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This book is designed as a textbook for professional courses and other allied business courses. It incorporates most of all the key provisions of Companies Act 2013 including the latest amendments in Companies Act, 2019 and 2020.
Salient Features
• Updated with the major amendments pertaining to Companies (Amendment) Act, 2015, 2017, 2019, and 2020.
• Provides a detailed overview of the new concepts introduced in Companies Act, 2013 such as One Person Company, Small Company, Dormant Company, Associate Company, Key Management Personnel, Global Depository Receipts, Registered Valuers, Vigil Mechanism, CSR, Rotation of Auditors, Secretarial Audit, Secretarial Standards, and Corporate Management.
• Elaborates on topics such as role of National Company Law Tribunal, and role of Serious Fraud Investigation officers in investigating serious fraud.
• Adopts a structured approach covering company law provisions and practice, new concepts and annexures.
• Includes question papers of ICSI and other examinations and numerous objective type questions.
• Has important statutory forms used by companies – useful to students to understand the practical dimensions.
This book is designed as a textbook for professional courses and other allied business courses. It incorporates most of all the key provisions of Companies Act 2013 including the latest amendments in Companies Act, 2019 and 2020.
Salient Features
• Updated with the major amendments pertaining to Companies (Amendment) Act, 2015, 2017, 2019, and 2020.
• Provides a detailed overview of the new concepts introduced in Companies Act, 2013 such as One Person Company, Small Company, Dormant Company, Associate Company, Key Management Personnel, Global Depository Receipts, Registered Valuers, Vigil Mechanism, CSR, Rotation of Auditors, Secretarial Audit, Secretarial Standards, and Corporate Management.
• Elaborates on topics such as role of National Company Law Tribunal, and role of Serious Fraud Investigation officers in investigating serious fraud.
• Adopts a structured approach covering company law provisions and practice, new concepts and annexures.
• Includes question papers of ICSI and other examinations and numerous objective type questions.
• Has important statutory forms used by companies – useful to students to understand the practical dimensions.
DR V BALACHANDRAN is currently Dean, School of Business Studies and Professor and Head, Department of Management Studies, Central University of Kerala. He has also served as Senior Professor and Head, and Dean, Faculty of Management, Alagappa University, Karaikudi. He is a Fellow Member of the Institute of Company Secretaries of India. He has over 36 years of PG level teaching experience and is a well-renowned researcher and Research Supervisor.
DR M GOVINDARAJAN is a Practising Company Secretary and Insolvency Professional, Madurai. He has 38 years of experience in legal, taxation, arbitration, accounts, ?nance and audit areas. He is a Fellow Member of the Institute of Company Secretaries of India and Institute of Cost Accountants of India.
A STUDENT HANDBOOK ON
COMPANY LAW AND PRACTICE
THIRD EDITION
A STUDENT HANDBOOK ON
COMPANY LAW AND PRACTICE
THIRD EDITION
Dr. V. BALACHANDRAN
Dean, School of Business Studies
Professor and Head, Department of Management Studies
Central University of Kerala
Dr. M. GOVINDARAJAN
MA, BL, MBA, ACS, FCMA, PGDCA
Practising Company Secretary, Madurai
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A Student Handbook on Company Law and Practice, 3e
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Laser typeset at: Maven Learning, Chennai – 600 091
Jagadguru His Holiness Sri Kanchi Mahaswamigal
2. Classification of Companies
3. Formation and Incorporation of Company
7. Share Capital and Debentures
9. Borrowing Powers and Charges
10. Acceptance of Deposits by Companies
13. Company Directors & Related Party Transactions
14. Appointment and Remuneration of Managerial Personnel
18. Inspection, Inquiry and Investigation
19. Compromise, Arrangement and Amalgamation
20. Prevention of Oppression and Mismanagement
22. New Concepts in Companies Act, 2013
HIGHLIGHTS OF THE COMPANIES ACT, 2013
1. Total sections: The Companies Act, 2013 has 470 sections and has been divided into 29 chapters with 7 schedules.
2. One Person Company: Concept of One Person Company (OPC) has been introduced. [Section 2(62)]
3. Private Placement: ‘Private placement’ means any offer of securities or invitation to subscribe securities to a select group of persons. A company may make private placement through issue of private placement offer letter. [Section 42]
4. e-voting: e- voting by members of a class of companies [Section 108].
5. Political contribution:The limit for political contribution has been raised to 7.5 % from 5 %. [section182]
6. Corporate Social Responsibility: Every company hving neworth of Rs.500 crore or more or turnover of Rs. 1,000 crore or more or net profits of Rs.5 crore or more during any financial year is required to spend at least 2 % of its average net profits made during three immediately preceding financial years. If the company fails to spend such amount, reasons have to be disclosed in the Board of Directors’ Report.[Section 135]
7. Internal Audit: Internal Audit by CAs/CWAs/ such other professional as may be decided by the Board has been made mandatory for the prescribed classes of companies. [Section138]
8. Appointment of woman director on the Board of Directors: It is mandatory for prescribed classes of companies to have at least one woman director.[Section 149]
9. Limited Liability Partners may be appointed as Auditors [section 141]
10. Independent directors: Every listed company and other prescribed classes of companies are required to have independent directors [section 149]
11. Audit report: Audit report has to be made in authorized Accounting and Auditing Standards [section 143]
12. Auditor is not permitted to render certain services [section 144]
13. Mandatory rotation of auditors: It is made mandatory rotation of auditors for listed companies and other prescribed classes of companies after 5 years in case of auditor who is an individual CA and after 10 years for auditor which is a CA firm.[section 139]
14. Establishment of vigil mechanism: Every listed company or such class or classes of companies , shall establish a vigil mechanism for directors and employees to report genuine concerns, in such manner as prescribed. [section 177]
15. Insider trading: Prohibition of insider trading of securities [section 195]
16. Secretarial Audit: Mandatory Secretarial Audit for bigger companies(listed companies and such other class of companies as may be prescribed) by a Company Secretary in practice. [section 204]
17. SFIO: Investigation into the affairs of companies by Serious Fraud Investigation Office (SFIO). The SFIO shall be headed be a Director and such member of experts from banking, corporate affairs, capital market, Information technology, Forensic Audit, Law and Taxation or such other fields as may be prescribed. [section 211]
1. Class action suits: Class action against oppression/mismanagement by member/members or by creditor/shareholders associations or group of shareholders/depositors to be enabled to take legal action in case of any fraudulent action on the part of a company and to take part in investor protection activities and “Class Action Suits” [section 245].
2. Registered valuer: Valuation in respect of any property, stocks, shares, debentures, securities, goodwill, networth or assets of a company shall be valued by a person registered as a valuer [section 247].
3. Removal of name of the company from the Register: Application by a company by special resolution or consent of seventy-five per cent. of members in terms of share capital to Registrar of Companies for removing name of the company from register of companies [section 248]
4. Revival and Rehabilitation of sick companies (section 253-269].
5. Winding up of a company may be either by the order of the Tribunal or voluntary [section 270]
6. Company incorporated outside India [sections 379-393]
7. Nidhi company: Nidhi means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings among its members [section 406].
8. Special Courts: The Central Government has been empowered to establish Special Courts in consultation with Chief Justice of the High Court within whose jurisdiction the Judge is to be appointed [section 435]. The Special Courts would have the liberty to try summary proceedings for offences punishable with imprisonment for a term not exceeding three years [section 436]
9. Definition of fraud and punishment for fraud [section 447].
10. Dormant company: ”Dormant company” means a company registered for a future project or to hold an asset or intellectual property and has no significant accounting transaction, may make an application to the Registrar for obtaining the status of dormant or inactive company [section 455]
11. Mandatory Committees: For listed companies and other classes of companies, it becomes mandatory to constitute following committees: They are: Audit Committee, Nomination and Remuneration Committee and Stakeholders’ Relationship Committee [Sections 177 and 178]
12. Consolidated financial statements: They are mandatory if a company has one or more subsidiaries. It means that consolidation of financial statements of subsidiaries with those of holding companies are mandatory. [section 29(3)]
13. Change of Auditors: Tribunal may direct a company to change its auditors if it is satisfied that auditors have acted in a fraudulent manner or abetted or colluded an any fraud by or in relation to the company or its officers or directors. [section 140]
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