cs devesh a. pathak partner devesh vimal & co., practising company secretaries...
TRANSCRIPT
Disclaimeri) This Presentation may not be conclusive in view of -
- Rules yet to come in view of power of CG [Sec 469(1)]
- Power of CG to make staggered applicability of the provisions [Sec. 1(3)]
- Probability of co existence of some provisions of the Companies Act, 1956 (‘the Act’) and some provisions of the Companies Bill, 2012 (‘the Bill’)!
- Power of CG to amend schedules [Sec. 467]
- Power of CG to make provisions not inconsistent with other provisions within 5
years [Sec. 470(1)]
ii) Prefixed the words ‘overview of ’ to the theme
CS Devesh A. Pathak [email protected]
Focus on general care & compliance in ordinary course of business
relating to …..
- Incorporation of the Company
- Directors & KMP
- Meetings
- Annual Filing
- CSR
- Registration of charges
- Deposits
- Related Party transactions
- Allotment of Securities
CS Devesh A. Pathak [email protected]
1. Incorporation of a Company
i) Reservation of name [Sec. 5]:
- to make application to Registrar [Sec. 4(4)]
- reservation upto 60 days [Sec. 4(5)]
ii) Reservation on the basis of wrong information in the application:
a) if the Co. is not incorporated [Sec. 5(ii)(a)]
- cancellation of name
- penalty upto Rs. 1 lakh to the applicant
CS Devesh A. Pathak [email protected]
1. Incorporation of a Company
b) if the Co. is incorporated [Sec. 5(ii)(b)]
Registrar may direct
- to change the name within 3 months
- to take action for striking off
- to make petition for winding up
CS Devesh A. Pathak [email protected]
1. Incorporation of a Company
Incorporation documents to be filed [Sec. 7(1)]
i) M/A & A/A signed by the subscribers
ii) Declaration relating to compliance
iii) Affidavit by each subscriber and first director
iv) Address for correspondence till Regd. Office established
v) Particulars of subscribers with identity proof
vi) Particulars of First Directors with identity proof
vii) Particulars of interest of First Directors with identity proof in other firm /bodies corporate
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2. No. of Members:
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Sr. No. Type of Company Minimum
[Sec. 3]
Maximum
1. Public 7 No Limit
2. Private 2 200 [Sec.2(68)]
3. One Person Company (name of nominee to be mentioned in M/A)
1 1 [Sec. 2(62)]
3. Directors
i) No. of Directors [Sec. 149]:
CS Devesh A. Pathak [email protected]
Type of Company Minimum Maximum
Public 3 15
Private 2 15
One Person Company
(More than 15 Directors can be appointed by Special Resolution)
1 15
3. Directors
ii) No. of Directorship [ Sec. 165]
-Not exceeding 20 Companies (including alternate directorship).
-Not exceeding 10 in Public Co.
iii) Noteworthy features of disqualification of Director [Sec. 164]
-Equally applies to Private and Public Co.
-Power of Pvt. Co. to add more disqualification continues.
-Life time ban if imprisonment for 7 years or more on conviction of any offence.
CS Devesh A. Pathak [email protected]
3. Directors
iv) Mandatory appointment of some types of Directors:
a. Every Co. to have at least one resident director (stayed in India at least for 182 days in previous calendar year) [Sec. 149(3)]
b. Prescribed class(es) of the Company to have at least one woman director [Sec. 149(1)]
c. Independent Director [Sec. 149]
- at least 1/3rd of total strength of the Board in case of Listed Co.
- in classes of Public Company as may be prescribed
-director other than MD, WTD, or nominee director
CS Devesh A. Pathak [email protected]
3. Directors
iv) Mandatory appointment of some types of Directors:
d. A listed Co. may have one director elected by small shareholders as may be prescribed . [Sec. 151]
‘small shareholders ‘: Value of shares not exceeding Rs. 20,000 or such other prescribed sum.
v) Tenure and mode of appointment
a) Independent Directors [Sec. 149]
- Appointment at the general meeting
- Not more than 2 consecutive terms each of five years
- App. for second term by Special Resolution
- App. after 2 consecutive terms only after cooling period of 3 years
- Not liable to retire by rotation
CS Devesh A. Pathak [email protected]
3. Directors
v) Tenure and mode of appointment
b) Appointment of Directors at Board Meeting [Sec. 161]
- App. Of Additional Director upto the date of AGM or due date of AGM
whichever is earlier
- App. Of Alternate Director for original director in his absence from India for
atleast 3 months
- Filling up casual vacancy occurred before expiry of normal term in case of
Public co.
c) Retirement of Directors [Sec. 152]
- applicable to Public Co. only
- Independent Director not to retire
- at least 2/3rd of the total strength to retire
- 1/3rd of them to retire at every AGM
CS Devesh A. Pathak [email protected]
3. Directors
v) Tenure and mode of appointment
c) Retirement of Directors [Sec. 152]
-Person other than retiring director to give notice of 14 days with deposit of
Rs. 1 lakh for his candidature
-Deposit refunded if he gets elected or gets atleast 25% of the valid
votes [Sec. 160]
vi) Key Managerial Person [KMP] [Sec. 203]
a) Prescribed classes of the Companies to have
- MD or CEO or Manager or in their absence Manager
- Company Secretary
-CFO
CS Devesh A. Pathak
3. Directors
vi) Key Managerial Person [KMP] [Sec. 203]:
b) Appointment of wholetime KMP at Board Meeting
c) Non applicability of Sec. 196/197 and Schedule V relating to appointment and remuneration to other KMPs like CEO, CS or CFO
vii) Appointment of and remuneration to Managerial Person:
a) Appointment of MD/WTD/Manager [Sec. 196/ Schedule V]
- to be approved by Board
- to be approved at next general meeting
-return to be filed within 60 days to Registrar
CS Devesh A. Pathak
3. Directors
vii) Appointment of and remuneration to Managerial Person:
b) Remuneration to MD/WTD/Manager of Public co.
- to be approved by Nomination and Remuneration Committee in case of listed and other prescribed Companies
- to be approved by the Board
- to be approved by the general meeting in accordance with Sec.197 and
Schedule V
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3. Directors
viii) Resignation of Directors [Sec. 168]
a) Notice in writing to the Company
b) Board to take note (no approval)
c) Effective from the date
- of the receipt of the letter by the Board or
- date specified in the letter
whichever is later
d) Facts to be mentioned in Directors’ Report
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3. Directors
ix) Intimation to Registrar
a) A Consent of Director to be filed within 30 days as may be prescribed [Sec.150]
b) A Return containing particulars of Director / KMP to be filed within 30 days from the date of appointment or charge [Sec. 170(2)]
c) Return within 60 days of appointment of managerial person [Sec. 196]
d) Intimation in the manner prescribed in case of resignation of a Director [Sec. 168(1)]
e) Resigning Director shall forward a copy within 30 days [Sec. 168(1)]
CS Devesh A. Pathak [email protected]
4. Board Meetings [Sec. 173]
i. First Board meeting within 30 days from the date of incorporation
ii. Atleast 4 Board meetings in every year
iii. No gap of more than 120 days between two Board meetings
iv. Bye Bye to the concept of Board meeting in every quarter
v. Special requirement for OPC, Small Co. and dormant co.
- One Board meeting in every half of calendar year - Gap between 2 Board meetings of atleast 90 days
CS Devesh A. Pathak [email protected]
4. Board Meetings [Sec. 173]
Small Co. means
- Paid up share capital not exceeding Rs. 50 lacs (or such sum upto Rs. 5 crores as prescribed)
- Turnover not exceeding Rs. 2 Crores (or such sum not exceeding upto Rs. 20 Crores as prescribed)
- Excluding holding / subsidiary/ Co. with charitable object/ body corporate under Special Act.
vi. Board meeting through video conferencing with recording facilities allowed
vii. Atleast seven days notice in writing by hand delivery, post or electronically.
viii. Interested director of any Company can not participate in meeting.
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5. Financial year [Sec.2(41)]
- 1st Financial year from the date of incorporation to 31st March of next year
- Subsequent financial year from 1st April of one year to 31st March of next year
- Tribunal may allow different financial year of the co. if its overseas holding or subsidiary co. required to follow different financial year for consolidation of accounts.
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6. Financial statement:
i. Financial Statement includes [Sec.2(40)]
a. B/S
b. P&L
c. Cash flow statement
(may not be required in case of OPC, small co. and dormant co.)
d. A statement of changes in capital, if any
e. Explanatory note forming part of above
ii. In case of subsidiary (including associate & Joint venture co., the Company)
- consolidated financial statement of the Company and its subsidiary
- statement containing salient features of subsidiaries )
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7. Broad Contents of Board’s Report [Sec. 134]
i) Matters specified in Sec. 134(3) including
- risk management policy
- CSR initiatives
- Annual evaluation of Board’s performance (in case of Listed Co. & Prescribed Co.)
ii) Extract of Annual Return [Sec. 92(3)]
iii) Matters specified in Listing Agreement
iv) Explanation to qualification / reservation in Secretarial Audit Report
v) Secretarial Audit Report to be annexed
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8. Secretarial Audit Report [Sec. 204]
i) Applicable to Listed and other Companies of prescribed classes
ii) Audit by PCS
iii) To be annexed to the Board’s Report
iv) Explanation in Board’s Report to qualification in SDR
9. Authentication of Financial Statement and Director’s Report
[Sec. 134]:
i. Financial statement (including Consolidated Financial Statement shall be approved by the Board)
ii. Authentication of Financial Statement by
- a chairperson, if authorised by the Board or
- at least by 2 Directors (including MD and CEO Director if any)
- Company Secretary
- CFO
CS Devesh A. Pathak [email protected]
9. Authentication of Financial Statement and Director’s Report
[Sec. 134]:
iii. Authentication of Directors’ Report alongwith annexures by
- a chairperson, if authorised by the Board or
- at least by 2 Directors (including MD)
- at least by 1 Director if there is only 1 Director (in case of OPC)
10. CSR [Sec. 135]:
i) Applicability to the Co. having
- net worth of Rs. 500 crores or more or
- turnover of Rs. 1000 crores or more
- net profit of Rs. 5 crores or more
CS Devesh A. Pathak [email protected]
10. CSR [Sec. 135]:
ii) Compulsory spending
- atleast 2% of average net profits of last 3 years
- spending compulsory even if loss in the current financial year
iii) Incidental Broad Compliance
a) CSR committees of 3 Directors including 1 independent Director
b) CSR activities as per Schedule – VII
c) Disclosure in Board’s Report
- Composition of CSR committee
- Contents of CSR Policy
- Disclosure of failure, if any with reasons
CS Devesh A. Pathak [email protected]
11. Right of Members to Audited Financial Statements [Sec. 134(7)]
i) Financial Statement alongwith
- Notes forming part of financial statement
- Auditor’s Report
- Board’s Report
ii) Aforesaid documents to be laid before general meeting shall be sent
[Sec. 136(1)]
- at least before 21 days of the meeting
- to member , debenture trustee and other entitled persons
iii) In case of Listed Company
a. statement containing salient features
b. if aforesaid documents available during working hours on 21 days before the meeting for inspection
CS Devesh A. Pathak [email protected]
12. General Meetings:
i) Notice [Sec. 101]
- not less than clear 21days notice
- in writing or electronically
- shorter notice, if consented by 95% of the members
- to member, auditor and director
- Explanatory Statement [Sec. 102]
ii) Annual General Meeting:
a. Frequency [Sec. 96(1)]
- at least one in every year
- gap not exceeding 15 months between 2 AGM
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12. General Meetings:
ii) Annual General Meeting:
a. Frequency [Sec. 96(1)]
- first AGM within 9 months from the close of F.Y.
- subsequent AGM within 6 months from the close of F.Y.
- power of Registrar to grant extension not exceeding 3 months in case of
subsequent AGMs
b. Date, Place and Time:
- during business hours i.e. between 9 a.m. to 6 p.m.
- not being National holiday
- at the Regd. office or some other place within the city, town, village of Regd.
office CS Devesh A. Pathak
12. General Meetings:
ii) Annual General Meeting:
c. Quorum:
in case of Public Co.
- 5 members (upto 1000 members)
- 15 members (exceeding 1000 but upto 5000 members)
- 30 members (exceeding 5000 members)
in case of Private Co.,
- 2 members
CS Devesh A. Pathak [email protected]
13. Filing of Financial Statements with Registrar [Sec. 137]:
Financial Statement alongwith annexures to be filed
i. within 30 days from the date of adoption at AGM or adjourned AGM
ii. unadopted FS if any within 30 days from the date of AGM
iii. in case of Listed Co. shall be placed at website also
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14. Annual Return [Sec. 92]
i) As at the close of financial year( instead of position as at date of AGM)
ii) Matters specified in Sec.92(1) including
- General/Class/Board/Committee meetings with attendance details
- remuneration of Directors/ KMPs
- penalty/punishment/compounding/appeal etc.
- certification of compliance, disclosure
- details of FII holders
iii) Authentication by
- A director and CS
- A director and PCS (if no CS in the Co.)
- CS (in OPC)
- Director (if no CS in OPC)
CS Devesh A. Pathak [email protected]
14. Annual Return [Sec. 92]
iv) Certification by PCS (in case of listed and other prescribed Companies
with such turnover / paid up capital)
v) Filing within 60 days from AGM or due date of AGM
15. Return in respect of Promoters’ stake change [Sec. 93]
- Applicable to every Listed Co.
- Change in Promoters and top ten shareholders
- To be filed within 15 days of change to Registrar
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16. Statutory Registers:
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Sr. No.
Nature of Register Section No.
the Act the Bill
i Register of investments in securities not held in Company’s name
49(7) 187(3)
ii Register of charges 143 81
iii Register of securities bought back 77A 68(9)
iv Register and index of members 150,151 88
v Register and index of debenture holders 152 88
vi Register and index of security holders - 88
vii Register of beneficial owners (to be maintained by Depositories)
152A 88
viii Minutes of meetings 193 118
ix Register of contracts or arrangement in which Directors are interested
301 189
17. Registration of Charge:
i) Particulars of creation of charge to be filed within 30 days to ROC
[Sec. 77(1)]
ii) ROC may accept within 300 days of creation with additional fees
[Sec. 77(1)]
iii) Power of charge holder to make application to ROC in case of failure of
the Co for filing particulars. [Sec. 78]
iv) Particulars of satisfaction of charge to be filed within 30 days [Sec. 82]
v) Power of Central Government to grant extension for filing particulars, on
application by the co. or interested person [Sec. 87]
CS Devesh A. Pathak [email protected]
18. Deposits:
i) Deposits from members [Sec. 23]
a. Approval of members in general meeting [Sec. 73(2)]
b. Subject to rules framed by CG in consultation with RBI
c. To file a copy of circular with ROC
d. To issue circular to members within 30 days from filing
e. Deposit of at least 15% in separate Bank A/c known as ‘Deposit repayment reserve A/c’
f. To provide for deposit insurance
g. In case of fraud, responsible officers would be personally liable
[Sec. 75]
CS Devesh A. Pathak [email protected]
18. Deposits:
i) Deposits from public [Sec. 76]
a. Public Co. having such net worth / turnover as may be prescribed can accept deposits
b. Subject to such rules as may be prescribed
c. Procedure for acceptance of deposits from members also to be followed
d. Credit rating to be obtained
e. If secured deposits, creation of charge within 30 days
CS Devesh A. Pathak [email protected]
19. Related Party Transactions:
i) Definition of ‘related party’ [Sec. 2(76)]
a. a director or his relative
b. a KMP or his relative
c. a firm in which director , manager or relative is a partner
d. a Private Co. in which director or manager is a member or
director
e. a Public Co. in which director or manager
- is a director
- holds more than 2% of the paid up capital with relatives
f. any body corporate whose Board, MD or manager is accustomed
to act as per the advice of director or manger (except in
professional capacity)
g. person accustomed to act as per the advice of director or manger
(except in professional capacity)CS Devesh A. Pathak
19. Related Party Transactions:
i) Definition of ‘related party’ [Sec. 2(76)]
h. holding, subsidiary, associate co.
i. Subsidiary of its holding co.
j. such other prescribed person
ii) Related Party Transactions [Sec. 188]
a) Approval of Board for related party transactions
- Sale/Purchase/supply of goods/ materials/ services
- Sale/Disposal/Purchase of any property
- Lease of any property
- Availing/ rendering any services
- Related party's appointment to office of profit in the company/ subsidiary co./ associate co.
- underwriting the subscription of securities/ derivatives
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ii) Related Party Transactions [Sec. 188]
b) Prior approval by special resolution
- Company having such paid up capital or value of transactions
- No approval of Central Government
20.Restrictions on non – cash transactions with Directors etc. for
acquisition of asset:
Prior approval of members for acquisition of asset for consideration other than cash by/ from
- director of the co./ holding/ subsidiary/ associate co.
- a person connected to a director
CS Devesh A. Pathak [email protected]
21. Allotment of Securities [Sec. 39 & 42]:
i) Application money shall be at least 5%[Sec. 39(2)]
ii) If on private placement basis [Sec. 42]
- offer to not exceeding 50 persons or such higher no. as prescribed
- no fresh offer unless previous offer completed/ withdrawn/ abandoned
- payment should be by cheque/ DD/ other banking channel but not cash
- allotment within 60 days from the date of receipt of application money
- no advt. / media, marketing, distribution channel
- return to be filed in prescribed manner
CS Devesh A. Pathak [email protected]
22. Appointment of Auditors [Sec. 139(1)]
- Approval to appointment from conclusion of 1st AGM to 6th AGM
- Ratification implies ‘post facto approval’
- Ratification at every AGM should tantamount to approval for second time
- The word ‘ratification’ needs to be changed
CS Devesh A. Pathak [email protected]
