06 June 2017 10:34AM
A SUMMARY OF THE KEY PROVISIONS
Ø The Act has 29 Chapters, divided into 464 Sections, and 7 Schedules.
Ø A company comes into being by way of its incorporation, and it has to follow the requirements and mandates under the Act, such as the application to be made to the Registrar of Companies (RoC), the creation of the Memorandum of Association and Articles of Association, the issue of certificate of Incorporation by the RoC, setting up of a Registered Office, etc. before it can commence its business.
Ø Once it is all set to commence business, the company now has to raise capital, and the Act provides for this to be done by offering its securities either to the public, or through private placements. The general public are entitled to purchase shares of a Public Ltd Co. only, and a Pvt Ltd Co. cannot offer its securities to the public. The Act lays down strict provisions regarding the manner and eligibility to make an offer to the public, such as a number of detailed disclosure to be made in the Prospectus, the regulatory requirements to be satisfied to make such issue, etc. (also refer ICDR Regulations, 2009). On the other hand, a Private Placement is an offer of securities to certain specified persons only, without making it open for the general public, and the regulatory controls are less stringent here.
Ø The raising of capital can be done by issuing either Shares or Debentures of the company. A Share in a company gives a certain membership status to the purchasers, and they pay money in return for the Shares. Shares are further divided into Equity Shares and Preference Shares, and the equity shareholders get dividends out of the profits made by the company, and not any fixed amount of payment; while preference shareholders get a fixed dividend from time to time. Debentures are instruments wherein a creditor lends money to the company, and receives in return, a Certificate acknowledging the debt, and on the stipulated time, the debt will be paid back with interest. The Act provides for the different requirements and procedures under each of these.
Ø The Company may also accept deposits from its members, or take a loan from a credit by creating a charge on the assets of the company, in accordance with the provisions of the Act.
Ø The mode of management of the company, including the requirement to file Annual Returns, need to file declaration of any beneficial interest of any member in any Shares, maintenance of Records, Voting Rights and its procedure, kinds of Resolutions passed in meetings, etc. are also enumerated in the Act.
Ø The manner in which dividends are to be declared and paid to the shareholders.
Ø The mandates regarding maintenance of accounts of the company; and the appointment of auditors and manner of audit are given in the Act.
Ø The company must have a Board of Directors, and their appointment, qualifications, duties, and prohibitions are enumerated in the Act. The Board of Directors must hold meetings from time to time, and pass resolutions on certain matters; the Cat provides for the powers of Directors, Related Party Transactions, etc. The appointment and remuneration of managerial personnel is also provided in the Act.
Ø A company is liable to be under an inspection of document or an inquiry/investigation by the authorities.
Ø After having dealt with the manner of functioning of companies too, the Act lays down detailed Chapters on the winding up (voluntary or by Tribunal); compromise/arrangement/amalgamation with another company; revival and rehabilitation of sick companies, etc.
Ø Special provisions regarding Govt companies and Companies incorporated outside India. The Act also provides for the setting up of NCLT, Appellate Tribunal, and Special Courts.
HIGHLIGHTS OF THE 2013 ACT
· Maintenance of documents in electric form allowed
· Corporate Social Responsibility made mandatory
· One Person Company allowed
· Independent Directors and Women Directors made mandatory in some cases
· Whistle-Blower policy facilitated; ethical corporate behaviour promoted
· Better protection to minority shareholders – Exit option made available
· NCLT established to hear company related matters; replaced the Company Law Board
RELATED STATUTORY REFERENCES (for company compliances) (INDIAN KANOON)
· ICDR, 2009 by SEBI
· SEBI ACT
· LODR by SEBI
· SAST Regulations, 2011 by SEBI
24 October 2017 03 08 PM
At a time when fundamentalists are shoving patriotism down people’s throats, which is no less than anarchy camouflaged as nationalism, the Supreme Court has reined in a part of it by stating that there is no need to stand up at cinemas while playing the National Anthem. In the Court’s ow
10 October 2017 02 45 PM
You never know when you might find yourself in the requirement of legal advice, in the most unforeseen circumstances. Having heard plenty of people say “we have never needed a lawyer”, we come to realize that they perceive the narrow aspects of the requirements in Court, and it is only s
05 October 2017 05 16 PM
Get expert legal advice and guidance on Indian Kanoon Bangalore related to Divorce Law, Property Law, Criminal Law, Consumer Court, Muslim Law and Labor Law in India. Awareness of law is the key to securing justice and ensuring that none of your rights have been infringed. To claim what is yours, yo
13 September 2017 12 28 PM
Crimes against women have been a recent issue in India. Especially with time, the rampant increase in reported scenarios has reached heights. Even with conventional laws, new age offences, Legal equipment and machineries fall short on the bigger canvas of justice delivery, though we are slowly catch
07 September 2017 12 13 PM
Many of us may not know that there are lot of laws that indirectly impinge on our lives. There are certainly new laws that have reshaped our social live all together. Some of these happen to be as follows:-
12 August 2017 11 03 AM
Abortion laws in India are contained in the Medical Termination of Pregnancy Act, 1971, and the provisions in relation to the procedure are governed by the Act. The Act has been widely requested to be amended owing to the changed medical and social circumstances, but the Amendment Act has been pendi
04 August 2017 06 04 PM
The CBDT recently extended the deadline for filing Income Tax Returns to August 5th from the original date that fell on July 31st, providing some relief to those taxpayers who also happen to be procrastinators. The move came from the Income Tax Dept., they tweeted and I e, “in view of the diff
03 August 2017 10 14 AM
In a decision that may aid corporate debtors under insolvency proceedings to reach mutual settlements, the Supreme Court used its extraordinary powers in a case that came before it to permit two companies to withdraw insolvency proceedings and settle their loan dispute amongst themselves. The Court
28 July 2017 02 52 PM
Controversies have a power of shaping the outcome of an incident, altering the course of an event, and sometimes even setting right what could otherwise have gone wrong; while on the other side of the coin, it also sometimes ruins the true essence of the subject matter. India has had a series of con
19 July 2017 12 43 PM
On a plethora of cases that have flooded various Courts in the country challenging the imposition of Aadhaar on citizens as a mandatory identity proof and linking the unique ID to almost all personal identification documents including PAN, Phone Number, Social Welfare Schemes, etc. and with the impe
14 July 2017 10 31 AM
WHAT A DEPOSITORY IS: A “Depository” is an institution that receives deposits and holds them in trust for the public, with the condition that it exercises reasonable care and restores it to the person on demand. It holds securities of investors in an electronic form, and it is of param
08 July 2017 10 38 AM
INTERNET OF THINGS: THE BUSINESS PROSPECTS As we have seen in the previous posts, the IoT business is in the boom, exploring new trends and possibilities constantly, and continuously evolving with technological advances. It gives rise to several legal questions, and the law is rapidly undergoing co
06 July 2017 10 24 AM
Aadhaar and Marriage Registration: The New Development With Aadhaar or the Unique Identification Number (UID) slowly but eventually taking over the domain of as a repository for all information on a person, the latest development is the recommendation by the Law Commission to the Govt that registra
04 July 2017 10 15 AM
One thing that has flooded the news channels with debates and discussions these days is the highly controversial ban that was imposed on the slaughter of cows and other cattle that indeed caused a “beef” between the Govt and the public. Much worse is the dangerous manifestation of commun
28 June 2017 12 57 PM
INTERNET OF THINGS AND THE LAW As we have already seen in the previous articles, the advent of IoT marks a major shift in the technological dependence of human beings, and the law is evolving to adapt to the changing demands and requirements corresponding to new smart machines. Major questions are
27 June 2017 11 04 AM
Lawyers and Doctors: Liability for Wrong Advice : Doctors and Lawyers are two classes of people whose services are indispensible to social life, and every person, at some point of time, depends on them for assistance. This leads at to the question to what extent doctors and lawyers must be held lia
22 June 2017 01 07 PM
Money laundering is the process of converting illegally obtained profits into legitimate money for the purpose of pushing it into the economy and spending it, disguising its illegal origin. Illegal means include criminal activities like arms sale, smuggling, organized crime, etc. the PMLA defines Mo
21 June 2017 11 00 AM
WHAT IS IoT? Internet of Things is a network of interconnected devices that communicate information amongst each other using data and sensors, and work in a coordinated manner to create a technologically enabled ecosystem of various devices. For example, the wearable devices that monitor a person&r
19 June 2017 12 33 PM
An E-Signature is an encoded signature embedded on an electronic document, instead of printing it out and putting a physical signature on it. It symbolises the person’s intent to affix his sign on the said document. An e-signature is different from a digital signature, which is a mode of encry
13 June 2017 10 36 AM
Contracts are the primary instruments under the Indian commercial law structure, creating mutual rights and obligations enforceable under law, though it also plays vital roles in personal and other laws as well. In layman’s language, a contract is an agreement between two parties, to do or not
09 June 2017 12 50 PM
For people new to the technology and its possibilities, it sounds just like the thing out of a sci-fi movie, or one of the ideas borrowed from George Orwell’s famous Novel “1984”. The concept is certainly path-breaking, to say the least, but at the same time it instils a fear akin
08 June 2017 11 09 AM
SAVING CONTRACTS ONLINE: WHAT IT MEANS : The technological advancement of this era has transformed a great portion of human transactions into online form from actual physical form. Letters have given way to mail and chat messages, library references have given way to online information services, s
07 June 2017 10 47 AM
THE COMPANY LAW BOARD : The CLB was a quasi-judicial body that exercised jurisdiction over matters stipulated in the old Companies Act of 1956, especially with respect to dispute resolutions. It had its Principal Bench in New Delhi, and regional benches in New Delhi, Kolkata, Mumbai and Chennai. T
06 June 2017 10 34 AM
It is the primary legislation relating to the incorporation, composition, functioning, and compliance requirements of companies in India. The previous Companies Act of 1956 had to undergo numerous amendments over the past several decades, especially after the post-liberalization era that came after
05 June 2017 11 17 AM
REGISTRATION OF YOUR COMPANY – WHAT AND WHY? If you are looking forward to becoming an entrepreneur and wish to start up a private ltd company in India, you must familiarise with the requirements of registration of company and the mandatory legal compliances, in the default of which you may f
03 June 2017 10 40 AM
WHAT IS A CONTRACT? A contract is an agreement between two or more parties, involving the exchange of something of value, and creating some obligations and corresponding rights on both the parties as against each other. A valid legal contract is enforceable in Court, meaning that if one party refus
02 June 2017 10 20 AM
Provident Fund (PF) – Meaning and Law Public Provident Fund (PPF) is the scheme of the central government formulated under the Public Provident Fund Act, 1968. It is a long-term small savings scheme which facilitates people to attain a security for retirement while saving tax by investing in
01 June 2017 12 29 PM
Full and final settlement from employment – Meaning When the employment of the employee terminates, it is time to get all the dues settled from the company. This whole process of money recovery from the employer is considered as the full and final settlement from employment. The dues are the
30 May 2017 11 23 AM
Forensic Expert is a person who is an expert in applying scientific, technical or medical knowledge to the purposes of law. A Contract Forensic Expert is an independent, experienced forensic expert who is engaged independently by a party or by an Organization (including the Govt.) for forensic analy
29 May 2017 11 30 AM
The Companies Act 2013 define shares, ‘a share in the share capital of a company and includes stock’. Shares is a type of security and in layman’s definition it “one of the equal parts into which a company's capital is divided, entitling the holder to a proportion of the prof
27 May 2017 10 45 AM
While working in a public or private enterprise, when a woman is going through her pregnancy, the paid leaves that are allocated to her are known as maternity benefits. The paid leaves are given in accordance to the average daily wage for her actual absence for the period which spans across her deli
26 May 2017 10 22 AM
Public Provident Fund (PPF) is the scheme of the central government formulated under the Public Provident Fund Act, 1968. It is a long-term small savings scheme which facilitates people to attain a security for retirement while saving tax by investing in the scheme. Interests are provided on such de
25 May 2017 10 29 AM
Sexual Harassment means an unwelcome sexual advancement, request for any kind of sexual favours or any other kind of sexual harassment. It may be in written, verbal or physical form which creates a hostile work environment for the woman. In 1992, a woman named Bhanwari Devi was raped near Jaipur. A
24 May 2017 11 29 AM
It is not uncommon for the companies to abruptly terminate the services of their employees because of many reasons. Many of such reasons are unjustified and in the eyes of the law, illegal. However, employees have the various legal beacons to get their day in court against such companies.
16 May 2017 11 38 AM
The electricity meter measures the amount of energy consumption, maximum demand and other electrical parameters of applicable tariffs and is used to determine the monthly bill by the distribution companies. However, due to some technical fault or malafide tampering with the meter by the distribution
15 May 2017 01 40 PM
We are consumers of everything – the moment we arrive into this world, we consume some goods or avail some services and hence, we become the consumers. And to support that, we are entitled to seek relief under the Consumer Protection Act, 1986. It is apparent that almost every consumer in Indi
13 May 2017 10 15 AM
Earlier in India, the electricity supply industry was governed and regulated by the Indian Electricity Act 1910, Electricity Act 1948 and the Electricity Regulatory Commission Act 1998. These three Acts were not able to cater to the changing times of industrialization, globalization, the economic ne
04 May 2017 10 56 AM
On 23 August 1985, Arif Mohd. Khan, former Minister of State for Home Affairs during the reign of Rajiv Gandhi, conveyed a zealous perspective in Lok Sabha, defending the then Supreme Court judgment in the case of Ahmed Khan v. Shah Bano Begum. It was in the milieu of a private member bill that was
03 May 2017 10 04 AM
In India the laws appertaining to divorce have undergone some major changes. Depending upon the peculiarity of the cases, various legal reforms have ensued over the year for both men and women. Precedents, being the essence of a legal system have played a major role in shaping up the divorce proced
21 April 2017 02 14 PM
When a startup company comes into existence, it requires a set of rules between the founders/promoters of that company. “Founder Agreement” is a contract which is drawn between the founders/promoters of a company on key issues in regards to their company.
14 April 2017 10 27 AM
Most of the people who seek legal advice are afraid of the es they will get from the lawyer – will they be very steep or they would be just average? Quotes differ from lawyer-to-lawyer. A well-reputed lawyer would provide high ations while an inexperienced lawyer would provide lower es.
11 April 2017 01 20 PM
Section 125 of Cr.P.C. has provided the procedure by which a person who has unable to maintain himself can claim maintenance to another if that another fails to discharge his duty to maintain certain of his relations
10 April 2017 12 09 PM
As our society is moving towards a digital era, several processes have been trying to adopt an approach based upon the growing technology. More and more things everyday are added to the online digital world where internet is the key to everything. A person may search anything and everything on the i
07 April 2017 01 20 PM
Lawyers are essentially the social engineers who drive the society through time. Their presence is an absolute necessity which establishes and topples governments all over the world. Here is a list of the 10 Most Influential Lawyers in the World who have made their name and the lawyers of today shou
31 March 2017 11 13 AM
A company having equity investors must have a SHA which acknowledges their contribution in a safe and secured manner. A Shareholder Agreement is a contract between the shareholders of a company which helps establishing a fair professional bridge between the stakeholders and the operation of the comp
29 March 2017 12 42 PM
Arbitration is an alternate dispute resolution mechanism in which the dispute is submitted to a neutral third-party known as the arbitrator(s). He is appointed by both the parties, who subsequently holds the arbitral proceedings, analyses evidence and adjudges on the matter by passing an award.
28 March 2017 12 16 PM
Business and competition are the phase of the same coin. There is cut throat competition to expand the business and it is becoming harsher day by day in the globalized World. Every company wants to become a global brand so that its presence can be appreciated world- wide in every class of consumer.
27 March 2017 03 53 PM
An Employment Contract is a legal agreement which delineates the terms and conditions of employment between an employee and an employer such as wages, duration of works, non-compete procedures, etc. They are usually signed and executed at the time of the inception of employment. There are majorly th
24 March 2017 12 39 PM
A Non-Disclosure Agreement is a contract which enables the parties to the contract from sharing any piece of confidential information or knowledge shared between them for the purposes of business or any other kind of access but restricts such sharing to any third party to such contract.
Popular Lawyers in India