3 months from the date of such vacancy, whichever is later.

To restrict the total tenure of an Independent Director to 2 terms of 5 years.

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An Independent Director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director:-

(a)who is a person of integrity and possesses relevant expertise and experience

(b) who is or was not a promoter and who is not related to promoters or directors

of the company or its holding/subsidiary/associate company. (c) who has or had no pecuniary relationship with the company or

its holding/subsidiary/associate company, or their promoters, or directors, during the 2 immediately preceding financial years or during the current financial year.

(d) none of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to 2 %. or more of its gross turnover or total income or Rs.50 lakh or such higher amount as may be prescribed, whichever is lower, during the 2 immediately preceding financial years or during the current financial year.

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(e) who, neither himself nor any of his relatives—1. holds or has held the position of a key managerial

personnel or has been employee of the company or its holding, subsidiary or associate company in any of the 3 financial years immediately preceding the financial year in which he is proposed to be appointed.

2. is or has been an employee or proprietor or a partner, in any of the 3 financial years immediately preceding the financial year in which he is proposed to be appointed, of:

a. a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

b. any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to 10 % or more of the gross turnover of such firm;

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3. holds together with his relatives 2% or more of the total voting power of the company; or

4. is a Chief Executive or director, by whatever name called, of any non profit organization that receives 25% or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent. or more of the total voting power of the company; or

• (f)who possesses such other qualifications as may be prescribed.

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Meetings of Board & its Powers….

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Powers of Board Sec-179   The Board of Directors of a company shall exercise the following powers on b

ehalf of the company by means of resolutions passed at meetings of the Board, namely:(a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorize buy‐back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; 

(j) to take over a company or acquire a controlling or substantial stake in another company; (k) any other matter which may be prescribed: 

  

In addition to the powers specified above, the following powers shall also be exercised by the Board of 

Directors only by means of resolutions passed at meetings of the Board.(1) to make political contributions;  (2) to appoint or remove key managerial personnel (KMP);  

(3) to take note of appointment(s) or removal(s) of one level below the Key Management Personnel;  (4) to appoint internal auditors and secretarial auditor;  (5) to take note of the disclosure of director’s interest and shareholding;  

(6) to buy, sell investments held by the company (other than trade investments), constituting five percent or more of the paid up share capital and free reserves of the investee company;  (7) to invite or accept or renew public deposits and related matters;  (8) to review or change the terms and conditions of public deposit; 

(9) to approve quarterly, half yearly and annual financial statements or financial results as the case be.

Restrictions on power of Boards- [Sec 180]

Restriction u/s 293 of the Companies Act, 1956 is now covered u/s 180 of the Companies Act, 2013.

It will be applicable to all classes of companies.A special resolution is required to be passed instead of

Ordinary resolution. Term “Undertaking” has now been defined to mean an

undertaking in which the investment exceeds 20% of Net worth or an undertaking which generates 20% of total income of company.

Term “Substantial Undertaking” has now been defined to mean 20% or more of the value of undertaking.

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Section 180 relates to restrictions on powers of the Board and passing of Special Resolution in respect of the following:-

Section 180(1)(a)

• To sell, lease or otherwise dispose of the whole or substantially

the whole of the undertaking of the Company

Section 180(1)(c)

• Borrowing Money where the money to be borrowed, together with the

money already borrowed in excess of paid-up capital and free reserve

(apart from temporary loans obtained from the company’s bankers in the

ordinary course of business)

V.M. & ASSOCIATES

Loan to Director [Sec 185]Company cannot directly/indirectly :

Advance any loan to any of its directors or to any other person (Individual) in whom the director is interested

Give any guarantee; or provide any security in connection with any loan taken by him or such other person.

Even a private Company cannot give loans to its Directors. Loans can be given to MD or WTD as part of conditions of

service extended to all the employees or in accordance with a scheme approved by members by a Special Resolution.

Approval of Central Government has been dispensed with.

V.M. & ASSOCIATES

Loan and Investment By Company No company shall invest, provide any loan and guarantee to

any other body corporate without passing a Special resolution in general meeting, if limits exceeding

60% of its paid up capital, free reserves and securities premium account

or 100% of free reserves and securities premium account

whichever is more

Exemption given to private company, holding and subsidiary companies lifted.

Full particulars of loans, investments, guarantees given and the purpose for which they will be utilized by the recipient shall be disclosed in the financial statements.

A company cannot make investment through more that 2 layers of subsidiaries. Exceptions – Overseas acquisition & legal purpose.

V.M. & ASSOCIATES

Table of Fees

Pursuant to Rule 12 of the Companies (Registration of Office and Fees)Rules, 2014

For Submitting, Filing, Registring or Rcording any

Fee Payable

Document by this act required or authorized to be

Submitted, filed, registered or recorded

a. In respect of company having a nominal share capital Of upto 1,00,000

200

b. In respect of company having a nominal share capital Of Rs.1,00,000 or more but less than Rs. 5,00,000

300

c. In respect of company having a nominal share capital Of Rs.5,00,000 or more but less than Rs. 25,00,000

400

d. In respect of company having a nominal share capital Of Rs.25,00,000 or more but less than Rs. 1 crore

500

e. In respect of company having a nominal share capital Of Rs. 1 crore or more

600

Following table of additional Fees shall be applicable for delays in filing the forms other than increase in Nominal share capital

Period of delays Forms including charge documents

Upto 15 Days (Sec 93*, 139* and 157*)

One time of normal filing fees

More than 15 days but upto 30 days (Sec 93, 139 and 157) and upto 30 days remaining forms

2 time of normal filing fees

More than 30 days but upto 60 days 4 time of normal filing fees

More than 60 days but upto 90 days 6 time of normal filing fees

More than 90 days but upto 180 days 10 time of normal filing fees

More than 180 days but upto 270 days

12 time of normal filing fees

*Sec 93: Return with ROC in case of promoter’s stake change.*Sec 139: Appointment of Auditor to be filed with ROC.*Sec 157: Company to inform DIN to ROC.

V.M. & ASSOCIATES

Email-id: cs.vmanda@gmail.com